Redrow doubles profit

Housebuilder Redrow nearly doubled pre-tax profit on sharply rising revenue of £864m in its results for the year to June.

Redrow reported pre-tax profit of £133m, a rise of 91%, with the turnover figure a rise of 43%. Redrow chair Steve Morgan said both figures were a record for the group’s 40-year history.

The housebuilder said it sold 3,597 homes, an increase of 27% on 2013, with the rest of the growth in revenue coming from a 13% rise in the average selling price of its homes.

Redrow said it had taken on 21% more staff to meet the growing demand, fuelled by the government Help to Buy scheme, which was used in 35% of the firm’s private sales.

Steve Morgan said: “Market conditions have returned to a more seasonal pattern of activity.  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.”

Morgan said that with sales rates unlikely to increase further, the majority of Redrow’s future growth would come from increasing the number of outlets it sold from. He said he expected similar growth in outlets next year, of around 12%, to that experienced this year, but that this was seriously constrained by the planning system. “As usual the constraints are the planning system, it’s the age-old problem of turning outline permissions into implementable permissions, that’s what’s holding it up.”

Redrow chief executive John Tutte said the housebuilder was still experiencing shortages of bricks as long with and certain labour and trades, particularly bricklayers. He said this had driven construction prices up by 5% outside of London and around 10% inside the M25.

Redrow’s London business contributed £124m in revenue from the sale of 293 homes, and Tutte said it would continue to show further growth next year.