Redrow announced an annual pre-tax profit of £70 million, which compares with £43 million last year. Analysts were expecting profit to be between £52 and £70 million, so the figure came in at the top end of estimates. The firm also reported full-year revenue of £604.8 million, and this is 26% higher than the previous year.
Chairman Steve Morgan stated that business is returning to ‘normal’ levels, and the new financial year has got off to a good start with reservations up 54%. The government’s help-to-buy scheme has assisted Redrow and other homebuilders, as it makes it easier for first-time buyers to get on the property ladder on the proviso that they buy a new property.
Redrow’s net debt position has risen from £14 million in 2012 to £91 million in 2013. This jump is due to large-scale investment in land, and if the net debt keeps rising it may become a concern for shareholders. The homebuilder has reinstated its dividend policy, and one penny per share will be paid to each shareholder. It is not much, but it is a positive sign.