Builders pinning their hopes on Budget boost
Housebuilders were back in favour yesterday as investors cheered bullish updates from two of the sector’s biggest players and looked to the Chancellor for a budget boost.
shares in McCarthy & Stone shot up by 6.7pc, or 9.8p, to 157p, as the retirement housebuilder’s full-year results pointed to a strong forward order book for 2018.
in the 12 months to 31 August, operating profits were down 1pc to £94.2m. but revenues rose 4pc to £660.9m and the company said it has started the new financial year ‘with a strong forward order book and a robust balance sheet’.
Meanwhile, Bovis Homes rose by 2.7pc, or 30p, to 1135p, as a confident trading statement indicated the builder is on track to meet its profit expectations for the year.
rival builders berkeley Group, Persimmon and Taylor Wimpey were also among the best performers on FTse 100 as they bounced back from last week’s mauling.
The industry is anticipating changes in the Chancellor’s budget on 22 November. Analysts at Peel Hunt talked up the potential for Philip Hammond to deliver a sweetener for the sector: ‘A cut in stamp duty or direct support for much-needed retirement housing ... would provide a material boost’.
The FTSE 100 index was broadly flat, closing down 0.76 points at 7414.42, while the FTSE 250 rose 58.69 points to 19,846.60.
despite a brief spike in early trading, shares in Land Securities ended the day lower at 921p, down by 2.1pc or 19.5p. The commercial property development firm reported a 5.2pc rise in its half-year revenue profit, but warned that brexit negotiations were taking too long, with the ‘resulting uncertainty’ beginning to show in the economy. Figures published by Kantar Worldpanel on the uK grocery market saw Sainsbury’s shrug off news of a deal between rival Tesco and food supplier booker.
its shares ended the day up slightly by 0.6pc, or 1.5p, to close on 228.8p, after data showed that out of the big Four grocers it posted the strongest rise in uK grocery sales in the last 12 weeks, with an increase of 2.6pc.
However, the competition authority’s decision to allow the Tesco-booker deal appeared to spook investors in food suppliers, with both Cranswick and Premier Foods taking a hit.
Pork and poultry producer Cranswick saw shares dwindle by 2.7pc, or 83p, to close at 3020p. Meanwhile, Premier fell by 5.2pc, or 2p, to 36.5p, ahead of the release of its half-year results on Wednesday.
iT provider Computacenter, whose clients include domino’s Pizza and John lewis, enjoyed an astounding jump in its share price to 1075p, up by 8.8pc, or 87p, after it announced that full-year trading would be comfortably ahead of expectations. Credit suisse raised its price target to 1230p from 1200p on the news.
Having been previously impacted by weakness related to brexit in its domestic market, Computacenter changed tack to report that it had not seen any ‘major impact’ on its day-to-day business.
News of a €5.2bn fundraising at mid-cap asset manager intermediate Capital sent the company’s stock price soaring by 8.2pc, or 76.5p, to 1006p. The bulk of intermediate’s new capital – €4.2bn – will be used to invest in the firm’s senior debt Partners strategy.
‘Today’s results indicate that the business is in a very strong position,’ analysts at liberum said.
Also ending the day on a high was endurance sports nutrition company Science in Sport.
The brand, endorsed by sir Chris Hoy, enjoyed an 8pc, or 5.7p, increase in its share price to 77.25p after announcing a placing on its shares. science in sport hopes to raise £15m to pursue opportunities in new markets and e-commerce.