Housebuilder Redrow's revenues and profits rise to record

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This allowed Redrow to post a record 20 per cent rise in revenue of £890 million and record first-half pre-tax profits of £176 million, up 26 per cent from the previous year.

Numis said the H1 results were stronger than it expected and lifted its estimate for 2018 pre-tax profit to £365m from £355m and its 2019 estimate to £401m from £395m.

The stellar performance was underpinned by a 14% rise in legal completions to 2,811, with the average selling price lifting 9% to £330,000.

Operating margins rose slightly to 19.7 per cent, while return on capital employed rose to 25 per cent.

Earnings per share (EPS) were up 27% to 39.5p and the interim dividend was boosted to 9p per share (2017: 6p).

This time past year Redrow was chasing Bovis Homes for a merger. Given Redrow's smaller position in the market compared with bigger brothers Barratt Developments, Persimmon and Taylor Wimpey, the company can afford to bolster growth through increasing completions and stands out as one of the only housebuilders consistently improving this metric by double digits. We entered the second half with a record order book, and customer traffic and sales remain robust.

He also raised concerns about the state of the secondary housing market - the sale of homes that are not new - adding that Redrow relied on people selling up to stimulate the purchase of its own new homes.



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