UK house prices reach 16-year high
New figures from Nationwide have revealed UK house prices to hit a record high during August.
The average house price last month was £224,123, which rose by 2% just in August – the highest increase since February 2004.
“UK house prices rose by 2% in August, after taking account of seasonal effects, following a 1.8% rise in July,” said obert Gardner, Nationwide’s chief economist.
“This is the highest monthly rise since February 2004 (2.7%). As a result, annual house price growth accelerated to 3.7%, from 1.5% last month. House prices have now reversed the losses recorded in May and June and are at a new all-time high.
“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions. This rebound reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing.
“Behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown. Our own research, conducted in May, indicated that around 15% of people surveyed were considering moving as a result of lockdown.
“Moreover, social distancing does not appear to be having as much of a chilling effect as we might have feared, at least at this point. These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.
“However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the aftereffects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again in the quarters ahead,” he added.
New data this week from the Bank of England revealed that UK mortgage approvals jumped to 66,300 in July – suggesting a bounceback in the housing market.
Barratt shares rise on strong sales
Barratt shares (LON: BDEV) surged over 6% on Wednesday’s opening after the housebuilder revealed strong sales.
Despite the strong sales, the effects of the COVID-19 pandemic still hit, with pre-tax profit plunging 45.9% to £491.8m in the first half of the year.
The COVID-related costs for the housebuilder have been £74m. These are made up of safety costs, non-productive site costs and site-based employee costs.
Barratt will not propose an ordinary dividend for 2020.
“While Covid-19 has had a significant impact on our results, our priority has been to keep our people safe, mitigate the effect of the pandemic on our business and be able to emerge from the crisis in a resilient position,” said David Thomas, the chief executive.
“Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism.
“We are now renewing our focus on our medium term targets, on leading the industry in quality and service and on supporting jobs and economic growth by building the homes the country needs.”
Susannah Streeter from Hargreaves Lansdown commented: “Barratt’s full year results out today show just how badly the coronavirus hit the house builder…But all of Barratt’s operational sites reopened by 30 June, and since then customers have been flocking back to showrooms. The pent up interest has inevitably also been fuelled by the stamp duty holiday and the company says a robust financial position means that the firm is entering the new financial year with ‘cautious optimism’.”
Barratt shares (LON: BDEV) surged +6.90% and are trading at 538.36 (0908GMT).
The Gym Group posts £26.3m loss
The Gym Group has reported an adjusted pre-tax loss of £26.3m for the six months to the end of June.
As all sites were forced to close over the pandemic, profits for the first half of the year fell from £7.1m in 2019.
Revenue was £37.3m for the first half of the year, which is compared to the £73.9m revenue posted last year.
The Gym Group shut all sites on 20 March this year as the country went into lockdown and did not open until 25 July.
The group has suffered over lockdown and has put various cost-cutting measures into place as well as raise £40m through an equity placing.
“Following our decisive actions during lockdown to minimise costs and secure additional liquidity, we have reopened as the strongest capitalised company in the sector,” said Chief executive Richard Darwin.
“We anticipate the long-term structural growth of low-cost gyms will continue to be driven by the underlying interest in health and fitness, which is accelerating as a result of Covid-19 and the government’s initiative to reduce obesity.
“With the likelihood of a challenging economic environment in the coming months, gym-goers will increasingly look for great value and as the lowest-priced high quality gym operator we are well placed to meet this demand,: he added.
The Gym Group shares (LON: GYM) are trading at 155.51 (0853GMT)
STV shares rise, despite H1 loss
STV shares (LON: STVG) grew on Tuesday, despite the broadcaster posting a loss for the first half of the year.
Compared to a £9.1m profit for the same period last year, STV revealed a £4.9m loss for the first six months of 2020.
Revenue fell 19% to £44.7m as national advertising revenue plunged 23% and filming was put on hold over lockdown.
STV chief executive Simon Pitts admitted to the “challenging period”, however, remained positive due to the growth in viewing figures over lockdown.
Daytime viewers surged 48% in the height of lockdown, whilst STV news figures grew 40%.
“While our advertising and production revenues have been significantly impacted by Covid-19, we have been able to mitigate nearly half of the impact thanks to the proactive steps we have taken and our variable cost model. The successful share placing in July has also significantly strengthened the balance sheet and given us the confidence to continue to invest behind our growth strategy,” said Pitts.
“The outlook is much more positive in the second half, with advertising trends improving materially in July and August, and a strong schedule to look forward to on TV and online including the return of a full complement of weekly soap episodes from later this month, new drama like Des starring David Tennant, and entertainment juggernauts like the rescheduled BGT live finals and I’m a Celebrity.”
The group has revealed an interim dividend of 3p per share.
STV shares (LON: STVG) are trading +6.13% at 225.00 (1521GMT).
Is the housing market bouncing back?
New data from the Bank of England suggests that the housing market is bouncing back after lockdown.
UK mortgage approvals jumped to 66,300 in July – up from May’s low 9,000 in May and June’s 40,000.
Figures are still lower than February’s 74,000, however, remain strong and are higher than the expected 55,000 approvals expected by economists.
Capital Economics economist, Andrew Wishart, said: “Overall, these figures support other evidence that the economy continued to recover in July. But we still think that the realisation of more job losses after the furlough scheme started to be wound up in August will cause the recovery to slow.”
The growth in mortgage approvals during July is partly thanks to the stamp duty threshold being temporarily raised by Rishi Sunak. Part of the package to support the economy, the initiative is here until the end of March and can save buyers up to £15,000.
According to analysis by Zoopla (LON:ZPG), the scheme will take the total number of homes eligible for stamp duty exemption from 16% of all sales in England, to 89%, up 73%.
Sunak said the measures would “catalyse the housing market and boost confidence.”
Hugh Wade-Jones, from brokers Enness Global Mortgages, said: “There is no doubt that the huge surge of buyer demand seen once the market reopened has been seriously turbo-charged due to the stamp duty holiday announced shortly after.”
Ted Baker shares slide as retailer appoints new Board member
Ted Baker shares (LON: TED) fell this morning the appointment of Colin La Fontaine Jackson as the group’s new Non-Executive Director.
Jackson is a representative of founder Ray Kelvin, who owns over 10% of the company, and left the clothing retailer in 2019 after allegations of inappropriate behavior towards employees.
Following his departure, Ted Baker shares, and profits have fallen as the group warned of difficult trading conditions. The retailer has issued several profit warnings over the past year.
“We are pleased to welcome Colin to the Board and to be able to access Ray’s great experience in building the brand over the last 30 years as we continue to make progress with Ted’s new Formula for Growth,” commented John Barton, the Chairman.
The company has said in a statement that the partnership will bring “the benefits of access to Ray’s unique brand experience and insight, while at the same time introducing clear guidelines that will ensure board independence is maintained.”
Ted Baker shares (LON: TED) fell 5.5% on Tuesday after the announcement and are currently trading -7.60% at 102.38 (1144GMT).
Saga PLC shares soar 77% on £150m equity raise
Saga PLC shares (LON: SAGA) rallied on Tuesday morning after the group announced that it was close it raising £150m in equity capital.
The group previously rejected a private equity offer and instead has raised the funds primarily from Roger De Haan, Saga’s former owner.
De Haan will raise up to £100m in several ways. There will be 224 million new ordinary shares, representing 20% of the current issued share capital of the company. They will be issued at 27p per share, which is a 98% premium to the 13.61p closing price of Saga shares on 28 August 2020.
He also plans to join the Board and become Non-Executive Chairman.
“The board unanimously considers that the proposed equity raise will support the execution of its reinvigorated strategy under its strengthened management team, which it believes will return Saga to sustainable growth and lead to the restoration of significant shareholder value,” said Saga in a statement.
“Saga has continued to make good progress against the plan launched last year and has taken a series of actions in the last six months to protect the business from the significant disruption that has resulted from COVID-19, especially in relation to the Group’s travel operations.”
Shares in the group soared 77% to 24.14p, however, they remain lower than where starting 2020.
“Saga remains in a very tricky place, it has no certainty on when normal service will resume in the travel business, and it will still be saddled with debt, partly associated with its ill-timed launch of two purpose-built cruise ships,” said Russ Mould, investment director at AJ Bell.
“If Saga can steer a course through the current choppy waters one can understand why the proposition might have some merit, given demographic trends should create an increasingly large pool of prospective customers. However, like many businesses, Saga still doesn’t know exactly how a post-Covid future will look,” he added.
Saga PLC shares (LON: SAGA) are currently trading +34.75% at 18.34 (1024GMT).
Location Sciences shares rally 18% as it confirms first contract for its Verify platform
Location data verification company Location Sciences (AIM:LSAI) announced on Tuesday that it had secured a contract with US consumer intelligence company InMarket, for its Verify Audience platform.
The company states that its Verify Audience product is a, “proprietary verification platform, offering independent, media-agnostic analysis and authentication of the accuracy and quality of location-targeted advertising data”, which enables brands, agencies and suppliers to check the validity of location based derived audience segments via a review of historical movements.
Location Sciences said that the product gives it access to the audience segment industry, which it deems a significant part of the location-based advertising market.
The partnership will allow InMarket customers to reach their target audiences, with the audit process analysing the source, quality and accuracy of location data, to verify its suite of up to 1,000 location derived audiences.
Commenting on the contract announcement, Location Services CEO, Mark Slade, commented:
“We are delighted to announce this partnership with InMarket so soon after the launch of our Verify Audience platform in the US. Location data used to build audiences in ad-tech can be extremely valuable, but it can be very difficult for buyers to differentiate the best from the worst data. The fact that InMarket has grasped the opportunity to take the lead in the marketplace when it comes to transparency is a testament to its business and data quality. It is clear that buyers are becoming more aware of the vast differences and nuances in location data, and we expect other agencies and suppliers to follow suit in the coming month.”
Following the news, Location Services shares rallied 17.96% or 0.084p, to 0.55p per share 01/09/20 08:24 BST. This is far short of its year-to-date high of 1.88p near the end of January.Cake Box shares rally 6% with a recovery led by tasty online sales growth
The recent trading update of baked goods retailer Cake Box (AIM:CBOX) told the story of promising customer demand, with the reopening of its stores and strong online sales acting as the icing in the cake.
Between April and May, the company noted that all of its stores in the UK due to lockdown. Having implemented its new safe work and hygiene protocols, the company began reopening its stores, with 131 of its 133 UK stores open by June 1 2020.
Though operating with a limited menu, Cake Box stated that between the start of June and end of August, like-for-like sales were up 14.1% year-on-year in franchise stores, as consumers released pent-up demand.
The real boost, however, came from the growth of its like-for-like online sales, which were up 74% year-on-year. The company said this jump had been aided by increased exposure and appeal of its new delivery service partnerships, offered by Uber Eats, Just Eat and Deliveroo.
In addition to sales picking up, Cake Box added that it had opened five new stores since the start of June, in areas including Swindon and Basingstoke. It continued, saying that it has a good pipeline of franchisees and locations, and would look to target further store openings and new staff appointments at its headquarters.
Further, the company say it will repay £156,000 in furlough payments received from the government under the Job Retention Job. It also stated that it would be paying a special dividend of 3.20p on October 23 2020, with the amount being equal to the final year dividend announced on March 31 and later withdrawn on April 14.
Commenting on its expectations for the coming month, the company’s statement read: “With one month left of the Company’s half year, the Board is encouraged by the trading performance since reopening, its level of cash generation, and the prospects going forward.” Following the news, Cake Box shares rallied 5.92% or 10.30p, to 184.30p per share 01/09/20 08:03 BST. The company’s p/e ratio is 22.31, its dividend yield stands at 0.92%.AstraZeneca receives EU approval for new lung cancer treatment
Cambridge-based pharmaceutical firm AstraZeneca (LON:AZN) has announced the EU approval of Imfinzi as a first-line treatment for adults suffering from extensive-stage small cell lung cancer (ES-SCLC).
The drug is to be used alongside standard chemotherapy after positive results from AstraZeneca’s Phase III CASPIAN trial showed that Imfinzi plus chemotherapy demonstrated a “statistically significant and clinically meaningful overall survival benefit” as a treatment for patients with ES-SCLC.
Imfinzi’s encouraging trial results have boosted hopes that the drug could be instrumental in treating ES-SCLC, which is a “highly aggressive, fast-growing form of lung cancer”, and poses a unique challenge as it “typically recurs and progresses rapidly despite initial response to chemotherapy”.
Lung cancer is the leading cause of cancer deaths worldwide, accounting for about one fifth of all fatalities. Prognosis for patients suffering from ES-SCLC is “particularly poor”, with an average survival rate of just 6% five years after diagnosis.
The CASPIAN trial showed that Imfinzi reduced the risk of death by 27% versus chemotherapy alone, helping patients sustain a median overall survival of 13.0 months versus 10.3 months for chemotherapy alone, and that Imfinzi administered alongside chemotherapy delayed the worsening of cancer symptoms.
Dave Fredrickson, AstraZeneca’s Executive Vice President of Oncology Business, welcomed the company’s pioneering new treatment:
“Imfinzi plus chemotherapy is becoming a new global standard of care for patients with extensive-stage small cell lung cancer, and we are pleased to bring this option to patients in Europe who urgently need it. This is the first immunotherapy regimen to offer both a sustained survival benefit and an improved response rate, as well as a choice of chemotherapies and convenient dosing every four weeks during maintenance”.
Imfinzi in combination with standard cancer treatments is already approved in the USA, Japan and several other countries for the first-line treatment of ES-SCLC, and is currently “under regulatory review” in others.