BUSINESS LIVE: Barclays buys Tesco Bank; Call route completions drop 31%; Howden’s £1.1 billion war chest

Oli Creasey, real estate research analyst at Quilter Cheviot:

‘The only concern for investors will be that Bellway has spent two-thirds of its cash reserves in this six-month period, with its balance sheet cash position falling from £232 million to just £77 million.

‘This appears to be due to increased payments to land creditors (which mainly relate to contracts signed in the last two years), but future land liabilities have been significantly reduced and the net debt ratio (which includes the impact of future land payments) remains low at C. 5%.

“While we expect management will want to build this cash buffer in coming periods, the reduction is not as alarming as the overall reduction suggests.”

Bellway welcomed affordability concerns and improved booking rates in the first half of the fiscal year, buoyed by recent cuts in home loan rates.

The UK housing market has seen signs of stability in recent weeks, helped by the easing of mortgage rates, after suffering from weak demand for most of the past year, while builders have remained cautious amid macroeconomic concerns and lack of clarity about the Bank of England’s monetary policy. .

Reflecting the green shoots of the sector’s recovery, UK house prices rose more than expected in January, while UK lenders approved the highest number of mortgages since June in December.

“While the economic backdrop remains uncertain, the gradual reduction in mortgage rates in the first half has eased affordability constraints,” CEO Jason Honeyman said in a statement.

Bellway expects to complete 7,500 homes this year, more than 30 percent fewer than the 10,945 built in the year to July 31, 2023.

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It has bought exclusive streaming rights to the pop superstar’s Eras Tour concert film.

Barclays plans to acquire Tesco’s retail banking business in a deal worth up to £700m, launching a 10-year ‘exclusive strategic partnership’ that will enter the lending market and distribute credit cards, unsecured personal loans and deposits under the Tesco -brand.

Barclays boss CS Venkatakrishnan said: ‘This strategic relationship with the UK’s largest retailer will help create new distribution channels for our unsecured lending and deposit business.

“We are able to leverage our expertise in partnership cards, developed over decades in the US, to further strengthen the highly successful Tesco Clubcard loyalty program.

‘Similar to our acquisition of Kensington Mortgages last year, this partnership with Tesco is a further demonstration of the investments we continue to make in our UK consumer business.

‘We look forward to working closely with the Tesco team over the coming months to enable a smooth transition and, subject to the completion of the transaction, we look forward to welcoming Tesco Bank colleagues and customers at Barclays.’