Redrow and the Miller Group both defied the weak UK housing market this week by revealing solid profit growth. Redrow reported a 14% rise in pre-tax profit to £141m for the year to 30 June and raised its dividend 20% to 10.8p.
Miller, a private company that operates mainly in Scotland and the north of England, said that profit at its housing division rose 38% to £37m in the half year to 30 June. Miller Group, which includes a construction and commercial property division, reported a 63% increase in pre-tax profit to £39m. It increased its interim dividend 25% to 11.4p.
The increases in profit were achieved despite a tough market, which has been hit by a lack of consumer confidence since the Bank of England increased interest rates last year.
Neil Fitzsimmons, who succeeded Paul Pedley as the chief executive of Redrow in July, described the current market as “challenging and competitive”. He added that despite the good results it had been a difficult year, and that the company had managed to protect itself from the downturn by building strong forward sales.
John Richards, group finance director at Miller, said it had also benefited from taking strong forward sales into this year, as well as being focused on the more robust markets of Scotland and the north of England.
Redrow’s Debut projects, which provide affordable homes for first-time buyers and key workers, were a success last year in places such as Rugby in Warwickshire.
Fitzsimmons said that with Debut, Redrow was catering for a part of the market that others had failed to reach.
Redrow has pledged to increase its dividend 20% next year.
Both Fitzsimmons and Richards said that they were not sure how competitive the autumn market was going to be. Richards commented that it was “all about confidence”.