Redrow posts record results in milestone year

JUST weeks before its 40th birthday North West-based national housebuilder Redrow has reported record annual sales and profits on the back of a sharp upturn in the sector.

The company, founded in November 1974 by Liverpool businessman Steve Morgan, said revenue in the year to the end of June rose 43% to £864.5m driven by a 27% increase in legal completions and a 13% jump in average selling price to £239,500 With profits up 91% to £132.6m, the group based just outside Chester, doubled its dividend to 2p per share.

Redrow said its sparkling performance had been boosted by the government’s Help to Buy Scheme, set up to drive activity in the sector. Legal completions rose 27% to 3,597 (2013: 2,827). With such a pick-up in demand the company boosted its workforce by 21% in the year to 1,346.

Chairman and founder Steve Morgan was in bullish mood as he forecast another good year ahead – Redrow’s order book is £482m, an increase of 85%.

He said: “November 2014 marks the 40th anniversary since I founded Redrow, therefore it is quite fitting that I am able to report a significant increase in turnover and pre-tax profits, both of which are a record for the group.

“The number of homes we built has increased by 27% and as a consequence of this ongoing growth, the number of people we employ has risen by 21%.  Whilst this is clear evidence of the success of our strategy it also shows the positive impact of the Government’s Help to Buy Scheme.

“Market conditions have returned to a more seasonal pattern of activity.  We have substantially increased our land bank, which should see a good growth in the number of outlets during the year.  This, combined with our strong order book, leaves me confident that the group will see another year of significant progress.”

 Net debt increased to £172.6m vs £91m in 2013, due to ongoing investment in land and work in progress.  Reflecting this,  Redrow’s owned and contracted land bank at the end of June 2014 was 16,724 plots, up fron 14,162 in June 2013.

Regarding the impact of the Help to Buy scheme, Mr Morgan said it had enabled many first time buyers to take a first step on the property ladder.

“The housing market has been robust throughout the last financial year as the Government’s Help to Buy schemes have enabled many people to purchase their own home for the first time.  During the year 1,023 (35%) of our private legal completions were under the Help to Buy scheme (2013: 82). 

“A large proportion of these were first time buyers and over half were in the north of England.  As these statistics show, Help to Buy is providing assistance where it is needed most.”

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