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The Markets
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Proactive UK has moved.
Coverage of London’s small caps continues on proactiveinvestors.com
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The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK
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The Markets
by Proactive
Proactive UK has moved.
Small-cap coverage continues on .com
Go to Proactive UK

Real Estate

Breedon Aggregates Ltd tipped to do well in first half

Building materials company expected to announce good performance south of the border

Breedon Aggregates Ltd (LON:BREE) is expected to report an upbeat first-half performance, at least in England.

Broker Peel Hunt, which has a 'buy' recommendation on Breedon with a 77p target price, said it suspects England will have continued to do better than Scotland in the period.

Peel expects the group to say it remains on track to meet expectations set before its acquisition of Hope Construction Materials, which it announced last November.

Ongoing capital spending programmes will have helped boost profits as should the balance of price rises versus costs.

The broker said: "While 'Brexit' will have affected consumer and corporate confidence levels for embarking on new investment projects, the extent to which it has impacted activity will not be known for a few months.

"Infrastructure work is unlikely to be affected.

"The Hope deal should be completed from the start of August, which means we will have to take one month from our estimates for 2016, but do not see any changes to 2017 figures at this stage."

Land Securities PLC (LON:LAND) reports on trading on Thursday. Analysts say the company has protected itself against a 'Brexit' impact by halting further speculative developments.

But they say it is difficult to see what actions management can now take to insulate against decreases in asset valuations.

Negative yield trends could badly hit the company, with its large average lot sizes across its portfolio, if valuations of assets in the less liquid end of the market go negative.

That could happen if gated property funds sell down assets at a discount to BV.

The referendum outcome is also likely to be a factor considered by investors when easyJet PLC (LON:EZJ) issues a trading update.

EasyJet warned on profits last month due to third quarter disruption from strikes and other issues, currency and fuel price volatility and concerns about consumer demand following the EU vote.

Numis Securities reduced its 2016 pre-tax profit forecast from £716mln to £612mln.

The broker's Wyn Ellis said: "Roughly four weeks on, it will be interesting to see what impact Brexit has actually had on bookings at a vital time of the year and whether there is any further change to guidance.

"The very substantial fall in the share price (-25% as we write) post-Brexit suggests that the stock market anticipates a disappointing third quarter update."

But Numis added: "We continue to believe structural growth opportunities remain attractive."

Other companies reporting include:

Interims: Breedon Aggregates, Howden Joinery, Nichols, Unilever;

Trading statement: Intermediate Capital, AO World, Babcock International, Britvic, DMGT, Euromoney, Hilton Food, SABMiller, SSE, Tate & Lyle;

Production results: Hochschild Mining;

AGM: Halma, Royal Mail.

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