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(Alliance News) - Housebuilder Persimmon on Wednesday said its 2020 results will include a GBP75 million provision to address cladding issues.
"As first and foremost a builder of traditional family homes, the group has not been a major developer of high-rise buildings. We believe we account for less than one percent of all high-rise developments. However, in the past we have built multi-storey buildings which met all the fire safety rules and regulations in place at the time, but which used cladding materials which may now be considered unsafe and require removal," the company explained.
"The group believes strongly that it has a responsibility to step forward and tackle this issue head-on. Persimmon has therefore made a provision of GBP75 million in its 2020 results to pay for our contribution to any necessary work on 26 buildings that may be affected by the cladding issue."
Flammable building cladding came into focus following the fire that engulfed Grenfell tower, a residential tower block in London. The fire killed 72 people. The UK government is expected to announce billions of pounds in funding to help tackle the cladding crisis.
UK Housing Secretary Robert Jenrick is due to address the Commons on Wednesday, and he is expected to set out a package of measures.
According to reports cited by PA, plans under consideration include a GBP5 billion grant on top of the GBP1.6 billion safety fund that leaseholders can currently apply to.
It is also reported that grants to remove cladding will only be available to those living in buildings higher than 18 metres, with those in smaller ones having to rely on loans for the cost of the work.
Persimmon shares were down 0.3% early Wednesday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 6,568.63
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Hang Seng: up 2.0% at 30,056.53
Nikkei 225: closed up 0.2% at 29,562.93
DJIA: closed down 9.93 points at 31,375.83
S&P 500: closed down 4.36 points, or 0.1%, at 3,911.23
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GBP: up at USD1.3829 (USD1.3790)
EUR: up at USD1.2133 (USD1.2100)
Gold: up at USD1,845.63 per ounce (USD1,837.66)
Oil (Brent): up at USD61.04 a barrel (USD60.70)
(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
1700 GMT UK BoE Governor Bailey delivers Mansion House speech
0830 EST US consumer price index
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Germany's annual inflation rate was 1.0% in January, according to numbers from Destatis, in line with consensus cited by FXStreet. Monthly, consumer prices rose 0.8%, also in line with market forecasts. Numbers from Destatis also showed a 1.6% annual rise and a 1.4% monthly hike in the harmonised index. Both figures met market forecasts.
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BROKER RATING CHANGES
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BERENBERG RAISES DISCOVERIE PRICE TARGET TO 770 (660) PENCE - 'BUY'
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BARCLAYS RAISES REDROW PRICE TARGET TO 700 (645) PENCE - 'OVERWEIGHT'
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BARCLAYS RAISES DUNELM GROUP PRICE TARGET TO 1650 (1600) PENCE - 'OVERWEIGHT'
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COMPANIES - FTSE 100
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Paper-based packaging firm Smurfit Kappa's revenue in the year ended December 31 fell 5.8% to EUR8.53 billion from EUR9.05 billion. However, profit rose as finance costs were reduced. Smurfit posted pretax profit of EUR748 million, up 10% from EUR677 million. Finance costs fell 28% to EUR179 million from EUR247 million. Earnings before interest, tax, depreciation and amortisation fell 8.5% to EUR1.51 billion from EUR1.65 billion, though Chief Executive Officer Tony Smurfit noted earnings came in ahead of guidance. "Driven by strong secular trends such as e-commerce and sustainability, the outlook for our industry is increasingly positive," CEO Smurfit said. The company recommended an 87.4 cents final payout, to go with the 80.9 cents interim payout and a 27.9 cents dividend it paid in December. Smurfit had pulled its final dividend for 2019 in the wake of the Covid-19 crisis. Its interim dividend in 2020 was more than double the 27.9 cents from the prior year and equal to the final 2019 dividend it had pulled due to the virus crisis. It then paid the same 27.9 cents as a second interim dividend to catch up.
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The International Air Transport Association is in talks with the UK government about a coronavirus vaccination app for travellers, according to its chief executive. The trade body is working with carriers on the TravelPass app, which will give people flying abroad the ability to share their coronavirus test and vaccination results. Alexandre de Juniac told the BBC's Newscast podcast that the app could be rolled out from April and that discussions with the UK government have been "very fruitful". "We should not anticipate, but the UK authorities are among those with whom we have the closest link on this element," he said. De Juniac confirmed reports that the app is being trialled by IAG, the parent company of British Airways.
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COMPANIES - FTSE 250
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Housebuilder Redrow said revenue in the six months ended December 27 soared 20% to GBP1.04 billion from GBP870 million. Pretax profit rose 11% to GBP174 million from GBP157 million. The company confirmed the reinstatement of its interim payout, with a 6.0 pence dividend per share. Redrow back in November said it would pay an interim dividend, after putting payouts on hold back in March of last year, in the wake of the Covid-19 crisis. Since then, the UK housing market as bounced back. It was one of the first sectors to re-emerge from the initial lockdown in the spring of last year, and it has been spared from the most stringent measures imposed since then.
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Retailer Dunelm said sales in the six months to December 26 soared 23% year-on-year to GBP719.4 million from GBP585.0 million. Pretax profit rose 34% to GBP112.4 million from GBP83.6 million. Dunelm posted "very strong sales growth of 23%, despite the impact of store closures in the second quarter". "Sales were particularly strong in the first quarter, before we had to navigate the various restrictions which impacted the remainder of the period. These restrictions have become more severe in the second half of our financial year, with all but one of our stores currently closed, although we continue to serve customers through our digital channels, which have significantly advanced during the last year, CEO Nick Wilkinson said. Dunelm declared a 12.0p interim payout, after no dividends were paid in financial 2020.
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COMPANIES - GLOBAL
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Apple has teamed up with Taiwan Semiconductor Manufacturing on micro OLED displays at a "secretive" Taiwan facility, Nikkei Asia reported. Nikkei Asia cited "sources briefed on the matter" who said Apple is planning to use this new technology for "upcoming augmented reality devices". According to Nikkei Asia's sources, who are "familiar with the projects", Cupertino, California-headquartered Apple intends to develop these micro OLED displays, to make much thinner and smaller displays that don't need as much power so are suited for use in wearable devices like those used for augmented reality.
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Dutch brewer Heineken said a restructuring will result in 8,000 job cuts. The announcement came as Heineken reported a 49% drop in net profit to EUR1.15 billion in 2020.
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Wednesday's Shareholder Meetings
GCP Infrastructure Investments Ltd - AGM
Glenveagh Properties PLC - EGM re replacing Crest with Euroclear Bank
Grainger PLC - AGM
Hibernia REIT PLC - EGM
Keystone Investment Trust PLC - GM re change of name and investment policy
Mothercare PLC - GM re delisting & application to admission to AIM
Ramsdens Holdings PLC - AGM
RWS Holdings PLC - AGM
Tharisa PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
