Steve Morgan

Redrow interim profit nearly doubles

Redrow produced a pre-tax profit of £15.3m in the six months to 31 December 2011, an 80% increase on the same period the year before.

Revenues rose 8% to £232.8m and average selling prices increased 19% to £204,000. Gross margin increased to 15.4% but net debt also went up as the Deeside-based house builder added to its land holdings.

Steve Morgan, chairman of Redrow, said: "Redrow has again delivered a strong set of results with a significant improvement in performance against the backdrop of a challenging marketplace. When I returned to the business in 2009 my first priority, after putting the company on a sound financial footing, was to return Redrow to its traditional focus of a high quality differentiated family housing product, where the overwhelming market demand lay. These results today show that our change of strategy is paying off with the New Heritage Collection going from strength to strength and private average selling prices of circa £200,000. At the same time, return on capital employed, a key metric for us, has increased further to 6.4%.

"While the outlook for the industry undoubtedly remains fragile there is increasing confidence in the housing market, including first time buyers. This should be helped further when the availability of 95% mortgages kicks in under the NewBuy scheme at the end of March.

"We believe that we are well positioned for the future and the second half has started encouragingly with the value of private reservations up 11% to £69m and with a strong portfolio of sites in the pipeline. Provided we can overcome the delays in the planning system and short of a crisis in the Eurozone damaging confidence Redrow is set to continue along our path of recovery."

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