Sep 15 2011 by Dave Goodban, Flintshire Chronicle
HOUSEBUILDING giant Redrow has reported a better-than-expected annual pre-tax profit on the back of a 12% rise in its sale prices.
But the Ewloe-based company warned the outlook for the property market was challenging.
Redrow unveiled strong annual figures last week which showed a 14% boost to revenues of £452.7m and pre-tax profits of £25.3m in the year to June 30.
The turnaround is due to the New Heritage housing, a range of two to four-bedroom homes launched in February 2010 which now accounts for more than 50% of reservations value.
The average selling price rose from £149,300 to £164,800. The average price of a New Heritage home jumped by 11% to £201,000.
Net debt increased from £47.1m to £75.4m due to investment in a new London division and the group’s land bank.
Five sites have been secured in London with the potential for 342 plots and a development value of about £200m.
Redrow founder Steve Morgan said: “London is a strong market with considerable international as well as domestic demand.”
Describing the results as ‘robust’, he added: “Through decisive management action, particularly the introduction of the New Heritage collection, we have been able to increase average selling prices and margins by changing mix and keeping costs under control.
“Redrow has demonstrated over the last two years we have been able to grow the business by changing group strategy. The nature of our land acquisitions will continue to drive the average selling price in an upwards direction.
“Other than a marked deterioration in the general economy and the housing market in particular, I feel confident that Redrow will make further progress during the current year.”