LONDON |
LONDON (Reuters) – Housebuilder Redrow (RDW.L) posted annual pretax profit ahead of expectations, thanks to a 10 percent rise in selling prices, but warned the outlook for the property market is challenging.
Redrow, one of the smaller listed volume housebuilders, posted a pretax profit of 25.3 million pounds in the 12 months to end-June, compared with 0.7 million in the prior year.
Market expectations edged higher during the year, with the consensus at 18.3 million pounds, according to a Thomson Reuters I/B/E/S poll of 17 analysts.
Legal completions rose 1.5 percent to 2,626 while the average selling price rose 10 percent to 164,800 pounds.
“The nature of our land acquisitions over recent times will continue to drive the average selling price in an upwards direction,” said Redrow’s chairman Steve Morgan in a statement on Thursday.
London focussed builder and developer Berkeley Group (BKGH.L) said on Monday that it would hit its profit target two years earlier than expected due to strong trading in recent months. Rival Bovis reported a doubling of first-half profit.
Redrow, run by its founder Morgan who made a flamboyant return to the group over two years ago as the market floundered at the bottom of the property crash, said the market remains uncertain as sales rates are flat year-on-year.
Construction overall in the is at low levels as builders operate in a weak environment, squeezed by low mortgage approvals and poor consumer confidence.
Sluggish demand for houses is keeping property prices subdued, with house prices falling in August according to mortgage providers.
Shares in Redrow closed at 116.5 pence on Wednesday, valuing the company at 360 million pounds.
(Reporting by Lorraine Turner; Editing by Sarah Young)