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Housebuilders’ share prices fell in early trading after Barratt Developments’ (BDEV) adjusted profits sank. The housebuilder posted a 16.2 per cent decrease in adjusted pre-tax profit and a 13.6 per cent drop in adjusted gross profit in its results for the year to 30 June as demand for new houses fell as mortgage costs have skyrocketed.
The company could see a slump of as much as 25 per cent in the number of houses built in the current financial year, with guidance at 13,250 – 14,250 for completions. Forward sales fell 36 per cent by value when compared with this time last year.
Barratt cut its final dividend by 9 per cent, to 23.5p a share, in line with its payout policy.
Shares in Barratt, Persimmon (PSN), Berkeley (BKG), Bellway (BWY), and Crest Nicholson (CRST) fell by over 2 per cent this morning. ML
Read more: Barratt battered by housing downturn
WH Smith boosted by passenger recovery
WH Smith (SMWH) continues to benefit from the recovery in travel demand, which helped the retailer keep its full-year expectations steady. The company said in a pre-close update that revenue grew by 28 per cent in the year to 31 August, driven by a 42 per cent uplift in travel sales “as passenger numbers continue their positive trajectory”. Revenues fell by 1 per cent on the high street, however, as the company sticks with its focus on cost savings and “the return on space”. Management expects the company to open over 80 new travel stores in the 2024 financial year, with around half of these in North America as it tries to make further inroads across the Atlantic. The shares fell by 2 per cent in early trading. CA
Listen to WH Smith, investment trusts and beating the market
Airport demand helps Restaurant Group pivot to profit
Restaurant Group (RTN) returned to profit in the half-year to 2 July as the travel rebound drove like-for-like (LFL) sales at its UK airport-focused concessions division up by 29 per cent. Sales at the company’s Wagamama restaurants and pubs rose by 7 per cent and 8 per cent respectively, while leisure sales fell by 3 per cent. Statutory revenue rose by 10 per cent to £467mn, with pre-tax profits coming in at £2mn compared to a £29mn loss last year. Management said that “excellent early progress” had been made towards hitting cash profit margin and leverage targets. The shares were up by 3 per cent. CA
DCC takes five
DCC (DCC) has spent £160mn on five new acquisitions aimed at growing its energy management and low-carbon energy distribution businesses.
The purchases include a UK-based solar PV and energy consultancy business, Centreco, companies in France, the Netherlands and Norway offering solar PV and energy efficiency services and a US-based distributor of propane. DCC said the companies acquired would deliver a “mid-teen return on capital employed” in their first year of ownership, which UBS analysts said employs earnings accretion of 3-4 per cent. It maintained its buy recommendation on the company’s shares, which trade at 9-times forecast earnings – below their 10-year average of 16-times. MF
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