Two of the nation’s biggest housebuilders are set to report strong half-year results as they benefit from building more family homes and capitalising on land bought cheaply following the financial crisis.
Results from Persimmon and Bovis Homes will also reflect a strong spring selling season, as first-time buyers rushed to take advantage of a stamp duty holiday before it expired in March.
Since then, the government has launched its NewBuy scheme south of the Border to encourage the return of 95 per cent mortgages, while more recently it launched its Funding for Lending scheme to incentivise banks to boost mortgage availability.
Housebuilders have said these schemes have helped keep market conditions stable in recent months.
Their recovery strategies have seen them build more family homes – rather than flats – to reduce their exposure to first-time buyers and build on cheaper land they bought since the financial crisis, which has helped boost their margins.
Persimmon is expected to report a 30 per cent rise in pre-tax profits to £75.3 million as it benefits from these trends. Its average selling price rose 7 per cent to £171,400 in the half year, helped by its focus on the more affluent south.
Investec analyst Mike Bessell said: “Persimmon remains the national housebuilding business that is furthest down the road to full recovery and its strategy underpins confidence in that view.”
Bovis, reporting today, is expected to reveal that pre-tax profits nearly doubled to £15.2m in the first half of 2012, up from £8.1m the previous year, according to Numis analyst Chris Millington.
When the Kent-based group last updated the market, it reported an 18 per cent jump in completions to 944 in the first-half although it said buyers were still struggling to get affordable mortgages and taking longer to make decisions amid the economic uncertainty. However, average sale prices rose 1 per cent to £164,400 as its strategy of building family homes paid off.
WH Smith is expected to reveal improved like-for-like sales across the group in a final trading update before it publishes full-year results in the autumn.
The group, which has around 1,200 stores, including 586 in the powerhouse travel division, is also expected to give an update on the success of the Kobo e-reader, which it introduced to stores earlier this year to compete with Amazon’s Kindle.
Half-year figures from the UK’s biggest pawnbroker, H&T Group, will be scrutinised tomorrow for further signs of a slowdown in its gold arm.
The group, which has 174 stores and 55 GoldBar units, revealed in June that the gold purchasing division – a star performer in recent years – had “experienced competitive pressure on margins” as gold prices softened and competition increased.
This followed a warning from rival Albemarle & Bond that annual profits would be lower than expected due to the falling price of gold and the possible impact of wet weather.
But H&T expects a good first half as core pawnbroking is expected to report double-digit year-on-year growth, boosted by an increased size of the average loan and a bigger pledge book.