Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Barratt Redrow’s half-year results back in January painted a mixed picture for the housing giant.
“Revenues raced ahead at double-digit rates, driven by growth in new home completions and average selling prices.
“But it turns out the group had to use more financial incentives to stimulate this buyer demand, which weighed on margins and caused first-half underlying pre-tax profits to drop 14 per cent to £200million.
“Next week’s third-quarter update is likely to strike a cautious tone, with the conflict in Iran bringing a host of challenges for the housebuilder.
“Higher oil prices look set to bring inflationary pressures to building materials.
“On top of that, market forecasts for interest rate cuts have flipped to potential rate hikes this year, which is unhelpful for buyer affordability.
“As a result, don’t be surprised to see Barratt’s full-year underlying pre-tax profit outlook wound back from prior guidance of £590million.
“Tesco heads into next week’s full-year results with good momentum, following an uptick in demand since the Christmas period.
“Easy comparable figures and continued market share gains throughout the year should help flatter performance.
“As a result, the nation’s largest supermarket is forecast to deliver like-for-like sales growth of over three per cent.
“Full-year underlying operating profit guidance was nudged to the top end of its £2.9-£3.1 billion target range back in January.
“But given Tesco’s enormous scale, broad product offerings, and cost discipline, this figure still looks a touch conservative.
“Looking further ahead, investors are keen to hear how the conflict in Iran is expected to impact the group’s costs and whether there’s been any change in recent customer spending habits.”
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