Redrow ‘cautiously optimistic’ on continued growth

Redrow said profit before tax for the six months to end-December was £23m, compared to £15m in the same period last year. Analysts expected the company to report a profit of £21m.

Redrow Chairman Steve Morgan, who led a failed takeover bid for the company last year, said improvements in Britain’s mortgage market as well as a focus on margins had aided Redrow’s performance.

He said the second half had started well, with reservations up 8 per cent on the same period last year.

“Given the strong pipeline of new sites and the modest improvement in market conditions, I am cautiously optimistic that Redrow’s strong recovery is set to continue.

“In line with this, we expect to propose a modest final dividend at the year end,” he said.

Net debt rose to £65m from £14m in the year-earlier period and would continue to rise in the second half, Redrow said, as it increases its landbank and pushes forward with developments in London’s lucrative property market.

Redrow’s results come after its larger rivals Persimmon and Bovis Homes posted full year profit increases of 52 per cent and 69 per cent respectively, reflecting how housebuilders have beaten a stagnant British housing market by building in the more affluent South and focusing on selling more expensive family homes rather than flats.

The company said it had completed 1,202 homes over the six months, up from 1,168 over the same period in 2011, and that its average sales price rose 9.8 per cent to £224,000.

It added 939 plots to its land bank over the first-half, taking the total to 13,295.