Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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November 22, 2022


Company research

Forterra (FORT, 220p, £468m mkt cap) – FORT is a client of Progressive

UK’s second largest brick producer and leading building materials producer. Trading update. Link to Progressive Equity Research note, Forecasts maintained amid “robust” trading:

“Leading UK brick and concrete products manufacturer Forterra has confirmed FY22E guidance in today trading update, which highlighted “robust” trading for the 10 months to 31 October. We have maintained our FY22E adjusted PBT at £69.1m. We believe recent sales weakness, highlighted by housebuilders, could have only limited impact due to the ultra-low inventory levels in the UK brick industry.”


Severfield (SFR, 58p, £180m) – SFR is a client of Progressive

Britain’s leading structural steel group, with sales to Europe and a rapidly growing Indian JV. HY (Sep) results. Rev +20%, £234.9m ; u-lying PBT +17%, £12.1m  Link to Progressive Equity Research note, Interims confirm sustained infrastructure drive:

“We have kept our FY23E-25E PBT estimates for Severfield, Britain’s top steel construction specialist, as its FY23E interims maintained guidance amid ‘consistently high’ demand in the UK and Europe and strong growth in India. Inflationary pressures remain well-managed. We believe Chancellor Jeremy Hunt’s Autumn Statement confirms the strong long-term outlook for energy and infrastructure, as explored in our extensive recent report.”

Company news

M Winkworth (WINK, 158p, £20m) – Progressive provides research services to Shore Capital on this stock

Franchised estate and lettings agency, focused on London and SE. Trading update, 10 months to October. Guidance: “As a result of buoyant level of activity in the second half of 2022, Winkworth’s full year revenues are expected to exceed management forecasts and our full year pre-tax profits to be ahead of the current market forecast of £2.1m”. Trading: “Market conditions remained strong in Q3, with network sales 38% higher than in Q3 2021, reflecting both an overhang of uncompleted transactions from Q2 and still strong levels of demand. Lettings were ahead by 13% over the same period, with London rentals continuing to be driven by higher prices rather than a significant increase in new mandates”. Outlook: “After the mini budget at the end of September, new buying registrations fell significantly. Sales already underway, however, continued to progress, with a limited number of fall throughs and our results for October were good. With the steps taken [in the Autumn Statement] to reverse most of the measures in the mini budget we expect to see mortgage rates continuing to moderate and sales demand rebounding in November, before we enter the traditionally quiet Christmas period. Rentals demand remains strong and the shortage of available properties continues to underpin the sales market”.


Van Elle (VANL, 45p, £47m)

Specialist ground engineering contractor. Trading update. Guidance: “Strong activity levels are expected to be sustained through the second half, despite the winter months which traditionally deliver lower activity. The Board is pleased with the progress made in the first half and anticipates trading for the full year to be slightly ahead of market expectations”. Trading: “The strong momentum in trading from the start of the year through to the update at the time of the AGM, continued through the remainder of the first half. All divisions operated at high activity levels, with significantly increased revenues delivered in Housing and General Piling. As a result, the Group expects to report record revenues for the period of approximately £81m, representing an increase of 35% on the prior year. Profit before tax is expected to exceed £3.0m (H1 22, £1.9m). Although there has been some easing in supply chain disruption, inflation, and in particular wage, fuel and materials costs have continued to impact the cost base.  These are substantially mitigated through contract price mechanisms as far as possible, however in some cases there is a lag in recovery”. HY results, 25 January.

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Opinions contained in this communication represent those of PERL and/or our affiliates at the time of publication and PERL does not undertake to provide updates to any opinions or views expressed. PERL does not hold any positions in the securities mentioned in this communication, however, PERL’s directors, officers, employees, contractors and affiliates may hold a position,  and/or may perform services or solicit business from, any of the companies or related securities mentioned.

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