A mixed bag

It has been a mixed results season so far, with the heights scaled by housebuilder Persimmon鈥檚 50% increase in dividend and the depths plumbed by Mowlem鈥檚 拢7.4m loss.

Last week was no exception. Shares in consultant WSP rose 7% after it increased its dividend for the first time in three years and pre-tax profit leaped 38% to 拢15m.

The confident tone of chief executive and founder Chris Cole was echoed in the City, as high-profile projects such as New York鈥檚 Freedom Tower and lead consultancy roles gave a firm impression that it is progressing onwards and upwards after tough times three years ago.

While Balfour Beatty managed a 15% hike in pre-tax profit to 拢150m, 鈥渟ubstantial鈥� losses in the USA tinged success with sorrow, just as Mowlem鈥檚 Australian subsidiary kicked it in the bottom line two weeks ago. Shares in Balfour dropped just 2% to 315p and long term it remains a favourite in the City, but in the short term there is concern that cash could be put to better use than expansion in the USA.

Among the housebuilders, Redrow was last week championing the government鈥檚 cause and more specifically the deputy prime minister John Prescott鈥檚 call for a 拢60,000 house. It reported an interim pre-tax profit of 拢69m, up 22%, and it is considered by many in the City as a well-managed company destined to perform well in a slower market.

However, in a week when Prescott lambasted housebuilders鈥� response to the 拢60,000 house idea, others in the City suggested that Redrow鈥檚 efforts may be in vain if Prescott leaves the Cabinet after the election. Other housebuilders are privately hoping that this will turn out to be the case 鈥�

Among the building materials firms, Travis Perkins fared poorly. Despite reporting a 17% rise in pre-tax profit to 拢190m for 2004, shares dropped 9% to 1750p last week. The performance of Wickes, which Travis Perkins bought for 拢950m in January, was not included, but the fact that trading in the DIY chain dipped in January and February overshadowed Travis Perkins鈥� results.

The sector overall had a poor week, with shares in construction and building materials dropping 2% to 3472. This reflected the All-Share Index, which fell about 1% to 2503.

Angela Monaghan is business editor

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