ECONOMY

Housebuilder Berkeley reiterates commitment to London

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Housebuilder Berkeley said it remains committed to the “deeply undersupplied” London housing market after delivering better than expected annual earnings.

For the year ended April, Berkeley posted a pre-tax profit of £518m, up 2.9 per cent and ahead of a £510m consensus forecast by analysts. Revenue grew 14.7 per cent to £2.2bn, with cash due on forward sales holding almost steady year on year at £1.7bn.

Leaving long-term targets unchanged, the company said that for the next two financial years it expects pre-tax profits to be at a similar level to the current year.

“We fully recognise the impact of Covid-19 and the important conjecture and debate around the future of cities,” Berkeley said. “However, we firmly believe that this does not represent a permanent structural shift that has the capacity to reverse urbanisation or detract from the attraction of a global city such as London, with all that it has to offer in terms of culture, entertainment, education, recreation and business.”

Briefly

Swiss Re sold half its stake in Phoenix Group overnight, having been given permission by the insurer to break a 12 month lock-up agreed in July 2020. The sale cuts Swiss Re’s holding to 6.6 per cent and means it is no longer entitled to appoint a non-executive director to the Phoenix board. As a result, Swiss Re’s nominated representative Christopher Minter will resign later this week.

The Competition and Markets Authority said it had secured what it called landmark commitments from Aviva and Persimmon as part of its investigation into the leasehold sector. Aviva voluntarily agreed to scrub clauses from leasehold contracts that were doubling ground rents and will repay homeowners affected, while Persimmon will offer leasehold house owners the option to buy the freehold of their property at a discount, the CMA said. The regulator launched enforcement action against four housing developers in September.

Anexo, which provides motorists with car credit hire and legal claims management, said it has received a takeover approach from private equity group Dbay Advisors at an indicative price of 150p per share. Anexo shares closed on Tuesday at 136.25p, which valued the company at £158m.

Retailer Joules said store sales have been ahead of expectations since lockdown restrictions were lifted. Revenue grew 4 per cent to £199m in the year ended May thanks to online growth and a positive contribution from its homewares division, Garden Trading. Pre-tax profit will be “slightly ahead of current market expectations” at between £5.5m and £6.5m before exceptionals, it said.

Flooring maker Victoria revealed a further expansion of its North American distribution business with the acquisition of Cali Bamboo for £55.1m.

Liontrust Asset Management posted a pre-tax profit for the year ended March of £64.3m, up 69 per cent year on year, on revenues up 54 per cent to £164m. The fund manager recommended a second interim dividend of 36p per share that will bring its total payout for the year to 47p, up 42 per cent versus 2020.

Russian gold miner Nordgold pulled its plan to list in London just two weeks after its announcement, citing volatility in the price of the precious metal.

UK companies struggling with coronavirus-related debts have been thrown a lifeline by the HM Revenue & Customs, which will not pursue them for unpaid taxes in order to avoid a wave of insolvencies this summer.

Every taxpayer-backed loan provided by Greensill Capital under the government’s Coronavirus Large Business Interruption Loan Scheme scheme went to companies linked to metals magnate Sanjeev Gupta, according to documents seen by the FT.

Job moves

Polymer maker Synthomer named former Clariant director Michael Willome as its new chief executive officer. Willome succeeds Calum MacLean, who announced in January that he planned to step down.

Beyond the Square Mile

Vivendi has won shareholders’ support to hive off Universal Music Group into a separate company, with plans for the label controlled by billionaire Vincent Bolloré and recently valued at €35bn to list on Euronext in Amsterdam in September. 

US pharmaceutical distributor McKesson is exploring a sale of its European business in a move that would reverse its 2014 acquisition of Germany’s Celesio for $8.3bn, Bloomberg reported. Phoenix Group of Germany might buy the continental European business and an unidentified private equity fund is in talks for the UK division, which includes the Lloyds Pharmacy chain, it said citing people familiar with the matter.

Blackstone has agreed to acquire rental property buyer and operator Home Partners of America for $6bn. The private equity firm’s real estate arm, which has $378bn worth of property assets, will add a portfolio of more than 17,000 homes across the US. 

Morgan Stanley employees and clients who have not received their Covid-19 vaccine will be barred from entering the bank’s New York offices, according to an internal memo seen by the FT.

Wall Street stocks gained overnight, lifting the Nasdaq to a fresh high after the Federal Reserve chair signalled a patient approach to scaling back monetary policy support in testimony before Congress.

Essential comment before you go

Martin Wolf
If high-income democracies are to lead, they need far more coherent ideas than they showed at the G7. These countries are right to wish to protect their core values. But their principal threat comes not from China, but from closer to home. It is the failure to ensure widely-shared prosperity and defend democratic norms that matters most.

Helen Thomas
The government wants to send more of the nation’s retirement savings into private equity, property and similar illiquid investments. But the pensions and investments industries will remain on the sidelines until they can find fee structures that work.

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