MARKET REPORT: London no longer the prime location for housebuilder Berkeley Group, which warns of a ‘lack of urgency’ in capital’s property market
London is no longer the prime location for housebuilder Berkeley Group, which warned of a ‘lack of urgency’ in the capital’s property market.
As it announced a 26 per cent fall in half-year profits, but raised its guidance for the full year, Berkeley said it had invested in 11 new sites, all outside London.
Though the FTSE 100 giant seemed to be in no rush to buy land in the capital, which it warned in September was ‘constrained’ by Brexit uncertainty, it hasn’t given up on its home market entirely.
Chief executive Rob Perrins said he saw new opportunities in London and the South East as the market factored in economic uncertainty and policy interventions, such as stamp duty hikes.
Over the six months ending in October, Berkeley finished 2,027 homes, more than 10 per cent of London’s new private and affordable houses. Though pre-tax profit of £401.2m was down on last year’s £539.8m for the first half of its financial year, Berkeley said it now expects to make at least 5 per cent more than the £641m it was due to rake in for the full year.
The group also promised to extend its shareholder returns programme until 2025, which gives investors a combined £280m per year through dividends and share buy-backs. Shares climbed 1.1 per cent, or 35p, to 3356p.
But George Salmon, an equity analyst at Hargreaves Lansdown, said: ‘Sentiment will remain closely tied to the Brexit barometer, since London could well be in the eye of the storm should a disorderly departure [from the EU] trigger a housing meltdown.’
After Thursday’s slump, the FTSE 100 rebounded 1.1 per cent, or 74.06 points, to 6778.11.
John Wood Group, an engineer for oil wells and industrials businesses, was the largest riser – it climbed 4.4 per cent, or 26.6p, to 628p as the oil price jumped.
Following its brief foray below $60 per barrel on Thursday, the price of oil was up by almost 5 per cent. This gave a helping hand to London’s hefty energy sector: Royal Dutch Shell was up 2.8 per cent, or 63.5p, at 2365p. Premier Oil hit new production records and shares shot up 14.8 per cent, or 9.75p, to 75.85p.
Satellite firm Inmarsat was vindicated in court after a long- running battle with competitor Viasat over in-flight wifi.
Several years ago Inmarsat was granted a contract by the European Commission to build the European Aviation Network, to provide wifi on planes.
It then had to obtain permission from the telecoms regulator in each European country to build the network. The UK’s Ofcom, as well as other European regulators, granted the licence. But California-based Viasat, which itself wants to muscle in on the network, claimed Ofcom should not have given Inmarsat a licence.
It said Inmarsat was in breach of its contract with the Commission, because it was using ground-based infrastructure as well as satellite frequencies to build the network. But Viasat’s challenge at the Competition Appeal Tribunal in London was dismissed yesterday. Inmarsat’s shares climbed 1.6 per cent, or 6.5p, to 418.4p.
Miniature war-gaming manufacturer Games Workshop reported sales of £124m and an operating profit of £41m in the six months leading to December 2.
It said its Warhammer game, which now commands increased factory capacity, was in ‘great shape’ and announced a 30p dividend, taking the year-to-date dividend to 95p compared to 85p last year. The shares rose 4.3 per cent, or 130p, to 3125p.
Miner Condor Gold jumped 8.9 per cent, or 2.5p, to 30.5p on announcing it had expanded a site at a project in Nicaragua by 45 per cent.