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Redrow posts record results and hikes dividend by 70pc

FTSE 250 housebuilder Redrow has made light of the wider slowdown in the housing market by posting record results and hiking its dividend by 70pc.
Redrow said its pre-tax profitsfor the year to the end of June had increased by 26pc to ?315m, surpassing expectations by 3pc.Revenues jumped 20pc to a record ?1.66bn.
Revenues were boosted by a 7pc increase in Redrows average selling price, to ?309,800. Legal completions, meanwhile, grew 15pc to 5,416, and beat a record set in 2007.
The strong set of results allowed the company to raise its full-year dividend by 70pc to 17p and upgradeits profit guidance in the medium term. The update sent Redrow shares up more than 5pc in early trading. The company has also had the second-highest growing share price among housebuilders this year, according to analysts at Peel Hunt, up44pc and second only to Persimmon.
Redrow posts record results and hikes dividend by 70pc

Chief executive John Tutte

Credit:
John Lawrence
Chief executive John Tutte said: These exceptional results were achieved against an uncertain political and economic backdrop as a result of Brexit and also an ongoing requirement to manage an industry-wide shortage of skills to meet our build programmes.
The company said that stamp duty "has increasingly become a tax on mobility", and had led to a reduction in housing transactions, but added that "demand in the new homes market remains robust".
Anthony Codling, an analyst at Jefferies, said: "Redrow appears to not to be troubled by concerns about the future of Help to Buy or the impact of Brexit."
The company sells around one third of its homes using the Government-backed Help to Buy scheme which allows buyers to purchase with a 5pc deposit. It is due to come to an end in 2021, and the Government is currently in consultation about its future. Mr Tutte said: "It is frustrating you have some uncertainty [with Help to Buy] but to be quite frank that is what happens with governments."
Redrow operates over much of England, and in 2015 switched its London operations from the centre to the outskirts. The group has also acquired a Derby-based housebuilder to take advantage of the soaring house prices in the East Midlands.
Redrow
Mr Codling added: "In our view the fundamental demand for housing outweighs the challenges facing the sector and by tapping into that demand Redrow is not only building more homes but also building bigger profits."
Jon Bell, an analyst at Barclays said that the strong results were not a "high watermark" and raised his forecasts for the company.
Veteran chairman Steve Morgan, who founded the company, used the results as an opportunity to reveal that he has decided to ease back from a full-time executive role during the current financial year.
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