Poor housing sales reduce pre-tax profit to £120.5m

Housebuilder Redrow has seen profits drop 13% in the year ending June 2006, due to weaker housing sales.

Pre-tax profit at the company was down to £120.5m from £139m in 2004/05. Turnover also fell slightly to £770.1m, down 1% from £780.4m in 2004/05.

Redrow's Homes arm fared slightly better with a small increase in turnover up nearly 2% to £765.5m from £753.8m in 2004/05.

Robert Jones, chairman of Redrow, blamed a difficult market and said the company was positioning itself for future growth. He said: “The results reflect a sound financial performance against the backdrop of a challenging market. The second half achieved good momentum in turnover and operating profit with increased profits in the Homes operations.”

The company said low turnover in mixed use and regeneration was largely responsible for the slump. Turnover in this sector fell by more than 80% to £4.6m, compared with £26.6m in the year ending June 2005.

Plans for the upcoming year include pushing sales of the Debut affordable home and developing a forward land bank. Redrow’s current land bank increased more than 20% in the year ending June 2006 to 21,000 plots, compared with 17,300 in June 2005.