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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 salesJanuary 17 2013, 6:30pm
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.
Companies: Bovis, Spectris
Macroeconomic: UK retail sales
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