The construction sector will be in the corporate news focus tomorrow as housebuilder Persimmon PLC (LON:PSN) and contractor Costain Group PLC (LON:COST) both update the market.
FTSE 100-listed Persimmon is expected to continue the trend which has seen companies in the sector provide solid trading figures during 2016 even after last June’s Brexit vote.
Ian Forrest, investment research analyst at The Share Centre, expects Persimmon’s private sales rates to show double digit growth, with strong advances in average selling prices which should feed through to good revenue growth.
But, in a recent note to clients, he added: “It’s the forward looking statement that will be of more interest: expect the order book into 2017 to remain strong but could we see some caution on land and plot acquisitions?”
Housebuilders were in demand today after Deutsche Bank said it saw “appealing value” in the sector.
In a note to clients, Deutsche Bank analysts said that after a tumultuous 2016 for the sector, they have hiked their price targets across the board, which now “suggest close to 30% upside across the sector as a whole.”
Meanwhile, the focus for Costain will be on the year-end order book, which stood at £3.9bn in August, with the firm focused on winning contracts in the water, energy and transportation sectors.
The market will also be interested in progress on some of the group’s current major contracts, such as Crossrail and London Bridge Station, as well as with Thames Water, UK Highways Agency and nuclear decommissioning at Sellafield.
The last news from the group was in mid-December with regards to the renewal of its £120mln maintenance contract with Highways England – as part of its joint venture with CH2M – to provide services for Area 14, across the North East.
Commenting on Costain at the time, analysts at Liberum Capital, said: “While there are ongoing concerns about Manchester waste, we believe that the business is trading well and is well positioned to benefit from the increased investment in infrastructure.”
Significant announcements expected …
Trading update: Costain Group PLC (LON:COST), Persimmon PLC (LON:PSN)