The Week Ahead: Home in on Berkeley for housing market pointers

Housing market trends will be in focus this week when Berkeley, the London and South East-focused house builder, posts full-year figures.

The sector has been under pressure in recent weeks as investors focused on fears that the combination of historically constrained credit growth and the government's fiscal austerity drive could hold back the housing recovery.

Last week, Bellway said uncertainty caused by the looming public spending squeeze had already resulted in "a slight reduction in both site visitor levels and weekly sales rates" since the election. This week, then, Berkeley's update is likely to be scrutinised for any comments about the state of the market at present, and for its views on the potential for ups and down in the months ahead.

As for the headline figures, the City is looking for £105.2m in full-year pre-tax profits, with a net cash position of £301.9m. "Berkeley's preliminary results ought not to surprise," Deutsche Bank said in preview published earlier this month. "Focus instead will centre on management's confidence in the sustainability of the London housing market and the extent of its land buying."

Today

The printing specialist Domino Printing Sciences is due to issue interim results this morning, and ahead of the update, Altium warns that first-half comparatives are "particularly weak", meaning that the growth rates seen in the March interim management statement may not persist into the second half of the year.

"There is probably some scope for estimates to be lifted, but the full-year outcome won't be clear until the end of the summer, thus the group will probably err on the side of caution regarding the outlook statement," the broker said. "The shares have been very strong recently, anticipating upgrades ... and on the current rating ... need an upgrade to support the momentum."

Results/Updates: Kewill Systems and Domino Printing Sciences.

Tomorrow

The City remains positive ahead of tomorrow's first quarter update from Whitbread, the hospitality group which proved exceptionally resilient throughout the downturn. Deutsche Bank expects this week's release to confirm that the group, which owns the Premier Inn hotel chain, continues to trade "well across the board".

That in turn could rekindle interest in the shares, which have underperformed peers in recent months.

Numis is also hopeful, saying: "We expect to maintain our forecasts, which anticipate a return to double-digit growth, and expect the shares to perform well on the back [of this week's] announcement."

Also tomorrow, the safety products group Halma is due to issue its full-year figures. Numis expects to hear of a continuation of the positive trends highlighted in the company's interim management statement in February, "with order input running ahead of sales and an improvement in profitability across all divisions".

"The near-term trading outlook continues to improve and management remains focused on market share gains through international expansion (in China and India), acquisitions (to gain technology or market foothold) and research & development (5 per cent of group sales)," the broker said.

It added that the current valuation of the shares looked "undemanding" given the company's defensive characteristics.

Results/Updates: Chemring, Daisy, Halma and Whitbread. Other: Chancellor George Osborne to deliver the coalition Government's emergency Budget statement.

Wednesday

Results/Updates: Kesa Electricals, Stagecoach and Imagination Technologies.

Thursday

The IT group Micro Focus International will post its annual figures later this week and, given the pre-close update back in May, investors are likely to be greeted by few surprises, according to analysts.

Comments from the new chief executive, Nigel Clifford, who will make his first outing in front of the City this week, are likely to attract interest, Numis says. Its analysts also expect the market to focus on the outlook, particularly when it comes to licences.

Also on Thursday, Société Generale is expecting to hear of £85m in pre-tax profits when the electricals retailer DSG International issues its full-year results. That would equate to a 52 per cent rise in annual terms, and would be in the middle of the consensus range of £80m to £90m, according to Société Generale.

"The pre-tax profit forecast includes an estimated £19m of property losses, relating to the restructuring of the store portfolio," the broker added. "A similar level of property losses is forecast for 2011-12."

Results/Updates: Go-Ahead, Petrofac, DS Smith, DSG International and Micro Focus International.

Friday

Results/Updates: Keller and Berkeley.