Redrow profits surge from £700k to £25m

Deeside-based house builder Redrow said average sales prices and margins are rising as it reported vastly improved full year results.

Redrow said its operating margin in the year to July 2011 was 6.9%, more than double the 3.2% reported in 2010.

Pre-tax profit rose to £25.3m (2010: £0.7m) with adjusted earnings per share excluding the impact of deferred tax rate change of 6.0p (2010: 0.2p). Turnover was up too from £396.9m in 2010 to £452.7m.

Average selling prices of private homes, accounting for 87.5% of completions, compared to subsidised 'affordable homes', was up 12.5% to £174,100 (2010: £154,800).

Steve Morgan, chairman of Redrow, said: "The outlook for the industry remains challenging due to the lack of mortgages, particularly for first-time buyers. With five new jobs being created for every new home built, it is strongly in our country's interest to resolve the mortgage issue, which would once again enable the housing industry to provide urgently needed new homes and a major stimulus to the economy.

"Redrow has demonstrated over the last two years that we have been able to grow the business substantially by changing group strategy. The nature of our land acquisitions over recent times will continue to drive the average selling price in an upwards direction. Other than a marked deterioration in the general economy and the housing market in particular, I feel confident that Redrow will make further progress during the current year."

Shares in Redrow were up 3p to 119p at 10.45am on Thursday.