MARKET REPORT: Marshalls shares floored by UK housing downturn

Marshalls sank into the red after the decking and driveway specialist had a dismal start to the year.

The FTSE 250 landscape group said fewer homes are being built in the wake of last September’s disastrous mini-budget.

It also pointed to higher mortgage costs as the Bank of England raises interest rates and the end of the Help to Buy scheme.

At the same time, Marshalls said households are not spending as much money refurbishing their homes and gardens as they did during the pandemic when business boomed.

As a result, turnover in the first four months of 2023 was 14 percent lower than in the same period last year.

And in another blow, Marshalls warned that full-year results would likely be lower than expected.

The Yorkshire-based company plans to cut 70 jobs to save money. Shares of the company, which traded more than £8 each during the pandemic, fell 8.7 per cent, or 26 pence, to 272 pence.

The FTSE 100 fell 0.2 percent, or 14.29 points, to 7764.09 and the FTSE 250 fell 0.9 percent, or 175.46 points, to 19277.04.

Official data from China has been a mixed bag as the world’s second-largest economy grew faster than expected in the first three months of the year. But imports fell 7.9 percent year on year in April, while export growth slowed.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the “numbers are yet another warning light that China is far from immune to the global slowdown.”

Investors had a lot to digest closer to home.

Figures from Halifax showed home prices rising at their slowest pace in more than a decade as rising interest rates take their toll.

Shares in builder Persimmon fell 2.3 percent, or 32p, to 1335.5p, Berkeley Group lost 2.2 percent, or 98p, to 4368p and Taylor Wimpey fell 1.6 percent, or 1.95p, to 124.1p.

Stock Watch – Hostelworld

Business is booming at online travel agency Hostelworld as vacationers take to the skies after the pandemic.

The company said bookings in many key destinations are above pre-Covid levels.

Hostelworld said it brought in record sales in the first quarter of the year.

It expects revenue to grow by 30 per cent this year, while profits should be between £14.3m and £14.8m, well above City’s £12.7m projections.

Shares gained 4.3 percent, or 5.5 pence, to 135 pence.

Victoria Scholar, head of investment at Interactive Investor, said: “Many would-be buyers are waiting in hopes that property prices will cool and mortgage rates will fall later this year, when inflation finally starts to come down.”

Direct Line warned earnings could come under pressure this year due to rising repair costs of damaged cars.

Car insurers are suffering from the rising prices of second-hand cars and parts and higher labor costs. Shares fell 4.6 percent, or 7.55 pence, to 156.8 pence

The CEO of DCC will temporarily step down for health reasons. Donal Murphy, who has led the Irish conglomerate since July 2017, will “handle a medical condition” and hand over his day-to-day responsibilities to finance chief Kevin Lucey for the next few weeks.

He hopes to return to normal work before the annual general meeting in July, DCC added.

Shares fell 3.1 percent, or 151 pence, to 4,714 pence. Ingredient maker Treatt highlighted China’s reopening as it posted record sales in the first half.

Sales rose 14.6 percent to £76 million in the six months to the end of March, while profits rose 15 percent to £7.3 million.

Sales across China – which it said remains an “important strategic region” – rose 38.6 percent over the period Covid measures were lifted. But shares fell 2.1 percent, or 14 pence, to 650 pence.

TT Electronics said sales in the first four months of 2023 were 16 percent higher than the same period a year ago. Shares in the electronic component maker rose 1.1 percent, or 1.8 pence, to 171.6 pence.

Victrex saw polymer sales fall 14 percent to 1,941 tons in the six months to the end of March.

Profit fell 10 per cent to £39.1m on weaker demand, higher wage bills and an increase in investment. Shares fell 9.6 percent, or 160 pence, to 1,504 pence.