Housebuilder Redrow has not been affected by the depressed housing market – full-year profits jumped 70%, helped by an increase in average selling prices.
Pre-tax profit was up to £43m (2011: £25.3m). Revenue increased by 5.8% to £478.9m (2011: £452.7m).
The revenue increase was driven by a 15% increase in average selling prices.
Redrow’s operating margin rose from 7.5% (excluding Scotland) to 10% as a result of increased sales from sites purchased since the downturn, improved product mix and the benefit of high profit on land sales and freehold reversion sales. And the group’s net debt was down £61.4m to £14m.
Redrow said its New Heritage Collection is now firmly established as a primary brand and represented 67% of private turnover during the year (2011: 35%).
Opening of new outlets remains a priority for the firm with 82 outlets at year end (2011: 74). Redrow says this should increase to more than 90 outlets by the end of the current financial year.
Redrow now has a land bank of 12,350 plots at the end of June 2012 (June 2011: 11,190 plots).
Chairman Steve Morgan, also chaiman of Wolverhampton Wanderers, said:
“Redrow has once again delivered a strong set of results with a significant improvement in profitability against the backdrop of a challenging marketplace.
“Our strategy of focusing on high quality differentiated family housing product is clearly paying off with The New Heritage Collection firmly established as our primary brand accounting for 67% of our private turnover during the year. The average selling price of a New Heritage home is now £215,100, which is a 7% increase on the previous year.”
He added: “Supply of mortgages, although slightly improved on last year, remains a significant constraint, as does public confidence due to the country’s fragile economic state.
“Nevertheless, we have an excellent product range and a strong pipeline of new sites, which gives the board every confidence that Redrow will continue along its path of improving performance.”
The business is currently subject of a takeover offer led by Mr Morgan. Last month his investment vehicle Bridgemere Securities proposed a takeover at 152p a share. Under takeover rules he has until September 28 to make a formal offer for the business.