The housebuilder served up something of a shock to markets a month ago after revealing a black hole in its accounts and the situation deteriorated further this morning after the latest trading update. Following work by an external team of forensic accountants, the liability highlighted has been increased and full year profit forecasts have been revised down by a further £50m. On top of this, despite a strong start to the year, sales over the last couple of months slowed, likely as prospective buyers became jittery over the new government’s budget. The market response to this news has been telling, with Vistry’s shares trading down 15% shortly after the open.
It has been a miserable end to the week for the London-listed outsourcing provider Serco, too. The company announced that it had failed in its attempt to rebid for the Australian immigration detention centres contract, which will have an £18m impact on profits next year. However of equal impact was the news that the recent hike in UK national insurance contributions would cost the business an additional £20m next year. Management note they are looking at mitigation measures here, but it would seem likely they will revolve around price hikes, further driving UK inflation. The Serco share price was off 12% less than 30 minutes into the session.
International Consolidated Airlines Group
A solid set of Q3 numbers from the owners of British Airways, Aer Lingus and other airlines are out this morning, but arguably the most compelling point here was news of a €350m share buy back. Operating profits for the quarter were 15% ahead, fuel costs are lower and the strong financial performance is expected to continue until the year end. Load factors also rose, growing by 2.2% to reach 89.1%. The IAG share price was almost 8% higher in early trade before giving back a little of those gains.
Headlines we expect on Monday
Kainos Group Interim Results
This time last year Revenue £193m, Pre-tax profit £30.9m, Cash £113m
Dialight Interim Results
This time last year Revenue £73m, Net debt £22.7m, Gross margin 29.6%
