Redrow, a leading home builder, has announced its fiscal 2023 pretax profit, which saw a significant rise of 60.6%. This surge in profit can be attributed to the increase in the average selling price of homes during this period. The company has also provided guidance for the year ahead, although it is notably lower than previous years.
Impressive Financial Performance
For the year ended July 2, Redrow achieved a pretax profit of £395 million ($493.5 million), compared to £246 million in the same period last year. Despite a slight decrease in revenue from £2.14 billion to £2.13 billion, the company’s profit margins remained strong.
Projections for Fiscal 2024
Looking ahead, Redrow expects to report a pretax profit of between £180 million and £200 million for fiscal 2024, with revenue anticipated to be between £1.65 billion and £1.7 billion. While these projections indicate a decrease compared to the previous year, the company remains optimistic about its ability to adapt to the challenging and uncertain market conditions.
Home Sales Performance
Redrow sold a total of 5,436 homes during the fiscal year, slightly lower than the 5,715 homes sold in the same period last year. However, there was a notable increase in the average selling price of both private and affordable homes. Private home completions experienced an 8% rise, while affordable homes saw a 5% increase, driven by house price inflation and product mix.
Market Volatility & Future Readiness
Nonexecutive Chairman Richard Akers acknowledged the macroeconomic volatility witnessed in the previous financial year, which has resulted in an ongoing challenging and uncertain market environment. However, Redrow believes that it is well-positioned to respond effectively to any developments in the market, maintaining its commitment to delivering quality homes and meeting customer demands.
The board of Redrow has declared a final dividend of 20.0 pence per share, bringing the total payout for the year to 30.0 pence. This final dividend aligns with the company’s policy of maintaining a three-times dividend cover.