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Redrow hikes dividend and declares special payout after record first-half profit

“In this, my final report as chairman, it gives me great pleasure to announce that Redrow has once again delivered record results for the first half of the financial year," Steve Morgan said.
Redrow
The market was subdued in the lead up to Christmas and the first two weeks of 2019

Redrow plc (LON:RDW) hiked its interim dividend and declared a special payout to shareholders after achieving a record first-half profit.  

The housebuilder said profit before tax rose 5% to £185mln in the six months to December 31 from £176mln a year ago.

READ: Redrow reveals boss Steve Morgan to retire at end of March 2019, says sales reservations have stagnated due to London market

Revenue gained 9% to £970mln from £890mln the previous year as the number of housing completions increased 12% to 2,970 from 2,646.

Revenue from private legal completions increased by 4% to £847mln from £816mln while revenue from affordable completions surged 97% to £114mln from £58mln.  

The average selling price of private homes increased 4% to £391,00 from £375,000 in 2017 while affordable homes prices jumped 15% to £141,000 from £123,000, mainly due to more completions in the southern businesses.

Brexit uncertainty and higher stamp duty hits sales rates

However, the sales rate per outlet per week fell to 0.61 from 0.64 a year ago with Redrow blaming Brexit uncertainty and higher stamp duty.  

The gross margin edged down to 24.0% from 24.5% due to the change in the balance of tenure.

Return on capital employed rose to 28% from 25%.

The order book stood at £1.16bn at the end of the period, up 11% on the prior year’s £1.05bn.

Net cash at the end of December was £101mln, compared to £63mln at the end of June.

Redrow lifts dividend and declares special payout

Redrow raised the interim dividend by 11% to 10p per share from 9p last year and proposed a special payout of 30p through a B Share Scheme.

Outgoing chairman Steve Morgan said: “In this, my final report as chairman, it gives me great pleasure to announce that Redrow has once again delivered record results for the first half of the financial year.”

He that cautioned that the market in the lead up to Christmas and the first two weeks of 2019 was subdued amid political and economic uncertainty.

However, he said the last three weeks have “bounced-back” with reservations running at similar levels to last year's strong market activity. 

“Overall, private sales for the first five weeks of 2019 were £156mln (2018: £166mln),” he said.

“Nevertheless given our record £1.2bn order book, our strategy remains on track giving me every confidence that this will be another year of significant progress for Redrow.”

Morgan, who founded Redrow in 1974, is to step down next month 10 years after returning to the board to lead it out of the financial crisis. He is being replaced by chief executive John Tutte. 

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