Redrow plc doubled its dividend to four pence a share as it reported a 53% higher full-year pretax profit. The company reported a pretax profit of GBP204 million ($313.7 million) in the 12 months to June 30, compared with GBP133 million in its 2014 financial year.
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Total Group revenue rose 33% to £1.15bn. Private homes revenue increased by 29% to £1,026m (2014: £798m) as a result of a 16% increase in private homes legal completions and a 10% increase in average selling price.
Social homes revenue reduced by 6% to £59m as a result of timing differences on legal completions. In addition there was £65m of other revenue. This comprised £47m from the sale of all the commercial units and revisionary interest in company's development at One Commercial Street, London, £8m from the sale of a number of freeholds of London developments and £10m from sundry land sales.
Gross profit increased by £86m in the year to £274m (2014: £188m) giving a gross margin of 23.8% (2014: 21.7%). In addition to increased revenues this is due to the decrease in the proportion of company's homes legal completions from provisioned land acquired before the downturn from 20% to 12% and house price inflation net of build cost inflation. The company expects the proportion of provisioned plots in cost of sales to be zero by 2018.
As a consequence of this strong growth the Group generated an operating profit in the year of £213m (2014: £138m), a 54% increase. This represents an operating margin of 18.5% (2014: 15.9%) and means the company has exceeded company's 2017 target operating margin of 18%. The company is now targeting an operating margin of 19% by 2018.
Net financing costs at £9m were £1m higher than the prior year due to increased imputed interest payable on deferred land creditors as the company continues to invest in land opportunities and successfullynegotiate deferred terms.
The record profit before tax of £204m (2014: £133m) delivered in the year produced a basic earnings per share up 57% at 44.5p (2014: 28.3p). ■