MARKET REPORT: Investors Scrap Tools At Housebuilder Persimmon With Stocks Down 6.2% As It Warns Of An Uncertain Few Months Ahead Amid Coronavirus Pandemic
House builder Persimmon was in the doldrums after noticing that the coronavirus could still mean an uncertain few months.
That was the message from FTSE 100, which brought in £ 3.3 billion in revenue last year despite the interruption of the lockdown.
Nonetheless, the trade update pointed to a relatively strong 2020. The £ 3.3 billion was slightly lower than the £ 3.7 billion in 2019, and the average selling price of a house had risen from £ 215,709 to £ 230,500.
Housebuilder Persimmon was in the doldrums after noting that the coronavirus could still mean an uncertain few months
Persimmon attributed this to pent-up demand for homes after the initial lockdown, an increase in interest in larger homes, and the stamp duty holiday in effect until March. But by the end of the year, these factors started to decline. Weekly sales in the last quarter fell, prompting investor caution.
It also warned of the impact of the pandemic on ‘unemployment levels and consumer confidence’, which could damage home buying, the impact of an end to the stamp duty holiday and increased customs duties on goods imported from the EU as a result of Brexit.
It added, “We recognize the increased risk to the group’s planned build programs presented by the higher transmission speeds of the new variant of the Covid-19 virus.”
Uneasiness caused the stock to drop 6.2 percent, or 173p, to 2612p. Persimmon finished as the greatest faller on the FTSE 100, which was almost flat at 6745.52 points. But as the large-cap index entered water, there were some larger swings on the small end of the market.
Shares in Synairgen, listed on the junior stock market Aim, rose 9.7 percent, or 15 pence, to 169 pence as the UK drug company began late-stage testing of a coronavirus treatment
Classifies Synairgen, listed on the subordinate stock market Aim, rose 9.7 percent, or 15 pence, to 169 pence when the British drug company began late-stage testing of a coronavirus treatment.
The first person was dosed yesterday as part of an accelerated study looking at the impact of the inhaled drug, most commonly used to treat lung disease, on hospitalized Covid patients.
STOCK WATCH: Touchstar
Technology company Touchstar celebrated a year of profitability after demand for its products held up despite the pandemic. The tiddler, who uses gadgets to provide services such as proof of delivery, route planning and vehicle tracking for logistics companies, said it was ‘profitable’ in 2020, after losing £ 89,000 a year before. Chairman Ian Martin said he hoped 2021 would be ‘easier’. Shares were up 17 percent, or 8.5p, to 58.5p.
Testing will take place in 20 countries, Synairgen said, and is expected to involve 610 patients. Synairgen chief Richard Marsden explained, “This trial represents an opportunity for a major British scientific breakthrough and, if we get the right support, our drug could quickly help with the global crisis.”
The FTSE 250 fell 0.5 percent, or 96.65 points, to 20 616.31 points, amid growing fears that the UK economy will need some time to recover from the virus, even with vaccines.
Fund manager Liontrust was a ray of hope: 8 percent or 100 p. climb to 1350 p. It said investors had raised £ 792 million more than they had committed between October and December, and £ 2.5 billion more over all of 2020. It now brings in £ 29.4 billion in savings, up 83 percent since January.
Howden Joinery was also on the rise. The company, which makes kitchen and joinery products, said sales were stronger than expected at the end of last year. Home improvement companies are supported as more households are at home and decide to make changes.
Howdens now thinks earnings for 2020 will be £ 185 million – down from £ 260.7 million the year before, but higher than initially thought the stock is up 2.8 percent or 19.2 pence to 713.2 pence.
Back among the smaller stocks, broadcaster STV skyrocketed after the 2020 earnings announcement would be ‘well above expectations’ at a minimum of £ 18m. The Scottish company made more money from advertising than the average of its rivals, seeing a 14 percent increase in TV viewing and 68 percent in on-demand service. Shares were up 14.6 percent, or 43p, to 338p.