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The UK Index housebuilders aren’t part of today’s market bounce after Berkeley Group (BLG) suggested that reservations had fallen 20% before the UK votes on whether or not to stay in the EU next week. Although some of this can be explained by a planned reduction in launches in anticipation of the event, the statistic is nonetheless dragging down peers Taylor Wimpey (TW), Barratt Developments (BDEV), McCarthy & Stone (MSC), Bovis Homes (BVS), Bellway (BWY) and Redrow (RDW) – all in the red to the tune of 0.5% to 2% – as investors fret about the now very real possibility that the UK votes to leave the European union and the impact it may have on our precious housing market. With FY pre-tax profits already -1.6%, an outlook suggesting it on track to meet medium-targets (£2bn pre-tax profits over three year to 2018) is just not cutting the mustard this morning given the high level of uncertainty on the horizon and the outcome of the Brexit vote being described by management as significant for the sector.
Mike van Dulken, Head of Research, 15 Jun
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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