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(Alliance News) - Stocks in London are called to open slightly higher on Wednesday, with all eyes on the property sector.
FTSE 100 housebuilder Barratt Developments announced that it will be taking over FTSE 250-listed Redrow.
Both firms announced interim results, too, on Wednesday. They have both slashed dividends, as revenue and profit dropped.
Also on Wednesday, new data from Halifax showed that UK house prices rose for the fourth consecutive month in January.
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 0.1% at 7,688.70
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Hang Seng: down 0.3% at 16,094.81
Nikkei 225: closed down 0.1% at 36,119.92
S&P/ASX 200: closed up 0.5% at 7,615.80
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DJIA: closed up 141.24 points, 0.4%, at 38,521.36
S&P 500: closed up 11.42 points, 0.2%, at 4,954.23
Nasdaq Composite: closed up 11.32 points, 0.1%, to 15,609.00
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EUR: up at USD1.0770 (USD1.0749)
GBP: up at USD1.2620 (USD1.2590)
USD: down at JPY147.84 (JPY148.09)
Gold: down at USD2,035.33 per ounce (USD2,036.43)
(Brent): flat at USD78.56 a barrel (USD78.57)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
07:00 EST US MBA mortgage applications
08:30 EST US trade balance
10:30 EST US EIA Crude oil stocks
14:00 EST US Fed Reserve Governor Michelle Bowman speaks
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UK house prices rose for the fourth consecutive month in January, according to data from Halifax on Wednesday. The Halifax house price index rose 1.3% on a monthly basis in January, after rising by 1.1% in December. The typical UK home cost GBP291,029 in January, up GBP3,924 compared to December. On an annual basis, prices rose 2.5%, having risen 1.8% in December. Annual growth was the highest since January last year. "The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market has contributed to increased confidence among buyers and sellers. This has resulted in a positive start to 2024's housing market," said Halifax Mortgages director Kim Kinnaird.
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BROKER RATING CHANGES
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Jefferies cuts Biopharma Credit to 'hold' (buy)
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JPMorgan cuts Vodafone price target to 80 (88) pence - 'neutral'
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Barclays raises Renishaw price target to 3,510 (2,920) pence - 'underweight'
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COMPANIES - FTSE 100
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Barratt said it has agreed the terms of an all-share offer for the takeover of Redrow. Under the takeover, each Redrow shareholder will receive 1.44 new Barratt shares for each Redrow share. The takeover values Redrow at GBP2.52 billion. Barratt said: "We believe that the combination will create an exceptional UK housebuilder in terms of quality, service and sustainability, delivering excellence and driving innovation for customers, employees, sub-contractors and the supply chain. The combination will bring together two companies with highly complementary geographic footprints and three highly respected brands - Barratt Homes, David Wilson Homes and Redrow - with which to accelerate the delivery of much-needed housing across the UK and provide the opportunity for shareholders to participate in future value creation in the combined group." Separately, Barratt Developments said that in the half year ended December 31, revenue fell 34% to GBP1.85 billion from GBP2.78 billion a year earlier. Pretax profit plummeted 70% to GBP157.1 million from GBP521.5 million. On the back of lower profit, Barratt slashed its interim dividend to 4.4p from 10.2p. Chief Executive David Thomas said: "During the period, we have been rigorous in carefully controlling our build activity, managing our costs, being highly selective in land buying, and driving revenue. These clear priorities have helped maintain the strength of our balance sheet despite lower levels of profitability and ensure we remain resilient and responsive through the cycle."
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DCC said that in the quarter ended December 31, adjusted operating profit was "modestly" ahead of the prior year. It said that this has been achieved despite a "volatile macro environment." Looking ahead, DCC said it continues to expect that its financial year will be another year of operating profit growth in line with expectations, and continued development activity. It expects to report full year results on May 14.
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COMPANIES - FTSE 250
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Redrow said that in the 26 weeks ended December 31, revenue fell to GBP756 million from GBP1.03 billion a year earlier. Pretax profit fell to GBP84 million from GBP198 million. On the back of the results, Redrow cuts its interim dividend to 5.0p from 10.0p. It said that the results are due to "subdued housing market". For the full year, Redrow expects to achieve revenue between GBP1.65 billion and GBP1.70 billion, as well as an underlying pretax profit between GBP180 million and GBP200 million. It added that, as reported in November, due to the subdued autumn housing market it expects the 2024 results to be towards the lower end of the range. Chief Executive Matthew Pratt said: "In recent weeks the housing market has shown signs of improvement, with increasing mortgage approvals and reduced mortgage rates with greater competition amongst lenders. This in turn has improved homebuyer confidence and raised the prospects of a return to a more stable sales market."
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OTHER COMPANIES
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Just Eat Takeaway.com named Mayte Oosterveld as its chief financial officer. Oosterveld joins from Plus Holding, a Dutch supermarket retailer. She will succeed Brent Wissink, who announced in July last year that he will be stepping down as CFO. Wissink will continue to support the company as an advisor until the end of the year. Chair Dick Boer said: "I am very pleased to welcome Mayte Oosterveld to Just Eat Takeaway.com. I have had the pleasure of working with Mayte previously at Ahold Delhaize, where she headed the Mergers & Acquisitions department, expanded her experience in leading financial planning and performance and driving the synergies of the combined company and was responsible for many transactions, including the merger with Delhaize. She will bring strong finance leadership to the management board."
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By Sophie Rose, Alliance News senior reporter
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