黑洞社区

Announcing worse-than-expected results for the six months to 31 December 2007, Neil Fitzsimmons said Persimmon and Barratt were more upbeat after their results earlier in the week because of their size.

He said: 鈥淭here are economies of scale and diseconomies of scale. Barratt has benefited from the cost synergies of the Wilson Bowden acquisition and Persimmon has demonstrated in the past that its land and size can make it very successful.鈥�

Redrow has a turnover of about 拢700m, compared with Barratt鈥檚 拢3.6bn and Persimmon鈥檚 拢3bn.

In the second half of 2007, Redrow made a pre-tax profit of 拢35.8m, which was several million down on most forecasts. Turnover dropped from 拢387.7m to 拢353.1m and completions fell by 4.2% to 2,111 units.

Fitzsimmons said: 鈥淭his year will present a more difficult trading environment than the industry has experienced for many years.鈥�

He said sales so far this year were a third down on the same period in 2007, although it was too early to say how the rest of the year would pan out.

This year will present a more difficult trading environment

Neil Fitzsimmons, Redrow

One analyst suggested the lack of detail about its future plans and downbeat tone meant it was effectively raising the for sale sign. He said:鈥淢y impression is that these guys have rolled over and given up. I鈥檇 say it was logical that Persimmon would have a pop, although not at the moment of course.鈥�

Asked whether the company would talk to any potential suitors, Fitzsimmons said: 鈥淲e are getting on with running the business as best we can and maximising value for shareholders.鈥�

According to Alastair Stewart at Dresdner Kleinwort, Fitzsimmons鈥� downbeat tone was a more accurate reflection of the sector than the statements from his bigger rivals.

Kevin Cammack at Kaupthing said the figures showed there were more fundamental problems with a company that was 鈥渦nable to shake off its mantle as an underperforming housebuilder in financial terms鈥�.