Redrow profit jumps boosted by demand for larger homes during pandemic
A buoyant housing market has boosted housebuilder Redrow’s order book to record levels.
Redrow this morning posted profit after tax of £314m, up from £140m last year.
The FTSE 250 firm said it had entered the year in good shape and was “well-prepared” to take advantage of any bounce-back in demand following the first lockdown.
The order book was at a record level at £1.43bn and work in progress carried forward was higher than normal.
It said this was partly due to a “conscious decision” to increase production in anticipation of higher Help to Buy demand ahead of the original scheme drawing to a close.
During the year to 27 June 2021, Redrow saw increased demand for its larger ‘heritage’ properties in locations outside of London.
Revenues increased by 45% to £1.94bn, only 8% below 2019 and it completed sales on 5,620 properties, up by 39% in 2020.
The company has continued to add land to its with c8,300 plots added to current land and 7,749 to forward land.
The board has also proposed a final dividend of 18.5p making a total of 24.5p for the year, in line with the company’s policy of three times dividend cover.
John Tutte, Chairman of Redrow, said: “The buoyant housing market has moderated in recent months and we anticipate sales rates will return to historically average rates over the course of the current financial year.
“It is on this basis we have planned for the future and we are confident our timely investment in land, combined with strong demand for our Heritage homes, will support our longer-term growth aspirations.
“Additionally, our record order book also provides us with an excellent platform for the future with over £1.3bn of revenue already secured for the current financial year. As a result, the business is well-placed to deliver another set of strong results.”