Next week on the stock market

Berkeley’s London focus and higher-end product means it offers something different to the other large housebuilders. First-half revenue of £1.2bn was broadly flat year-on-year. A 14.2% fall in the number of house sales was offset by higher average selling prices of around £624,000 as the mix of properties sold shifted.

Next week, the group’s set to give markets a look into its fourth-quarter trading. We expect to hear that demand in the key London area has held up better than in most other parts of the country, thanks to both its domestic and international appeal. The long-term profit outlook will also be in focus, with Berkeley expecting at least £1.5bn of pre-tax profits over the three financial years ending April 2026. Markets are looking for full-year pre-tax profits of around £544mn this year, which if all is tracking well would put that target well within reach.

Persimmon’s already told investors that its full-year sales rates fell around 16% in 2023, as high interest rates and the removal of the Help-to-Buy scheme have weighed on affordability. As a result, total completions of new homes were reduced by around a third to 9,922. These lower volumes, coupled with build-cost inflation, mean operating profit margins are set to roughly halve to around 14% when Persimmon reports full-year numbers on Tuesday.

There was a “strong improvement” in fourth-quarter sales rates and we’re keen to see if this uplift has carried over to the new year. Markets expect operating profits to grow at double-digit rates to around £398mn in 2024. And with early signs that challenges for buyers are easing, we’re keen to hear where Persimmon lays the marker for its 2024 guidance.

Vistry looks set to report full-year underlying revenue of around £4.0bn in next week’s results, down from £4.5bn in the prior year. This comes as the number of new homes completed fell by 914 to 16,124 and average selling prices slipped 4.2% lower to around £277,000.

We’re hoping to hear more details on how the group’s transition away from traditional housebuilding to a partnerships-focused model has gone. This new strategy means that the group’s partners foot most of the bill, which reduces Vistry’s risk and frees up cash to deploy elsewhere in the business. But it comes at a cost – the margins on this kind of work aren’t as juicy, and markets are expecting operating margins to fall around three percentage points to 11.6% as a result.