Builder’s profit boast as it readies takeover bid

Housebuilder Redrow said it was on track to notch up a 22pc rise in profits this year as it flexed its muscles in the battle to take control of troubled Bovis Homes.

The company, which had a £1bn takeover offer knocked back by rival bovis early this month, said it is on course to make profits of ‘at least £306m’ in the year to the end of June.

Analysts said the unscheduled update was ‘a show of strength’ from redrow and its chairman and founder steve Morgan in the bidding war for bovis.

Bovis has rejected an 814p a share offer from redrow and an 886p a share offer from Galliford

Try though it remains in talks with Galliford Try. but redrow has said it sees a tie-up with bovis as a ‘compelling opportunity’ and analysts believe it could be preparing an improved offer.

Will Jones, an analyst at redburn, said: ‘We can only assume this is a show of strength ahead of a revised offer.’

Shore Capital’s robin Hardy said it was ‘the equivalent of the peacock fanning its tail in the hope that another swing at a bovis offer will be more welcomed’.

Redrow shares rose 1.5pc, or 7.2p, to 500.5p while bovis was up 0.7pc, or 6.5p, at 914p. Galliford Try was down 0.4pc, or 6p, to 1577p.

With investors on both sides of the Atlantic growing increasingly worried that the record-breaking stock markets are overvalued and due a correction, the FTSE 100 index fell 53.62 points to 7324.72.

Michael Hewson, chief market analyst at CMC Markets, said: ‘ The question being asked is whether the scales are starting to fall away from investors’ eyes as to whether President Trump will be able to deliver anything close to what has been priced into markets since his election.’

Airline shares traded lower on the back of a security clampdown banning laptops and other large electronic devices. british Airways owner IAG fell 2.8pc, or 15.5p, to 545p and easyJet was down 2.4pc, or 24p, to 985p. back in the property sector,

Savills hailed ‘another record performance in 2016’ and a ‘solid start to 2017’ as the fall in the pound following the brexit vote attracted international investors to britain.

The top end of the housing market benefited from the slump in the pound, but it was not enough to stop revenues at its UK estate agents slipping 3pc to £124.4m.

revenues from UK commercial property sales also fell last year, down 13pc to £86m. savills said: ‘since the referendum, a large majority of the stock traded, particularly in central london, has been acquired by overseas investors, particularly from Asia Pacific and the Middle east.’

The firm, which has operations all over the world, said total group revenues rose 13pc to £1.4bn and profits edged up 1pc to £99.8m.

It will pay total dividends for the year of 29p a share, up from 26p a share, but the stock fell 0.9pc, or 8p, to 876.5p.

Shares in Wood Group slipped 0.2pc, or 1.5p, to 726.5p after analysts at Jefferies warned of the risk to its ‘ progressive dividend’ following its planned merger with

Amec Foster Wheeler. Jefferies slashed its target price on Wood shares to 650p from 800p. Amec shares fell 0.4pc, or 2p, to 505p.

Credit suisse took the red pen to commercial laundry group Ber

Endsen, slashing its target price from 1200p to 700p with a warning that underinvestment meant the firm now requires a major cash injection. shares fell 3.8pc, or 31p, to 781.5p.