Dividend-starved shareholders were given good news yesterday after two British building firms vowed to bring back their payouts next year.
When the pandemic reached its height and hammered construction businesses, Redrow and Galliford Try were among companies that suspended their payouts to save cash.
But the pair will resume their divis and said they expected to return to profitability as demand returned. The housing market has picked up since it came out of lockdown hibernation in May, with sales turbocharged by the stamp duty relief announced in July.
Going up: Redrow and Galliford yesterday revealed plans to resume their divis and said they expected to return to profitability as demand returned to the sector
It was despite full-year profits at Redrow slumping from £406million to £140m in the year to June 28, while Galliford unveiled an annual loss of £35million.
Redrow said it had started the new financial year with a strong order book and reservations were up 12 per cent in the first 11 weeks when compared to 2019.
John Tutte, the company’s boss, said divi payments were expected to return in 2021 ‘subject to market conditions’.
Galliford expects to return to a profit after two years of losses in a row, adding that it will reinstate dividends as soon as it turns a profit. Investors celebrated the results, sending shares 3.5 per cent higher, up 3.06p, to 91p.
But the pledge wasn’t enough to rouse Redrow’s followers, with the FTSE 250-listed group’s stock falling 1.8 per cent, or 8p, to 448.2p.
Stock Watch – Loungers
Cafe and bar group Loungers was a hit with investors after it reported sales rose by 30 per cent between July and mid-September compared with last year – boosted by the ‘Eat Out to Help Out’ scheme.
The AIM-listed group, which operates the Lounge and Cosy Club chains, said the VAT reduction on food and non-alcoholic drinks also helped.
Loungers rose 15 per cent, or 24p, to 173p, despite losses more than doubling because of Covid costs, its float last April and branch openings.
Elsewhere on the FTSE 250, bus and train operator First Group made gains after it appointed Ant Green, a bus driver and employee trainer for First Bus, to its board.
He will be group employee director and joins the safety committee. The shares rose 1.7 per cent, or 0.72p, to 43p,
But it was Mediterranean-focused oil and gas company Energean that shot to the top of the mid-cap leaderboard – rising 20.3 per cent, or 106.2p, to 629p – after it signed two contracts, worth up to around £2billion, to supply gas from a project off the coast of Israel.
Its surge wasn’t enough to bring up the wider FTSE 250, which, after a day of treading water, closed 0.11 per cent lower, down 20.12 points, at 17795.26.
The FTSE 100 also finished in the red, dropping 0.44 per cent, or 27.06 points, to 6078.48.
Online trading group Plus500 dodged an embarrassing potential investor revolt by delaying a vote on fat cat bonuses.
The company, whose shares fell 1.1 per cent, or 16.5p, to 1483p, had been due to hold a ballot on a special £900,000 payout for finance chief Elad Even-Chen, which has been criticised by influential investor advisory services ISS and Glass Lewis.
But it withdrew the resolution just before its annual meeting started, citing concerns raised by ‘some shareholders’.
Even-Chen’s bonus, on top of a pay package that could reach £3.7million already this year, had been proposed as a reward for his efforts to secure a tax cut in Israel, where it is based.
However, some 16 per cent of investors still opposed the re-election of Plus500 chairman Penelope Judd, after being urged to so by Glass Lewis.
Posh tonic maker Fever-Tree saw its shares fizz after Berenberg increased the target price on its shares from 2350p to 2500p.
Analysts said there is ‘excellent’ momentum in the US, where lockdown supermarket sales will have raised the profile of its brand.
It also has ample opportunity to expand to ‘next wave’ European markets including Germany, Italy, Spain and Switzerland, they said, adding that whenever the company adds a new product it quickly proves popular.
Fever-Tree closed 9.9 per cent higher, up 217p, to 2400p.