Redrow talks up hopes for construction sector

Housebuilder Redrow has revealed signs of life in the housing market after a surge in annual profits on the back of a 13 per cent bounce in sale prices.

The Flintshire-based group, which recently sold its Scottish operations to Elgin-based Springfield Properties, reported pre-tax profits of £25.3 million in the 12 months to 30 June, compared to £700,000 the previous year as average selling prices of private homes increased to £174,100 from £154,800.

Redrow said yesterday that the improvements were driven by strong sales of its New Heritage Collection, a range of two- to four-bedroom houses launched in February 2010, which made up 41 per cent of total sales in the second half of the year.

Chairman Steve Morgan, who also chairs football club Wolverhampton Wanderers, said the company delivered a robust performance “in spite of the difficulties facing the home-building industry”.

He said the lack of mortgages, particularly for first-time buyers, was dragging on the market, adding: “With five new jobs being created for every new home built, it is strongly in our country’s interest to resolve the mortgage issue, which would once again enable the housing industry to provide urgently needed new homes and major stimulus to the economy.”

Chris Millington, an analyst at Numis, said the figures were better than expected and upgraded his forecasts for the full year to June 2012 from £27.4m to £34.9m.