Housebuilders will remain in the news on Tuesday, along with a focus on commercial property and supermarkets.
Shares in Persimmon, which had mostly escaped the industry’s share price decline this year, were carried higher along with the rest of the sector as TW said its building capacity was now “close to normal”, prices remained robust and that it expected full-year profits to be at the upper end of expectations this year and next.
As for Persimmon, investors last heard in August that house sale completions were down 35%, with operating profit dragged down 43%, but that its sales pipeline stood at GBP2.25bn.
With new chief executive Dean Finch making his debut, broker Peel Hunt expects a “generally positive” statement, saying that Persimmon’s lower price point and higher Help to Buy exposure “should continue to drive good sales performance in the second half of the year, especially in the context of reduced availability of high LTV mortgages”.
“However, the market share gains the group has enjoyed as a result of its more advanced build position may begin to erode as rival housebuilders restock their inventories.”
Analysts at Hargreaves Lansdown wondered how a second coronavirus lockdown will affect the housing market.
“People usually like to visit houses before committing to buying them, and while online shopping is gobbling up traditional retail we doubt houses are quite ready for that,” the Hargreaves analysts added.
“A surge of pent up demand was unleashed when the lockdown ended though, so the builders may be able to look forward to that. Furthermore, construction activity was halted during the last lockdown but looks set to forge ahead this time.”
LandSec portfolio in the spotlight as pandemic batters commercial landlords
Interim results from Land Securities Group PLC (LON:LAND) on Tuesday are likely to be dominated by questions about how the company’s property portfolio is faring as continued home working during the pandemic hits office and retail landlords hard.
The company’s shares are currently trading at around 550p each, well below its last stated net asset value (NAV) per share figure of 1,192p, indicating that most investors believe the portfolio is likely to decline more steeply in value than it has done in recent years.
Key metrics for investors will be the company’s rent collection, vacancy rates and net debt.
Also of interest will be the firm’s plans for its dividend after binning its third and fourth quarter payouts last year and scrapping the first quarter payment this year.
Chief executive Mark Allan is aiming to bring the divi back, while investors will also be looking for any details on the CEOs restructuring plans and a new strategy.
Grocers back on top
Kantar will release the monthly sales data for the grocery sector at 8am, with the prior update showing demand had been picking up in October as UK coronavirus restrictions become tighter in more areas around the country.
The latest four weeks saw growth of 10.6%, up from 8% in the preceding weeks, which was apparently the slowest rate since April.
With all pubs and restaurants in most of the UK forced to close their doors, apart from for takeaways, since early November there will be a further boon for the sector but only for part of the time period in the Kantar report.
The joint venture between Ocado Group PLC (LON:OCDO) and Marks and Spencer Group PLC (LON:MKS) has been the biggest beneficiary of a surge in demand for online grocery orders, but Wm Morrisons Supermarkets PLC (LON:MRW), Tesco PLC (LON:TSCO) and J Sainsbury PLC (LON:SBRY) also have received a boost.
Significant news expected on Tuesday November 10:
Interims: DCC PLC (LON:DCC), Electrocomponents PLC (LON:ECM), Land Securities Group PLC (LON:LAND), Oxford Instruments PLC (LON:OXIG), Renewi PLC (LON:RWI), Zoo Digital Group PLC (LON:ZOO), Premier Foods PLC (LON:PFD)
Economic data: UK unemployment