New Heritage range drives renaissance for Redrow.
CHANGING the mix will enable Deeside housebuilder Redrow to continue driving up average selling prices, said founder and chairman Steve Morgan.
The Liverpool entrepreneur unveiled strong annual figures yesterday which showed a 14% boost to revenues of pounds 452.7m and pre-tax profits of pounds 25.3m in the year to June 30, compared with pounds 700,000 last year.
The turnaround is due to the New Heritage range Mr Morgan introduced at the Ewloe-based business, which now accounts for more than 50% of reservations value.
Legal completions of homes rose from 2,587 to 2,626 and the average selling price jumped from pounds 149,300 to pounds 164,800. The New Heritage average selling price was 11% up at pounds 201,000.
Net debt increased from pounds 47.1m to pounds 75.4m, due to investment in a new London division and the land bank.
Five sites in London - including Ealing, Kingston, Marble Arch and Wapping - cover 342 plots with a gross development value of about pounds 200m.
Mr Morgan said: "London is a strong market with considerable international as well as domestic demand." He described the results as "robust" and said: "Through decisive management action, particularly the introduction of the New Heritage collection, we have been able to increase average selling prices and margins by changing mix and keeping costs under control."
He added: Redrow has demonstrated over the last two years that we have been able to grow the business substantially by changing group strategy. "The nature of our land acquisitions over recent times will continue to drive the average selling price in an upwards direction."
By the end of June, Redrow owned 11,190 plots, which represents about 4' years of supply. Increased building activity has seen more than 100 new jobs added to its direct labour force, which now stands at 949. The firm also recruited 50 apprentices.
Mr Morgan again bemoans the lack of affordable mortgages for first-time buyers, and advocates the introduction of a new version of the mortgage indemnity guarantee which allowed lenders to offer 90-95% mortgages.
Redrow chairman and founder Steve Morgan is seeing swift returns from his decision to improve the company's housing range