Wednesday’s schedule is bang on trend for the week, with Barratt Developments PLC (LON:BDEV) the latest UK homebuilder to give the market a trading update.
Bellway, on Tuesday, told investors that it is looking to increase the number of houses it builds, though it remains wary of a possible Brexit effect on consumer confidence.
Barratt has so far avoided the strain of a slowdown in the housing market, according to analysts.
That’s thanks to low-interest rates and the government’s Help to Buy scheme. The housebuilder posts its first-quarter trading update on Wednesday and analysts expect it to show a strong order book and an increase in home sales at higher prices.
“However, management’s tone in recent trading updates has been cautious and there is nothing to suggest that this will change,” said Graham Spooner, investment research analyst at The Share Centre.
“This will be reflected in the land and plot acquisition strategy while the cost pressures of rising material and labour prices is likely to also become more prominent.”
While the company’s recent successes have been buoyed by government schemes and low-interest rates, analysts have warned that these conditions can’t last forever with the Bank of England saying it would gradually raise rates and Help to Buy due to end in 2021.
Pipeline key for Segro
Property investment group Segro PLC (LON:SGRO) is due to publish a third-quarter trading update on Wednesday.
The shares have outperformed the market and many other commercial property groups so far this year, largely because of its large warehouses which offer it exposure to the booming online retailing industry.
July’s half-year results showed a 21% rise in pre-tax profits and an 8.5% increase in net asset value per share.
Investors will be focused on the retention rate and any comments on the level of demand for its properties. Segro has a large pipeline of new properties to develop so any update on that, and the amount of capital needed to complete it will also be of interest.
Wednesday October 17:
Trading update: Barratt Developments PLC (LON:BDEV), Segro PLC (LON:SGRO)
Finals: Softcat PLC (LON:SCT), CAP-XX Ltd (LON:CPX)
AGMs: BHP Billiton plc (LON:BLT), Barratt Developments PLC (LON:BDEV), Tlou Energy Ltd (LON:TLOU)
Economic data: UK CPI, PPI, HPI inflation; FOMC minutes; US housing starts