GG now spends rainy days trading equities and currencies. He likes to use a combination of technical analysis and news flow to make trading decisions.
Bovis Homes and AMEC
Housebuilder Bovis is due to report final results on Monday. Analysts are looking for profits of about £125m but it is the outlook statement that is more important. I covered the Bovis trading statement as one of my first blogs back in January here for those of you who want more info.
Certainly the UK housing market is much more tricky, but I personally rate the Bovis management as out of the top drawer and likely to deliver a decent set of results in which the focus will almost entirely on obtaining decent margins rather than volume. Other building companies have reported results broadly in line with (albeit downgraded) estimates. The forward sales figures and recent viewing numbers will be keenly scrutinised, as will the levels of incentives required to sell homes.
On Tuesday the multi-faceted consultancy and engineering group AMEC takes centre stage. These will be its first set of results since being reshaped under CEO Samir Brikho. A lot of the ‘old’ AMEC (construction/building contracts) has been swept aside, leaving a company that focuses mainly on the oil, power and environmental engineering markets.
Analysts are looking for about £180m pre-tax and 26p of earnings. An upbeat presentation is expected, as at the interim stage all 3 core divisions reported record performances. However, the focus will be on whether the group is likely to meet its targets for margin growth and how the company’s estimated cash pile of £600m is to be redeployed.
March 10th, 2008 at 9:33 am
Eeek! The Bovis figures at £123.6m weren’t far away from forecasts, (sector leading margins too) but the fact that reservations are down 20% this year indicates that ’something is rotten in the state of Denmark’.
A desperate call for the BOE to cut rates is probably no more than what one might expect from a housebuilder, but the comments on the market outlook has unsettled investors, who have knocked the stock back by 8%.
March 11th, 2008 at 9:04 am
AMEC figures look top end ,(after you strip out the accounting ‘funnies’) with pre-tax coming in at £123.6m vs. market estimates of an adjusted £122m. Earnings per share (arguably a cleaner measure) came in at 28p. vs. the 26p expected. Company on target to meet margins of 6% for 2008.
Net cash at year end £733m, looking for acquisitions, intend to spend £100m in H1. Arguably this is slightly disappointing-cash on a company balance sheet earning 5.5% (FA after tax and inflation) could i’m sure be better deployed.
Decent set of results, markets in all3 divisions look good, some disappointment on pace of aquisitions.