Companies
Redrow’s sales drop 23 per cent
Housebuilder Redrow (RDW) has blamed a 23 per cent nosedive in sales on the “recent instability in financial markets”. In a trading update, the housebuilder reported that private revenue per outlet per week was £238,000 compared to £310,000 last year in yet another sign of the impact rising interest rates are having on house prices. The company is also being buffeted by build cost inflation which it expects to increase by 7 per cent. “The business has had to adapt to the changing economic outlook,” it said. ML
FRP still awaiting insolvency surge
Insolvency specialist FRP Advisory (FRP) has reported a strong six months of growth – but says the administration market is still lagging behind pre-Covid levels.
In a half-year trading update, the group reported revenue growth of 10 per cent, while underlying adjusted Ebitda has risen by 5 per cent to £11.6mn. This is in line with the board’s expectations.
However, the formal administration appointment market – which tends to be the most lucrative for FRP – still remains below pre-pandemic levels. This is despite a “long list of well documented headwinds” including interest rate rises, supply chain disruption, input cost inflation, Brexit and the withdrawal of pandemic support measures. JS
Urban Logistics’ pre-tax profit tumbles 95 per cent
Warehouse developer Urban Logistics (SHED) saw its pre-tax profit tumble 95 per cent in its results for the six months to 30 September as real estate assets of all types haemorrhage value due to the recent spike in interest rates. Earnings before tax sunk to just £2.39mn compared with £50.3mn at the same time last year due to a £22.2mn hit on the revaluation of its assets. This week, fellow real estate investment trusts (Reits) Custodian Reit (CREI), Picton Reit (PCTN), Warehouse Reit (WHR) and UK Commercial Property Reit (UKCM) all reported large valuation drops which they pinned on the soaring cost of debt. ML
Scottish Mortgage’s NAV falls by 15 per cent
Scottish Mortgage (SMT) has reported a 15 per cent drop in its net asset value (NAV) for the six months to September 2022, underperforming the FTSE All-World TR index, which decreased by 7 per cent.
Some of the biggest contributors to the negative performance included biotech company Illumina (US:ILMN) and semiconductor company ASML Holding (NL:ASML), the trust’s fourth and third largest holdings, respectively. The trust has reduced its holdings in various Chinese companies, including Alibaba (US:BABA) and Tencent (HK:700), and given an update on its 32 per cent unlisted portfolio, where companies have been revalued multiple times, mostly in negative.
“The market’s focus has narrowed to a handful of economic variables… This environment is off-putting, but it is not relevant to our investment decision-making,” said the manager, adding that it will be “redoubling our efforts to find new investments that can adapt to difficult economic conditions”. VC
Read More: Today’s Markets: Positive mood holds after inflation print