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Redrow's full-year profit nearly doubles

Tuesday, September 02 09:18:58

British housebuilder Redrow Plc's full-year profit soared 91 percent, spurred by the UK government's 'Help-to-Buy' housing scheme and strong consumer sentiment.

Shares in the company, which doubled its final dividend to 2 pence per share, rose 1.4 percent to 285.57 pence in early trade on Tuesday on the London Stock Exchange.

"We have substantially increased our land bank, which should see a good growth in the number of outlets during the year. This, combined with our strong order book, leaves me confident that the group will see another year of significant progress," Chairman Steve Morgan said in a statement.

However, the company cautioned that the Bank of England's decision to introduce new rules to help curb the surge in Britain's housing market and limit mortgage lending had moderated the market, forcing housing activity back to a more seasonal pattern.

The bank said in June it would cap mortgages worth 4.5 times a borrowers' income from October, and that the changes would apply to 85 percent of total new home loans, sending shares in leading British housebuilders down more than 4 percent on the day.

Pretax profit rose to 132.6 million pounds ($219.9 million) in the 12 months ended June 30, from 69.4 million pounds a year earlier.

Full-year revenue jumped 43 percent to 864.5 million pounds, the mid-sized residential and mixed-use property developer said.

The FTSE-250 company's total legal completions rose 27 percent to 3,597, encouraging it to add 230 direct employees to its workforce. 'Help to Buy' represented 35 percent of Redrow's private completions during the year.

'Help-to-Buy' scheme helps people buy homes priced up to 600,000 pounds with a deposit as low as 5 percent, largely to encourage first-time buyers to get on the property ladder.

Redrow said the value of private reservations increased 53 percent to 1.021 billion pounds, with its average selling price rising 13 percent to 239,500 pounds. (Reuters)

For more visit: www.businessworld.ie