Datafile

The Month
January has seen unprecedented takeover activity in the housebuilding sector and some analysts believe there may be more to come. As a result the sector's stocks have risen from the doldrums of last year. It is too early to predict if they will stay high as the Halifax said house prices rose only 0.1% this month.

housing market activity
January saw new build registrations sharply up year-on-year. Average daily sales of new build are in line with Jan 2000. Halifax reports that house price rises have stalled with low growth in January (+0.1%) but Nationwide reported stronger sales (+2.5%).

Stockwatch
On the back of good figures a number of UK housebuilders saw strong share price rises at the tail end of last month. Bellway announced a 15% rise in profits to £37.5m for the six months to January. The company reported that bad weather and planning delays will reduce its forecast of up to 6000 homes by about 300 - to last year's level. Bovis Homes announced profits for the full year to December 2000 up 21% at £67.1m compared with £54.4m in 1999. Turnover during the period rose 10% to £305m from £277.8m despite a fall in volume. Operating profit rose 24% to £70.7m compared with £56.9m in 1999. Barratt Developments half year pre-tax profit increased to £63.1m from £50.5m in 1999. Operating profit during the period increased to £69.4m from £53.4m. Half year results from Miller Group has seen full-year profits up 20% from £17m to £20.6m. The Edinburgh-based company is setting its sights on establishing a housebuilding foothold in south-east England. Last year the company bought Birch, Crest Nicholson (Northern) and John Lynch. Group turnover was up 2.3% to £509m. Profits from its housebuilding division were sharply higher at £13m against £3m last year. Turnover from housing was 62% higher at £159m with house sales 34% higher at 1892 units. Miller expects this to rise to 2200 units this year and above 3000 next following the acquisitions. Last year's wet weather made for a damp financial start for conservatory manufacturer Ultraframe. The conservatory roofing group says the "extraordinary weather" had a serious impact. Laura Ashley's design service has won contracts worth £1.2m from Persimmon to revamp the image of its showhomes.

Business fact - background on UK housebuilders
Housebuilder Quintain has put plans for a massive planning application for the Greenwich peninsula in London on hold in order to concentrate on a bid for the Millennium Dome. The move follows the Government announcement that it is increasing the land to be sold from 63 acres to 123 acres.

Quintain has joined in a consortium with Grosvenor, Lend Lease and the Duke of Westminster's Stanhope Estates and is considered by observers to be the frontrunner to win the bidding process. The abandoned Quintain bid was for an 8 hectare site.

White Goods watch
UK sales of two door fridge Freezers
The Refrigeration market as a whole is not showing very strongly at the moment(+5% volume), but as this is very much a seasonal market it is not entirely surprising. Nevertheless, the two door market is up 6.5% (GfK Lek Trak Feb 2001) in volume terms.

The majority of this growth is coming from the two door frost free products which are up 19.1% year-on-year. This could well be attributed to the price erosion within this sector, with the average price down nearly 10% to £390. But it could also signify a move towards more high tech products and greater demand for convenience from buyers.

Another key winner is the side by side or American style fridge freezer. This sector is up 17.3% year on year in volume terms, and 27.2% in value.

While this is substantial growth, it is still early days and the year end (Feb 2001) volume sales were at 19 700 units.

Though small in terms of the overall market this might signal a trend in how consumers will view food storage requirements in the future - possibly adopting the US approach to shopping. Homebuilders may want to reassess the amount of non-refrigerated food storage.

A key issue within refrigeration is the multiple ownership of cooling products.

"The penetration levels of fridge freezers, according to GfK's ownership study are now at 66%, from 52% in 1991. While fridge penetration levels have dropped 3% from this time last year to 39%," says GfK account manager Laura Bartlam.

Did you know?
Local councils continue to give planning consent for low density greenfield housing developments where brownfield alternatives exist and planning inspectors are not ensuring the consistent implementation of the new government guidance.
Source: Sprawl Patrol: First Year Report (CPRE)