Redrow hikes dividends 70% on record revenues

Redrow posted a record revenue of £1.66bn for the year to 30 June 2017, a 20% increase on last year. Financial highlights include:

• A 7% increase in Average Selling Price to £309,800;
• Operating margin rose to 19.4% (2016: 18.9%);
• Record pre-tax profit of £315m, up 26% (2016: £250m);
• Earnings per share up 27% to 70.2p;
• Record Order Book, up 14% to £1.1bn;
• Return on Capital Employed up 10% to 26.0% (2016: 23.7%);
• Net debt reduced from £139m in June 2016 to £73m in June 2017;
• Proposed final dividend of 11p per share, making 17p for the full year, up 70%.

Steve Morgan, Chairman of Redrow, said, “Overall housing transactions in the UK have reduced as a consequence of the political uncertainty and increasing cost of moving home, particularly Stamp Duty which, over the last seven years, has increasingly become a tax on mobility. Nevertheless, demand in the new homes market remains robust and we have not seen any impact from recent domestic and international political events.

“Mortgage availability is good and interest rates on mortgages have again improved. The government’s Help to Buy scheme continues to support both home buyers and the new homes industry. In this financial year 1,882 of our private reservations utilised Help to Buy, up from 1,521 in 2016. Help to Buy has boosted housing supply and we look forward to working with government to consider the future of the scheme beyond 2021.”

John Tutte, Group Chief Executive, said, “The longer-term prospects for the housing market remain encouraging: unemployment is low, mortgage rates are attractive and there is robust underlying demand for new homes.  However, aside from the short-term risk of political and economic uncertainty, there are key issues that need to be addressed by Government to support future growth: in particular, the status of EU workers, the future for Help to Buy and the need to revitalise stalled planning reforms.

“Notwithstanding the need to address these issues, we are in a strong position to both deliver another set of record results in 2018 and to meet the ambitious targets we have set for 2020. We have a very strong order book, an excellent land bank, a sought-after product range and, above all, a talented team of people. I am confident we can overcome the challenges we face and maintain our track-record of meeting or exceeding our targets.”