6th Sep 2016 06:49
LONDON (Alliance News) - Housebuilder Redrow PLC on Tuesday said activity in the higher end of the UK market, and in particular central London, was "sluggish", but said all other areas in which it operates have shown strong growth.
The FTSE 250-listed company said demand for new homes was strong throughout the year, and said it benefited from the UK government's Help To Buy scheme.
This meant revenue for its financial year ended June 30 came in 20% ahead of the prior year at GBP1.38 billion from GBP1.15 billion, driving pretax profit 23% ahead to GBP250.0 million from GBP204.0 million.
Redrow said its legal completions were up 17% during the year at 4,716 from 4,022 the year before, and its average sales price rose 7.0% to GBP288,600.
The company noted it had a "very successful year" in acquiring land and obtaining planning permission on its forward land holdings, with the owned and contracted land bank increasing to 26,000 plots. This, Redrow said, gives it a "significant platform" for increasing the number of new homes built going forward and to maintain its expansion plans.
Redrow entered the new financial year with a private forward order book of GBP807.0 million, up 54% on the previous year. Including social housing, the total forward order book was GBP897.0 million, up 51% on the prior year. Sales in the first 10 weeks "are very encouraging and up 8.0% on a strong comparator last year," Redrow said.
The company said it was proposing a full year dividend of 10.00 pence per share, 67% ahead of the 6.00p per share offered a year earlier.
Redrew noted that the slowdown in the higher end of the market had continued since its interim results in February, principally as a result of the stamp duty changes which came into effect in 2015 with further hikes in April.
Activity in this section of the market "remains sluggish", Redrow said, though noted its exposure is "very limited and all other areas in which we operate, including outer London, have shown strong growth".
Redrow said it has seen very little impact as a result of the Brexit vote.
"Our strategy of continued growth for the business is on track, and I am confident this will be another year of significant progress for Redrow," saiud Chairman Steve Morgan.
By Hannah Boland; [email protected]; @Hannaheboland
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