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Redrow H1 Profit Up On Higher Prices

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2/26/2013 6:41 AM ET

Redrow Plc (RDW.L), a developer of residential and mixed-use properties, Tuesday reported a higher first-half profit, as revenues grew 10 percent driven by an increase in average selling price of private homes. The firm is cautiously optimistic that its 'strong' recovery is set to continue.

Chairman Steve Morgan stated, "The backdrop remains challenging, but the stability of the housing market, the gradual improvement in both the planning environment and the mortgage market, together with our distinct focus on our high-quality, differentiated family housing range has meant that we have continued to make good progress."

Legal completions during the period were 1,202 homes, higher than 1,168 homes in the prior year. Private average selling price increased to 224,000 pounds from 204,000 pounds a year ago.

In the first half, the company's profit before tax rose to 23 million pounds from 15.3 million pounds in the previous year.

On a per share basis, earnings were 4.2 pence, up from 3 pence per share a year earlier. Adjusted earnings were 4.8 pence per share, while the company posted 3.7 pence per share last year.

Revenues for the period grew 10 percent to 257 million pounds, driven by 10 percent increase in private average selling price. Private volumes increased 4 percent and overall volumes, including social, increased to 1,202 from 1,168 last year.

Gross margin improved to 18 percent from 15.4 percent in the same period last year, reflecting increased sales from sites purchased since 2009, and improved product mix.

Looking ahead, the company anticipates increasing the number of outlets in the second half from an average of 83 to around 90.

The company also said it expects to propose a modest final dividend at the year end.

RDW.L is currently trading at 186.42 pence, down 9.38 pence or 4.79 percent, on a volume of 196,184 shares.

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by RTT Staff Writer

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