Builders soar as Crest Nicholson restores divi
DIVIDEND-STARVED investors piled into housebuilder Crest Nicholson after it laid out plans to resume its shareholder payouts.
Business has rebounded amid the recovery in the housing market, which has been driven by pent-up demand and the Government’s stamp duty cut.
this means it will be able to reinstate dividends at the end of the first half, it said in a full-year trading update. as well as the industry-wide bounceback, Crest Nicholson’s homes have also caught the attention of buyers who were inspired to move out of big cities during lockdown.
the company, which builds homes in the south of England commuter towns and the Midlands, said expectations that there will be a permanent shift to flexible working had ‘featured strongly in customers’ reasons’ for choosing their homes.
Crest Nicholson’s trading was so strong during the second half that profits will be ‘significantly above’ City forecasts of £38m and will come in at the top end of a previously given range of £35m to £45m. this was in stark contrast to a glum update in June, when it racked up a £51m loss after lockdown had halted construction and virtually wiped out house sales. It will be able to keep building during the next round of restrictions that will kick in tomorrow. Crest Nicholson barrelled to the top of the FtsE 250 leaderboard as shares rose 16.5pc, or 36p, to 253.6p.
and the effect was contagious – with housebuilder peers Taylor Wimpey (up 6.9pc, or 7.45p, to 116.05p), Barratt Developments (up 4.1pc, or 20.3p, to 515.2p) and Persimmon (up 4pc, or 93p, to 2421p) all closing higher. recovery was a key theme on the market yesterday and drove some of the day’s biggest risers.
thread maker Coats Group was the second- highest mid- cap gainer after putting its profit estimates at up to £85m – far higher than was expected.
sales went from being 45pc below last year’s levels during the second quarter to 15pc lower between July and the end of October. Coats advanced 11pc, or 6p, to 60.4p.
Engineering group Weir also said business was on the up and in particular that mining work was ‘relatively robust’ in the third quarter, sending shares higher by 3.5pc, or 51.5p, to 1509.5p.
But not every firm was so lucky, with aerospace parts maker Senior warning profits and cash would be hit by a decision to extend its already wide-ranging restructuring programme after global air travel stayed much lower than the industry had hoped for. shares fell 1.1pc, or 0.6p, to 54.9p.
the FTSE 100 closed up 2.3pc, or 131.80 points, at 5786.77, while the FTSE 250 rose 1.8pc, or 311.18 points, to 17491.7, ahead of the Us election results.
traders also cheered a series of dealmaking announcements.
Telit Communications confirmed City chatter that it was being eyed up as a takeover target. It has been approached by DBaY advisors, though discussions are at an early stage.
telit, a scandal-hit technology company and tesla supplier that connects everyday devices to the internet, also rejected another proposal from a group called Lantronix, though the pair are still in talks which could possibly lead to a higher offer. Its shares jumped 9.8pc, or 13.6p, to 152.4p.
British American Tobacco also rose – climbing 1pc, or 25.5p, to 2488.5p – after it bought the division of Us-based Dryft sciences which makes nicotine pouches.
they are an alternative to cigarettes and vaping – which has dived during the pandemic – that can be popped under the upper or lower lip and kept there while nicotine and a flavour is released.