Citywire for Financial Professionals
Stay connected:

View the article online at http://citywire.co.uk/money/article/a1128081

‘Miserable’ house builders push FTSE into the red

The FTSE 100 edged lower with house builders struggling after half-year profits fall at Crest Nicholson but the pound rose on positive jobs figures.

 
‘Miserable’ house builders push FTSE into the red
 

Housebuilders struggled, making up four of the 10 biggest FTSE 100 fallers, after what one analyst called ‘miserable’ half-year results from Crest Nicholson (CRST) and subdued house price data.

The UK’s main stock market index shed 13 points, or 0.1%, to 7,723  and the FTSE All-Share benchmark dipped seven points, or 0.1%, to 4,258.

Crest, a FTSE 250-listed housebuilder, dropped 6% to 420p with Accendo Markets analyst Artjom Hatsaturjants blaming increased costs for ‘devouring pre-tax profits’ and knocking margins. 

‘With the company unable to significantly upgrade its pricing structure as the housing sector was being hit by Brexit uncertainties, there was precious little Crest Nicholson was able to achieve to offset rising cost pressure,’ he said.

Markets were left ‘unimpressed’ with the lack of cost control at Crest and a more general downturn in the UK housing market, with the latest Halifax house price data pointing to ongoing weak pricing.

Hatsaturjants added: ‘It is not clear if the outlook for the housebuilder will improve substantially’, and this spilt over into other housebuilders. Barratt Developments (BDEV) was the biggest faller, down 2.2% at 566p, followed by Berkeley Group (BKG), which dropped 2.1% to £42.12. Persimmon (PSN) fell 1.5% to £28.15 and Taylor Wimpey (TW) 1.4% off at 186p.

The pound picked up at $1.3407 against the dollar after the Office of National Statistics said the number of unemployed in the UK fell by 38,000 to 1.42 million in the three months to April, a second month at a record employment rate of 75.6%.

Job creation still isn’t translating into higher wages however, with regular pay growth now actually weaker. Basic pay growth slowed to an annual 2.8%  in the last quarter – down from 2.9% a month ago. Total pay growth, including bonuses, also slowed from 2.6% to 2.5%.

XTB analyst David Cheetham said employment data was ‘pretty solid overall’ despite wage growth missing consensus forecast.

‘The squeeze on real wages seems to be alleviating somewhat, as inflation has drifted back towards target after peaking near the back-end of last year and we’ll get the latest consumer price index release our tomorrow, which is expected to remain at 2.4%,’ he said.

 

 

 

 

1 comment so far. Why not have your say?

Awesome Dave

Jun 12, 2018 at 14:22

Crest Nicholson did you say? Now let me think. Wasn't that one of Mr Woodford's more recent forays into losing his investors yet more money?

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire Guide to Investment Trusts


In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.

Watch Now

More about this:

Look up the shares

  • Crest Nicholson Holdings PLC (CRST.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Barratt Developments PLC (BDEV.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Berkeley Group Holdings PLC (BKGH.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Persimmon PLC (PSN.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Taylor Wimpey PLC (TW.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them

More from us

Archive

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Read more...

The Expert View: CYBG-Virgin, Cineworld & Indivior

by Michelle McGagh on Jun 19, 2018 at 05:30

Sorry, this link is not
quite ready yet