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PREVIEW - UK housing market in focus again with Persimmon

Published: 05:47 23 Aug 2016 BST

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Houses and prices back on the  agenda on Tuesday as one of the big builders Persimmon PLC (LON:PSN) reports interim results.

It comes the very next day after a report from Countrywide, which predicts a fall of 1% in prices nest year in the wake of the UK's decision to leave Europe.

It reckons growth for the rest of 2016 will slow to 2.5% and then decline 1% in 2017 as economic uncertainty takes hold.

But, having said that, Countrywide expects this to be a relatively short-lived blip, with prices recovering to 2% growth the very next year - in 2018.

Britain has yet to start the process of EU withdrawal proper yet or formal negotiations on trade deals, and has not yet invoked Article 50 of the Lisbon Treaty.

On Tuesday, traders will undoubtedly be looking to see how Persimmon's trading has been affected by the EU referendum vote.

Approvals remained ahead of last year for the April/May period despite a period of increasing uncertainty leading up to the EU referendum.

City broker Numis rates the shares 'hold' and targets 2,200p.

It says following the detailed trading update released on July 5, it reckons the focus will be on recent trading rather than the financial performance of the first half.

The company has already announced that first half revenues were up 12% year-on-year at £1.49bn and Numis has done a bit of crystal ball gazing to predict earnings before interest and tax will exceed £345mln.

“Regarding post Brexit trading, we think that Persimmon will have held up relatively well, in keeping with the wider sector and benefiting from its very low level of London exposure. Overall, we expect guidance for the full year to remain unchanged/improve slightly and the company to state that 2017 will be dependent on trading conditions in autumn and beyond,” Numis said.

Significant announcements expected

Final: The Rank Group PLC (LON:RNK)

Interims: AcenciA Debt Strategies Ltd (LON:ACD), Cape PLC (LON:CIU), Eurocell PLC (LON:ECEL), Hansteen Holdings plc (LON:HSTN), Hostelworld Group PLC (LON:HSW), Persimmon PLC (LON:PSN), PV Crystalox Solar PLC (LON:PVCS).

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