Redrow ‘in great shape’ as profits and sales climb

Redrow saw profits nearly double to £95m as sales leapt 50% to a half-year record £560m in the six months to 31 December 2014 compared to the same period a year earlier.

Return on capital employed rose from 14% to 21% and earnings per share went from 10.3p to 19.9p. The gross profit margin during the period was 22%, helped by an 18% increase in legal completions and a 14% increase in private average selling price to £300,000 (2014: £262,000).

Net debt reduced to £140m (June 2014: £173m) giving gearing of 18%. Shareholders will be rewarded with a 2p interim dividend, twice that of last year.

The Deeside-based housebuilder now employs a record number of staff nationwide at 1,550, up 900 from 2009. The London division contributed £145m of turnover, both residential and commercial (2014: £41m). The current land bank is 16,950 plots (Dec 2013: 16,250). The regional private order book was up 30% at £334m (Dec 2013: £256m).

Steve Morgan, chairman of Redrow, said: "Our policy of retaining capital to concentrate on growth continues to reap the benefit, with a further substantial rise in both turnover, up 54% and pre-tax profits, up 92%. As a result of this strong performance, whilst we continue first and foremost to invest in the ongoing growth of the business, we have also doubled the interim dividend to 2p per share.

"Whilst we are only at the beginning of the spring selling season, demand for new homes is strong and the welcomed changes to stamp duty will undoubtedly help home buyers within our market segment. We started the second half with a very strong order book and are expecting to increase the number of active outlets to 115 by June 2015, a 12% increase.

"Redrow is in great shape and I am confident this will be another strong year of growth for the business."