Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Crest Nicholson
Housebuilder Crest Nicholson LON:CRST has this morning published full year results for the period to October 31st. COVID-19 has hit the business hard, with revenues off by almost 40% and pre-tax profits down by almost two thirds, although this reading did come in ahead of the previously issued guidance. In terms of the outlook, the business notes it has a strong order book but notes that it wants to improve operating margins as these stand to be impacted by legacy projects. More critically for investors however is that with government furlough money repaid, dividends will be reinstated from the forthcoming mid-year point at two and a half times cover.
Rolls Royce
There’s a trading update out from Rolls Royce [LON:RR], updating on expectations for the year ahead. Essentially the company looks to be downgrading expectations in terms of likely flying hours, down to 55% of 2019 levels. That had previously been set at 70% but regardless there’s still an expectation of becoming cash flow positive at some point in the second half of the year. That, combined with the £9bn worth of liquidity on tap means the company is confident of addressing challenges in the near term.
City Pub Group
There’s no doubting that the hospitality industry is having a rough time right now, so this morning’s trading update from City Pub Group LON:CPC for the 52 week period to December 27th makes for interesting reading. Cash burn has been reduced to £300k per month across the network of 48 pubs and the company notes it has adequate liquidity to last into 2022 if needs be. Revenues were off 57% as a result of forced closures and the company believes it is well positioned to emerge strongly once restrictions are lifted. It’s difficult to see all pub companies being in the same position, however…
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