Redrow (RDW) joined the recovery party relatively late after the financial crash, but has more than made up for it with a third consecutive year of record results for the year to June. The shares responded with an on-the-day gain of over 7 per cent.
All the key metrics showed a healthy improvement, with legal completions up 17 per cent to 4,716, boosted by the government's Help to Buy scheme, while average selling prices rose 7 per cent to £288,600. These helped to lift operating margins from 18.5 per cent to 18.9 per cent, and the return on capital employed shifted up from 22.8 per cent to 24.2 per cent. And the outlook for the coming year promises more of the same, with the £807m private order book up by over a half from a year earlier.
Redrow remains well-placed geographically, with very little exposure to the higher end of the market, while there has been very little impact on sales and reservations in the wake of the EU referendum. In fact, sales in the first 10 weeks of the new financial year were up 8 per cent from the previous year's strong comparator.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits of £265m for the year to June 2017 and EPS of 58.4p.
| REDROW (RDW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 411.5p | MARKET VALUE: | £1.52bn | |
| TOUCH: | 409.9-411.8p | 12-MONTH HIGH: | 505p | LOW: 100p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 275p | NET DEBT: | 14% | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 0.48 | 43.0 | 9.7 | nil |
| 2013 | 0.60 | 69.0 | 14.6 | 1 |
| 2014 | 0.86 | 133 | 28.3 | 3 |
| 2015 | 1.15 | 204 | 44.5 | 6 |
| 2016 | 1.38 | 250 | 55.4 | 10 |
| % change | +20 | +23 | +24 | +67 |
Ex-div: 22 Sep Payment: 11 Nov | ||||
