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Steve Morgan steps aside again as Redrow hits record highs

5 Sep 17 With house-builder Redrow reporting group revenue up 20% and profits up more than a quarter, founder Steve Morgan has decided – not for the first time – that it is time to step back.

Redrow founder Steve Morgan
Redrow founder Steve Morgan

For the year to 30th June 2017, Redrow has reported group revenue up 20% to a record £1.66bn. Revenue growth was driven by a combination of a 7% increase in average selling price to £309,800 and a 15% rise in completions to 5,416 units.

Pre-tax profit also reached a new record high for the company, up 26% to £315m (2016: £250m).

Operating margin rose to 19.4% (2016: 18.9%) and return on capital employed was up 10% to 26.0% (2016: 23.7%).

Chairman Steve Morgan said that the current financial year had also started well and the outlook was strong. “Redrow began the current financial year with a record order book, up 14% year on year to £1.1bn. Sales in the first nine weeks are very encouraging, up 8% on a strong comparator last year,” he said.

“Based on the strength of our current performance and the robust demand that we are seeing, we are today updating our medium term guidance. We now expect turnover in 2020 of c.£2.2bn and pre-tax profit of c.£430m.

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“Our strategy of continued growth for the business is on track. I am confident this will be another year of significant progress for Redrow.”

Steve Morgan, who founded the company in 1974 when he was 21, is once again stepping back from day to day control, as he did once before. In 2000 he reduced his stake in the company and stepped aside before staging a comneback in 2009, increasing his shareholding again and taking back control.

“Eight years after returning to Redrow, I have decided to ease back from a full time executive role towards a non-executive role,” he said today. This transition will take place during the current financial year, giving chief executive John Tutte more authority.

“It is my intention to continue to focus with the board on the strategic development of the business and I will retain my keen involvement with the product and key important projects,” Mr Morgan added.

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