Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Full year results from housebuilder Barratt Developments [LON:BDEV] are out this morning, providing some true context of COVID’s impact on the sector. All headline reporting metrics have taken a hit, with completions almost 30% lower, pre-tax profits down by 45%, margins down by almost 5% and net cash has been eroded sharply, too. The company is however eyeing a sharp rebound, looking to complete 20,000 homes this year, up from the 17,856 achieved in the year to June 2019, although there are concerns that unemployment, Brexit or changes to the Help to Buy scheme could all impact future performance. The dividend has been suspended but the note adds that when the time is right, this will resume on 2.5 times cover.
There’s a strategy update out from Pendragon [LON:PDG] this morning, which amounts to a three point plan, driven by the impact of COVID disruption. The narrative seems fairly benign – accelerate digital innovation, cut costs and so on, although one stand out is the focus on individual used car sales. The company sees the UK as being incredibly fertile here and plans to expand its network of stores, which will seemingly be built to a more comprehensive specification, having used recent events as a trigger to shutter unprofitable outlets.
Eastern Europe’s largest low cost airline, Wizz Air [LON:WIZZ], has published monthly passenger figures today. As one of the first airlines to resume passenger flights into the UK, the comparisons with last August’s numbers make for interesting reading. Capacity is down around 20% and passenger numbers are down just over 40%. That has hit load factors and in turn pushed the CO2 emissions per passenger/km up by almost 24%, but that’s simply a function of the maths and the reporting of this statistic is to be applauded. In the circumstances and against peers, these numbers could well offer a glimmer of hope for the beleaguered aviation sector as a whole.
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