Proactiveinvestors United Kingdom - RSS feed

Engineer Kentz reports strong year in 2011

Fri, 20 Jan 2012 08:40:00 +0000

Engineering giant Kentz Corp Ltd (LON:KENZ) expects 2011 revenues and profits to be marginally ahead of consensus, it said in a pre-close statement today.

The firm reported another strong year with growth in revenue, profit and backlog.

Separately, it announced that it has appointed Christian Brown as its new chief executive with effect from February 1 this year - succeeding Hugh O'Donnell who has been in the role for 12 years.

Kentz posted a record backlog of US$2.40 billion at the end of the year, an increase of 50 per cent from December 2010, underpinned by further new awards and natural growth on existing contracts.

The company now has a pipeline of prospects which stands at over US$10 billion, it told investors.

Papua New Guinea shows opportunity for growth, the firm said, as shown by further new contract wins.

Kentz had around US$223 million in cash at the end of the year, which supports continued growth.

In today' statement, O'Donnell said: "2011 was another strong year for Kentz with growth in revenue, profit and backlog.

"We anticipate continued development in both our core and emerging markets such as Russia, Australia and Canada. Overall, the outlook is very positive, underpinned by the solid project pipeline of our core clients, which gives us confidence for 2012 and beyond."

Broker Brewin Dolphin rates the stock a 'buy' with a target price of 600 pence.

"Kentz has an impressive track record of meeting and exceeding market expectations, and delivering consistent growth. With backlog, pipeline and balance sheet all strong, we see this continuing," it said in a note.

It added that the company was trading broadly in line with its peers but saw scope for earnings upgrades throughout the year.

The broker added it believes Kentz is a quality business which would be a solid buy for the long term.

The firm's 2011 results are due to be published on March 26 this year.

Bovis Homes sees further profit growth in 2012

Mon, 16 Jan 2012 09:31:00 +0000

Bovis Homes (LON:BVS) said it is “well positioned” to achieve a further improvement in profits, which grew significantly in 2011 and met expectations as both home sales and prices increased.

In an update ahead of its full year report, the housebuilder said it has completed 2,045 homes in 2011, while the overall average sales price for private and social homes rose from £160,700 in 2010 to £162,400.

At the start of the year, the group’s forward sales for 2012 stood at 568 homes, a 35 percent improvement compared to 2012 as both private and social reservations rose in part due to an 11 percent increase in active sales outlets.

The number of sales outlets is set to increase by a further 16 percent to 85 in the current year.

“We are delighted with the improved returns delivered in 2011. The group is well placed for 2012 with increasing active sales outlets and stronger profit margins,” said chief executive of Bovis David Ritchie.

“Based on current market conditions continuing, the group can deliver significantly increased profit and, coupled with improving efficiency of capital employed, a stronger return on capital employed in 2012 and beyond.”

In terms of outlook, Bovis said market conditions are likely to remain challenging in 2012 amid continuing economic and employment uncertainty.

The group expects this to be partly offset by the launch of the Government backed mortgage scheme, which should boost the new build homes market.

Balfour Beatty wins commercial property contracts worth £100 million

Mon, 16 Jan 2012 08:25:00 +0000

Construction giant Balfour Beatty (LON:BBY) has won £100 million worth of contracts in the commercial sector, it said today.

In the City, London's financial heart, the firm has been awarded a two phase £57 million contract to build AXA Real Estate's Sixty London prime office development.

It has also won a £25 million contract to deliver an 11-storey office building in the City for Viridis Real Estate Service Ltd on behalf of their client, Emmatown Properties Ltd, it said.

Elsewhere, in Glasgow, Balfour Beatty has been awarded an £18 million contract for Land Securities to create a new five-storey residential and retail scheme in the heart of the city.

All three projects are due for completion in 2013.

Balfour's chief executive, Ian Tyler, said: "We are delighted to see encouraging signs of renewed activity in the London commercial sector and to be able to demonstrate our diverse capabilities which enable us to take advantage of such growth opportunities.

"We have been able to harness technology to create innovative solutions for our customers and look forward to working with them in delivering these first class schemes."

Barratt Developments profits jump 40pct as house prices rise

Thu, 12 Jan 2012 09:23:00 +0000

Shares in Barratt Developments (LON:BDEV) were in demand this morning after the housebuilder said it expects to post a significant increase in interim profits despite continuing economic uncertainty.

In a trading update ahead of its interim results for the six months to December 31, Barratt reported an 8 percent improvement in revenues to £950 million due to a 3 percent increase in the average selling price compared to a year earlier to £181,000.

As a result, Barratt expects to report a group operating profit of around £61 million, up 40 percent from the first half of 2010.

The increase in sales has allowed the group to reduce its debt to £550 million by the end of the year, which is below its previous guidance.

Barratt also highlighted the 8.1 percent improvement in its order book to £698.1 million including a 29.8 percent surge in private forward sales to £415.3 million.

“This has been yet another six months of good progress for our business despite the wider economic uncertainty,” said chief executive of Barratt Developments Mark Clare.

“We have delivered a further substantial increase in profits, brought debt in below expected levels and are starting the second half with a much stronger forward order book.”

Barratt traded at 100.3 pence this morning, up 3.5 percent from Wednesday’s close. The group currently has a market cap of £968.4 million.

Peel Hunt sees tougher market for UK housebuilders in 2012, downgrades likely

Fri, 06 Jan 2012 10:35:00 +0000

Peel Hunt expects a tougher market for UK housebuilders in the first quarter - and if house prices drop as feared there is a risk of downgrades later in the year. There should still be growth, but it will be slower than in the first half of 2011.

In a note headlined ‘Last Hurrahs?’ the broker said the solid performance of builders last year was flattered by the fact that they had performed so poorly the year before.

This meant they were up against what Peel Hunt called “soft” comparable figures.

Tougher markets and more demanding comparatives should make for more cautious commentary through 2012, starting in the current quarter, the broker added.

Peel Hunt believes the tone from builders in the early part of this year is likely to be more cautious than in the first quarter of 2011, where rising consumer confidence, a “thawing” of the mortgage market and a rise of buy-to-let activity lifted the market.

The broker said 2012 is likely to lack any such impetus.

Household incomes are under pressure, mortgage lending is tighter and more costly and the market ended 2011 with prices outside the south-east falling between 3.7 and 6.1 percent, the broker said. “If house prices drop by 4-5 percent it is easy to see margin pressure and the risk of downgrades,” it added.

Its top picks are Galliford Try (LON:GFRD) and Berkeley Group (LON:BKG).

The former’s ongoing expansion of the housebuilding business - while still operating the construction division -, strong growth and high income are still not reflected in the share price. Peel Hunt said concerns over the London market, which have dragged Berkeley lower, have been overdone.

Trading or quarterly updates are expected this month from Persimmon, Barratt Developments (LON:BDEV), Galliford, Bellway (LON:BWY), Bovis Homes and Taylor Wimpey (LON:TW.).

Balfour Beatty agrees £750 mln contract upgrade with National Grid

Thu, 05 Jan 2012 09:38:00 +0000

Infrastructure group Balfour Beatty (LON:BBY) has secured a five-year extension to its existing contract with National Grid (LON:NG.) to maintain and upgrade the UK's electricity transmission network in an agreement worth up to £750 million.

The contract involves design, programme management, construction and technical support for National Grid's electricity network.

Balfour Beatty and National Grid formed the Electricity Alliance East (EAE) partnership five years ago to secure the long-term stability of much of the UK network.

Work involves the ongoing maintenance and refurbishment of overhead transmission lines, as well as designing and delivering National Grid's upgrade plans across the network.

Balfour Beatty delivers professional services, construction services, support services and infrastructure investments.

Balfour Beatty and partner win £535 mln Melbourne rail contract

Wed, 21 Dec 2011 08:21:00 +0000

Infrastructure group Balfour Beatty (LON:BBY) said it has been awarded an A$835 million, or £535 million, contract for works on the Footscray to Deer Park section of the Regional Rail Link project in Melbourne, Australia, in an alliance with Thiess and Sinclair Knight Merz.

Balfour Beatty has a 35 percent share in the alliance, which under the contract will design and construct the first major new rail line for metropolitan Melbourne in 80 years.

The Regional Rail Link will separate regional trains from metropolitan trains for the first time, giving trains dedicated tracks and hence, increasing capacity and reliability.

The project involves the construction of 7.5 kilometres of new track, rail bridges, a new station at West Footscray, and upgrades and improvements to the current infrastructure.

Balfour Beatty will put in place the rail systems including signalling and track and will act as the programme manager for the project. Major works are expected to commence in early 2012.

The news lifted the stock, and by 8.20 am, Balfour Beatty was trading up 1.75 percent at 264.85 pence.

Bellway shares up as firm releases solid trading statement

Fri, 09 Dec 2011 11:41:00 +0000

Shares in housebuilder Bellway (LON:BWY) were up more than four per cent in early deals after it released an IMS saying it was confident of further growth.

It is well positioned to continue its three pronged strategy of volume, average selling price and operating margin growth, the firm said.

Investors cheered the news and as at 11.20 am the shares were trading up 4.46 per cent, or 32.5 pence - to change hands at 761 pence.

The statement covered the period from August 1 to November 30.

Visitor levels and reservations had been remarkably resilient, with reservations having increased by some 14 per cent compared to the same period last year, the firm said.

The management expect that legal completions for the six months ending January 31 next year will increase by around 5 per cent.

Operating margin for the same period will be at least in line with that achieved in the second half of the previous financial year of just under 10 per cent, the trading statement revealed.

Bellway also said it had renewed a £150 million bi-lateral banking facility with one of its existing banking partners, Lloyds Bank Corporate Markets, with no significant changes to banking covenants.

"Notwithstanding the current backdrop of global and domestic economic uncertainty, Bellway is well positioned to continue its three pronged strategy of volume, average selling price and operating margin growth.

"The order book at 30 November is £458 million (2010: £440 million) and the group has secured some 73 per cent of its current annual target," it said.

Evolution Securities analyst Mike Bessell said: "The Eurozone crisis having no impact on housing activity underlines our view that the current level of transactions is something of a nadir for the UK housing market.

"No change to Bellway forecasts on the back of this. A very solid trading statement provides confidence that the story continues to roll-out as expected, and very happy to remain a BUYer," said analyst at Evolution Securities Mike Bessell.

Evolution targets a price of 850 pence for the stock.

Carillion sees strong growth in fourth quarter

Wed, 07 Dec 2011 09:49:00 +0000

Engineering and support services business Carillion (LON:CLLN) this morning announced strong growth in its profit during the current quarter. Shares in the firm were up 4.6 per cent at 320 pence each in early trading today.

The firm said that underlying profit before tax and underlying earnings per share are both expected to increase strongly during the three months to the end of December 2011, in line with market expectations.

Cash flow at the group remains strong with year-end net debt now expected to be below £100 million and significantly better than the firm’s previous target of below £125 million, said Carillion.

The firm said that the integration of its Carillion Energy Services business, which was acquired for £298 million in April this year, was ahead of expectations and that the group is continuing “to target strong returns from this acquisition”. It said that Carillion Energy Services cost savings are expected to increase from £15 million to £25 million, with one-off cost of delivery expected to double to £40 million due to the government’s proposed changes to solar feed-in tariffs.

Meanwhile, a strong order book continues to provide good revenue visibility, said Carillion, which stated that its pipeline of contract opportunities remains well over £30 billion.

Carillion’s preliminary results are expected on February 29.

Balfour Beatty’s shares improve after £110 million Crossrail contract win

Thu, 24 Nov 2011 09:39:00 +0000

Shares in engineering and construction group Balfour Beatty (LON:BBY) were ahead by 2.2 per cent at 219.4 pence each in early trading this morning after the £110 million Whitechapel Crossrail contract was awarded to a joint venture it is part of.

Crossrail is London’s new high-frequency railway that will serve 37 stations, from Maidenhead and Heathrow to the west of the capital to Shenfield and Abbey Wood in the east.

The FTSE250 firm, along with its partners Morgan Sindall Group (LON:MGNS) and Vinci Construction, will demolish the existing Whitechapel station before constructing a new ticket hall behind the retained station facade and upgrading and extending the Hammersmith & City Line and District Line platforms.

The firms will also construct a new station bridge concourse in and over the East London Line cutting.

The works will include the shafts and platforms for the Crossrail tunnels plus related architecture and mechanical and electrical infrastructure.

“We are delighted to have been awarded this Crossrail contract,” said Ian Tyler, Balfour’s chief executive.

“We, together with our joint venture partners, are using the full range of skills, resources and technical expertise required to deliver not only this contract, but the Whitechapel and Liverpool Street station tunnels project, awarded to the joint venture in January this year.”

Shares in Morgan Sindall were flat at 558 pence each this morning.

Renew Holdings feels positive effect of Amco deal

Tue, 22 Nov 2011 09:31:00 +0000

Renew Holdings (LON:RNWH) revealed its preliminary results had been bolstered by the acquisition of Amco earlier in the year and the performance of its nuclear division.

The firm, which operates nine nuclear licensed sites in the UK, said the division grew sales by 23 per cent, as it released its full year results.

This year saw the acquisition of engineering firm Amco Group Holdings Ltd in February, which had integrated very well, accelerating the board's repositioning into focusing on engineering services, it said.

The group's full year results were in line with market expectations, it said.

Group revenues came in at £356.7 million compared to £290.4 mln in 2010. Pre-tax profit stood at £8.1 million and adjusted EPS was 9.6p compared to 5.3 pence last year.

Breaking this down, revenue for engineering services was up 39 per cent at £176.7 million, compared to £127.4 mln in 2010.

The company said it was proposing a final dividend at 2 per share, maintaining the full year dividend at 3.0p (2010: 3.0p) - to be paid on February 23 next year.

"The acquisition of Amco has accelerated the transformation in the shape of the group and offers Renew a range of opportunities for further growth in engineering services markets.

"Over the last five years, our engineering services activities have grown organically by 93 per cent and, when combined with our acquisitions, now represent annual revenue of more than £200mln as well as providing 80 per cent of the group's operating profit," said chief executive Brian May.

City broker Arbuthnot said the firm had "delivered a good set of results" in what was the first "concrete demonstration of the full positives of the AMCO deal".

"The star division was nuclear, which grew sales by 23 per cent and demonstrated the underlying growth capabilities of the business pre-AMCO," it added.

Arbuthnot, which rates the stock a 'buy' targeting a price of 112 pence, added: "Fundamentally we see the business has having shifted decisively into more attractive areas such as energy, environmental and infrastructure, which now dominate the business, but as still being valued by the market in a very modest way."

Barratt Developments is 'buy' says Panmure after 'solid' IMS

Wed, 16 Nov 2011 09:16:00 +0000

Panmure rates house builder Barratt Developments (LON:BDEV) a 'buy' after reporting today what the broker called a 'solid' interim management statement.

The firm revealed average weekly private reservations were up 25.9 per cent in the period July 1 to November 13 due to an increase in sites and an improved reservation rate.

The private average selling price (ASP) increased by around 7 per cent compared to last year to around £207,000, said Barratt.

Private forward sales were up 27.4 per cent on the prior year at 3,221 plots and net debt as at June 30 next year is expected to be at the lower end of the company's previous guidance at around £400 million.

In a note, Panmure analyst Rachael Waring said Barratt had reported a strong IMS and the increase in private reservations was an improvement on the 10 per cent improvement seen in the first few weeks of the year.

"Breaking this down, the group appears to be operating from 9 per cent more sites, and has seen a 17 per cent improvement in the sales rate," she said.

Waring added that it remained early days in terms of the full-year and Panmure left its forecasts in place - of June 2012 pre-tax profit of £86.8 million, EPS of 6.7pence and NAV (net asset value) of 219 pence.

She said the broker continued to believe the stock was "significantly undervalued" and reiterated its 'buy' recommendation, 158 pence target price and key sector pick stance.

Carillion's acquisition strategy and tight control of costs is paying off

Tue, 04 Oct 2011 08:40:00 +0100

The support services firm Carillion (LON:CLLN) gave an upbeat assessment of its prospects this morning, as it said it is on target to meet City profit forecasts.

Earnings growth is being driven by the recent acquisition of energy saving specialist Eaga, a firm control of its cost base and a switch to higher margin business.

“Outsourcing by public sector organisations continues to account for a major proportion of our current bidding activity and pipeline, consistent with our expectations that substantial growth as a result of increased public sector outsourcing would only come through during 2012 and beyond,” the company revealed in a trading update this morning.

It also revealed cashflow remains strong, which means its net debt will fall to around £125 million by the year-end – down from £298.4 million last year, and below the company’s targeted £150 million ceiling.

Carillion said it continues benefit from the strategy of reducing the size of its UK construction business, with annual revenues expected to fall by around one-third to £1.2 billion in 2013.

“This strategy anticipated cuts in government spending on construction and is also helping us to support margins as we avoid bidding for low margin work in the increasingly competitive UK market,” the company revealed.

Barratt Developments back in profit thanks to house price increase

Wed, 14 Sep 2011 08:47:00 +0100

House builder Barratt Developments (LON:BDEV) reported today that it had moved back into profit, thanks to an increase in the average selling prices of its homes.

Announcing results for its 2010 financial year, Barratt said that before exceptional items it made a £42.7 million pre-tax profit during the year to June 30, compared with a £33 million loss in 2010, on revenues of £2,035.4 million (2010: £2,035.2 million).

Operating profit improved to £135 million during the year (2010: £90.1 million).

Average selling price (excluding joint ventures) rose by 2.3 per cent to £178,000, with private average selling prices increasing by 7.4 per cent to £198,900. The increases were mainly as a result of changes in mix, including from flats to houses, said the firm.

“This has been a year of good progress against a challenging backdrop, particularly in the first half of our financial year,” said Mark Clare, Barratt’s chief execuitve. “We have achieved a 50 per cent increase in profit from operations before operating exceptional items, agreed terms on 8,861 plots of land, were awarded HBF [Home Builders Federation] Five Star status for a second consecutive year, and refinanced our business until 2015.”

Clare added that Barratt’s primary focus continues to be on optimising selling prices. “We expect to see a further shift in product mix, with houses likely to represent around 70 per cent of total volumes, resulting in a further increase in private average selling price,” he said.

Brokers see buying opportunities in UK house building sector

Mon, 29 Aug 2011 09:04:00 +0100

On Friday, both Liberum Capital and Numis Securities released research in which they argue that UK house builders, as a sector, are undervalued. Liberum believes Barratt, Berkeley and Bovis all rate as ‘buys’.

Balfour Beatty buys UK office outfitter for £8 mln

Mon, 22 Aug 2011 09:24:00 +0100

Construction group Balfour Beatty PLC (LON:BBY) said it has acquired Office Projects Group Ltd (OPL) for £8 million.

OPL manages and delivers commercial interior and exterior fit-out and refurbishment projects for a range of blue-chip UK customers.

The acquisition represents a strategic fit with Balfour Beatty's existing capabilities, further extending the company's skill base within the fit-out market, it said in a statement.

Balfour Beatty’s key infrastructure markets include transportation (roads, rail and airports); social infrastructure (education, specialist healthcare, and various types of accommodation); utilities (water, gas and power transmission and generation) and commercial (offices, leisure and retail).

Balfour Beatty employs 50,000 people around the world.

Balfour Beatty sees tough times ahead after modest first half

Wed, 17 Aug 2011 08:57:00 +0100

Balfour Beatty (LON:BBY), the infrastructure group, posted a modest increase in first half profits and warned of “significant challenges” in many of its markets, with the trading environment expected to remain tough over the near term.

Underlying interim pre-tax profits rose to £138m from £133m on revenues of £5.22 billion versus £5.16 billion last time.

There was a £14 million gain from infrastructure investment disposals over the period. The cash position remains good at £292 million after acquisition, investment and working capital outflow.

The interim dividend has been increased by 5 per cent to 5.3 pence.

The company notes that nearly a year on from the UK government's Comprehensive Spending Review, the impact of the reduction in government spending is evident in UK infrastructure markets and consequently in its UK order book.

And while commercial markets in London are showing signs of recovery, Balfour says it is too early to call this a trend.

In its US market, meanwhile, the delay in the re-authorisation of a six-year transportation bill and the lack of bank financing in commercial markets have been adversely impacting its business.

Despite the muted first half numbers, the group says trading over the period evolved broadly in-line with management’s expectations.

Ian Tyler, Balfour’s chief executive, says: “The diversity and flexibility of our business allowed us to increase our focus on the areas of greatest opportunity and therefore, we continued to grow both revenue and order book in a tough market.”

Tyler says that although there are “significant challenges” in many of Balfour’s markets, the company has planned and structured the business to address these challenges, and remains confident of making progress this year.

He adds: “Looking ahead, we will continue to manage the business on the basis that market conditions will remain tough.

“The clear strategy we have put in place, the scale and capabilities we have built over the last several years, the actions we have taken in individual markets and the cost measures we started implementing in 2010 will stand us in good stead.”

While the immediate outlook is challenging, the company predicts recovery in its markets in the medium term, and says it is well positioned to take advantage of the growing demand longer-term for infrastructure globally.

Barratt Developments confirms talks to sell shared equity loans

Mon, 08 Aug 2011 11:18:00 +0100

Barratt Developments (LON:BDEV) shares edged higher this morning as it confirmed that it is in talks to sell its shared equity loans.

The move would be the first of its kind and it is thought could lead to other housing companies disposing of their shared equity products.

The shared equity loan is where first-time buyers purchase a percentage of the property - while the housebuilder takes a stake for the rest of the home - to allow the buyer to meet the rising costs of properties.

The loan is paid back by the buyer over a fixed period, while the value of the builder's holding rises and falls alongside the home's value.

Barratt says it is not planning to dispose of the loans that are partnered with the government, but those where it is the sole holder.

In a statement to the Stock Exchange today, the firm said:

"Barratt notes the recent press speculation around its portfolio of shared equity loans.

"Barratt confirms that it is in the early stages of looking at options to monetise part of its interest in this portfolio. There is no certainty that any transaction will be concluded."

The firm's shared equity loan book is estimated to be worth £170 million, according to a report in the Financial Times.

Barratt Development's shares were up 1.46 percent in early deals today, before dropping back down as the morning went on. As at 11.15 am, the shares stood at 81.75 pence, or 0.55 percent down on friday's close.

Last month, the company announced a return to profitability this year, but it also reported lower full year home sales. Barratt had said that the trading environment in some of its areas of operation remained tough.

In a trading update, the firm said that its home sales in the full year to end June reached 11,171, down from 11,377 in the previous year.

However, the average selling price was higher, climbing 5 percent to £204,000.

Profitability has increased during the period with operating margin surging from 5.9 percent in the second half of 2010 to 7.8 percent in the six months to end June 2010.

The company said it expected to report a pre-tax profit of £40 million for the full year after making a £33 million loss in 2010.

Bellway sees full-year pretax modestly ahead of market expectations

Fri, 05 Aug 2011 07:40:00 +0100

Housebuilder Bellway PLC (LON:BWY) expects pretax profits for the full year to be modestly ahead of the current market consensus of £62 million. It is currently selling more houses and achieving higher average prices.

In a trading update following the July 31 end of its financial year, the group said it has legally completed 4,922 homes in the period, an increase of 7.1 percent compared with the previous year's total of 4,595.

The average selling price of homes sold has increased 7.2 percent year-on-year to around £175,000 and this increase is mainly derived from changes in product mix.

The operating margin is set to rise from 6.7 percent to between 8 and 9 percent for the full year with the second half margin being towards 10 percent.

Following the interim management statement in early June, reservation rates throughout the traditionally slower summer months have been ahead of last year. Bellway currently has an order book of £426.8 million, up from £421 million a year ago.

The group expects to continue increasing house sale volumes, average prices and thus pretax profit should market conditions remain stable and reservations follow their normal seasonal trends.

It also announced that group finance director Alistair Leitch has decided to retire from the board on January 31 2012. He joined the group in 1981 and worked his way up to become appointed to the FD post in 2002.

Leitch will be replaced by the current group chief accountant Keith Adey, who will join the board on February 1 2012 as FD.

Barratt Developments swings to profits

Thu, 14 Jul 2011 09:47:00 +0100

Barratt Developments (LON:BDEV) announced its return to profitability in 2011, but shares in the housebuilder dropped as it also reported lower full year home sales.

In addition to that, Barratt said that trading environment in some of its areas of operation remains tough.

In a trading update this morning, Barratt said that its home sales in the full year to end June reached 11,171, down from 11,377 in the previous year. However, the average selling price was higher, climbing 5 percent to £204,000.

Profitability has increased during the period with operating margin surging from 5.9 percent in the second half of 2010 to 7.8 percent in the six months to end June 2010.

The company expects to report a pre-tax profit of £40 million for the full year after making a £33 million loss in 2010.

“Whilst we have seen some recovery following the difficult autumn selling season, trading conditions in some areas outside London and the South East remain challenging...our focus remains on improving margin rather than driving volumes,” said chief executive of Barratt Developments Mark Clare.

Improved profitability allowed the company to reduce its debt from £366.9 million a year earlier to £330 million at the end of June.

Barratt said it would continue to maintain focus on higher value products and “tight control over costs to drive profitability.”

Shares in Barratt fell 2.4 pence (2.2 percent) to 108.8 pence this morning, giving it a market cap of £1.05 billion.

Bovis unveils a 16 per cent rise in new home reservations

Fri, 08 Jul 2011 07:37:00 +0100

Bovis Homes (LON:BVS) said it is trading in line with expectations as it unveiled a 16 per cent rise in private reservations to 802 in the first half.

It also said completed 801 sales – two fewer than the same point last year – while the average price rose 3 per cent. The gross margin increased to 20 per cent from 16.5 per cent previously.

Including social housing, Bovis sold 1,333 units in the six months, down from 1,474.

And it said it has received funding confirmation for 446 homes to be built under the government’s FirstBuy scheme, which enables first time buyers to get a foot on the property ladder.

Bovis has also been busy building its landbank and acquired 1,571 consented plots that are expected to generate revenues of £339 million at gross margin above 25 per cent. At the end of June, the builder had £46 million in the bank.

Chief executive David Ritchie said: "On the basis of the current stable market conditions continuing, the group remains confident that it can deliver on its expectations for 2011 and will continue to invest to increase output capacity to deliver higher returns to shareholders."

Galliford Try flags in-line full year as house sales firm up

Tue, 05 Jul 2011 09:31:00 +0100

Galliford Try, (LON:GFRD) put out an upbeat update saying its full year results will be in line with expectations and that it is confident about prospects. Following an improvement in the housing market early in 2011, house sales levels have remained firm and prices stable, it added.

The housebuilding and construction group said housing completions for the year to 30 June increased 27% to 2,170.

Average private house sales over the year rose 10% to £227,000 compared to the 2010 year. Its landbank has been increased by 7% to 10,250 plots.

The company experienced house buyer cancellation levels of 19%, close to the historical average. The requirement for sales incentives, meanwhile, reduced significantly during the second half, particularly in the south east of England where it southern biased business is strong. That all amounts further evidence of a firming of the market.

As for the group’s construction arm, the company notes it put in a “resilient performance in difficult markets” with the order book broadly flat at £1.75 billion.

Major construction contract awards secured over the year include the £790 million Forth Road Crossing; a £200 million United Utilities treatment works; and a £50 million Petrofac plant.

The group’s net cash position of over £30 million at end of the year was ahead of target and compares to £75 million last time.

Greg Fitzgerald, chief executive of Galliford Try, said that two years into the company’s housebuilding expansion plan, Galliford Try is on target to meet its objectives.

He added: “Our financial strength and the spread of our activities mean that, subject to the economic uncertainties affecting our markets, we enter the new financial year with confidence."

UPDATE: Bellway sees sales recover

Fri, 10 Jun 2011 08:30:00 +0100

UPDATE: With broker comment....

Housebuilder Bellway saw its shares advance after it hailed a return to “more normal” trading patterns following a difficult autumn and despite ongoing concerns about the outlook for the wider economy.

In a trading update the group said the uncertainties that affected consumer confidence during the autumn trading period appear to have diminished. It added: “Encouragingly, there has been a return towards a more normal reservation pattern, with a healthy spring selling season…”

For the 17 weeks from 1 February to 31 May, the group achieved a sales rate of 111 units per week, an increase of 9% on the same period last year, from an average of 195 sites.

The average selling price of these reservations is £182,000, an increase of 4% compared to last year, with demand in London remaining strongest.

At the time of its interim statement in March, Bellway targeted increasing unit completions for its year end 31 July 2011 by around 5%. It assured today these reservations are now secure, with operating margin continuing to improve.

Bellway warned that tight mortgage supply, particularly for first time buyers remain a drag. That, together with the wider economic concerns, continues to pose challenges for the housebuilding sector.

Still, with its order book strong, gearing low and the contribution from sites acquired since the downturn increasing, the group believes it is well positioned to continue delivering both operating margin and volume growth if market conditions remain unchanged.

Broker Shore Capital responded positively to the "robust" statement. In its view, the company’s increased focus on the South East, where market conditions are more favourable, is likely to have contributed to the good trading. It reiterated its 'buy' recommendation on the stock, believing that Bellway’s strong balance sheet leaves it well placed to buy new land on attractive margins.

Panmure was also pleased with the update, saying the group is likely to complete more homes this year than it had forecast. It plans a small upgrade to its forecasts for and retains its belief that Bellway is a "high quality company". The broker reiterates 'buy' on the stock, with a 761p target price.

Bellway plans to announce a trading update for the financial year ending 31 July 2011 on Friday 5 August.

In early morning trade Bellway shares were up 5 pence to 702 pence.

Barratt Developments expects higher profits after sales return to normal

Wed, 11 May 2011 09:18:00 +0100

Barratt Developments (LON:BDEV) said today that sales returned to “more normal levels” in the first half as market conditions improved, expecting substantially higher profits in H2.

The property developer and FTSE 250 constituent delivered 0.53 new private reservations per active site per week, lower than the 0.56 in 2010, but significantly higher than the 0.39 during the first half of the year.

In the interim management statement for the period from 1 January to May 8 2011, the group said that forward sales stood at £1.05 billion at the end of the period, slightly lower than the £1.07 billion a year ago.

“We are encouraged by the improvement in market conditions we've seen since the start of 2011, following a challenging autumn period. Our strategy for recovery is progressing well and we continue to expect a substantial increase in operating profit in our second half,” said chief executive of Barratt Developments Mark Clare.

“The successful refinancing provides a strong platform for the business and will enable us to reduce the effective cost of financing going forward,” he added.

The cancellation rate climbed from 13.7 percent in 2010 to 16.1 percent, which Barratt said was broadly in line with historic norms.

The group is expecting to open another 24 new sites on top of the 55 opened so far this year by the end of 2011, which it said should improve profitability and margin of the group.

Barratt has also announced that it has agreed a complete debt refinancing package, providing it with £1 billion of committed facilities to May 2015, some of which extend as far as 2021. The effective cost of borrowing will decline as the term debt being reduced from £903 million to £310 million.

The refinancing will be fully effective by the end of May.

The update was met with a positive response in the markets as shares in Barratt climbed 2 percent to 114 pence in early deals.

Northern Bear still a ‘buy’ despite profit warning - Seymour Pierce

Fri, 08 Apr 2011 13:52:00 +0100

Northern Bear (LON:NTBR) is still a ‘buy’ despite this morning’s profit warning, according to the Seymour Pierce, the company's broker.

This morning the North East based construction group revealed that the severe weather conditions in November and December 2010 caused it to trade below market expectations.

It told investors that while trading conditions improved in January, and activity has increased further since then, particularly in March, this has not been sufficient for it to make up the lost ground.

Consequently it warned that full year profits, for the twelve months ended 31 March 2011, would be below market expectations. The shares dropped around 13 percent on the AIM market in response to the news.

"Clearly (the update) is disappointing news but we view this as a temporary setback," Seymour Pierce analyst Caroline de La Soujeole said in a note to clients.

"We continue to believe the company has a resilient business model and we are encouraged to hear that trading momentum has picked up with March a very positive month.

"Up until the spate of bad weather, Northern Bear had navigated through the downturn effectively."

The analyst repeated a ‘buy’ recommendation, but said that her target price was under review.

Barratt Development H1 losses narrow as selling price rises, 2011 sales rates "encouraging"

Thu, 24 Feb 2011 09:15:00 +0000

Barratt Developments (LON:BDEV) reported that its interim losses declined significantly and margins improved, but said that the market still remained fragile.

Revenues for the six months to 31 December were in line with the prior year equivalent period at £877.6 million, while pre-tax losses narrowed from £178.4 million to £4.6 million.

Completions for the period declined from 5,053 a year earlier to 4,832 and operating margins improved from 0.6% to 5% as average selling price climbed 5.7% to £175,800 with private average selling price increasing by 10.8% to £191,900.

Net debt was reduced year on year from £605.3 million to £537 million and is forecast to be around £400 million at 30 June 2011.

The company said that 2011 has started well with “encouraging sales rates and stable underlying pricing”.

“We expect to see further operating margin growth in our second half as we continue to optimise prices, reduce costs and open new higher margin sites from recently acquired land.

“However, the market remains fragile and longer term recovery continues to depend on greater availability of mortgage finance,” said chief executive of Barratt Developments Mark Clare.

Shares in the company declined 2% on the report.

Carillion gobbles up Eaga in £306.5m cash deal

Fri, 11 Feb 2011 09:19:00 +0000

Carillion (LON:CLLN) has agreed to acquire Eaga plc (LON:EAGA) in a cash and share deal worth £306.5 million, creating a business with a combined support services revenue of approximately £3 billion.

The Newcastle headquartered business is one of the largest suppliers of heating and renewable energy in the UK.

The value of each Eaga share comprises consideration of 118.79 pence in cash and payment of the interim dividend of 1.21 pence.

A share alternative, worth a maximum of 40 percent of the cash consideration, values new Carillion shares at 385.2 pence each.

The acquisition, together with the interim dividend, values Eaga's issued and to be issued share capital at approximately £306.5 million.

Carillion expects the merger to establish a scalable platform to build the UK's largest independent energy services provider. The company is targeting synergies of £9 million by the end of 2013.

The deal will also offer Carillion a number of attractive cross-selling opportunities between Carillion and Eaga's existing customers and increase its capabilities to provide integrated support services solutions for its customers.

“The acquisition brings together two complementary companies, enhancing Carillion's position as one of the UK's leading support services companies.

“The acquisition is expected to be immediately earnings enhancing and builds on Carillion's previously announced objectives for growth,” said chairman of Carillion Philip Rogerson.

The acquisition value represents a premium of approximately 50 percent to Eaga's closing price of 80 pence on 2 February 2011, the last business day before the announcement that Eaga was in talks that might lead to an offer.

Shares in Carillion rose 6% to trade at 409 pence in early deals.

Bellway says customer interest since start of January ‘encouraging’, but too early to revise forecasts

Mon, 07 Feb 2011 08:52:00 +0000

Housebuilder Bellway PLC (LON:BWY) said the number of visitors to its showrooms and subsequent reservations since the beginning of January has been encouraging, but it is too early for a revision forecasts for the current full year.

In a trading update covering the six months ended 31 January 2011, it said it completed the sale of 2,332 homes, an increase of 85 units over the same period a year earlier.

The average sales price of these homes has risen from £155,871 to £168,000 in the period under review. This increase, whilst aided by greater price stability during 2010, is primarily a result of the change in product mix as Bellway continues to change its focus away from apartments towards more traditional two storey homes.

The operating margin is expected to exceed that achieved in the comparable period last year of 6.1 percent by almost 100 basis points. This improvement in margin should continue in the second six months as more recently acquired sites start to contribute to completions.

“The strength of this year's spring selling season should be more apparent when the results for the six months to 31 January 2011 are announced on Wednesday 30 March,” Bellway added.

Costain raises offer price for Mouchel, includes cash element

Fri, 21 Jan 2011 08:07:00 +0000

Engineer Costain Group PLC (LON:COST) has tabled a higher offer for Mouchel Group PLC (LON:MCHL) in order to gain approval from the Mouchel board for the planned takeover.

Its initial all-share offer of 0.5135 new Costain shares for each Mouchel share - valuing every Mouchel share at 105.8 pence - was rejected just before Christmas.

Costain has on January 19 put forward a revised proposal comprising 0.5531 new Costain shares and 30.0 pence in cash for each Mouchel share which, based on Costain's share price at the close of business yesterday, values each Mouchel share at approximately 153.2p.

The new offer represents a 171 percent premium to Mouchel’s closing price on 3 December 2010, being the last business day prior to Mouchel entering into its current offer period.

Costain chairman David Allvey said: "The strategic rationale for a combination has been widely supported and following extensive discussions with both sets of shareholders we have now significantly enhanced our proposal.

"We firmly believe that a combination of the two businesses is clearly in the best interests of both sets of shareholders and would bring resolution to the issues Mouchel faces for the benefit of its shareholders, customers and employees after a sustained period of uncertainty.

"Having made our first approach to Mouchel seven weeks ago and as one of a number of options to deliver our strategy, we believe that our revised proposal is attractive to both sets of shareholders and should now encourage Mouchel's board to engage with us without delay."

Barratt reports a mixed picture as margins firm, but sales volumes weaken

Wed, 12 Jan 2011 08:58:00 +0000

The housebuilder Barratt Developments (LON:BDEV) reported a mixed picture as it delivered its first half trading update.

The group said operating margins improved, offset by weaker volumes - a trend which is set to drag on sales this year.

Barratt said completions dropped to 4,832 units from 5,053 in the first half, while revenues are expected to be flat at £875 million. The average selling price rose 6 per cent to £176,000.

The company warned: "Whilst the Group will benefit from the opening of approximately 110 sites during the second half of FY 2010/11, we anticipate that any volume growth for the year will be limited."

Peer Persimmon (LON:PSN) said earlier this week that underlying annual pre-tax profit would be at the top end of expectations but sounded a note of caution on the outlook for 2011.

Barratt said its operating margin increased to 5 percent, from 2.4 percent in the same period last year.

The shares, which have fallen 30 per cent in the past year, were flat at in a lackluster opening hour of trade.