- Sales and earnings top 2019 levels
- Target customers 'more financially resilient'
- 2024 estimates nudged higher
Premium housebuilder Redrow (RDW) posted revenue and earnings above 2019’s previous record for the year to the start of July and unveiled a 31% increase in the full-year dividend.
The firm also raised its medium-term forecasts for earnings per share, dividend per share and return on capital based on the current strength of the housing market and its recently-announced £100 million share buyback.
The shares rose 1.6% to 484p, bucking the weak market backdrop.
RESILIENT MARKET
Sales for the 12 months to 3 July rose 10% to £2.14 billion, slightly ahead of July 2019, while underlying pre-tax profits jumped 31% to £410 million, also slightly above the pre-pandemic record.
Reported pre-tax profits declined by 22% or £68 million to £246 million after the firm booked £164 million of costs for fire safety measures under the government’s building safety repairs pledge.
Non-executive chair Richard Akers flagged the success of the company’s Heritage range of family housing which is ‘ideally suited to our target home mover customer, who tends to be more financially resilient’.
Redrow has carved itself a niche with more affluent buyers, with a record number of customers using its online service to upgrade their interior fittings and fixtures after making their reservation.
Cash buyers represented 33% of reservations last year compared with 23% the previous year, while Help to Buy made up just 8.6% compared with 28% the previous year as the firms weans customers off the scheme ahead of its withdrawal next spring.
POSITIVE OUTLOOK
With an order book of £1.44 billion, of which 77% has already exchanged, and a land bank of 67,000 plots, the group has good visibility for the coming year and is ‘well placed to deliver another set of strong results’ said Akers.
The company also updated its July 2024 guidance with earnings now seen reaching over 96p per share against 92p or more previously, the dividend topping 32p per share instead of 31p or more previously and returns on capital employed surpassing 23% against its previous forecast of between 22% and 25%.
