Friday preview: Berkeley Group, US non-farm payrolls

It has been a quiet week for corporate news flow and it is not set to get any busier on Friday, with FTSE 250 house builder Berkeley Group likely to be the big fish in a small pond as it announces its interim results.

Broker Northland Securities thinks the group will have put in a strong showing in the six months to the end of October, helped by its regional focus and better overseas investor activity.

Thanks to a "strong and seemingly unstoppable London residential market, the group's five year goals are now likely to be achieved within three years," the broker notes, citing Berkeley's trading update in early September.

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"London is the focus for The Berkeley Group. It has both the land and cash for WIP [work in progress] to continue to drive ahead the number of active sites this financial year and beyond. Its cash flow strength is highlighted by its £500m land buying over the last two years, the £42m of cash remaining on the balance sheet and the confidence to commit to return £1.7bn in dividends by 30th September 2021," Northland said. The group is tapping into "strong investor interest in London residential property and strong underlying demand for homes in the capital," and, what's more, the broker continues, the' London effect' has "undoubtedly spread into the surrounding geographic markets."

"From here we see a further margin improvement as the lower cost land, acquired during the recession, starts to come into production. The overall reservations level is now 30% up on last year and, given the group's approach to pricing and the better margin on new sites, this should be a significant driver of performance in the current financial year. This is supported by the group's strong cash potential given its gross margin of over 28% and its £42m net cash position on 30 April 2011. With stronger site visitor levels, and a largely trade-up and overseas buyer market, the impact of restricted mortgage availability is less of an issue for the company. Nonetheless, it could fly if the shortage was overcome," the broker suggests.

Switching to the economy, the big event of the week is the release of US non-farm payrolls data for November. Many economists think the figures could bring a much needed boost to sentiment. Just about all economists expect an increase in payrolls, but the size of the forecast uplift varies wildly from 60,000 to 200,000.

INTERIMS

Berkeley Group Holdings

INTERIM DIVIDEND PAYMENT DATE

BlackRock Smaller Companies Trust, DCC, Elderstreet VCT, Hansa Trust, Hilton Food Group, Laird, Marshalls, SThree, TDK Corp.

QUARTERLY PAYMENT DATE

Boeing Co, Duet Real Estate Finance Ltd

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Non-Farm Payrolls (US) (13:30)

Producer Price Index (EU) (10:00)

Retail Sales (GER) (07:00)

Unemployment Rate (US) (13:30)

SPECIAL DIVIDEND PAYMENT DATE

Aberdeen Asian Smaller Companies Inv Trust, Blackstar Group SE, SThree

AGMS

Ceres Power Holdings

TRADING ANNOUNCEMENTS

SThree

FINAL DIVIDEND PAYMENT DATE

Aberdeen Asian Smaller Companies Inv Trust, Ashmore Group, James Halstead, Matchtech Group, Tawa, United Carpets Group

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