McCarthy & Stone MCS blames the referendum for its poor performance in the 6 month to 28th February but doesn’t even attempt to explain why it should have been so badly affected. On the face of it, the ludicrous explanation makes it look as if management is scrabbling round trying to find excuses for its own weakness. Revenue for the half year fell by 5%, completions were down by 6% and profit before tax slumped by 25%. Net debt surged nearly fivefold. Management is however, perhaps wisely, determined to look after shareholders and is maintaining its “progressive” dividend policy with a rise in the interim dividend of 80%.
The total order book over the last 5 weeks is now down only 1% on a year ago which the company describes as ( please try not to laugh at this ) “an increase in sales momentum”.
HSS Hire Group HSS is basically a tool hire business but it looks like management took its eye off the ball so that its core business in 2016 lacked both growth and momentum. The aim for 2017 is to try and restore that momentum. Revenue for the year to 31st December grew by 9.6% but on a statutory basis last years operating profit of £6.8m was turned into a loss of £2.7m and the reported loss before tax rose by some 25%, reflecting, the company says, a year of investment. As is proper in these circumstances, the dividend remained unchanged at 57p per share.
Gooch & Housego GHH reports good trading in the 6 months to 31st March, helped by positive market conditions and favourable currency movements. The order book is now 70% up on a year ago but this is reduced to 17.2% without the benefit of currency movements.
Telford Homes TEF has gone into built to rent in a big way. Now there is only one reason a housebuilder will do that, namely that building to sell has become less profitable. A stark warning if ever there was one, for the house building industry. record revenue and profits are forecast for the year to 31st March and profit before tax is expected to be slightly ahead of market expectations. The non prime London market remains robust. Taken as a whole, this is definately not the sort of news expected from housebuilders. And if buyers are leaving the housing market how long will it be before investors start doing the same. Hands up any one who knows what a de -risked forward sale is ? Its a rental ! You have been warned.