No respite as retirement home builder misses out
THE share price rally after Brexit gathered pace yesterday – but there was no respite for retirement home builder McCarthy & Stone.
Incredibly, the FTSE 100 index is now higher than when it closed on Thursday evening before the Brexit result was known, after advancing 3.6pc, or 219.67 points, to 6360.06.
House builders breathed a sigh of relief as investors granted them a reprieve for the day. The latest Nationwide House Price Index showed property prices had increased 5.1pc over the past year, and 0.2pc between May and June, which perhaps helped ease concerns about the market briefly.
Taylor Wimpey climbed 8.9pc, or 10.9p to 132.9p; Persimmon advanced 7.4pc, or 100p to 1444p; and Barratt rose 7.3pc, or 27.7p to 408.7p. But they all still have a lot of ground to make up.
Analysts at Hargreaves Lansdown were quick to point out that the rapid rises in some stocks masked the misfortune of others.
Since last Thursday a third of FTSE 100 stocks have lost more than 10pc of their value. One in seven are down more than 20pc.
Retirement house builder
McCarthy & Stone didn’t make it into the black despite an upbeat trading update. The group said it was continuing to capitalise on the opportunity of a growing ageing population and a lack of retirement housing supply.
In the first 43 weeks of its financial year, the firm released 2,137 units. It said it had made progress in building its land bank and had received 43 full planning consents. McCarthy said that in normal market conditions it would expect to deliver a 20pc sales increase over the year but that the referendum result might impact on timing and costs.
Shares had slipped up to 8pc by the early afternoon but recovered to finish the day down 0.84pc, or 1.4p to 165.9p. Healthcare stocks have been popular in recent days. The defensive nature of these companies, which have an almost guaranteed demand for their products, makes them attractive in uncertain times.
Shire climbed yesterday when it announced positive efficacy and safety results after testing a drug to treat adults with ADHD. The pharma firm said the drug had met its main goal in a four-week study across 275 adults aged 18 to 55. In testing, patients given a dosage of the drug did significantly better than those who took a placebo, it said.
The group now has a database of 16 clinical studies which evaluated more than 1,600 subjects. Shire said the programme was on track for potential US approval in the second half of 2017. It was estimated around 4.4pc of adults in the US – around 10.5m people – have ADHD. Shares rose 5.4pc, or 228p to 4472p.
Ted Baker was back in fashion after several months in the doldrums. Shares in the retailer were up 13.6pc, or 299p to 2490p as investors looked for bargains. A trading update earlier this month showed online sales had grown 32pc while overall retail sales had increased 10pc in the 19 weeks to June 11. Shares in Brammer more than halved after a profit warning. The industrial services company said it had seen a significant slowdown, with sales per working day in May down 3pc compared with last year.
The firm said that weakness had not reversed as expected but rather had continued into June. Pre-tax profits for the first half of the year are now expected to be around £5m, compared with £14.1m last year.
Brammer is in the midst of recovery plans, with stock reduction in progress, which is expected to trim stock by £30m by the end of September. The board is now reviewing whether it is appropriate to declare an interim dividend. It will provide an update in August.
Investec almost halved its target price for the stock to 95p. The bleak outlook hit shares hard. They slumped 56.2pc, or 80.2p to 62.5p.
Work Group suspended its shares after it announced its audited report and accounts for the year to December 31 would not be ready by June 30. Shares in the Aim-listed recruitment and consultancy business are up 82pc so far this year.