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Berkeley Group and Barratt Developments go head-to-head

Last updated: 06:00 05 Sep 2018 BST, First published: 13:14 04 Sep 2018 BST

Bricklayer

Two of the bigger house-builders go head-to-head on Wednesday with updates: Berkeley Group and Barratt Developments.

More than its house-building peers, Berkeley Group Holdings PLC (LON:BKG) is focused on London and the South-East, and while this has been a double-edged sword of late, the stock still trades at a premium to the sector, largely because of that southern bias.

The builder’s June trading update hinted of tougher times ahead so investors will be interested to see if the trading update (covering the period from May) contains more hints of that nature.

“Looking forward, we remain concerned that the impact of recognised skills gap in the UK construction workforce may become more pronounced as the UK exits the European Union. While this is hard to predict, it is a fact that over half of London's site labour comes from the EU.

“This needs to be addressed by a combination of continued access to EU labour, skills training and innovation in construction if the industry is to achieve its medium-term production aspirations,” said Rob Perrins, Berkeley’s chief executive.

Deutsche Bank is expecting Barratt Developments PLC (LON:BDEV) to announce full-year profit before tax of £837mln on Wednesday, in-line with the house-builder’s recent guidance of around £835mln.

The company has suggested net cash will be around £790mln, but the German bank is expecting it to be a little better than this, at £793mln.

As with all the house-builders, much of the rear-view window stuff has already been released so the focus will be on current trading, particularly in London, where Barratt has seen an improvement in the centre of the capital.

Significant announcements expected

Trading update: Berkeley Group Holdings PLC (LON:BKG)

Finals: Barratt Developments PLC (LON:BDEV), Haynes Publishing Group PLC (LON:HYNS), Frontier Developments PLC (LON:FDEV)

Interims: Anpario Plc (LON:ANP), Everyman Media Group PLC (LON:EMAN), Frenkel Topping Group PLC (LON:FEN), Gem Diamonds PLC (LON:GEMD), Location Sciences Group PLC (LON:LSAI), Somero Enterprises Inc (LON:SOM)

Traffic numbers: International Airlines Group PLC (LON:IAG)

Economic data: BRC UK shop price index; UK services PMI index; US balance of trade

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