The week ahead: Capita, Persimmon

Monday 27 February

After recent results from Barratt Developments, the country's largest housebuilder by market capitalisation delivers its numbers for 2016 on Monday.

Also the best-performing housebuilder share of the past decade, Persimmon is back roughly where it was before last summer's Brexit vote and near a record high.

January's trading update beat expectations, with revenue said to have risen 8% to £3.14 billion. That triggered upgrades to both forecasts and ratings. At Numis Securities, Chris Millington raised profit estimates for 2016 by 7% and by 9% for 2017, but even these could be conservative, he says.

Look for pre-tax profit of £767 million in 2016 and total dividends of 110p, which gives a prospective yield of 5.5%.

"In our view Persimmon continues to be one of the best operators in the market and its cash performance is exemplary," writes Millington. "We do not regard [2.1 times price/tangible net asset value, 5.7% yield and a PE of 9.2 for Dec 2017] as expensive on an absolute basis, arguing that the yield looks very well underpinned given the net cash position and c.2 times dividend cover."

Trading Statement

Dechra Pharmaceuticals, Rotork, Dialight, Persimmon, FBD Holdings, Keller, Hiscox, Senior, Ascential, Verona Pharma, Bunzl, Associated British Foods

Tuesday 28 February

Trading Statement

Waterman Group, Swallowfield, Ricardo, Go-Ahead Group, Redde, Johnson Service, Jardine Lloyd Thompson, IWG, Fresnillo, GKN, Novae Group, St James's Place, Taylor Wimpey, Sphere Medical, Provident Financial, Meggitt, Moneysupermarket.com, Laird, Interserve, Direct Line Insurance, Dalata Hotel, Croda International, Bodycote, Elementis, Derwent London, Babcock International

AGM/EGM

Sage Group

Wednesday 1 March

Trading Statement

Carillion, Inchcape, RIT Capital Partners, Evraz, Empresaria, Fisher (James), Livanova, Man Group, ITV, Admiral, International Personal Finance, Elementis, BBA Aviation, Riverstone Energy

Thursday 2 March

Last September's damaging profits warning started a series of events that ended up halving Capita's share price in less than three months, ending at a 10-year low. They've bounced back a bit since, but still trade 40% below pre-warning levels.

A comprehensive review of major contracts this week caused Capita to write off £50 million of legacy contracts, with £40 million written down as a charge to underlying results.

Michael Donnelly, an analyst at Panmure Gordon, is no fan. He's just downgraded earnings per share (EPS) estimates for 2016 by over 4% to 62.7p, and by 13% for 2017 to 54.2p. He still rates the shares a 'sell' and thinks they're worth only 440p.

"We believe that the shares trade on a levered FCF yield (2017) of only 8%," Donnelly says. "This is simply not enough for the sizable and increasing risks that we see in the business."

Trading Statement

Schroders, Spire Healthcare, Travis Perkins, Arrow Global, Spirent Communications, Vesuvius, Sportech, Convatec Group, RPS, Gocompare.com, Dairy Farm International, Jardine Matheson, Merlin Entertainments, Melrose, Capita, Hunting

AGM/EGM

Local Shopping REIT

Friday 3 March

Trading Statement

WPP, London Stock Exchange, Berendsen, STV Group

AGM/EGM

Actual Experience

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.