Next week on the stock market

Berkeley Group will be the last major UK housebuilder to give an update on performance in 2025. The general trend among peers is that market forecasts have been too optimistic as limited house price movements, and the return of modest build cost inflation have put pressure on profitability in the sector.

Industry data points toward demand in London remaining broadly stable in the period. Given Berkeley’s focus in the capital and higher-end product, with an average sale price of £600,000, the group offers something different from the other large builders. However, buyer preferences did shift towards slightly cheaper properties in the first half, and we’re keen to see whether that trend continued when the group gives its third-quarter update next week.

Berkeley’s currently guiding for pre-tax profits to fall around 6% to £525mn this year, and we’re cautiously optimistic that this target remains within reach despite ongoing affordability challenges for buyers.

Since Persimmon already provided a sneak peek into its performance back in January, next week's full-year results are unlikely to bring many surprises. We’ve already heard that sales rates rebounded sharply last year due to increased buyer demand. And better-than-expected completion volumes saw 2024 pre-tax profits guided towards the top end of its £349-390mn target range, marking a return to growth after two years of declines.

Our main focus will be on the outlook for 2025 though, with markets expecting further growth in pre-tax profits to around £380mn. Build cost inflation is on the rise again, but thanks to Persimmon’s in-house materials businesses, this impact should be limited to low single digits. And with Persimmon’s houses typically being priced more than 20% below the national average, we expect to see demand hold up relatively well even if the current affordability pressures persist.

Halma’s a steady and well-run business that may not grab headlines but has delivered consistent results. Next week’s trading update will shed light on whether mixed market conditions are having any impact on the relatively positive outlook for the year. There’s no specific guidance for organic revenue growth, but with an 11.5% rise at the half-year mark, investors will be hoping to see the momentum continue. The Healthcare segment is worth keeping an eye on, with early signs of improvement coming through at the half-year mark after a period of softness.

Acquisitions are a key part of the strategy so updates on the integration of those already bought, plus the pipeline of potential new deals, will be key. Halma has a strong history of making attractive bolt-on acquisitions and that’s a trend we expect to continue.