Tuesday preview: Persimmon, Tullow, Punch

5th Jul 2010 16:15

As the credit crunch began to ease last year so the share prices of housebuilders bounced back strongly, but there are signs of the rally running out of steam as housing market data gets a bit spotty.Sector leader Persimmon updates the market on Tuesday with its pre-close statement, and Panmure Gordon thinks the group will "report a stabilised sales environment over the past six months, echoing similar comments from Taylor Wimpey last week."When it last updated the market, on 22 April, Persimmon said sales had remained consistent since the beginning of March and were running around 20% higher than a year earlier, in value terms. Volumes were up by around 11%.Panmure Gordon thinks sales may have softened around the time of the general election. The broker is a fan of the stock and thinks the company could potentially announce write-backs that would add 60p to the net asset value per share once its gets "a clearer picture of market conditions and what direction it is moving in."Investec is also a bit twitchy about the current housing climate. "In our view, management of the quoted companies sounds more nervous in tone in conversation than is immediately apparent in their published statements," the investment house said.Heavily indebted pubs group Punch Taverns is scheduled to give an update on trading in the first four months of the second half of the group's fiscal year. KBC Peel Hunt is not expecting much in the way of positive news on trading and thinks there is a risk of downgrades. "Tenanted LFL [like for like] profit has been declining by 11% for 18 months, and any improvement needs to be measured in conjunction with support costs. H1 [first half] managed [pubs estate] LFL sales were -3.4%, implying that Q2 [second quarter] was flat after Q1's -1.6%, and we would xpect Q3 to be slightly negative, given the cold conditions in April and May," the broker said.Internet and catalogue home shopping company N. Brown is set to announce sales data for the 18 weeks to 3 July. Panmure Gordon is forecasting like for like (LFL) sales growth of around 4.0% year on year (YOY). That would represent a slight deterioration from the 4.1% LFL sales increase YOY the company announced for the 8 weeks to 24 April."We think that changes to credit policies will ensure that improving bad debt trends reported in H2 2010 [second half of fiscal 2010] at the preliminary results in April, and in current trading, will have continued. Improving bad debt trends should help to protect a gross margin which is under pressure from higher commodity prices and unfavourable FX [foreign exchange] rates," Panmure Gordon thinks. The broker is predicting an easing in the gross margin over the full year of three-tenths of a percentage point.Public sector spending cuts have been high on the agenda in the UK but Numis Securities thinks that shareholders in infrastructure specialist Balfour Beatty can derive some reassurance from the group's global footprint. Though the broker thinks Balfour Beatty's current trading is likely to be mixed "we believe that the group has a very strong trading platform, which should enable it to offset macro issues."INTERIM DIVIDEND PAYMENT DATEVictrexINTERNATIONAL ECONOMIC ANNOUNCEMENTSABC Consumer Confidence (US) (22:00)ISM Non-Manufacturing (US) (15:00)ISM Services (US) (15:00)Unemployment Rate (EU) (10:00)FINALSAdEPT Telecom, Anite Group, SpiceIMSSBrown (N.) GroupEGMSChina Biodiesel InternationalAGMS3i Infrastructure, Blavod Wines and Spirits , Brown (N.) Group, China Biodiesel International, JPMorgan Income & Capital Inv Trust, Ortus VCT, Westside AcquisitionsTRADING ANNOUNCEMENTSBalfour Beatty, PartyGaming, Persimmon, Punch Taverns, Tullow OilUK ECONOMIC ANNOUNCEMENTSNew Car Registrations (09:30)FINAL DIVIDEND PAYMENT DATEAberdeen New Thai Inv Trust, Development Securities, French Connection