Housebuilder Crest Nicholson Holdings (CRST) sent shudders through the sector on Wednesday as it blamed Brexit for a Home Counties sales crunch which could wipe more than £30 million off annual profits. Crest’s key markets in London and the affluent commuter belt have been on the front line of the uncertainty over the UK’s exit from the EU, with buyers sitting on their hands amid mounting fears of “no-deal” disruption. The builder’s shares tumbled 7%, or 22.8p, to 300.2p as Crest warned an autumn pick-up in sales had fallen flat and a “turgid” second-hand market is also hampering the sale of its new-build homes. Crest’s warning comes after Bellway (BWY) said its biggest fear over the market was faltering consumer confidence around Brexit, while London-focused Telford Homes (TEF) shares were also hit last week as it said customers were taking a “wait-and-see” approach as March 29 looms. Shares in listed builders fell with firms with more exposure to dearer homes such as Persimmon (PSN) and Berkeley Group Holdings (The) (BKG) worst hit. Persimmon was down 2% and Berkeley off 3%. Barratt Developments (BDEV) fell more than 1% despite saying today it had started the year in a “strong position, with a good sales rate”. Peel Hunt’s Gavin Jago has a target price of 330p on the stock and said “bid speculation may increase if the shares fall significantly below this level”. Shore Capital analyst Robin Hardy added: “The problem is really one of affordability, although the industry is keen to blame Brexit. “Bellway yesterday acknowledged that Brexit actually barely registers outside London, so we still believe that that is not the core of the issue for the housebuilders but a raw lack of affordability.”
Pearson (PSON) is still struggling to turn around its key US arm, but thinks it will return to profit growth this year. The education group, best known for owning the Financial Times until 2015, has endured a miserable run until recently, with profit warnings smashing the share price and questions being raised about chief executive John Fallon’s abilities. The news was better today, as a nine-month trading update reported revenue up 2% at the core business, which includes the UK and Australia. Sales in the US were flat, however, with the higher education unit seeing a fall of 3%. That business is regarded as vital to Pearson’s future, but has been buffeted by lower education spending in America.
The boss of ASOS (ASC) was bullish on Wednesday as he revealed plans to plough more cash back into the business to turbocharge it after a jump in profits and sales. Investors have voiced concerns this year, reflected in the share price, about Asos’s aim to spend up to £250 million a year in the next few years to help build warehouses in Europe and the US. The business, started 17 years ago and now selling more than 87,000 branded clothes and its Asos Design brand in more than 200 markets, said its “substantial” investment continued apace. Chief executive Nick Beighton said: “Investment is important for future growth and we’re eyeing up a much bigger prize than where we’re currently at. We’re ramping up our capabilities faster than ever before.”
Fishing Republic (FISH) has managed to get itself into a pickle. Fears that the firm is on the brink of collapse were amplified today after the firm said new boss Daniel Quinn had decided against taking up his role. Quinn, due to start today, had been appointed last month but will not take his post after major shareholders yesterday pulled the plug on providing short-term financial assistance to the fishing tackle retailer. It was hoped retail veteran Quinn, who was previously at JD Sports and Tesco, would turn around the company’s fortunes after torrid trading. He was drafted in by ally and former Tesco boss Sir Terry Leahy, who owns 9.3% of Fishing Republic and was one of the investors to pull the plug. At its interim results last month Fishing Republic posted a half-year loss of £1.4 million. It said it had only £360,000 in cash left.
TLA Worldwide (TLA) has found a new broker after Numis quit in September. It has appointed Beaumont Cornish and it is undertaking a strategic review led by new chairman Ian Gray, best known for his short tenure at Tottenham Hotspur between 1990 and 1991.
Berkeley Energia Limited (DI) (BKY) sell-off has taken place after the Spanish government said it would not give approval for its planned uranium project in the country. It is understood Spain’s government will not issue the required permits for construction to go-ahead, even though the project was granted preliminary approval. In a statement, Berkeley said that it had received no official notice from the Nuclear Council nor any other government department to that effect. The company added it had contacted both the Council and Energy and Environment Ministry to clarify the position. Two permits are needed for the work to start – a local building licence and permission to handle radioactive waste. Shares are down a whopping 44%
Oxford Metrics (OMG) it expects revenue and adjusted profit in line with current market views after a “successful close to the financial year” ended September. Shares in the software company were trading 5.4% higher. Furthermore, Oxford Metrics said it remains on track to to reach its targets to double profit and triple recurring revenue by 2021.
