WIMPEY announced 400 redundancies last week as part of a drive to save £20m. Within 48 hours its share price had jumped 22% – the biggest increase on the market for the week. The group also recorded a 20% jump in profit for last year to £146m.
Before the announcements, Wimpey was trading at 175.25p. The price peaked at 202p before levelling earlier this week at 197.25p.
Most housebuilders enjoyed a good week, despite the markets taking a pounding. PERSIMMON, BERKELEY, WILSON BOWDEN and BARRATT all recorded good gains. Berkeley hit an 18 month high of 881p, compared with 881.5p two weeks ago. One analyst said: "Given all the chaos that the markets are in, it's astonishing that the sector is doing so well. But people are looking for solid earnings and housebuilders offer that." Contractors are also enjoying a nice, if more sedate, run. CARILLION was trading at 174.5p last week and earlier this week had reached 184.5p. BALFOUR BEATTY saw shares rise 6.5p to 154.5p.
The gains are noteworthy given the uncertainty over next week's budget, the looming general election and the possibility of rate cuts.