Financial highlights
Revenues rose 10% to £257.0m driven by a 10% increase in private average selling price to £224,000
Gross margin increased to 18% (2012: 15.4%) as a result of increased sales from sites purchased since 2009, and improved product mix
Profit before tax up 50% to £23.0m (2012: £15.3m)
EPS (adjusted) increased 30% to 4.8 pence (2012: 3.7 pence)
Net debt increased to £65.2m (June 2012: £14m), giving gearing of 11% (June 2012: 2%)
Volume of private net reservations up 24%
Return on capital employed increased to 8.6% (2012: 6.4%)
Operational highlights
The New Heritage Collection comprised 87% of private turnover (2012: 60%)
Average number of outlets increased to 83 (2012: 72) and expected to rise to 90 by end of June 2013
London region is making good progress and has now acquired a total of 700 plots with a gross development value of £450m.
Current land bank at the end of December 2012 was 13,295 plots (June 2012: 12,356 plots) The increase of 939 plots should in turn enable the business to grow volumes for the future
Volume of private net reservations in the first eight weeks of 2013 up 8% to 443
Steve Morgan, Chairman of Redrow, said:
"Redrow has delivered a strong set of results with another significant improvement in profitability. 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.
We applaud the Government's attempts to improve the market through the NewBuy, extension of FirstBuy, and Funding for Lending schemes and if the current trend in reduction of mortgage rates continues, it will undoubtedly assist in the housing market's gradual return to more normalised conditions. The National Planning Policy Framework has also stimulated some positive changes in the planning environment, albeit this has still got a long way to go.
We have started the second half well, with reservations up 8% on the same period last year. Additionally we are on track to increase the number of outlets from 82 to around 90 by June. Given the strong pipeline of new sites and the modest improvement in market conditions, I am cautiously optimistic that Redrow's strong recovery is set to continue. In line with this, we expect to propose a modest final dividend at the year end."
