Housebuilder reveals that last year's purchase resulted in 60 redundancies at Yorkshire-based firm.
Sixty employees of Tay Homes lost their jobs as a result of their company's takeover by fellow housebuilder Redrow last year, it was revealed this week.

The redundancies, which affected one-third of Tay's 180-strong workforce, were mostly among office staff at the Yorkshire-based housebuilder. Redrow said Tay's site workers were largely unaffected.

The takeover caused four redundancies among Redrow employees.

Robert Jones, chairman of Redrow, said: "We've followed the proper procedures. We think the people involved are as happy about it as they can be, in the circumstances."

The Tay acquisition came at the end of a year in which Redrow's earnings per share rose 41%, partly as a result of a buy-back in September. The firm this week announced that its pre-tax profit for the six months to December 2001 rose 18% to £41.6m compared with the same period in 2000.

Jones said: "The purpose of acquiring Tay was to grow our landbank. Tay added 1600 plots, primarily in Yorkshire and Scotland but also in the Midlands."

Those involved are as happy about it as they can be, in the circumstances

Robert Jones, chairman, Redrow

He added that the group's strong landbank and forward sales outlook meant it could be relatively selective in its land purchases.

The turnover of Redrow's housing business increased 19% in the second half of 2001. The company sold office developments worth £30m in Windsor and Altrincham, Manchester, to raise money to buy Tay. This pushed turnover up 34% to £265m for the second half of 2001.

Regarding future acquisitions, financial director Neil Fitzsimmons said: "Our policy is to grow organically, but when a deal comes along that's right for Redrow we're happy to do it. You never say never with acquisitions."

Jones said: "The economic outlook for the UK remains favourable and the key drivers of the housing market remain positive."

He said a narrower range of interest rate fluctuations and new mortgage products offering fixed rates over several years would offset interest rate rises.

  • Also this week, Persimmon announce its first annual results since its merger with Beazer. Pre-tax profit was up 80% to £188m in 2001, excluding merger costs.