More than £1billion was wiped off Britain’s housebuilders as the slowdown in the property market continues to bite.
Traders offloaded shares in their droves yesterday over fears the prolonged slump will hit profits.
Builder Crest Nicholson reported a 2 per cent drop in profits to £74.8million for the six months ending April 30, despite posting a 13 per cent increase in revenue to £473.8million over the period.
Operating in the South of England, it was stung by a combination of rising building costs and flat growth in house prices, it said in its half-year results.
House prices have been rising much more slowly than before the 2016 EU referendum, which knocked consumer confidence.
Dumped: Traders offloaded shares in UK housebuilders yesterday over fears the prolonged slump will hit profits
The announcement knocked 4.1 per cent, or 18.2p, off the builder’s shares, which ended the day at 428p.
Chief executive Patrick Bergin said: ‘Our experiences of generally flat pricing against a back-drop of continuing build cost inflation has had an adverse impact on our margins and we have taken a number of actions to seek to offset build cost pressures.’
The warning weighed heavily on the share prices of other builders as traders feared for the outlook for the property market.
Bellway shares slid 3.6 per cent, or 122p, to 3287p despite its boast that it is on track to sell in excess of 10,000 homes this year for the first time in its history.
In an upbeat trading update, the builder predicted another year of ‘substantial earnings growth’.
Stock Watch – Acacia Mining
Acacia Mining shares slumped following the death of a worker at its North Mara gold mine in Tanzania.
Sadock Crispin Tindahinile, who was working for a contractor, was hit by a reversing vehicle at the Gokona deposit on Monday and died a short while later.
The firm says it is investigating the incident and has informed the authorities.
Acacia expressed its ‘sincere condolences’ to Tindahinile’s family and colleagues.
Shares in the miner fell 3.8 per cent, or 4.6p, to 117.6p.
But Crest’s warning rang more loudly in the ears of investors.
Berkeley, Barratt Developments, Redrow and Bovis were all off more than 2.7 per cent yesterday, while Persimmon and Taylor Wimpey were down 2.5 per cent and 2.1 per cent respectively.
The FTSE 100 trundled 0.43 per cent, or 33.62 points, lower to 7703.81 while the FTSE 250 fell 0.36 per cent, or 77.13 points, to 21241.64.
British Gas-owner Centrica was one of the blue-chip index’s biggest risers after receiving a ratings boost to ‘buy’ from Jefferies.
The broker predicted Centrica would see a material earnings upgrade from the recent rally in gas and oil prices. Shares ticked up 3.7 per cent, or 5.4p, to 150p.
RBC Capital Markets warned trendy fashion label Superdry it was ‘not out of the woods yet’ as it slashed the retailer’s target price by 500p to 1400p.
In a note, RBC said the fashion brand’s online sales were eating into store profits and told investors they would have to adjust to lower revenue growth. Shares sunk 4 per cent, or 51p, to 1220p.
Morgan Stanley named IMI as its favoured pick in the fluid control engineering space at the expense of Rotork.
It upgraded IMI to ‘overweight’ with a target price of 1410p, arguing now is ‘one of the best entry points’ to invest with its shares at an eight-year low compared to its peers.
The investment bank downgraded Rotork to ‘equal weight’, arguing its shares look pricey compared with others in its sector. IMI climbed 1.6 per cent, or 19p, to 1193p. Rotork fell 1.2 per cent, or 4p, to 334p.
Shares in Oxford Instruments soared as the high-tech tool maker for the research industry swung back into the black.
It posted a £34.2million pre-tax profit on revenue of £296.9million in the year to March 31, up from a £26.2million loss the year before. Shares leapt 9.5 per cent, or 87p, to 1002p.
Motorpoint, the UK’s largest independent car dealer, flopped following a broker downgrade – despite posting a 71 per cent increase in profit to £20million in the year to March 31.
Numis slashed the firm to ‘add’ from ‘buy’ even though its shares have risen 77 per cent over the past year.
Despite the downgrade, Numis said it remains positive about growth prospects. Shares stumbled 5.7 per cent, or 15p, to 246p.