It is the misfortune of Barratt Developments to be the last of Britain’s big three housebuilders to issue results for the six months to June 30. That also made it the only constituent of its sector to update the stock market since Northern Rock’s woes came to light earlier this month. So it fell to Mark Clare, Barratt’s chief executive, to admit yesterday that sales of its homes plunged as much as 10 per cent last week in what should be one of the strongest months of the year.

It is of course difficult to extrapolate trading over the next six months from one bad week but Mr Clare was sufficiently concerned to caution that the knock to consumer sentiment from the credit squeeze and the tightening of lending criteria and mortgage availability is likely to mean “downward pressure on volumes and price inflation”.

That alert made yesterday’s full-year figures of largely historic interest. Pretax, preexceptional profits were up an above-forecast 16 per cent to £454 million, partly helped by a bigger than expected two-month contribution from Wilson Bowden, acquired in April for £2 billion. The dividend, raised 15 per cent, also beat estimates.

Operating margins fell as predicted – from 17 per cent to 16.7 per cent – but these should strengthen as synergies from the Wilson deal feed through. Estimates of these savings were raised by £5 million to £30 million for the current financial year, and by £15 million to £60 million for the next.

It is these, combined with Barratt’s strong forward sales position, that should partly protect it from the worst of a downturn. Reservations and sales are up 14.8 per cent on a like-for-like basis, such that 54 per cent of its current-year volume target is already met – a testimony to Barratt’s skill in using part-exchange deals to entice buyers. The company’s indication that it is comfortable to see dividend cover fall – which could mean a payout of 40p in the current year, or a yield of 5.5 per cent – also encourages.

At 726p, the shares sit at just six times current-year earnings. But that attraction pales besides the short-term uncertainties. Tightened lending criteria have arguably yet to be felt in the first-time buyer and buy-to-let market, where Barratt’s exposure to cheap flats and luxury apartments make it vulnerable. It also has £1.3 billion of debt after the Wilson deal, while the £817 million carrying value on the acquired business’s goodwill looks susceptible to downward revision.

Similarly, Barratt’s ex-goodwill net asset value of 600p a share could falter if mortgage market problems persist. It is the task of investors to look across the canyon to the other side. But with the view obscured, Barratt, albeit down 44 per cent this year, should be sold.

Euromoney

Bears waiting for signs that the credit crunch will feed through into the broader economy have yet to be satisfied. Euromoney Institutional Investor, the financial information group, said yesterday that adjusted full-year profits would be £60 million, at the top of the range the City expected. The publisher went out of its way to offer reassurance that it had not been hit by the crunch, with current trading in line with expectations.

That rallied the stock 24½p to 520p, but the shares are still below the 600p or so at which they traded at the beginning of August before the events that undid Northern Rock took hold. However, the 2007 results are now complicated by the fact that the strong profits have triggered a higher than expected employee share scheme payout, a noncash charge that trims the reported profit and loss by a little over £4 million. So the benefit to remaining investors is not so great. The shares are a relatively attractive 15 to 16 times 2007 earnings (the year end is September) and 13 times the year after – although DMGT’s 61 per cent shareholding acts as a cap on takeover speculation.

Despite all the reassurance, it is hard to believe that the summer’s turmoil will not have a wider impact that will in turn feed through to the company’s eponymous titles and the likes of Air Finance Journal and Securitization News. With expectations for 2008 likely to get worse, there will be better buying opportunities. Hold.

Manganese Bronze

For a company whose shares were the best performer in the FTSE all-share index last year – up 290 per cent – Manganese Bronze, the maker of black London taxis, is remarkably resistant to profit-taking. So far this year its shares have advanced a further 24 per cent. The explanation for that strength is not to be found in the full-year figures – which showed a company making £4 million of pretax profits, rather slight to support a stock market valuation of £209 million – but the value placed on its Chinese automotive venture.

Manganese has a 48 per cent stake in a facility in Shanghai – the balance is held by Geely, its 23 per cent shareholder – which by the end of next year should start making a lower-cost version of the TX4, its flagship model. The plant has capacity for 40,000 vehicles, against the 3,153 produced at Manganese’s Coventry factory last year.

Lower production costs mean that the Chinese-made vehicles should sell for about £15,000, putting these distinctive black cabs within reach of buyers in Europe, North America and China who are put off by the £27,000 price tag of the standard TX4. The venture will also cut costs at home by supplying Coventry with cheaper components. After property sales, Manganese has a clean balance sheet with a £3 million pension deficit and £9 million net cash. But at 57 times 2008 earnings, the upside from China – which will not be felt until 2010 – is already priced in. Sell.

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