Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
There’s a trading update out today from Ashtead Group [LON:AHT], the plant leasing specialists. Although there has been some disruption to the UK construction industry as a result of the COVID-19 pandemic, the majority of the group’s locations remain open for business. Supporting the emergency response efforts has also helped limit some of the downside, although the company expects April’s revenues from its dominant US division to be down 15% year on year. The company has however modelled various trading scenarios over the next year reflecting depressed activity and the business remains cash flow positive – it’s the speed of the economic rebound, especially in the US, that will likely be critical here.
Admiral Group [LON:ADM] has published a note on its stance over dividend payments, against a backdrop of pressure from regulators for the sector to show restraint when it comes to disbursements to shareholders. An unchanged normal dividend is to be recommended, but the proposed special dividend is being withheld. Any response from regulators will be closely followed here, especially given the fact the company has agreed to rebate £110m to vehicle insurance policy owners, reflecting the significantly reduced risk of accidents during the lockdown period.
There’s a trading update from Redrow [LON:RDW] out this morning, noting that along with other housebuilders, the company is now looking to restart construction from May 11th. It’s something the government is keen to see happen and the company notes it has established a series of policies which will maintain heightened site safety. There is however no detail over sales performance beyond stating that reservations have been running “very low” since the lockdown was imposed, but the cash position of the business remains strong. That’s obviously a positive, but it’s the state of the economy in the wake of COVID-19 that will be most critical.
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