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Redrow doubles dividend

The housebuilder's interim dividend has been doubled, with a pledge to boost the annual payout by two-thirds
February 9, 2016

Redrow (RDW) did a little more than tick all the right boxes at the interim stage. The dividend payout was doubled, and the housebuilder has pledged to make a full-year payout of 10p a share - that's a two-thirds jump from the previous year.

IC TIP: Buy at 412.8p

Profits rose to a record high, thanks to an 18 per cent increase in completions to 2,178. The government's Help to Buy scheme is taking an increasingly important role in boosting sales. Legal completions secured in this way were 44 per cent of overall sales, compared with 38 per cent last year.

The company's net debt grew from £154m to £183m, as over 5,700 plots were added to the current land bank (those with planning consent), of which over 1,500 were converted from the forward land bank. Overall, the total land bank grew by 18 per cent from last June to 21,435 plots.

Strong trading continued after the period-end, with private reservations since the beginning of January up a tenth on the same period last year at 455. Constraints on faster expansion remain however, with around 9,000 plots tied up at one stage or another in the planning process. And while the number of apprentices jumped from 104 three years ago to 304, skill shortages are restricting output.

Analysts at Peel Hunt forecast full-year adjusted pre-tax profits of £230m and EPS of 50.7p, from £204m and 44.6p in FY2015.

 

REDROW (RDW)
ORD PRICE:413pMARKET VALUE:£1.53bn
TOUCH:411.5-413p12-MONTH HIGH:505pLOW: 279p
DIVIDEND YIELD:1.9%PE RATIO:9
NET ASSET VALUE:246pNET DEBT:20%

Half-year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20145609119.92
201560310422.94
% change+8+14+15+100

Ex-div: 18 Feb

Payment: 31 Mar