Redrow H1 profits fall 15%; chairman John Tutte to retire

Housebuilder Redrow posted a drop in first-half profit on Wednesday amid falling completions, as it announced the departure of executive chairman John Tutte.

In the six months to the end of December, pre-tax profit declined 15% to £157m, with revenue down 10% to £870m and legal completions 14% lower at 2,554. The total order book was flat at £1.2bn but private net reservations were up 18% to £936m. Earnings per share fell 10% to 37.2p and the interim dividend nudged up to 10.5p a share from 10p.

Redrow said the results were in line with its expectations that revenue would be "considerably more weighted" than usual to the second half due to constrained outlet growth last year and the timing of apartment block completions.

The company said the wider housing market continued to be affected by political uncertainty around Brexit and during the run-up to the general election. "This had an impact on the time taken to close new homes' sales, particularly where extended chains were involved," it said.

Redrow also announced that John Tutte will step down to non-executive chairman from July and retire ahead of the annual meeting in 2021. Meanwhile, chief operating officer Matthew Pratt will be promoted to group chief executive from 1 July.

Tutte said: "The market in the first five weeks of the second half has been resilient with the value of reservations up 15% at £180m (2019: £156m).

"Current market conditions, combined with our very strong order book give me confidence this will be yet another year of progress for Redrow and our expectations for the full year remain unchanged."

At 0910 GMT the shares were up 0.6% at 827p.

Broker Peel Hunt said:"The group had already flagged the H2 bias in the current year and there has been no change to expectations on timing. Post election trading conditions have picked up but this is more likely to drop into FY21 results than this year.

"We continue to expect the group to make £408m for the year and at least for £419m for FY21. We think there are upside risks to the latter forecast if the improved market conditions hold."