UK Edition
Payout promises and a punchy profit prediction sent Crest Nicholson’s shares soaring yesterday.
The housebuilder jumped 36p to 253.6p after it said full-year adjusted profit would be “significantly ahead” of expectations, landing at the top of its guidance.
The FTSE 250 company said its trading had been “robust” over recent months, and slightly ahead of pre-lockdown levels.
It anticipates adjusted profit before tax to come in “at the upper end of the previously guided range of £35m-£45m”.
As of the end of October, its forward sales stood at 2,289 units and £480.5m in gross development value, versus 2,013 units and £378m in GDV for the same period last year.
The company’s board said it planned to reinstate a dividend at its interim 2021 results.
Peter Truscott, the chief executive, said Covid-19 “could not have come at a worse time” for the group, which is undergoing a strategic overhaul.
Jefferies’ Glynis Johnson said the update was reassuring, but added the risk versus reward balance offered by the group “will likely remain too heady for many” given uncertainties including Covid-19, Brexit and the company’s own reorganisation.
The rise left Crest Nicholson as the biggest mover across the FTSE 350 on a bright day for European stocks, which rose strongly for a second session amid a recovery from last week’s rout. The dollar fell sharply as investors shifted into riskier assets.
Nearly all of London’s blue-chip companies gained ground, with banks and housebuilders performing strongly.
Mining companies also rose strongly, in a jump analysts attributed to expectations that Joe Biden would win the US election, in-person voting for which was taking place during the European session.
Ocado was one of the few fallers on the FTSE 100, dropping 29p to £24.30 after rallying strongly on its raised outlook the day before.
The FTSE 250 also rose solidly, though the mid-cap index slightly lagged behind the continent’s top indices. Shares in sewing supplies manufacturer Coats jumped 6p to 60.4p after it predicted profits ahead of market expectations. It said operating profit would be in the range of $100m (£77m) to $110m, as a result of an “improving trading performance”.
It added the outlook for the rest of 2020 looked “encouraging”, but noted uncertainties related to the virus.
Citi analyst Charles Mortimer said the update pointed to improved trends, noting that even the midpoint of Coats’ guidance presented an 18pc upside to underlying profit forecasts.
Shares in office space provider IWG rose 22.4p to 277.2p after analysts noted several underlying improvements in its trading, despite the group posting a steep fall in revenues during the third quarter.
Engineering group Weir rose by 51.5p to £15.10 after it reported strengthening demand, despite a dip in overall order totals.
The group is focusing on mining, having recently sold its oil and gas division. Analysts said Weir’s trading remained solid.