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What to watch: Housebuilder slump, Rolls-Royce redundancies, stocks mixed

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Edmund Heaphy
·Finance and news reporter
·5-min read
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Builder working on roof of house
Builder working on roof of house. Photo: Getty

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Sales at Persimmon and Vistry Group plummet

House-building firms Persimmon (PSN.L) and Vistry Group (VTY.L), which owns Bovis Homes, have reported a pick-up in demand following a significant fall-off in sales during the coronavirus lockdown.

Persimmon said on Thursday that new home legal completions fell 35% to 4,900 in the six months to 30 June, with revenue plummeting 32% to £1.19bn ($1.50bn) during the period.

But the housebuilder said that demand was bouncing back and that its building sites were now returning to normal levels of production. Net reservations have risen by around 30% since its sales offices reopened in the middle of May.

Vistry, meanwhile, said that completions fell by more than half in the six months to 30 June, from 3,371 to 1,235. It said that it was experiencing an “ongoing pick-up” in sales in recent weeks, with prices remaining steady.

Both Persimmon and Vistry opened construction sites on a phased basis in April, with sales offices reopening in May as coronavirus restrictions were eased.

“Our build programmes had returned to normal levels by period end, and we have seen encouraging sales levels throughout the period, in particular over the last six weeks when net reservations have been circa 30% ahead year on year,” said Persimmon chief executive Dave Jenkinson on Thursday.

3,000 apply for redundancy at Rolls-Royce

Some 3,000 people have applied for redundancy at engine maker Rolls-Royce (RR.L), part of plans to cut 9,000 jobs globally.

Rolls-Royce said on Thursday its restructure, announced in May, was “progressing well.” 3,000 people have applied for its voluntary severance programme, which was opened last month, and about 2,000 of those are expected to leave the company by the end of August.

Rolls-Royce announce sweeping cutbacks to its business in May in response to the COVID-19 pandemic. The vast majority of the 9,000 job cuts fall on its aviation business, which makes engines for planes.

“These are exceptional times,” chief executive Warren East said in a statement on Thursday. “The COVID-19 pandemic has created a historic shock in civil aviation which will take several years to recover.

“We are taking steps to resize our Civil Aerospace business to adapt to lower medium-term demand from customers and help secure our future.eate “hundreds of thousands” of high-quality jobs for young people to stave off a sharp rise in youth unemployment.

Top UK recruiters shed 780 jobs as hiring dries up worldwide

Two British recruitment giants have shed more than 780 jobs and slashed a fifth of their costs in recent months, as the coronavirus has hammered hiring activity across the globe.

PageGroup and Robert Walters both reported sharp drops in gross profit on Wednesday (8 July), with recruitment drying up in the three months to the end of June. Both have operations worldwide.

At PageGroup (PAGE.L) profits slid by 47.4% in its second quarter year-on-year to £118.3m ($149.5m). It confirmed its staff numbers had dropped by 255 in April and a further 326 in May and June, with its fee-earning recruiters dropping mainly in the UK and Americas.

Rival Robert Walters (RWA.L) saw its group profits slide 34% year-on-year to £71.1m. It told investors its staff numbers were down by 5% on levels at the end of March, falling to 3,734.

PageGroup said most of its cuts to fee-earning staff had affected “inexperienced” recent joiners and staff on performance review.

Burger King warns 1,600 jobs could be lost

Burger King UK’s boss has warned it may have to cut 1,600 jobs as a result of the COVID-19 pandemic.

Economic damage stemming from the crisis could force the fast food chain to permanently close up to one in 10 of its restaurants, chief executive Alasdair Murdoch told the BBC’s Newscast.

He told Newscast: “We don’t want to lose any [jobs]. We try very hard not to, but one’s got to assume somewhere between 5% and 10% of the restaurants might not be able to survive.

“It’s not just us — I think this applies to everyone out there in our industry.”

Only about 370 of the restaurant chain’s 530 UK stores have reopened since the nation went into lockdown on 23 March.

European stocks mixed ahead of Eurogroup meeting

European stocks were mixed on Thursday ahead of a crucial meeting of eurozone finance ministers, with investors hoping that the group will signal support for the European Union’s expansive coronavirus recovery package.

The meeting of the 19-member Eurogroup comes ahead of next week’s EU leaders summit, during which the bloc is hoping to come to agreement on the €750bn (£678bn) package of fiscal stimulus measures.

But there is considerable division among member states about the plan, with several staunchly opposing the plan to raise vast sums of money on bond markets.

The pan-European STOXX 600 index (^STOXX) rose by around 0.4%, while London’s FTSE 100 (^FTSE) declined by 0.3% in the wake of chancellor Rishi Sunak’s summer statement.

Analysts noted that, since many of the measures had been flagged in advance, the statement did little to boost UK stocks.

Germany’s DAX (^GDAXI) rose by around 1.3%, while France’s CAC 40 (^FCHI) rose by 0.2%.

What to expect in the US

Futures were pointing to a lower open for US stocks on Thursday.

S&P 500 futures (ES=F) fell by around 0.2%, while Dow Jones Industrial Average futures (YM=F) declined by 0.3%. Nasdaq futures (NQ=F), meanwhile, rose by around 0.1%.