Redrow provides some welcome relief for Wolves owner Morgan
WOLVERHAMPTON Wanderers owner Steve Morgan put the club’s management problems to one side today to focus on the performance on his day-job, housebuilder Redrow.
Interim results show Redrow continued its recent positive run of results in the six months to December 31, with pre-tax profits up by 80% to £17.4m (2010: £8.5m) on the back of a 7% increase in sales to £232.8m (£216.1m).
The company said that when the contribution from its Scottish business (which was sold in June 2011) is stripped out, its like-for-like sales were 16% higher.
The sale of the Scottish arm also meant that completions on new house sales were 11% lower during the period at 1,168. However, the move to higher-value properties continued, with the ratio of its New Heritage Collection homes sold doubling to 60%.
This meant the average selling price for a private home built by the company increased by £33,000 to £204,000.
Net debt increased to £98.8m (£51.5m), which chairman Steve Morgan said was due to higher levels of land buying for future schemes, particularly in London and the South East where it has secured six sites containing 550 plots.
Mr Morgan said: “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.
“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.”
