Solid structure places Redrow ahead of rivals
HOUSEBUILDER Redrow shrugged off the difficult UK market conditions that have cut profits at its rivals yesterday to post a 17pc rise in sales and 14pc rise in profits.
Major competitors George Wimpey and Bovis Homes both posted 32pc profit falls and Taylor Woodrow reported an 18pc drop for the six months to June, whereas Redrow grew profits by 7pc to £72m after increasing the number of sales outlets.
Analysts such as Chris Millington of Bridgewell Securities attributed the company’s performance to a “strong management team, well sourced land bank, good forward order book and middleproduct offering”. A number of them said it was likely to be one of the best performers of the housebuilder pack.
Redrow, which raised its dividend by 20pc to 10.8p a share, said it would now focus on boosting sales by opening new outlets; protecting its 20pc operating margins; maintaining its land bank and controlling costs.
The company has more than 2,100 forward sales on its order books and during the year to June increased its land with planning to 15,800 plots, worth on average £29,300, or 17pc of the estimated average selling price.
Chief executive Neil Fitzsimmons said the company had based its strategy on brownfield land purchases and sales of three ranges: the average-priced £166,000 Signature, the City apartment range and the new entry-level Debut, which includes a onebedroom home for just under £ 50,000.
The Debut was launched in Rugby in May after 12 months of planning and Redrow expects to build 2,000 of the lightweight steel-framed houses a year within five years to satisfy what it said was a shortage of supply.
Mr Fitzsimmons said: ‘‘Debut is about providing affordable homes for young people and key workers. It can help them get a foot on the property ladder.”
Redrow’s Debut home was one of nine housebuilder models chosen as a fi nalist for the Office of the Deputy Prime Minister and English Partnerships’ Design for Manufacture Competition – to show a home could be built for £60,000 without sacrificing quality, sustainability or environmental standards.
At stake is a share of 10 English Partnerships lots from Merton in London to Milton Keynes that can hold around 1,000 homes.
“Solutions in the past for low-cost housing have meant poor quality,” said Mr Fitzsimmons. “We’re using products that are much more environmentally friendly. The competition provides an opportunity to work with English Partnerships, which owns all manner of land.’’ Questor: Page 38