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Market Watch

FINANCE

MOWLEM took a tumble last week as some traders decided not to dwell on one of the reasons for the contractor's profits warning - a change in accounting techniques - and sell up anyway.

Nearly 35 million shares in Mowlem were traded after the firm warned that half-year profits would come in £20 million lower than expected as a result of taking a more prudent approach to contract valuation.

And that was not the only profit warning in the FTSE Construction sector last week.

Wimpey, one of the UK's top three house builders, sank 15p to 444.5p after cautioning that, after a positive start to trading this year, the UK market has since been static, with no movement since the general election and no change in headline prices since last year.

Rachel Waring, an analyst at stockbrokers Numis, argued that the shares were underpinned by income and asset support but maintained a 'reduce' rating and a price target of 381p.

Another firm to disappoint last week with yet another profits warning for the sector was builders' merchant Travis Perkins.

In fairness, this was the firm's first ever profits warning but the City was still none too pleased.

Cutting his rating on the shares to 'sell', David Taylor, an analyst at brokers Teather & Greenwood, said: 'In short, the core UK builders' merchanting business has turned in a lacklustre performance.

'The specialist businesses have lost out to the real specialists.'