Construction News

Wed September 22 2021

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Redrow back on track

6 days House-builder Redrow started its last financial year in July 2020 with sites shut and £126m of net debt; it ended it with £160m net cash, 5,620 new homes sold and 8,300 additional building plots.

John Tutte retires from Redrow today after 20 years with the company
John Tutte retires from Redrow today after 20 years with the company

“An excellent performance” is how Redrow chairman John Tutte described the company’s year.

For the year to 27th June 2021, Redrow generated revenue of £1.94bn (2020: £1.34bn) and profit before tax of £314m (2020: £140m) from 5,620 legal completions (2020: 4,032).

Following a pause in land buying during the early months of the pandemic, combined with the decision to withdraw from the London market, growth in active outlets stagnated. However, capital released from selling three London sites is now being reinvested to help grow the regional businesses. During the year, Redrow bought 8,300 plots with planning permission, with a projected gross development value of more than £3bn. This puts it back on track to return to a pre-pandemic pattern of growth and an incremental recovery in profits and margins, John Tutte said.

The issue of supply chain blockages was addressed by chief executive Matthew Pratt, who took over in July 2020. He said: “We have continued to work largely uninterrupted across all our sites during the year. However, there have been some supply interruptions and specific shortages in steel, timber and cement-based products. In conjunction with our supply partners, we have mitigated the impact of these interruptions and we are confident that our close working relationships will allow us to continue to build unhindered. We expect that supply pressures will ease as more capacity is brought on stream to deal with high demand for materials.”

John Tutte, who was himself chief executive before stepping up to chairman, retires today, after 20 years with Redrow. The new chairman is Richard Akers, a former director of Land Securities.

  2021 2020 Var 2019 Var
Legal Completions 5,620 4,032 39% 6,443 -13%
Revenue £1.94bn £1.34bn 45% £2.11bn -8%
Profit before tax £314m £140m 124% £406m -23%
EPS 73.7p 32.9p 124% 92.3p -20%
Net Cash/(debt) £160m (£126m) +£286m £124m +£36m
Total order book £1.43bn £1.42bn +£10m £1.01bn +£420m
Final dividend 18.5p Nil +18.5p 20.5p -2p

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