Revenue grew 10% to a record £2.14bn in the year to 3 July. Pre-tax profit fell 22% to £246m from £314m after booking exceptional fire safety costs of £164m. Excluding these costs, underlying pre-tax profit rose by almost a third to £410m.
The FTSE 250 company warned that housing demand was losing momentum, hurt by rising mortgages amid a cost of living crisis.
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"Given rising inflation and higher interest rates, it is not surprising the buoyant housing market has moderated recently and demand has returned to historically average levels," said non-executive chairman Richard Aker.
Still, the property developer said its order book has placed it in an "excellent" starting position for the 2023 financial year.
“Excellent progress has been made during the year executing our strategy to grow in the regions. The new Southern business, based in Crawley, officially opened at the end of June but the team has been active in the land market for some time. This division is expected to make a positive contribution to profits in the current financial year.”
Redrow’s shares have fallen 31% since the start of the year, with the market pricing in a housing slowdown that will hit sales and values.
“Increasing house prices in recent years mean home buyers are having to borrow more to get on the housing ladder. Combine that with rising interest rates, which ultimately mean more expensive mortgages, and the affordability of property could fall substantially. If interest rates keep rising, it’s hard to see how the housing market would be immune,” Charlie Huggins, head of equities at Wealth Club, said.
“This is the kind of environment where you find out which housebuilders have built their success on a base of bricks, and which are about to be blown away because they built it on sticks and straw,” he added.
Redrow's final dividend was lifted to 22p, up 19% from 18.5p the year before. This took its total payout for the year to 32p, up 31%.
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