10th Feb 2021 09:11
(Alliance News) - Redrow PLC posted a double-digit first-half profit rise, crediting a strong sales market driven by pent-up demand from the first national lockdown, the introduction of the stamp duty holiday and the impending end of the Help to Buy scheme for existing home owners.
Shares in the FTSE 250-listed housebuilder were trading 3.5% lower at 551.50 pence each on Wednesday morning in London.
Redrow said revenue in the six months ended December 27 soared 20% year-on-year to GBP1.04 billion from GBP870 million due to legal completions also rising 20% to 3,065 from 2,554.
Private completions were up by 365 to 2,430 and affordable completions were 146 higher at 635. Affordable homes made up 21% of total completions, up from 19% the year prior. The private average selling price was unchanged at GBP387,000
Pretax profit rose 11% to GBP174 million from GBP157 million and administrative expenses reduced to GBP44 million from GBP49 million.
The Flintshire-based company said gross margin was 21%, down from 24% due to higher building costs as a result of Covid-19 measures.
Redrow confirmed the reinstatement of its interim payout, with a 6.0 pence dividend per share. The company back in November said it would pay an interim dividend, after putting payouts on hold back in March of last year, in the wake of the Covid-19 crisis.
Since then, the UK housing market has bounced back. It was one of the first sectors to re-emerge from the initial lockdown in the spring of last year, and it has been spared from the most stringent measures imposed since then.
Looking ahead, Chief Executive Matthew Pratt said: "The acceleration of changing buyer trends point to a positive outlook for the business. Our private forward sold position of GBP750 million beyond the end of both the original Help to Buy scheme and the stamp duty holiday, demonstrates the resilience of our target market and the desirability of our product and the places we create. These fundamentals mean we can look confidently to the future and fulfilling our ambitions to rebuild and grow the business."
As at December 27, Redrow had a total order book of GBP1.3 billion, up from GBP1.2 billion recorded at the end of the first half of financial 2020.
By Ife Taiwo; [email protected]
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