UK Homebuilders Report Earnings Amid Falling House Prices

Several homebuilders in the UK are set to report this week amid some concerning news for the market, as analysts expect home prices to decline in the coming months with the BOE keeping rates elevated.

Several homebuilders in the UK are set to report this week amid some concerning news for the market, as analysts expect home prices to decline in the coming months with the BOE keeping rates elevated.

The Main Expected Events

• The RICS report shows UK home prices expected to fall over the next three months before returning to growth next year. HBF reported the slowest growth in new home investment since 2012.
• Barratt Redrow will report after disclosing that the market remains challenging and saw a drop in completions.
• Kier's earrings report is expected to remain in line with forecasts, as the company touts a strong order book.
• MJ Gleeson will also present its annual results but has expressed little confidence that the market will improve in the coming year.

Falling House Prices

Markets were surprised earlier this month when house prices in the UK fell on average in August, down 0.1% instead of the anticipated 0.2%. What could be troublesome for UK homebuilders is that, according to a survey conducted by the Royal Institution of Chartered Surveyors (RICS). Sales volumes are anticipated to remain flat, while pricing is expected to decline over the next three months. However, respondents see prices returning to growth over a 12-month time frame. Markets are waiting for the BOE meeting this week, in which interest rates are projected to stay unchanged, keeping mortgage costs elevated.

Major UK Homebuilder Reports

The Home Builders Federation reported that Q2, with new home permissions 17% below the same time last year. Several UK homebuilders are scheduled to report their annual earnings this week, after updating investors back in July.

Barratt Redrow: Keeping Up With Expectations

The largest homebuilder in the UK will issue its annual report on Wednesday. In its post-close trading update back in July, the company but acknowledged a challenging market backdrop. Nevertheless, the company affirmed its intention to report earnings for the year within market expectations. Total completions were 13.1K, -1.2% compared to a year earlier. However, total sales increased 10.5% to £2.9 billion. The main focus for management under the current circumstances is completing the Barratt-Redrow integration, after confirming £69 million out of £100 million in expected cost synergies.

Kier: Manages Growth

The Kier Group will report its annual results on Tuesday. In its annual trading update back in July, the company, with 88% of its revenue for next year being secured. Cash generation rose 22%, but the company used the funds to pay down debt, leaving its £20 million shareback programme to run through the rest of the calendar year. Management reiterated its view that results will be in line with market expectations and above prior year levels.

MJ Gleeson: In Line With Forecasts

The property developer will issue its annual report on Tuesday, having forecast in its July trading update thatof £21.0 to £22.5 million. Home completions increased to 1793 from 1772 in the prior fiscal year. The company said that the housing market lacks confidence and remains subdued. The Board does not see any catalyst in the near term for a substantial improvement, expecting next year's performance to be similar to the current year.

• The RICS report shows UK home prices expected to fall over the next three months before returning to growth next year. HBF reported the slowest growth in new home investment since 2012.
• Barratt Redrow will report after disclosing that the market remains challenging and saw a drop in completions.
• Kier's earrings report is expected to remain in line with forecasts, as the company touts a strong order book.
• MJ Gleeson will also present its annual results but has expressed little confidence that the market will improve in the coming year.

Falling House Prices

Markets were surprised earlier this month when house prices in the UK fell on average in August, down 0.1% instead of the anticipated 0.2%. What could be troublesome for UK homebuilders is that, according to a survey conducted by the Royal Institution of Chartered Surveyors (RICS). Sales volumes are anticipated to remain flat, while pricing is expected to decline over the next three months. However, respondents see prices returning to growth over a 12-month time frame. Markets are waiting for the BOE meeting this week, in which interest rates are projected to stay unchanged, keeping mortgage costs elevated.

Major UK Homebuilder Reports

The Home Builders Federation reported that Q2, with new home permissions 17% below the same time last year. Several UK homebuilders are scheduled to report their annual earnings this week, after updating investors back in July.

Barratt Redrow: Keeping Up With Expectations

The largest homebuilder in the UK will issue its annual report on Wednesday. In its post-close trading update back in July, the company but acknowledged a challenging market backdrop. Nevertheless, the company affirmed its intention to report earnings for the year within market expectations. Total completions were 13.1K, -1.2% compared to a year earlier. However, total sales increased 10.5% to £2.9 billion. The main focus for management under the current circumstances is completing the Barratt-Redrow integration, after confirming £69 million out of £100 million in expected cost synergies.

Kier: Manages Growth

The Kier Group will report its annual results on Tuesday. In its annual trading update back in July, the company, with 88% of its revenue for next year being secured. Cash generation rose 22%, but the company used the funds to pay down debt, leaving its £20 million shareback programme to run through the rest of the calendar year. Management reiterated its view that results will be in line with market expectations and above prior year levels.

MJ Gleeson: In Line With Forecasts

The property developer will issue its annual report on Tuesday, having forecast in its July trading update thatof £21.0 to £22.5 million. Home completions increased to 1793 from 1772 in the prior fiscal year. The company said that the housing market lacks confidence and remains subdued. The Board does not see any catalyst in the near term for a substantial improvement, expecting next year's performance to be similar to the current year.