The trickle of downbeat trading statements from quoted housebuilders continued to flow last week.
Taylor Woodrow was the latest to hold up its hands and admit that actually, things are not as good as we might have been led to believe four months ago. The company said that it was forecasting that sales for this year would be 6% lower than anticipated.
In a statement to the stock exchange that sounded familiar, Taywood explained that although visitor levels in August and September remained broadly stable, continuing negative media speculation meant that buyers were taking longer to commit.
In response to the statement, investment bank Dresdner Kleinwort Wasserstein cut its forecasts for Taywood’s underlying profit in 2005 and 2006 11%. The bank said the reason for the cut was reduced volume forecasts for UK housing.
It is not surprising then that last week’s worst performer within the construction and building materials sector was one of the major housebuilders. Shares in George Wimpey dropped 7.6% to 344.5p mainly on the back of Taylor Woodrow’s announcement, but also unhelped by the general gloom overshadowing the sector.
The construction sector overall had an unremarkable week and dropped 1.7% to 2877. The market was sustained by a fairly stable performance from some of the major contractors. It was also held up by Wolseley’s stately progress. This is the sector’s biggest company – a member of the FTSE 100 with a market capitalisation of £5.3bn – and it closed unchanged at 919p.
One of the best performers last week was Gleeson, which clawed its way back 5.3% to 209p, after being hit the previous week by a disappointing set of annual results.
The FTSE All-Share was little changed at 2292.
Angela Monaghan is business editor