Banks, builders and property

Blue chips were firmly higher in early trading as bargain hunting appeared to be the name of the game following this week’s oil price volatility, uncertainty over the impact of the upcoming EU referendum and global growth concerns.

“Lloyds will be earning extra Brownie points from Chancellor George Osborne by simultaneously improving profitability, increasing dividends and reining in bonuses,” says AJ Bell Investment Director Russ Mould.

“The government, which has postponed the next sale of its stake in the bank due to ‘market turbulence’, will welcome the latest figures. But provision for mis-selling payment protection insurance continues to hover like the sword of Damocles over the bank although an additional provision of £2.1bn in the fourth quarter was lower than some forecasts. The deadline of October 2018 for mis-sold PPI claims, though, means that the latest provision is unlikely to the last.

“Galliford Try cheered investors with an 18% dividend increase following record first half profits. Construction remains the group’s main cash generator but house-building is driving profit growth. The group’s Linden Homes arm made operating profits of £61.5m on revenues of £362,7m, a margin of 17%. This was up from 15.1% last time and an increase to 18% is expected by 2018.

“Property portal Zoopla had a record audience of over 58 million visits in January. The group’s comparison services division uSwitch also did well on the back of national TV campaigns that focused on energy and broadband switching.”

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