Redrow predicts gloomy 2008 after 'poor' results

Housebuilder Redrow has reported worse-than-feared results for the back-end of 2007.

In the six months to 31 December the company made a pre-tax profit of £35.8m – several million pounds down on most forecasts. Turnover also dropped – from £387.7m to £353.1m.

The average selling price held steady at £162,800 (2006: £162,400) but completions fell by 4.2% to 2,111 units in a market that the chairman Alan Bowkett called “clearly challenging”.

will present a more difficult trading environment than the industry has experienced for many years

Alan Bowkett, chairman

He hinted it may not get better this year. He said: “2008 will present a more difficult trading environment than the industry has experienced for many years with lower levels of confidence in the housing market. It is difficult to assess when confidence will improve as this will depend upon a number of factors including the cost of borrowing, mortgage availability and general economic conditions.”

Citigroup called the results poor, Panmure Gordon removed its “buy” recommendation and Kaupthing was disappointed by a “less robust statement than either Persimmon or Barratt”.

Dresdner Kleinwort said the announcement was a reality check for the sector, claiming it was a more accurate reflection of the market than comments made by Persimmon and, in particular, Barratt.