City loses interest in housebuilders as Wilcon announces departure of chief executive John Tutte.
Analysts have blamed signs of distress at Wilson Connolly for a general fall in housebuilders' share values this week.

The ratings of all major housebuilders dropped after Wilcon's announcement last week that its pre-tax profit would fall below last year's £71m. Among the hardest hit were Persimmon, Wimpey, Crest Nicholson, and Barratt (see table).

Wilcon also announced that John Tutte, its chief executive, had resigned and admitted that it had failed to implement a review called after disappointing interim results in September.

Leslie Kent, analyst at stockbroker Seymour Pierce, said Wilcon's problems had reminded investors that housebuilders can run into problems. He said: "The bad news for housebuilders that have done everything right is that this type of news puts the frighteners on the whole industry."

Wilcon's announcement has come at a time of growing uncertainty over the housing market. Schroder Salomon Smith Barney analyst John Carnegie said: "They are dropping because Wilcon has made people realise that there is more risk than previously thought."

Allan Leighton, chairman of Wilcon, is to take over the running of the company and has pledged to lead a review. Former Alfred McAlpine Homes managing director Graeme McCallum and Cazenove, Wilcon's financial adviser, have been brought in to help.

This type of news puts the frighteners on the industry

Leslie Kent, Seymour Pierce

But the City remains dubious about the group's prospects. "The company has tried to do too much too quickly and look what's happened. It's a mess," said Peel Hunt analyst Stephen Rawlinson.

Analysts believe that Tutte has been made a scapegoat for the problems and fear that Wilcon may now have too few board members with housebuilding experience.

There were also calls for Leighton to step down.

Wilcon's unhealthy state has led to speculation that it may be snapped up by a rival, but industry watchers said this was unlikely. They said the company was in such a bad way that nobody would want to take it over.

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