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Redrow enjoys revenue surge, returns to profit

9 Sep 10 Revenue at Redrow grew by almost a third during the financial year ending 30 June 2010.

Revenue at Redrow grew by almost a third during the financial year ending 30 June 2010.

The house builder also returned to the black – narrowly – posting a pre-tax profit of £700,000 compared to a loss of £44.2m in 2009.

Operating profit for the year was £12.7m, compared to an operating loss of £119m in the prior year.

Redrow has cut its net debt to £47.1m, compared to £215m a year ago, thanks in part to a £150m rights issue last October. Its gearing has been reduced to 11% from 73%.

During the year, the firm completed 2,587 homes (2009: 2,113), at an average selling price of £149,300 (2009: £137,400).

The sales prices was boosted by the launch of its New Heritage Collection, a more family-oriented home, where the average selling price of £180,000 was 15% higher than the previous product range.

Redrow acquired 3,281 plots during the year across 31 sites, and at year end its land bank stood at 13,170 plots (2009: 13,130).

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Internally, the house builder has restructured, scrapping its regional chairmen positions, and promoting John Tutte to group managing director.

Three regional offices in the north west, Yorkshire and south Midlands were re-opened following their closure in 2008. In total Redrow now has nine operational businesses.

Steve Morgan, chairman of Redrow, said: "While we remain in a period of tough economic conditions and political uncertainty, the work that we have done over the past year means that Redrow is in good shape to continue to make progress.

“The new Coalition Government has announced a programme of considerable spending cuts and tax increases which will have a negative impact on everybody in the UK.

“The housing market has seen a reduction in the volume of transactions since the election, both as a result of the economic uncertainty and the lack of available mortgage finance. In volume terms Redrow has seen a small reduction in the number of reservations in the first ten weeks of our financial year. This has been offset however by the increase in average selling price.

“Redrow is in good shape with a low level of gearing, a strong and more streamlined management team, improving margins and an excellent new product. Short of a collapse of market conditions from those we have experienced to date, I expect the Group to make further progress during the current year.”

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