Redrow profit jumps as social housing boosts revenue

Redrow reported a jump in annual profit on Thursday as a double-digit increase in legal completions sent revenue to a record high.

The housebuilder recorded a profit before tax of £406m for the year ended 30 June, up 7% compared to the year before, as revenue jumped 10% to £2.1bn.

Revenue was driven higher by a 13% increase in legal completions to 6,443, passing the 6,000 milestone for the first time as Redrow saw a 55% rise in social housing output but a 2% drop in the average selling price.

With social housing revenue accounting for 12% of housing revenue over the full year, up from 8% the year before, the company's gross margin reduced slightly from 24.4% to 23.9%.

The FTSE 250 company proposed a final dividend of 20.5p per share.

Executive chairman John Tutte said: "We are understandably cautious about the post-Brexit future and also the eventual impact of the impending changes to the Help to Buy scheme. We do however, have a clear strategy to continue to grow centred on our award winning Heritage Collection that is so popular across a broad range of buyers."

He added that since the start of the new financial year, trading had been encouraging and the demand for new homes was strong, with reservations running ahead of last year.

At 0905 BST, the shares were up 0.9% at 571p.