Suggestions that the costs of cladding remediation work may be a lot less than first feared meant that housebuilders suddenly had investors back on their doorsteps yesterday.
Shares in the builders had come off the boil in recent months after Michael Gove, the housing secretary, demanded that they should foot the bill for repairing or replacing dangerous cladding on tower blocks nationwide. However, after months of negotiations between the industry and the government over who should pay, and how much, it appeared over the weekend that a viable solution may be on the cards.
According to The Sunday Telegraph, findings from PwC, hired by the House Builders Federation to clarify how much it would cost to remedy unsafe cladding, suggest the figure is “likely to be lower than £1 billion”. Investors were also encouraged by news that contributions towards the final settlement will come from a wider group of organisations, not only the listed housebuilders.
Charlie Campbell, an analyst at Liberum, which is a buyer of all nine housebuilding stocks that it covers, said that removing the uncertainty around cladding for a “milder than expected solution” would benefit an industry that is already facing challenges, including rising costs.
All the listed housebuilders advanced. Persimmon, Britain’s largest developer by market value, added 120p, or 5.5 per cent, to £22.92; Taylor Wimpey increased 5¼p, or 3.9 per cent, to 139¾p; Barratt Developments gained 16p, or 2.9 per cent, to 561¼p; and Berkeley Group rose 129p, or 3.4 per cent, to £39.40.
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Overall, London’s markets started the week on the front foot as investors seized on even the most tentative of positive signals from Russia over peace talks with Ukraine. The FTSE 100, which enjoyed its best weekly gain in nearly a year last week, improved a further 37.83 points, or 0.5 per cent, to 7,193.47. The FTSE 250 put on 264.64 points, or 1.3 per cent, to 20,471.25.
Miners weighed on the commodity-heavy premier index as metals prices eased. Glencore declined 29¾p, or 5.8 per cent, to 481½p and Anglo American fell 201½p, or 5.2 per cent, to £36.98½, while softer oil prices caused Shell and BP to dip 36¾p, or 1.9 per cent, to £19.26¾ and 4p, or 1 per cent, to 356½p, respectively.
Asia-focused stocks were in the red after a sell-off in Asian markets as traders grew nervous about a Covid wave in China. Fidelity China Special Situations, which invests primarily in Chinese companies, shed 17½p, or 7.1 per cent, to 228p and shares in JP Morgan Emerging Markets Investment Trust dipped 1¼p, or 1.2 per cent, to 102¼p.
Of London’s smaller companies, Fonix Mobile, a mobile payments business, rose 4p, or 2.7 per cent, to 152½p after a fist-half jump in revenues and profit. Tracsis shares rose 25p, or 2.8 per cent, to 925p after it said that it had agreed a deal to buy RailComm, a North American rail software provider.
Bens Creek, an American coalminer that was listed on London’s junior market late last year, rose after it said it had agreed a deal to supply 264,000 tonnes of coal on a monthly basis to Integrity Coal Sales, a New York-based supplier. Its shares closed up 8p, or 10.7 per cent, to 83p.
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There was no appetite for the restaurant operator behind the Fridays chain as its maiden results showed that it made a loss last year, albeit significantly smaller than 2020. As a result, Hostmore, which started trading at 147p in November, slipped 10p, or 10.9 per cent, to 82p.
Abcam is no longer seeing red
One of Britain’s biggest biotechnology companies swung into profit last year.
The Cambridge-based Abcam is on track to achieve its five-year growth plan, despite disruption caused by Covid-19. It had full-year unaudited sales of £315.4 million.
On a reported basis, pre-tax profits jumped to £4.7 million, compared with a £2.2 million loss the previous year. It bought BioVision, one of its long-term American suppliers, last year for $340 million, which Abcam said had contributed to 1 per cent of revenue. Abcam raised its revenue target for 2024 to between £450 million and £525 million.
The company supplies products and tools to two thirds of the world’s scientific researchers and has been dubbed the “Amazon of antibodies”. Jonathan Milner, a Cambridge University scientist, founded Abcam in 1988 and is the second biggest shareholder with a stake of nearly 6.9 per cent.
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Alan Hirzel, chief executive, said there had been “sustained progress” on its “growth strategy announced in November 2019”.
Abcam shares, which are listed on Aim, rose 44p, or 3.6 per cent, to £12.44.
Wall Street report
Unloved technology stocks dragged markets lower, although the Dow Jones industrial average escaped following the S&P 500 and Nasdaq into the red, closing flat, up (if you can call it that) a mere 1.05 points at 32,945.24.
