The economic recovery of the nation is underway. Businesses in the UK are rebounding well from the effects of the 15-month lockdown and analysts are predicting that several sectors will grow in September and beyond. Here are two FTSE 100 shares I am looking to buy to capitalise on the recovery.
Housing giant
Housebuilder Persimmon (LSE:PSN) recently released its first-half (H1) 2021 results and the numbers show the resilience of the housing sector in the UK.
The market is buzzing at the moment with the huge demand for living spaces driving prices up. Homes are becoming a larger part of our lives as a result of companies now allowing employees to work from home, even after the pandemic.
This surge has helped the builder generate a total revenue of £1.84bn in H1 of 2021. After a tough year, financial figures are now above 2019 pre-pandemic levels. Cash reserves have risen 56% from 2019 and stand at £1.32bn. Also, average weekly sales for H1 2021 is 20% ahead of 2019.
The company is expecting 10% growth in sales by the end of 2021 with first-time buyers accounting for 50% of sales in the owner-occupier market. I see this as a positive sign for the housing sector as it shows that lower-priced homes are much less affected by the withdrawal of the UK stamp duty incentives that were in effect during the pandemic.
Persimmon also has plans to resume its capital returns programme at 235p per share. The company has announced a 110p dividend payout across H2 of 2021. Along with the 125p interim dividend paid in H1 2021, current yield stands at 8.3%.
Many analysts fear that the cyclical nature of the industry could cause a fall in prices after a decade of inflation in the sector. However, large cash reserves allowed Persimmon to acquire 10,272 plots in 2021. As a result, I feel that the company is well-positioned to counter any future fluctuations. The strong market share, healthy cash reserves, and huge 8% dividend yield are reasons enough for me to add Persimmon to my list of FTSE 100 shares to buy in September.
Luxury fashion brand
High-end fashion company Burberry (LSE:BRBY) has seen share prices plummet 10.3% in the last month. This was triggered by new trade regulations in China, a major market for the brand. However, I think this presents an excellent buying opportunity at an entry price of 1,886p.
The first-quarter trading update for 2021 looks positive and shows an 86% jump in revenue which currently stands at £479m. Store sales have increased 90% since 2020 which is 1% higher than 2019 pre-pandemic levels.
The company’s strong presence in the Asia Pacific region is a big plus for me and I believe that the buying potential of growing economies there is expanding. Sales in the region grew 27% in 2021 with big jumps in Mainland China and Korea. Sales across the Americas grew a whopping 341% after lucrative partnerships with celebrities like Kendall Jenner and FKA Twigs.
Though the redistribution of wealth program in China could affect short-term sales, I think the target market for Burberry will remain unaffected. The luxury brand is well poised for growth and shares at its current price are very attractive, making it a must-have on my list of UK shares to buy in September.
