trading update2 Sep 2016 23:30
Outlook
There has been evidence of some weakness in the secondary housing market since our trading update on 29 June. Whilst website enquiries have increased, and we have continued to take new reservations, these have been at a lower level than we saw in the first nine months of the financial year and cancellations have been at higher levels.
Whilst it is too early to judge what medium term impact we will see from the EU Referendum result and the Bank of England's subsequent changes to monetary policy, prolonged housing market weakness, particularly in the secondary market, could affect our ability to deliver our targeted 15% volume growth previously indicated for the financial year ending 31 August 2017. There has been some improvement in customer sentiment during the month of August, however, it is too early to predict at this stage whether these improving conditions will persist into the new financial year.
The above gives the main reason for todays fall; the uncertainty in the outlook. It should be stessed perhaps that this is a trading UPDATE, ahead of the full year results for year ending 31 August, to be issued on 15 November. Hopefully by then, there will be an improvement in the market and the sentiment.
I was a little surprised by the degree of todays fall and had hoped it may finish around 190p. I have to say that there is much in what Velo says, whether we like it or not. No prediction as to where this may fall to (or not); but if I was looking to invest here, I would personally wait until there was some definite proof of a sustained recovery, even if that means I miss any bottom.
For any doubt, I do have a holding here.
Good luck all
Regards
CM
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