Redrow gives bumper dividend after 124% surge in income however the builder for the typical house purchaser highlights cooling housing market
- Redrow income develop three-fold to £314m within the yr to 27 June 2021
- Having minimize payouts in 2020, it declared a last dividend of 18.5p per share
- Now reintroduced forecasts predict revenues of £2.2bn in 2024
- Housebuilder expects gross sales to return to a extra regular development by the top of 2021
Homebuilder Redrow noticed a 124 per cent surge in pre-tax revenue within the yr to 27 June of £314million.
The developer, which specialises in medium-sized properties and targets the typical purchaser, reported that it had grown revenues from £1.34billion to £1.94billion over the previous yr.
That narrowed the hole to its pre-Covid earnings to only 8 per cent.
However Redrow additionally warned that the UK’s hovering housing market has been cooling in latest months and it now expects house gross sales ought to return to a extra regular development by the top of 2021.
Redrow marked a extremely worthwhile monetary yr by declaring a last dividend of 18.5p
Having delivered no dividends to shareholder in 2020, as swathes of UK corporations have been pressured to droop payouts, Redrow declared a last dividend of 18.5p per share.
Redrow mentioned it had been buoyed by ‘encouraging buying and selling for the reason that begin of the brand new monetary yr’, whereas mounting constructing prices felt throughout the sector have been ‘greater than offset’ by home value inflation.
The normalisation of buying and selling has enabled the corporate to renew medium-term income forecasts, with Redrow estimating revenues of £2.2billion in 2024.
Notably, Redrow additionally reversed a gap internet debt place of £126million to finish the yr with internet money of £160million, after making a big funding in new land, thereby enabling its bumper dividend.
Redrow’s encouraging forecasts prompted analysts at Peel Hunt to up its goal value from 830p to 900p, commenting that the Redrow’s share price, which was flat at this time at 696.8p, gives ‘among the greatest upside within the sector’.
The UK’s property sector has been supported by a short lived Covid-19 tax breaks for homebuyers, however has confirmed indicators of moderating since a phasing out of the profit started in June.
‘The buoyant housing market has moderated in latest months and we anticipate gross sales charges will return to traditionally common charges over the course of the present monetary yr,’ Redrow Chairman John Tutte mentioned within the firm’s annual earnings assertion.
‘It’s on this foundation we’ve deliberate for the longer term and we’re assured our well timed funding in land, mixed with sturdy demand for our Heritage properties, will help our longer-term progress aspirations.
‘Moreover, our file order e book additionally offers us with a wonderful platform for the longer term with over £1.3billion of income already secured for the present monetary yr. In consequence, the enterprise is well-placed to ship one other set of sturdy outcomes.’