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 WEEK AHEAD: HOUSEBUILDERS' DEBT UNDER SPOTLIGHT
Persimmon releases a trading update on Tuesday Monday July 6,2009 THE focus will be on the housebuilding sector next week and their comments on the property downturn.
Persimmon releases a trading update tomorrow when its debts will come under the spotlight. Analysts will be looking for further reductions from the £905million seen last June. Numis Securities said it expects net debt to now be below £600million and said it sees the group as “one of the most attractive housebuilders”. Barratt updates the market on Thursday, coming less than two months after it said that visitor numbers and reservation rates were improving. Bovis also releases an update on Friday and Numis is expecting higher sales and broadly stable prices from them. Restaurant owner Clapham House Group serves up annual results tomorrow when investors will be seeing what impact the economic downturn has had on business. The AIM-listed group owns the Gourmet Burger Kitchen chain, The Real Greek and Tootsies. At its last update three months ago it said sales for the year had grown by more than 15 per cent results would be in line with market expectations. During the year it has opened six new Gourmet restaurants, including Cardiff and Liverpool, taking the total to 49, including 28 in London. Recruitment firm Michael Page reports on second quarter trading tomorrow after a tough previous three months when profits fell 32.3 per cent as demand for employees weakened. It said UK first quarter gross profits plunged to £28.9million in the three months to March 31 from £47.1million.
Fellow recruiter Hays reports on its fourth quarter on Thursday. It has, like Michael Page, been downsizing with a nine per cent reduction in headcount, bringing the total employee reduction to 27 per cent in the last 12 months. However, it recently showed a more resilient performance from the temporary recruitment market. Fees from permanent recruitment – which accounts for half of Hays’ business – were down 46 per cent in the three months to the end of March, while those from temporary placements fell by 14 per cent. Associated British Foods updates on Friday. Its discount fashion chain Primark excelled in the six months to February 28 lifting operating profits by 10 per cent to £122million, increasing selling space and growing like-for-like sales by five per cent. Analysts are hopeful for more positive news from Primark. Elsewhere across the business trading is likely to be more mixed. Its grocery arm, which also includes Ovaltine and Twinings, saw operating profits fall 29 per cent to £62million over the half year. Shares in FTSE 100 exploration company Tullow Oil, which issues a trading update on Thursday, have climbed from 685p and to 912p this year, lifted by a series of breakthroughs at its wells in Africa. Last month analysts at Deutsche Bank raised their price target on the shares to £11.65. Key economics figures due include industrial production tomorrow when broker Global Insight expects expansion of just 0.2 per cent in May, helped by the weak pound. Producer price data for June on Thursday should provide further evidence of the squeeze on manufacturers in the face of weakening demand and intense competition. 
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