Record half year profits for Deeside based Redrow Homes
Redrow the Ewloe headquartered housebuilder has revealed this morning record first half year results.
Revenue from new homes’ sales in the first six months of the 2016 financial year increased by 14% to £584m, due to the increased number of legal completions, which were up from 1,850 to 2,178.
Total Group revenue increased by 8% to £603m despite revenues from commercial and land sales being £27m lower than in the first six months last year.
The average selling price of a Redrow home outside of London rose by 11% to £300,000
Operating profit rose by 16% to £110m from £95m for the same period last year, pre-tax profits increased by 14% to a first half record of £104m.
During the first half Redrow added over 5,700 plots to its current land bank, these included 920 plots on the major Garden Village project at Woodford in Cheshire.
However Redrow say the current planning system needs to be streamlined if the industry is to increase output to meet the country’s housing needs, around 9,000 Redrow plots are currently tied up within the planning process one stage or another.
The housebuilder currently has 304 apprentices, graduates and trainees in its business compared to 104 three years ago but say it’s essential they continue to encourage more young people into the industry to help fill the shortage of skilled people which is contributing to holding back output.
Steve Morgan, Chairman of Redrow, said
“I am delighted to report Redrow has again generated outstanding first half results. We legally completed almost 2200 new homes in the period, 18% higher than last year, leading to record first half pre-tax profits of £104m.
As a result of this strong performance, whilst we continue to invest in growing the business, we have also doubled the interim dividend to 4p per share.
We are only at the beginning of the spring selling season, however demand for new homes remains robust. We ended the first half with a record order book up 51% on this time last year, and in the first six weeks of the second half have secured 455 private reservations, 10% ahead of last year.
I am confident this will be another strong year of growth for Redrow.”
Financial highlights
- Group revenue rose 8% to a half year record of £603m
- Homes revenue increased 14% to a half year record of £584m driven by an 18% increase in legal completions
- Gross margin rose to 24.2% (2015: 22.3%); operating margin of 18.2% (2015: 17.0%)
- Record first half pre-tax profit of £104m, up 14%
- Earnings per share up 15% to 22.9p
- Return on capital employed of 21% (2015: 21%)
- Net debt of £183m (June 2015: £154m) giving gearing of 20% (June 2015: 18%)
- Interim dividend of 4p per share, double that of last year; guidance of 10p for the year (2015: 6p)
Operational highlights
- Legal completions rose 18% to 2178 (2015: 1850), with Help to Buy continuing to support demand
- Average number of outlets increased to 121 (2015: 101)
- Record number of employees at 1818, up almost 1200 from 2009 levels
- Current land bank 21435 plots (Dec 2014: 16950)
- Private order book up 51% at £655m (Dec 2014: £435m)
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