Housebuilders and inflation data to dominate mid-week calendar


The corporate calendar on Wednesday isn’t set to be awfully busy, although a handful of heavy-weights will keep the day interesting.

Persimmon and Balfour Beatty will offer yet another look at the building sector, while Hochschild will transport investors in the mining world.

UK inflation data is also on the menu, where the consumer prices index is seen retreating from the 2.3% year-on-year rise in June – well shy of wage growth.

Balfour Beatty to swing back to profit

The City is expecting to see a return to profits for Balfour Beatty plc (LSE:BBY) in its interims, with analysts at UBS forecasting a GBP63mln profit from operations, swinging back from a GBP14mln loss last year and close to the GBP72mln profits made in 2019.

The investment bank expects GBP7mln disposal gains from recent sales, while the net cash position of GBP600mln disclosed in May should soften given share buybacks.

“Margins will be the key factor to watch, as investors hope for signs of life after a particularly tough year,” analysts at Hargreaves Lansdown commented.

“The group operates on relatively thin margins at the best of times–in 2019 underlying margins were 2.2%. The pandemic’s disruption brought that figure below 1% last year.”

“Another key factor to watch will be the group’s buyback plans. At last check the group was planning to buy back a total of GBP150m worth of shares this year. The cash for these buybacks will undoubtedly come from asset disposals, which were on pause in 2020. We’d like to know if the group’s made any progress on its disposals and whether the buyback scheme is still on track.”

Persimmon looks to keep building

For housebuilder Persimmon PLC (LSE:PSN), volumes and outlook are likely to be the key focus as the UK housing market continues to adjust to the post-pandemic world.

The group has already flagged some of the top-line numbers in a trading update in July, disclosing volumes of 7,406 and revenues of around GBP1.75bn.

In light of this, UBS analysts are saying focus is likely to be on margins, current trading and the company’s outlook, forecasting margins for the first half of 27.9% and a pre-tax profit of GBP487mln.

Looking ahead, the investment bank expects sales to have remained robust in July and August.

Unearthing more interims

Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF, FRA:H3M) issues interims a month after it said its production numbers left it on course to meet full-year output and cost targets for the year.

The company may drop some teasers on its rate earths project in Chile ahead of a capital markets presentation on same due in September.

Significant announcements expected for Wednesday 18 August:

Interims: Balfour Beatty plc (LSE:BBY), Persimmon PLC (LSE:PSN), Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF, FRA:H3M), Network International Holdings PLC (LSE:NETW) (LSE:NETW)

Economic data: UK inflation, UK retail price index, UK producer price index


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