(Alliance News) - Housebuilder Barratt Developments on Wednesday said it has entered the new financial year with "cautious optimism", just as data from Nationwide showed UK house prices recovered from a recent dip to reach new all-time highs in August.
For the financial year ended June 30, Barratt's revenue fell 28% to GBP3.42 billion from GBP4.76 billion last year and pretax profit almost halved to GBP491.8 million from GBP909.8 million.
Total completions fell 29% to 12,604 homes from 17,856 last year, while Covid-19-related costs came to GBP74.3 million.
"While Covid-19 has had a significant impact on our results, our priority has been to keep our people safe, mitigate the effect of the pandemic on our business and be able to emerge from the crisis in a resilient position. Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism," said Chief Executive David Thomas.
In terms of current trading, Barratt said it has seen a substantial increase in home completion volumes in the eight weeks to August 23, which were up 62% compared to the prior period at 1,439 homes due to "pent up demand".
Also on Wednesday morning, Nationwide showed UK house price growth picked up to 3.7% in August from 1.5% in July. On a monthly basis, house prices rose by 2.0% in August, after taking account of seasonal factors, following a 1.8% rise in July.
Robert Gardner, Nationwide's chief economist said: "House prices have now reversed the losses recorded in May and June and are at a new all-time high. The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.
"This rebound reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing. Behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.8% at 5,908.20
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Hang Seng: flat at 25,173.25
Nikkei 225: closed up 0.5% at 23,247.15
DJIA: closed up 0.8% at 28,645.66
S&P 500: closed up 0.8% at 3,526.65
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GBP: lower at USD1.3362 (USD1.3414)
EUR: lower at USD1.1898 (USD1.1946)
Gold: lower at USD1,964.76 per ounce (USD1,974.90)
Oil (Brent): firm at USD45.98 a barrel (USD45.86)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
11:00 CEST EU PPI
09:30 BST UK House price index
08:15 EDT US ADP national employment report
10:30 EDT US EIA weekly petroleum status report
14:00 EDT US Beige Book
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UK Prime Minister Boris Johnson will face the wrath of MPs when he returns to the Commons after presiding over a series of U-turns that have soured Conservative backbench opinion towards the government's handling of the coronavirus pandemic. He will face critics from both sides of the House on Wednesday during his first Prime Minister's Questions since Parliament's summer recess began on July 22. As MPs started returning, Johnson insisted his government has not been blown off course by Covid-19, but acknowledged that "sometimes it is necessary" to change direction in "response to the facts as they change". His defence came as a series of policy U-turns increasingly angered backbench Conservative MPs, with one describing events as a "mega-disaster from one day to the next". Questions remain over whether A-level and GCSE exams will be delayed next year amid continued disruption, and whether Portugal and Greece will be added to England's quarantine list. Scotland will tell travellers returning from Greece to isolate for 14 days, while Wales will do the same for those coming back from the island of Zante, but England has not yet decided to reimpose the measure.
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Shop prices in the UK fell in August, data showed, with retailers running promotions in a bid to get customers through the doors again following Covid-19 lockdowns. Shop prices fell by 1.6% year-on-year in August, a greater decline than the 1.3% drop seen in July, numbers from the British Retail Consortium-Nielsen shop price index showed. The six-month average price decline stands at 1.5% with the 12-month average fall at 1.0%. Leading the August declines were non-food prices, which fell 3.4%, up from a 2.9% drop in July. Food inflation, meanwhile, eased to 1.3% in August from 1.5% in July. "Consumers will welcome another month of falling prices in shops. The faster rate of decline was driven by cheaper Non-Food goods, as many retailers have continued to run promotions and sales in order to entice customers to spend and make up for lost ground during lockdown," BRC Chief Executive Helen Dickinson said.
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Japan's ruling party will vote on September 14 on Prime Minister Shinzo Abe's replacement, an official confirmed Wednesday, as powerful chief cabinet secretary Yoshihide Suga consolidated his frontrunner status in the race. The Liberal Democratic Party's general council approved the date at a meeting, with candidate registration set for September 8, an official told AFP. A parliamentary vote that is expected to endorse the LDP's new leader will confirm the country's next prime minister, most likely on September 16.
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BROKER RATING CHANGES
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JPMORGAN CUTS FERGUSON TO 'NEUTRAL' ('OVERWEIGHT') - TARGET 7900 PENCE
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KEPLER CHEUVREUX RAISES HUNTING TO 'BUY' ('HOLD') - TARGET 250 PENCE
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MORGAN STANLEY INITIATES AGGREKO WITH 'UNDERWEIGHT' - TARGET 400 PENCE
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COMPANIES - FTSE 100
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Consumer goods giant Unilever will replace 100% of the carbon derived from fossil fuels in its cleaning and laundry products with renewable or recycled carbon, the company has announced. The company said the move would transform the sustainability of cleaning and laundry brands like OMO (Persil), Sunlight, Cif, and Domestos. Many cleaning and laundry products contain chemicals made from fossil fuel feedstocks, which are a non-renewable source of carbon. Unilever says its move to renewable or recycled sources of carbon for these chemicals is a deliberate shift away from the fossil fuel economy. The step is a component of Unilever's Clean Future programme designed to change the way its cleaning and laundry products are created, manufactured, and packaged. The programme is aimed at helping Unilever deliver its pledge of net zero emissions from its products by 2039.
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COMPANIES - FTSE 250
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Wizz Air said it flew 2.4 million passengers in August, down 41% on the 4.0 million carried a year ago. Load factor decreased to 70.9% from 96.3%.
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Computacenter said the successful trading performance seen in the first half of the year has continued for the first two months of the second half. The IT services provider said "it has become clear" that the likely outturn for the year as a whole will be "materially above" the company's previous expectations. It will report interim results next Wednesday.
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Domino's Pizza said Neil Smith has been appointed as chief financial officer on a permanent basis. Former Ei Group CFO Smith was appointed as Domino's interim CFO in April.
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COMPANIES - MAIN MARKET AND AIM
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Ryanair said it carried 7.0 million passengers in August, down 53% on the 14.9 million carried a year ago. The low-cost airline noted that it operated around 60% of its normal August schedule with a 73% load factor.
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COMPANIES - GLOBAL
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Roche Holdings said it will launch a SARS-CoV-2 rapid antigen test in countries which accept CE marks in late September. The pharmaceutical company also intends to file for emergency use authorisation to the US Food & Drug Administration. Launch is in partnership with SD Biosensor, with which Roche has a global distribution agreement and had launched a rapid antibody test in July.
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US President Donald Trump repeated his demand for a piece of the action from any sale of TikTok's US operations for forcing such a deal. TikTok has been at the centre of a diplomatic storm between Washington and Beijing, and Trump gave Americans a deadline to stop doing business with TikTok's Chinese parent company ByteDance – effectively compelling a sale of the app to a US company. "Well, I told them that they have until September 15th to make a deal; after that, we close it up in this country," Trump told journalists. Walmart has confirmed joined forces with Microsoft in negotiations to buy TikTok. Oracle is also reported to be interested in TikTok.
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Wednesday's Shareholder Meetings
Yellow Cake
Velocys
Aberdeen New Dawn IT
Polar Capital Technology Trust
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By Lucy Heming;Â lucyheming@alliancenews.com
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