Week Ahead: Global Market Wobbles | Persimmon | Beazley

5th Aug '24 by Keelan Cooper

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Good morning and welcome to the Week Ahead at the start of a slightly quieter (and hopefully less bruising) week for private investors.

The first cut in interest rate from the Bank of England since 2020 (to 5% on Thursday) wasn’t enough to ease international investors’ concerns about the state of the US economy. Last week we saw disappointing jobs data, which sparked mutterings that the US Federal Reserve has left it too late to cut interest rates. As earnings season starts to come to an end, investors have started selling.

The S&P500 closed the week down more than 2%, with the FTSE All Share down 1.5%.

There is still a strong handful of financial results on both sides of the pond to take a look at this morning (see table for the full calendar). The pharmaceutical sector (always a hot industry in election year) has a few companies announcing numbers, which Megan will look at later. But for now, we’ve taken a look at two British companies which have been on a strong run.

Day	UK interim results	US quarterly results	EU quarterly results
Monday - 5th August		Tyson Foods CSX	Infineon Technologies
Tuesday - 6th August	InterContinental Hotels Group Travis Perkins Rotork SIG	Amgen Caterpillar Teradata Molson Coors Brewing	Zalando Bayer Adecco
Wednesday - 7th August	Ibstock Glencore CLS Hiscox	CVS Health Walt Disney Ralph Lauren Occidental Petroleum Monster Beverage Zimmer	Siemens Beiersdorf Puma Novo Nordisk
Thursday - 8th August	Persimmon Beazley Hikma Pharmaceuticals Lancashire Holdings CRH	Eli Lilly & Co Gilead Sciences Murphy Oil	Allianz Deutsche Telekom Zurich Insurance Group
Friday - 9th August	Bellway Hargreaves Lansdown		Bechtle

Persimmon - On the road to recovery?

A few of the UK’s largest housebuilders will be providing updates next week. Roland Head recently wrote an excellent piece on the UK housing sector backdrop and what might come next for the housebuilders here. The article assesses the financial health and outlook of major UK housebuilders, noting that despite past profit surges, current valuations might still offer investment opportunities, especially if the sector's conditions improve as anticipated.

For now, however, we will focus…

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Keelan Cooper

10th Aug '24

Despite a challenging week in the markets, Beazley (LON:BEZ) and Persimmon (LON:PSN) demonstrated resilience. Beazley’s shares surged nearly 12% following the release of its half-year results, while Persimmon managed to recoup all its early-week losses.

Beazley reported a record profit of $728.9 million for the first half of 2024, nearly doubling the $366.4 million from the same period in 2023.

The company achieved a 7% increase in insurance written premiums, reaching $3.12 billion, with net insurance written premiums up 10% to $2.59 billion. The undiscounted combined ratio improved to 81%, down from 88% in 2023, reflecting enhanced underwriting efficiency. Return on equity rose significantly to 28%, driven by strong performance in the property sector, particularly in the US E&S market, and successful innovations in cyber security offerings.

Beazley is now on track to complete a $325 million share buyback by year-end and has reiterated its guidance for high single-digit premium growth, with an updated full-year combined ratio target of around 80%.

Persimmon also reported solid results for the first half of 2024, with new home completions rising 5% to 4,445 and total revenue increasing by 11% to £1.32 billion compared to the same period in 2023. The average selling price of new homes also saw a modest 3% increase.

Despite embedded build cost inflation, underlying operating profit remains steady at £152.3 million, with an operating margin of 13%. The company is on track to meet the top end of its full-year completion guidance of around 10,500 homes.

Persimmon’s private forward order book grew by 28% year-on-year to £1.12 billion, reflecting strong consumer demand amid improving market conditions and government planning reforms. The company's landbank also now sits at 81,545 plots, providing a robust platform for future growth.

Week Ahead: Global market wobbles | Persimmon | Beazley

Persimmon - On the road to recovery?

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Keelan Cooper

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