Redrow sees full-year profit up 22% on last year

Housebuilder Redrow said its trading performance continues to be robust and it expects pre-tax profit for the year to the end of June 2017 to rise 22% from the prior year.

The company said it is on track to deliver at least £306m in pre-tax profit, thanks to a record order book and a further increase in legal completions, as well as better-than-expected rises in average selling prices.

Shore Capital said the profit figure is above its estimate of £295m which was towards the top of the range and slightly above the forecast from Redrow’s own brokers.

"So, we will be raising our FY2017F estimates but as there is no indication of whether this is a sustainable change or just a burst in trading, we will not change other years’ estimates or our fair value."

Earlier this month, Bovis Homes rejected an offer from Redrow and Galliford Try, but said that it would continue talks with the latter.

Bovis said at the time that the share and cash offer made by Redrow "was not in the interests of Bovis shareholders as the cash element of the offer would require shareholders to crystallise value at the current Bovis valuation".

ShoreCap said: "We do not think that Redrow would really benefit from combining with Bovis, it could become a millstone and we are not convinced that any merger benefits would really realised."

At 0844 GMT, the shares were down 0.2% to 492.80p.