Avonside warning hammers shares

NIGEL COPE

The weak housing market claimed another victim yesterday when shares in Avonside, the building supplies group, collapsed by a third to 50p, their lowest point since floation three years ago.

The shares slumped after Avonside announced worse-than-expected results for the six months to June, halved the dividend and warned that profits for the full year were likely to fall significantly below 1994 levels.

Profits declined to pounds 1.1m from last year's pounds 2.6m on sales that increased slightly to pounds 39m. In February 1994, the share price stood at 191p.

Avonside's announcement is the latest in a string of downbeat announcements from the troubled sector.

In recent weeks Tarmac and BICC have announced that they are to abandon housebuilding. YJ Lovell has also put its housebuilding arm under the hammer.

Avonside announced a phased withdrawal from housebuilding in September but it is still reliant on the housing market through its building supplies division which supplies plumbing, heating and other building materials to contractors.

Housing completions at its Parry Homes and Avonside homes subsidiaries fell from 116 to 70 and the divisions slumped from a pounds 1m profit in the first six months of last year to a small loss this time. Both are up for sale, but with the market flooded with other housebuilding companies, buyers are few and far between. "We have had offers but not at the kind of prices we had hoped," Craig Slater, finance director, said.

The company said that the length and severity of the recession, combined with rising raw material costs, had placed margins under pressure for housebuilders and sub-contractors which have struggled to pass on the increases.

Management changes had been made at the timber frame and glazing divisions, both led by a new managing director. A small number of jobs will be cut and systems improved.

The dividend was cut from 2.10p to 1p. Bank borrowings stand at pounds 8m and gearing at 31 per cent.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'