finance

Housebuilders brace for ‘new deal’ to solve cladding crisis


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Housebuilders with profits of more than £10m have been put on notice by Michael Gove over the cladding crisis after the secretary of state for Levelling Up set developers a March deadline to come up with a “fully funded plan of action”.

In a letter published on Monday, Gove said a “new deal with industry” needed to be built on commitments from developers to contribute to an estimated £4bn fund to fix unsafe cladding on 11-18m buildings and to fix properties that they played a role in developing. The government said it would decide which companies had to contribute to the fund after talks with industry, “but expect it to cover all firms with annual profits from housebuilding at or above £10 million”.

Our correspondents have more on developers’ response to Gove’s letter and a catch-up on the cladding situation in this story from the weekend.

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Briefly

Private hospital group Spire Healthcare has reached an agreement in principle with the NHS to relieve pressure on public services from the Omicron wave of Covid-19. The deal, though not yet signed, will run from today until the end of March. Spire had a similar deal with the NHS last year between January and March.

Online trading group Plus500 said last year’s performance was ahead of market expectations, though revenues were almost 18 per cent lower than 2020 and ebitda fell 25 per cent.

Online electrical retailer Marks Electrical reported a 27 per cent rise in revenues to £22m in the three months to December after a “strong performance” during Black Friday and Christmas trading. For the nine months to December, Marks reported 55 per cent year-on-year growth in sales.

Aldi only releases limited information on UK performance, but the discount retailer said this morning that sales in December rose 0.4 per cent compared to the previous year. Sales were 8.1 per cent higher than in December 2019, it added.

The week in the City

We’re trialling a new item today: what to look out for in the UK corporate week ahead. Let me know whether you’d like me to keep it or whether you already get that information elsewhere by emailing me at citybulletin@ft.com. Be honest, I can take it.

Tuesday: Robert Walters updates on the end of a bumper year for recruiters (they’ve got a lot to thank the Great Resignation for) after telling the market in December that pre-tax profits would be “comfortably ahead” of expectations. Also out are half-year results from Warhammer group Games Workshop.

Wednesday: The Christmas trading update from J Sainsbury, the first of the big supermarkets to report, is the big event. Other retailers updating investors include trainer shop JD Sports and sofa group DFS Furniture. Premier Inn owner Whitbread, food ordering platform Just Eat Takeaway, recruiter PageGroup and housebuilder Vistry also give trading updates.

Thursday: A trio of large retailers take their turn today. In grocery, it’s Tesco, which is thought to have had the best Christmas of Britain’s big supermarkets. Then there’s M&S, where investors will be looking for confirmation the rebound continues, and Asos, which is on the hunt for a new CEO after abruptly parting ways with Nick Beighton in October. Also out are updates from housebuilder Persimmon, cycle shop Halfords and homewares retailer Dunelm.

Friday: Curry’s, formerly known as Dixons Carphone, rounds out the week. It warned in mid-December that its market had been “softer over recent weeks”, though it stuck by a profit forecast made in November, so this will show whether trading bounced back.

Beyond the Square Mile

The co-founder of N26, one of Europe’s highest-profile online banks, has said the fintech got it wrong on global expansion and crypto. “Should we have built trading and crypto instead of launching in the US? In hindsight, it might have been a smart idea,” Max Tayenthal told the FT. Eighteen months after beating a retreat from the UK, N26 announced in November it would leave the US too. Do read Olaf Storbeck’s interview here.

Founders and senior managers of companies held by Ark Invest’s flagship fund have embarked on an unprecedented bout of stock selling, ETF correspondent Steve Johnson reports. Company insiders sold $13.5bn of stock — and bought just $11m — in the six months to December. The Ark Innovation exchange traded fund (ARKK), which earned founder Cathie Wood the nickname “Queen of the bull market” after it gained more than 150 per cent in 2020, has lost nearly half its value since its February 2021 peak.

An eventful day in trading in Chinese stocks: shares in China Life Insurance dropped on Monday after Beijing’s anti-corruption agency revealed it was investigating the company’s chair, while shares in Modern Land, an indebted Chinese property developer which missed payments on an onshore bond in October last year, plunged almost 40 per cent after it revealed it had been in talks with creditors over a restructuring plan. But Chinese tech stocks rose after a difficult week’s trading. William Langley has more on all three stories.

Deputy editor Patrick Jenkins explains why a centuries-old trade finance product, the banker’s acceptance, serves as a modern day barometer of storminess in financial sector sentiment. For years, the Chinese financial sector has been innovating with supposedly safe banker’s acceptances, he writes. And “no matter how safe these kinds of products are in theory, they certainly aren’t risk free in practice. Unfortunately, the market is increasingly pricing them as if they were.”

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