Housing boom set to continue as value of homes sold could rise by 46% this year

Liam Roche
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Housing boom set to continue as value of homes sold could rise by 46% this year

Zoopla anticipates busiest property market for 14 years

The total value of homes sold across the UK is forecast to reach £461bn in 2021, a rise of 46% from the year before.

This is according to analysis by Zoopla, the property platform, that expects the housing boom to continue.

It could be the busiest property market for 14 years, according to the report.

Just last week the Office for National Statistics said average UK house prices in March had risen by 10.2% in year. It was the fastest rate of yearly growth since before the financial crisis.

Zoopla also confirmed it expected home sales would reach 1.52m in 2021, an increase of 45% from the year before. Therefore the value of the homes sold this year would amount to £461bn.

Director of sales at specialist lender Together, Sundeep Patel, commented on the factors bringing about a stronger than expected growth rate:

“Demand for homeownership across all customer bases shows no signs of abating, with buyers jostling to make the most of the Stamp Duty extension ahead of it tapering off on the 1 July. Indeed, the total value of homes sold in the UK this year is predicted to reach £461bn, an increase of 46% on 2020,” Patel said.

“That said, while record low interest rates and government incentives have clearly boosted activity, there are severe supply and demand issues to be cautious of in the long-term. Indeed, while it’s difficult to forecast what the property market will look like as we recover from the pandemic, we’re confident flexibility will be a top priority for hopeful borrowers and their needs in the future, given the financial considerations caused by the pandemic.”

Research by Wayhome, the Gradual Homeownership provider, has revealed that 58% of renters in the UK consider buying a home a priority, despite the pandemic putting many people’s plans on hold.

Owning a home takes precedence over getting married or entering a civil partnership (49%), or entering an early retirement (30%). 

Although lockdowns brought the housing market to a temporary halt for a significant portion of 2020, and house prices continued going up, 45% of 18-23 year olds remain steadfast in their desire to own a home.

Marks and Spencer to close 30 more stores following £201.2m loss

Liam Roche
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Marks and Spencer to close 30 more stores following £201.2m loss

M&S’s partnership with Ocado proved to be a success as its food sales contributed

Marks and Spencer (LON:MKS) confirmed plans to shut down a further 30 stores over the next decade as part of a plan to turn around the businesses’ fortunes.

M&S has previously closed or relocated 59 key locations, in addition to slashing 7,000 jobs across the business.

The company was badly impacted by the pandemic last year as it reported significant losses.

M&S’s partnership with Ocado proved to be a success as its food sales contributed towards a “resilient performance” during a testing year.

The FTSE 250 company recorder a loss before tax of £201.2m during the year to 27 March, a swing from a £67.2m profit the year before.

M&S says it has 254 “full-line stores”, selling clothes, homewares and food. However, it says they are all in decline and future investment is unsustainable.

“Marks & Spencer’s full year results are easy to interpret. The retailer smashed it with food sales, but clothing was a flop as the working from home trend caused a slump in suit sales and the nation no doubt decided it didn’t need to buy any of its pastel-coloured jumpers,” says Russ Mould, investment director at AJ Bell.

“The company seems to be hoping that 2021 will be a turning point (just like each of the previous years and their turning points, given its eternal turnaround programme).”

“If this new push with clothes is unsuccessful, it will no doubt raise the question once again as to whether Marks & Spencer would be better off focusing purely on food. It wouldn’t be easy to sell the clothing and homewares arm because of the shared floor space with food in so many stores, plus there can’t be many businesses who would want to take on additional property. Therefore, it has to make the new clothing strategy work.”

Another sluggish start for FTSE 100 as May continues to shuffle to a close

Liam Roche
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Another sluggish start for FTSE 100 as May continues to shuffle to a close

“It was another dull session in a week that has seen the drama that has defined much of May wholly absent,” said Connor Campbell, financial analyst at Spreadex.

This was demonstrated on Wednesday by the FTSE 100, which again began the session unchanged at 7,040. Investors may be warily waiting for more news on the so-called ‘Indian’ strain of Covid-19, and what that might mean for the UK’s lockdown-easing plans, before making any further moves.

“The pound was just as lifeless”, said Campbell, “dipping 0.1% against the dollar but rising the same amount against the euro”. That means cable, which had briefly crossed $1.42 on Tuesday, is back at $1.4144.

The Eurozone was equally as lethargic this Wednesday, with the DAX and CAC both up 0.1%, and just short of 15,500 and 6,400 respectively.

“The Dow Jones is looking a bit livelier, with the futures pointing to a 0.3%, or 100-point, increase after the bell. But even then, that’d only lift the index back above 34,400, the level it had started at on Tuesday,” said Campbell.

FTSE 100 Top Movers

Croda International (2.82%), Flutter Entertainment (1.81%) and Entain (1.68%) have seen the biggest rises on the UK index a couple of hours into trading on Wednesday.

Intertek (-3.77%), British Land (-2.23%) and Rolls-Royce (-1.92%) make up the bottom three fallers on the FTSE 100 so far today.

British Land

British Land, one of the UK’s largest property development and investment companies, has seen the value of its properties fall by £1bn due to the outbreak of coronavirus. 

As the outlook for high streets and shopping centres worsened, many businesses were forced to close, and the FTSE 100 company saw its portfolio fall by more than 10% to £9.1bn. 

British Land confirmed its third annual loss in a row, as its loss after tax came in at £1.08bn. A year earlier the company made a £1.11bn loss.

SSE

SSE (LON:SSE), the energy company based in Scotland, announced on Wednesday that its profits rose during the year, as the company moved forward with its plan to reach net zero carbon emissions. 

The FTSE 100 company made an adjusted pre-tax profit of £1.06bn for the year to March, an increase of 4% compared to the year before. 

SSE believes the total cost of the pandemic will be £170m, below its initial expectations.

SSE ploughs ahead with commitment to renewable energy

Liam Roche
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SSE ploughs ahead with commitment to renewable energy

SSE to spend £7.5bn on decarbonising from now until 2025

SSE (LON:SSE), the energy company based in Scotland, announced on Wednesday that its profits rose during the year, as the company moved forward with its plan to reach net zero carbon emissions.

The FTSE 100 company made an adjusted pre-tax profit of £1.06bn for the year to March, an increase of 4% compared to the year before.

SSE believes the total cost of the pandemic will be £170m, below its initial expectations.

SSE also pledged to move forward with its transition to using renewable sources of energy. The group said it plans to spend £7.5bn on decarbonising from now until 2025.

The transmission arm is set for expenditure of £2.8bn for its next regulatory period, while the distribution arm’s plans are set for submission in July.

James Magness, director of Energy and Resources at Edison Group, commented on SSE’s government partnership for this year’s COP26 climate summit, among other things.

“SSE PLC today reported a sturdy set of results for the past year as it managed to deliver an increase in operating profit of 1% up to £1,506.5m. The fallout of the pandemic was felt by the company, with the impact on its operating profit estimated at £170m, which was towards the lower end of its guided range. The adjusted earnings-per-share came in within its guidance of 85-90p, as it reported an increase of 5% to 87.5p, with reported earnings per share at 215.7p per share. The company continued to fundraise during the period, as it reaffirmed its status as the largest issuer of green bonds in the FTSE 100, with the issuance of £500m in March 2021, SSE’s fourth green bond in five years,” Magness said.

“The past year saw continued development for SSE across its £7.5bn Capex plan of investing in low-carbon projects, highlighted with construction well-underway on its new wind farms, including the world’s largest offshore farm at Dogger Bank. The development of these projects chimes with the government’s ambitious net-zero push, with SSE being established as a Principal Partner to the UK Government for the COP26 UN climate summit in November 2021.”

The Gym Group lifted by strong demand as gyms reopened

Liam Roche
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The Gym Group lifted by strong demand as gyms reopened

The Gym Group adds four new sites and is looking to go further

The Gym Group (LON:GYM) confirmed on Monday that its business has surpassed its expectations as people rushed back to its gyms as lockdown restrictions eased.

The company revealed that all of its 187 locations have now reopened, although social distancing measures remain, as well as a limit on guests.

Since the reopening The Gym Group’s total membership numbers rose from 547,000 at the end of February to 729,000 on May 24.

It remains some way of the 794,000 members recorded in December 2019, prior to the outbreak of Covid-19.

The fitness company has even opened four new sites across the UK, including Sydenham, Chichester, York and Cambridge.

The Gym Group expects its rate of new memberships to slow during the summer as that is generally a less busy period for the industry.

Net debt stood at £63.1m at the end of April, while the firm has a total bank facility of £100m. The company has said that it has entered talks of increasing its financial flexibility as it looks to expand by getting new sites.

The Gym Group share price is up by 2.51% to 265.50p in the morning session on Wednesday.

Richard Darwin, chief executive of The Gym Group, commented:

“Our members are delighted to be working out in the gym once more with visits per member and new joiner sign-up rates at record levels. With membership levels growing strongly, we are building our pipeline of new gyms to take advantage of what we see as a unique opportunity to extend affordable fitness to even more locations across the UK.”

British Land sees value of holdings fall by £1bn during pandemic

Liam Roche
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British Land sees value of holdings fall by £1bn during pandemic

British Land confirmed its third annual loss in a row

British Land, one of the UK’s largest property development and investment companies, has seen the value of its properties fall by £1bn due to the outbreak of coronavirus.

As the outlook for high streets and shopping centres worsened, many businesses were forced to close, and the FTSE 100 company saw its portfolio fall by more than 10% to £9.1bn.

British Land confirmed its third annual loss in a row, as its loss after tax came in at £1.08bn. A year earlier the company made a £1.11bn loss.

The property development company said that offices lost 3.8% of their value during the year to March 31, while shopping centres saw their value fall by 36%.

British Land’s underlying profit dropped by 34% to £201m as many tenants became unable to pay their rent.

At early morning trading, British Land shares are down by 1.69% to 510.80p.

British Land’s chief executive commented on the company’s results and looked ahead:

“While Covid-19 has clearly impacted our performance, with the portfolio value down 10.8%, we have a strong balance sheet and have already delivered excellent progress against our four priorities. We’ve sold £1.2bn of assets, overall 6.2% ahead of book value, completed our first net zero development at 100 Liverpool Street and committed to develop Norton Folgate and 1 Broadgate, where we have pre let nearly 30% of the office space to JLL. We have made our first logistics acquisition in north London and acquired £197m of high quality retail parks. Operationally, we have driven rent collection and leasing activity, which at 1.7m sq ft in Retail was our highest ever. I would like to thank the whole team for their incredible efforts this year.”

“Looking forward, we will further align our business to growth and value, benefitting from the pick up in economic activity that is now emerging. On our Campuses, we have an opportunity to introduce innovative growth sectors including life sciences at Regent’s Place. At Canada Water our planning permission is deliberately flexible, enabling us to deliver a range of uses aligned to growth and long term trends. In Retail & Fulfilment we will continue to target value opportunities in retail parks and development-led, logistics in London. We will maintain our focus on the everyday management of our spaces: driving rent collection, supporting our customers and making our space more sustainable.”

Amigo Loans share price plummets after court ruling

Liam Roche
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Amigo Loans share price plummets after court ruling

Amigo described the compensation package as essential to its survival

Amigo Loans, one of the UK’s major subprime lenders, could struggle to survive much longer after a high court judge refused to approve a compensation scheme on Tuesday.

The company described the compensation package as essential to its survival.

Amigo was attempting to minimise its liabilities for backdated customer complaints through the arrangement.

Amigo shares dived by 53%, down to 8.76p at the time of writing, following the judge, Mr Justice Miles’s ruling that the court would not sanction the scheme.

While the company had previously secured a majority of 95% of votes supporting the scheme from customers at a meeting earlier in May, Miles pointed out that the turnout was a mere 8.7%.

“I understand why the directors have sought to find a way of addressing the potentially unsustainable level of redress claims,” Miles said.

Miles added: “Some form of restructuring of the group is clearly desirable and indeed needed. But the question is whether, in all the circumstances, this scheme should be approved. I have accepted the submissions of the Financial Conduct Authority that the redress creditors lacked the necessary information or experience to enable them properly to appreciate the alternative options reasonably available to them; or to understand the basis on which they were being asked by Amigo to sacrifice the great bulk of their redress claims, while the Amigo shareholders were to be allowed to retain their stake.”

Having previously said that the company’s shares would become worthless without the scheme, chief executive of Amigo Gary Jennison said: “We are currently reviewing all our options and will provide an update at the earliest opportunity.”

Amigo grew in the aftermath of the 2008 financial crisis, reaching a valuation of £1.4bn as it was listed 10 years later.

How could China’s bitcoin mining ban impact the Argo Blockchain share price?

Liam Roche
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How could China’s bitcoin mining ban impact the Argo Blockchain share price?

Argo Blockchain Share Price

The Argo Blockchain share price (LON:ARB) is up by 11.53% on Tuesday, as it recovers somewhat from a turbulent period for bitcoin. The move comes as talk over China’s plan to ban bitcoin intensifies, as well was Argo making steps to prove its environmental credentials. Despite falling through April and May, the Argo Blockchain share price remains up by 294% since the beginning of the year. In light of recent news, investors will be curious to see if the mining company can gain a competitive advantage beyond its exposure to bitcoin.

Bitcoin Mining Council and China

Argo confirmed it has joined the Bitcoin Mining Council (BMC). The organisation is made up of North American cryptocurrency miners with the aim of promoting energy transparency and more sustainable mining methods. The move comes in addition to Argo recently signing the Crypto Climate Accord.

“Today is a good day for the planet. Sustainability has always been at the heart of Argo’s mining operations and the newly-formed Bitcoin Mining Council is the next logical step in fostering a sectoral shift towards renewable energy”, said Argo chief executive Peter Wall.

The Chinese government also appears set to ban all bitcoin mining. The government will “crack down on bitcoin mining and trading behavior and resolutely prevent the transfer of individual risks to the society,” according to a statement issued by the Financial Stability and Development Committee of the State Council, the country’s cabinet equivalent.

The Chinese government voiced concerns over perceived risks including financial stability, money laundering, drug trafficking, smuggling and profligate energy use.

Therefore, as Argo moves closer to being a net-zero miner, it could stand to gain a substantial market share from Chinese miners, which will no longer operate. In that case the Argo Blockchain share price could do very well in the future. However, those investing in Argo will remain exposed to the volatile price of bitcoin.

Ironridge Resources: Drilling into the figures

Jon Levinson
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Ironridge Resources: Drilling into the figures

DRILLING  INTO THE FIGURES 
Ironridge Resources (LSE:IRR) - 18.2p - Increased value seems unnoticed. 
There is a blindness when exploration companies announce drilling grades as IRR have today. Cynical  investors have also learned that a fund rise will often follow. Ironridge recently raised £12m at 20p as they are developing two metals reserves; they're near to a FS (Feasibility Study) for the Lithium Ewoyaa project and is highly prospective.
So drilling into today's announcement, further high grade results are reported from Ironridges Ewoyaa lithium Project...

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