CityWatch: Only words

A glance at the language used by Persimmon, Barratt and Bovis Homes paints an interesting if not altogether clear picture. Looking down the list of words, you could be forgiven for thinking Persimmon and Bovis Homes were more upbeat about life than Barratt.

And the share price movement earlier this week seemed to reflect exactly that; Barratt dropped 3% to 142p on Tuesday, while Persimmon remained broadly flat. In early trading on Wednesday Bovis didn’t register much of a flicker either way.

Charlie Campbell, analyst at Liberum Capital, said the suggestion Barratt was gloomier than its peers was an oversimplification. “I don’t know why there is this vibe around. Barratt was talking about a financial year that ends in June so it needs to be much more cautious. Persimmon can afford to be bullish because there’s only a month or so left in its financial year.”

With a general election next year and the prospect of rising unemployment, interest rates and taxes, nobody can say 2010 will be pain-free. “All we know for sure,” said Campbell, “is that we’re in a better position than we thought we’d be.”

Persimmon boss Mike Farley said as much on Monday, again ruling out a rights issue to boost its land-buying muscle. “I think the message is finally getting through,” he said wearily.

He was cagier about the question of housebuilders talking to banks about buying land they are sitting on.

Bellway boss John Watson had offered a “no comment” on the bank talks, but Barratt’s Mark Clare rather gave the game away when he said all housebuilders were sniffing around (admittedly not his exact words).