The highs and lows in construction shares this week...
The quoted construction industry enjoyed a positive flurry last week, with shares performing well on the whole and the construction and building materials index up 1.2% to 3791.
The star performer of the week was housebuilder Barratt Developments, which as expected reported a strong set of results for the year ended 31 June. Shares in the company rose more than 6% to 755.5p when it said that its strategy to build more affordable houses had paid off. This success offset a weaker private-sector market with the result that pre-tax profit was up 11% to £406.6m and turnover was up 6% to £2.5bn.
Chief executive David Pretty, respected as a safe pair of hands in the City, has always been keen to promote the company as a brownfield regeneration specialist and in the past financial year it completed 1760 social housing units, up a whopping 35%. This compared with a 1% dip in private completions.
The decent performance of housing shares came at the same time as the Construction Products Association said that construction activity in the past three months had been depressed because of a slowdown in new house construction and home improvement work, as well as a lack of road and rail investment.
The CPA’s latest construction activity barometer recorded a continued slowdown in the sales of construction products in the third quarter of 2005 compared with the same period last year.
Despite the fact that the repairs, maintenance and improvements sector is the biggest driver of Wolseley’s UK business, this FTSE-100 company managed to increase full-year pre-tax profit 15.4% to £648m. The impressive results, which coincided with the news that successful chief executive Charlie Banks is to retire next summer, sent shares up 2% to 1199p.
It was an unremarkable week for contractors, with no huge falls or rises – except that T Clarke suffered a 5% fall to 239.5p.
The All-Share rose 1.2% to 2746.
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Angela Monaghan is business editor