Crest Nicholson’s share value drops by 12% after revealing defects in London properties, with £15 million set aside for repairs, amidst broader economic news including the US Federal Reserve’s interest rate stance and Kering’s profit warning due to Gucci’s sales slump.
Crest Nicholson, a prominent housebuilder in the UK, has faced a 12% drop in its share value following the disclosure of construction defects in its London properties. The company has earmarked £15 million to address the issues identified in its London and regeneration divisions, though there is concern from analysts that the final costs could exceed this figure. Despite facing challenges, including a setback in shares due to a profit warning, Crest Nicholson is targeting the construction of between 1,800 to 2,000 new homes this year. The remediation of the defects in its London homes is expected to take place over the next three years, with further details to be disclosed in June.
In financial news, the US Federal Reserve has decided to maintain its interest rates, marking the fifth consecutive holding period. This decision comes as the UK sees a drop in inflation to the lowest level in two years, fuelling speculation about a possible rate cut by the Bank of England. Additionally, major UK banks have reported an increase in closed accounts over the past year, attributing the closures not to customer reputations but to the need for enhanced efforts in fighting fraud.
The fashion industry has seen significant developments with Kering, the parent company of Gucci, issuing a profit warning due to a notable decline in sales in China. Gucci’s sales fell by nearly 20%, leading to a 13.3% decrease in Kering’s share value. The decline in demand for traditional products such as leather handbags contrasts with positive responses to new offerings from the Ancora collection. Gucci’s shift under creative director Sabato de Sarno towards a more pragmatic style reflects a strategic adjustment in the brand’s direction.
Lastly, Reddit has announced its initial public offering (IPO) priced at $34 per share, valuing the company at $6.4 billion. The social media platform’s decision to go public aims to bolster its financial position and support growth initiatives despite its comparatively modest revenue and accumulated losses. The IPO could potentially raise additional funds for Reddit, with a portion of the shares allocated for its user base and the majority going to institutional investors. Reddit is set to trade on the New York Stock Exchange under the ticker symbol “RDDT”.
