London Shares Down, Builders Have Mixed Reaction to Housing-Market News

UK Builders Have Mixed Reaction to Housing-Market News

U.K. house-builders respond in mixed fashion to corporate and macro-economic news from the sector. Barratt Developments rises 0.7{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} after the construction group forecast better-than-expected full-year adjusted pretax profit. Still, others fall as official house-price data shows prices rising 10{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} in the year to May, with property prices in London weakest and north-west England strongest. Such rapid price growth can’t continue forever and the data may well represent a peak, Garrington Property Finders says. “With the stamp-duty holiday now ended in Wales and Scotland, and tapering away in England and Northern Ireland, the temporary stimulus it provided is fading fast,” Garrington’s Chief Executive Jonathan Hopper says. “The more conventional market dynamics of demand and supply are likely to drive prices from here.”

 
Companies News: 

Challenger Energy Completes Saffron Well Study in Trinidad & Tobago, Signs Loan Term Sheet

Challenger Energy Group PLC said Wednesday that logging of the Saffron-2 well in Trinidad & Tobago has been completed, and entered a term sheet for a $10 million loan.

Blencowe Resources Shares Fall on Discounted Share Placing

Shares in Blencowe Resources PLC fell as much as 11{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} in early trade Wednesday after the company said it has raised 235,000 pounds ($324,676) via a discounted share placing, and will use the money toward its Orom-Cross graphite project in northern Uganda.

Science in Sport Swung to 1H Underlying Profit on Higher Revenue

Science in Sport PLC said Wednesday that it swung to an underlying profit for the first half as revenue rose and supply-chain efficiencies and a continued online shift helped its margin.

Kromek FY 2021 Pretax Profit Narrowed, Revenue Fell

Kromek Group PLC said Wednesday that its fiscal 2021 pretax loss narrowed though revenue fell, and it has secured a number of new orders.

IQE Expects Lower 1H Revenue, Adjusted Earnings, But in Line With Views

IQE PLC said Wednesday that it expects to report lower revenue and adjusted earnings for the first half of 2021, but that its performance was in line with management expectations.

Pharos Energy Warns of Posting 1H Loss, Revenue Fall

Pharos Energy PLC said Wednesday that revenue is expected to decline for the first half of the year when compared with the year-earlier period.

Guild Esports Chairman Steps Down, Appoints Derek Lew as Successor

Guild Esports PLC said Wednesday that its Executive Chairman Carleton Curtis has decided to step down and leave the company, and that director Derek Lew has been appointed nonexecutive chairman.

Arecor Therapeutics’ 1H Performance Progressed in Line with Views

Arecor Therapeutics PLC said Wednesday that its first-half performance was in line with expectations.

Remote-Monitoring Company Big Technologies Plans to Float on London’s AIM

Big Technologies PLC said Wednesday that it plans to float on London’s junior AIM market later this month.

Altona Rare Earths Appoints Cedric Simonet as COO

Altona Rare Earths PLC said Wednesday that it has appointed Cedric Simonet as its chief operating officer with immediate effect.

LendInvest Shares Rise in London Stock Market Debut

Shares of LendInvest PLC rose as much as 10{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} in early trade Wednesday as the company started trading on the London Stock Exchanges Junior AIM, implying a market capitalization of 281.7 million pounds ($389.2 million).

Bradda Head to Raise GBP6.2 Mln in London Float to Develop Lithium Portfolio

Bradda Head Ltd. said Wednesday that it plans to float on London’s AIM, raising 6.2 million pounds ($8.6 million) to advance development of a portfolio of lithium assets.

Miner Central Copper Resources Plans London IPO

Mining company Central Copper Resources Ltd. said Wednesday that it plans to float on London’s junior AIM and that it plans to raise funds to advance copper projects in Congo and Zambia.

Poolbeg Pharma to Raise GBP25 Mln in London IPO

Poolbeg Pharma PLC said Wednesday that it plans to raise 25 million pounds ($34.5 million) and float on London’s junior AIM on July 19.

AstraZeneca Says $39 Bln Alexion Deal Set for Completion After UK Clearance — Update

AstraZeneca PLC said Wednesday that its $39 billion acquisition of Alexion Pharmaceuticals Inc. is expected to close next week after it obtained final clearance from the U.K. Competition and Markets Authority

 
Market Talk: 

Barratt Developments Medium-Term Delivery Looks on Track

0915 GMT – Barratt Developments has posted a positive trading update, Citi’s Ami Galla says, as the home builder reported increased full-year completions in fiscal 2021 and raised underlying pretax profit guidance. Underlying consensus expectations for Barratt’s fiscal 2021 earnings are likely to move up around 3{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} to 4{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} on the back of completions, the bank says. Barratt is progressing well toward driving higher volume growth, and focus will likely remain on the underlying cost headwinds and progress on outlet growth–driving volume performance in the medium term, Galla says. Citi retains a buy rating on stock, with a target price of 878 pence. Shares are up 0.6{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} at 701.0 pence.

Barratt Developments Offers Strong Mix of Returns and Targets

0915 GMT – Barratt Developments’ recent performace has remained strong, the balance sheet has strengthened and the forward order book looks to be in great shape, with the house builder delivering a good balance of returns and sustainability targets, Peel Hunt says. While Barratt’s balance between selling-price increases and cost pressures in fiscal 2022 is likely to be favorable, the biggest challenge will be build rates and, as such, the brokerage expects to make few changes to its forecasts. “However, having seen the shares drift back by 11{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} in the past month, we believe it is time to upgrade from hold to add,” Peel Hunt says, retaining its 800 pence price target. Shares are up 0.6{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} at 701.0 pence.

Barratt Developments Seen as in Good Position Though Some Sector Caution Remains

0911 GMT – House builder Barratt Developments is well positioned going into the new financial year despite some caution around the sector, Interactive Investor analyst Richard Hunter says. Barratt’s share price rose by 29{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} over the last year, compared with a 15{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} rise in the wider FTSE 100, the online investment platform says. Barratt is upbeat, though the withdrawal of coronavirus-related government aid programs hasn’t yet been felt, strong inflation readings remind of interest rates rises and completions have been temporarily inflated by the stamp-duty property tax holiday–but business is still robust, Interactive Investor says. “With strong demand and a promising outlook in evidence, market consensus also remains positive on prospects, coming in at a strong buy,” Hunter says. Shares are up 0.8{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} at 702.0 pence.

UK Inflation to Trend Upward in Midterm

0901 GMT – Structural factors such as an aging population, continued deglobalization in goods trade and fiscal activism are expected to reinforce the inflationary dynamic in the U.K., Berenberg economists say. The bank projects sustained core inflation within the 2.5{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} and 3{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0} range by the middle of the decade, with risks to the outlook tilted to the upside. “Given the long-run outlook for persistent inflation modestly above central bank targets in the U.K. and the U.S., a stronger-than-expected near-term inflation impulse could turn into a sustained trend,” Berenberg says. “The warning from history is clear–all periods of high sustained inflation appear temporary at first,” the bank says.

Dunelm Seen Benefiting From Continued Strong Demand

0856 GMT – Dunelm Group has been successful in capitalizing on its expanding e-commerce amid the coronavirus pandemic, which bodes well for further progress, according to Interactive Investor analyst Keith Bowman. The homeware retailer has used the challenges of the pandemic and closed stores to successfully boost its digital related sales, Bowman says. “A buoyant housing market and more time spent at home due to the Covid crisis are likely playing into its hands. Demand for bedding, curtains, bathroom textiles and cushions, and newer categories such as dining furniture has proved strong,” the analyst says.

Dunelm’s High Share Price Not Seeming to Deter Investors

0855 GMT – Dunelm’s shares are expensive but their price growth seems bound to continue amid improving forecasts and increasing sales, according to interactive investor analyst Keith Bowman. A more-than-doubled share price since the coronavirus pandemic hit the market in March 2020 has already priced in much of the good news, the analyst says. Furthermore, Dunelm continues to suffer from supply-chain disruption, he says. However, thanks to its greatly increased digital sales, a forecast dividend yield in the region of 2.2{028e8b43b440f88d50a94b0ac799d5b93a220d942414697744f001bd74eb64d0}, its ‘make-and-mend’ environmental initiative and plans still in place to expand its store portfolio, market consensus still points to a buy, the analyst says.

 

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July 14, 2021 05:58 ET (09:58 GMT)

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