Redrow full-year profit more than doubles
Redrow posted a rise in full-year profit on Wednesday as the housebuilder said it expects sales rates to return to historical averages over the course of the current financial year.
In the year to 27 June, pre-tax profit increased to £314m from £140m the year before, with revenue up 45% at £1.94bn. Compared to pre-pandemic levels in 2019, revenue was down only 8%.
Legal completions were 39% higher on the year at 5,620 and Redrow said house price inflation more than offset build cost increases.
"A strong market emerged from the lockdown driven by the Stamp Duty holiday and, in the earlier part of the year, by keen demand from buyers that would be excluded from the Help to Buy scheme after March 2021," the company said.
"The potential for a hiatus in the 2021 Spring market that we highlighted last year didn't materialise as the Chancellor decided to extend the Stamp Duty holiday to September 2021 with a phased return to previous rates."
With the market now back to "normal", Redrow set out its medium-term guidance. For 2024, it expects revenue of more than £2bn, earnings per share of approximately 90p and an operating margin of 19.5%.
Redrow proposed a final dividend of 18.5p a share, taking the total dividend for the year to 24.5p, in line with its policy of three times dividend cover.
Chairman John Tutte said: "The buoyant housing market has moderated in recent months and we anticipate sales rates will return to historically average rates over the course of the current financial year.
"It is on this basis we have planned for the future and we are confident our timely investment in land, combined with strong demand for our Heritage homes, will support our longer-term growth aspirations. Additionally, our record order book also provides us with an excellent platform for the future with over £1.3bn of revenue already secured for the current financial year. As a result, the business is well-placed to deliver another set of strong results."