Ofex-listed house-builder Wren Homes saw pre-tax profits fall from £140,000 to £117,000 in the six months to January. But chairman Peter West was 'very comfortable' with Seymour Pierce analyst Leslie Kent's forecast of £1 million profits for the year as a whole. Ben Cobley reports.

Surrey-focused Wren sold just one house in the first half, which slashed turnover from £1.3 million to £320,000. But activity at its existing sites was said to be 'brisk', with 'a minimum of three, and probably five or six', homes due to be sold in the second half.

When asked about Seymour Pierce's forecast, West said: 'If anything, we expect to do slightly better than that'. Kent expects the company to make around £1 million pre-tax profit for the year to August, with 2.3p earnings per share. After this, he suggests profits of £1.5 million and earnings of 4.3p a share. 'Wren is doing all the right things', Kent said. However, he added that, 'from the point of view of representing the company, I would like it to be on a higher market'.

He pointed out that a move to Aim was 'a matter of when, not if', and was likely to follow its yearly figures. The firm would probably seek a full listing about a year later.

Wren specialises in building £250,000-£750,000 standalone houses and is based in Sutton, Surrey. The Surrey housing market has held up well, with the company selling properties for an average of £500,000. Kent expects this trend to continue, highlighting the UK housing shortage, demographic changes and the attractiveness of 'the commuter belt '(Wren's focus).

The company's shares, which were floated in November at 14.32p, have since fallen to 11p, about midway between their high and low. Wren sits on a prospective p/e ratio of 4.8, with its adviser saying the firm is 'quite clearly grossly under-valued'.

Kent compares Wren to fully-listed Country & Metropolitan: 'They are very similar companies, with the same formula'.