Companies Reporting: Barratt Developments, Melrose Industries, Berkeley

It’s another quiet week for FTSE 100, FTSE 250 and international companies reporting from 30 August to 3 September. We’ve picked out a few highlights below – and you’ll find the full list of reporters further down the page.

• Barratt Developments’ outlook for cost inflation will be front and centre
• We’ll get an idea of how the global semi-conductor shortage is affecting Melrose Industries
• The strength of the London market is the main focus in Berkeley’s results

Barratt Developments LON:BDEV, Full Year Results, Wednesday 2 September

“Barratt has surprised us in a good way with its post-pandemic trading. Full year underlying pre-tax profit is expected to come in at around £899m – the high end of market expectations. That’s predicated on a strong recovery in completion volumes, which are meant to be just around 3.4% lower than before the crisis.

Seeing as we already have an idea of what Barratt expects for the full year, it’s the outlook statement that will be worth attention. There are a couple of reasons for this. The first is ongoing build cost inflation, which is running at a rather unhelpful 3-4%. We’d like to know if this trend is expected to continue, and what it might mean for margins.

The second is demand expectations. The stamp duty holiday and pandemic lifestyle changes lit a fire under the housing market. The government is still committed to supporting the housing market with things like 95% mortgages, which makes buying a house more accessible for those with only a small deposit. But demand is likely to dissipate as some of the headwinds of the last eighteen months ease.”

Melrose Industries LON:MRO, Half Year Results, Wednesday 2 September

Melrose’s biggest division, Automotive, is being weighed down by the issues caused by the global semi-conductor shortage. We expect this to have held the division back in the second half, although to what extent is unclear. The other issue is Melrose’s aviation businesses, which rely heavily on commercial air travel. You don’t need us to tell you this remains very disrupted.

One possible area of good news is margins. Despite the issues it’s faced, Melrose has managed keep margins healthier than we’d feared, thanks to very strong cost control. Analysts expect operating margins to be around 5.6% by the full year – up from 3.9% at the end of last year.

Berkeley Group LON:BKG, Trading Update, Thursday 3 September

“Berkeley Group updates on Q1 trading on 3 Sep ahead of its AGM later that day. With its bias to upscale central London property, Berkeley feels how sentiment in the capital is changing through its sales offices week by week. Overseas buyers have long been a big source of demand for Berkeley.

Are they still viewing the UK as a safe haven in an uncertain world, and does the UK’s strong vaccination uptake reinforce this?

Investors though are more likely to focus on what the group have to say about cash generation and their latest thinking on how to allocate that capital between buying land and returning it to shareholders.”

FTSE 100, FTSE 250 and selected other companies scheduled to report

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This article is brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.