Market Preview is published daily an hour before trading kicks off on the London Stock Exchange, giving investors a roundup of macroeconomic and corporate news that is likely to move the markets along with the expected opening level of the FTSE 100.


Friday's agenda: Small increase expected in retail sales

January 17 2013, 6:30pm
UK retail sales in December are predicted to be 2% higher than a year earlier, unchanged from November

Corporate news flow tails off on Friday, with even the retailers taking the day off from reporting.

There are, however, UK retail sales figures for the pundits to ponder.

Charles Stanley predicts that retail sales (excluding petrol) rose 0.2% in December, after rising 0.1% in November.

The year-on-year increase is seen holding steady at 2.0%.

House builder Bovis (LON:BVS) looks like being the heaviest hitter to update the market tomorrow, although instrumentation company Spectris (LON:SXS) might dispute that.

“We forecast a strong growth in unit completions in 2012E as new sites work through the system (+16.1%) whilst average selling prices will also see positive momentum on mix changes (+6.5%),” says Panmure Gordon, which has Bovis as its only ‘buy’ recommendation in the house building sector.

“We forecast a continued improvement in net margins (+ three percentage points) as the benefit of higher-margin land works its way through. This leads us to December 2012 profit before tax of £53.2m (+66% year-on-year), earnings per share of 29.4p, dividend per share of 9.0p and net asset value of 565p.,” the broker said.

“Despite an on-going land investment programme, Bovis has maintained a healthy balance sheet for a number of years now. We forecast a positive net cash position (£21.9m at the year-end) which means that the group has significant firepower for further opportunistic land investment,” Panmure Gordon added.

Spectris is expected by Numis Securities to deliver an in-line end of year trading update, despite the macroeconomic environment.

“Organic volume growth had declined in the third quarter of 2012 (2% vs. first half growth of 4%) and we expect those trends to have continued through the year end,” Numis analyst Scott Cahegin writes.

“However, we expect a strong contribution from acquisitions and despite c.3% currency headwinds we estimate 12% 2012 revenue growth. Regionally, we anticipate continued growth in Asia, with modest growth in North America and tough European markets,” Numis added.

Numis’s full-year forecasts are £215.3mln for profit before tax and 136.3p for earnings per share.

Announcements expected

Companies: Bovis, Spectris
Macroeconomic: UK retail sales

Advertisement Register here to be notified of future articles.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.