UK housebuilder Redrow's full year profit nearly doubles

Tuesday 02 September 2014 09.10
Redrow's pre-tax profit rose to £132.6m in the 12 months to June from £69.4m a year earlier
Redrow's pre-tax profit rose to £132.6m in the 12 months to June from £69.4m a year earlier

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

"We have substantially increased our land bank, which should see a good growth in the number of outlets during the year," Chairman Steve Morgan said. 

"This, combined with our strong order book, leaves me confident that the group will see another year of significant progress," he added. 

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% of total new home loans, sending shares in leading British housebuilders down more than 4% on the day. 

Redrow said its pre-tax profit rose to £132.6m in the 12 months ended June 30, from £69.4m a year earlier. Full-year revenue jumped 43% to £864.5m, the mid-sized residential and mixed-use property developer said. 

The company's total legal completions rose 27% to 3,597, encouraging it to add 230 direct employees to its workforce. 

The 'Help to Buy' scheme represented 35% of Redrow's private completions during the year. The scheme helps people buy homes priced up to £600,000 with a deposit as low as 5%, largely to encourage first-time buyers to get on the property ladder. 

Redrow said the value of private reservations increased 53% to £1.021 billion, with its average selling price rising 13% to £239,500.