Redrow returns to profit
Published: 18 February, 2011
WOLVERHAMPTON: Steve Morgan, the founder and chairman of Redrow, says the housing market has "started encouragingly" in 2011 after the house builder returned to profit in the second half of 2010.
Mr Morgan said Redrow's management "do not share the pessimism of some commentators that there will be a major fall in house prices during the coming year".
The company posted pre-tax profits of £8.5m for the six months to the end of December, compared to a loss of £8.7m in 2009, as revenue rose 15% to £216.1m.
Morgan said much of the upturn was due to the introduction of the house builder's family-homes: Redrow has moved away from first-time buyers and into the middle-market.
In the six months, New Heritage accounted for 30% of sales and should feature on 70% of development sites by June. The average selling price for New Heritage homes is £196,000, 7% higher than the previous Signature range.
Mr Morgan said: "In spite of the challenging conditions, Redrow's decision to return to our traditional values with the introduction of the New Heritage Collection proved to be a great success for the business.
Trading so far in 2011 has been "comfortably ahead" of the same period in 2010, Morgan said, although some of the increase is attributable to a slowdown in December due to snow. Sales rates in the six months to December were 0.47 per site per week, compared to 0.55 in the previous year, as the weather impacted the housing market.