Avonside warning hammers shares
Friday 25 August 1995
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.
- 1 Rules on 5p plastic bags likely to lead to arguments at the check-out
- 2 Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
- 3 Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
- 4 News agency criticised for describing Amal Clooney as 'actor's wife' in coverage of human rights trial
- 5 David De Gea to Real Madrid: Real finally get their man with £29m bid for Manchester United goalkeeper
Rules on 5p plastic bags likely to lead to arguments at the check-out
Watch the Supermoon live: How to see the brightest Moon of the year tonight
Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
News agency criticised for describing Amal Clooney as 'actor's wife' in coverage of human rights trial
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...