CREST FALLEN
Huge housebuilding firm warns Bank of England’s interest rates cut delays are hurting property market
Plus scroll down to find out how Elon Musk is about to become even richer
HOUSEBUILDER Crest Nicholson has warned the Bank of England’s delays in cutting interest rates is hurting the property market, as the firm tumbled into the red.
Crest said house sales had slipped since Easter after the Bank pushed back its decision to lower the base rate.
3
The comments came as it fell to a £30.9million loss before tax, compared with profits of £28.4million last year.
On an adjusted basis, which strips out one-off costs of fixing building defects, half-year profits still slumped by 88 per cent to just £2.6million.
Its shares tumbled by almost ten per cent as the FTSE 250 firm also warned for the fourth time in a year that profits would be below City forecasts.
It now expects to make adjusted profits of up to £29million, below its previous estimates of £39million.
read more business
With the backdrop of housing a political battleground for the election, Crest Nicholson said it would build fewer homes this year and expects to complete 1,800 to 1,900, against its former goal of 2,000.
While the spring season “started well”, dashed hopes on interest rates had caused volatility to return to the bond market, which determines the price of mortgages and has an impact on housing demand.
It said: “Momentum has softened slightly since Easter, reflecting the volatility in mortgage rates and the expectation of a base rate reduction coming later in the year than previously expected.”
The comments follow figures from the Royal Institute of Chartered Surveyors, which found the housing market went “into reverse” last month.
Most read in Business
Matt Smith, Rightmove’s mortgage expert, said mortgages had started to creep up again in recent weeks.
He commented: “As we get ever closer to the anticipated date of the first base rate cut, each piece of economic news has even more impact on the direction of mortgage rates.”
Latest interest rates explained by Business Editor Ashley Armstrong
But markets expect the Bank of England to keep the rate at 5.25 per cent next Thursday and not lower it until August or September.
ELON’S £44bn PAY
TESLA boss Elon Musk has claimed early victory in a shareholder vote on his $56billion (£44billion) pay package — the biggest award ever.
Shareholders voted to approve the package yesterday after a US court cancelled it in January over concerns about the independence of Tesla’s board.
3
A judge found Tesla directors were too “starry-eyed” about the tycoon and more like a fan club than a board.
Tesla had tied Mr Musk’s compensation to performance targets, including its share price. It required shares to rise from $50billion to $650billion — which he achieved.
Mr Musk posted on X on Wednesday night that votes to award his pay package were “passing by a wide margin”.
It comes a day after he and his firm SpaceX were sued by eight engineers who say they were illegally fired for raising concerns over alleged sexual harassment and discrimination against women.
WISE’S £1BN SLIP
AROUND £1billion was wiped off money transfer firm WISE yesterday as it warned growth will be lower than expected.
The UK fintech firm, which used to be called TransferWise, said profits had more than tripled to £481.4million after growing its customer base by 29 per cent to 12.8million during the year.
But investors were spooked by Wise saying growth would be 15 per cent this year, not the minimum 20 per cent expected by the City.
Shares tumbled by as much as 16 per cent on the news.
THE JIGGLE IS UP!
AROUND a dozen staff using “mouse jigglers” at a Wall Street bank have been fired for faking their work.
A shift to remote working has seen a boom in the software, which gives the impression of workers being active on their computers while elsewhere.
Wells Fargo fired them for being involved in the “simulation of keyboard activity creating impression of active work”, Bloomberg reported.
The Sun has seen a messaging board of Wells Fargo workers sharing “mouse jiggler” tips in 2020.
A SWIFT HALF… & 2 HALVES
THE boss of pub chain Fuller, Smith & Turner is toasting the Three Lions and Taylor Swift, as the industry gears up for booming alcohol sales during Euro 2024 and the pop star’s UK tour.
Simon Emeny said there had already been a rush of bookings for games.
3
He said: “I’m looking forward to England winning — that would really lift the spirits and give pubs a lot of extra business.”
And he said Fullers’ rooms in London were fully booked for Swift’s gig dates, adding: “We have one pub, The White Horse, in the shadow of Wembley Stadium.
"We’ll sell a lot of prosecco on the dates she plays!”
It came as Fullers shrugged off challenges of the last few years, including higher wages and inflation, with a 40 per cent rise in profits to £14.4million.
A rise in office returnees and demand for low-alcohol beers had helped drive up drink sales by 9.8 per cent, he said
VIRGIN IN RATE FEAR
VIRGIN MONEY has warned interest rate cuts will lower its earnings ahead of a £2.9billion takeover by Nationwide.
Banks have been boosted by higher interest rates for borrowing on credit cards.
READ MORE SUN STORIES
Virgin posted an 18 per cent rise in pre-tax profits to £279million in the six months to end of March but warned of “headwinds”.
It has pushed back restructuring plans to cut costs as it prepares to be swallowed by Nationwide.