Persimmon and Bellway down tools and halt dividend

Uncertainty over what should happen on construction sites is another example of the lack of clarity coming from Boris Johnson every time he blusters. Although Persimmon undoubtedly will have an eye on a collapse in demand.

When housing development eventually gets going again, Owl confidently predicts that developers will claim that EDDC has fallen behind its planned build out rate and demand more planning permissions to compensate.

Owl wonders what is happening at Hinkley – the construction that is so vital to Heart of the South West strategic plans? Have they downed tools?

Matt Oliver  www.thisismoney.co.uk 

Persimmon and Bellway down tools and halt dividend as row rages about whether construction should continue during lockdown

Persimmon and Bellway have told workers to down tools as a row rages about whether construction should continue during the coronavirus lockdown. 

The housebuilders also suspended their dividends to help conserve cash, following in the footsteps of other businesses. 

Shares in Persimmon rose 15.3 per cent, or 258.5p, to 1950p after the announcement, while Bellway’s shares fell 1.6 per cent, or 32p, to 2039p. 

Housebuilders Persimmon and Bellway have told workers to down tools as a row rages about whether construction should continue during the coronavirus lockdown

Rivals Barratt, Taylor Wimpey and Galliard Homes also announced site closures. Vistry Group, the owner of Bovis Homes and Galliford, also said it was cancelling a dividend due in May worth £60million. 

It had already halted work at its sites. However, others such as Redrow and Berkeley Homes have defied pressure to take similar steps, sparking a row about whether the Government should explicitly ban construction site work. 

Cabinet ministers including Health Secretary Matt Hancock and Housing Secretary Robert Jenrick have resisted an all-out ban, saying that work on infrastructure is important to the economy and should continue – so long as workers stay far enough apart under social-distancing rules. 

Despite this, major sites in London have been shut down after an outcry over the number of construction workers still using the London Underground. 

Mace, the main contractor in charge of redeveloping Battersea Power Station – one of the capital’s biggest building projects – announced a two-day shutdown on Tuesday to review whether it can continue safely. 

Work on major High Speed 2 (HS2) rail sites, including Euston Station and Old Oak Common, has also been suspended, as well as construction of Google’s new headquarters in King’s Cross. 

Persimmon said it had taken the decision to close building sites and sales offices because of the ‘exceptional’ challenges posed by the coronavirus outbreak. 

It said work would only continue at some to make them safe, but admitted the temporary shutdown would cause ‘significant delays’ in handing over homes to customers. 

In a move to free up cash and fortify its balance sheet, the company also postponed two dividend payments – worth 235p per share overall or £749.5million – that were due in April and July. 

Bellway also said it would also shut down its sites and cancelling its interim dividend. Smaller builders such as McCarthy & Stone said they were pausing work. However, Cairn Construction joined Redrow and Berkeley in continuing work on its sites.

 

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