Three things you need to know in the financial markets this morning from investment writer, Tony Cross
There’s a trading update out from Bellway this morning, covering the four month period to the start of June. The juggernaut that is the UK residential property sector shows no signs of slowing down with reservations up 4.7%, although house price inflation does seem to be slowing. This is also being met with rising costs across the construction sector, so whilst sales volumes are set to remain in line with expectations, the question investors may be left asking is how margins will be impacted.
Sticking with property and Crest Nicholson have a half year update out this morning, too. Revenues are 7% ahead but the operating profit margin has fallen by 2.7%. It still sits at a healthy 14.1%, although the company notes that as part of a de-risking strategy it is looking to sell more pre-funded properties into the rental sector. Again this is costing margin, although in return for guaranteed sales. Despite political uncertainty the company remains confident that the full year outlook remains in line with expectations.
Fashion brand Ted Baker may have been through a rough patch late last year and today’s trading update presents something of a mixed bag. Thanks to acquisitions, sales have jumped, but on an organic basis the picture is a little less impressive. The highly promotional backdrop for the sector is also squeezing margins and the company expects full year profits to come in below the 2018/19 figure.