Pre-tax profit lifted 124% for housebuilder Redrow (LSE: RDW) after 2021 completions rose by 39%. That’s comparing with 2020 figures, mind. Against 2019 results, completions are still down 13% with pre-tax profit down 23%.
Legal completions reached 5,620 homes, down from the 4,032 completed in the year to June 2020. There’s still a way to go to reach 2019’s count of 6,443 homes.
Revenue for the year came in at £1.94bn, down from £2.11bn two years ago. But the order book has built up during the downturn. It stood at £1.01bn in 2019, rose to £1.42bn by 2020, and has now reached £1.43bn.
The results, released Wednesday, don’t appear to show any underlying fall in demand. At least going on the order book and latest guidance they don’t.Â
The company is expecting revenue above £2.2bn by 2024, with EPS of at least 90p. That would be an increase of 22% over the latest 73.7p per share, and back to 2019 levels.
Redrow dividend reinstated
The balance sheet has turned positive again. For June 2020, Redrow had reported net debt of £126m. This time round, that’s swung to a net cash position of £160m, ahead of 2019’s £124m.
What has the improved profit and healthy cash situation done for the dividend? The payment was suspended last year as a result of the pandemic. But this year, the dividend’s back with a final payment of 18.5p. That’s a total for the year of 24.5p.
On the Redrow share price at market close Tuesday, the dividend represents a yield of 3.5%. That’s in line with the company’s targeted cover of three times by earnings. It’s not back to the 2019 level of 30.5p yet, but there’s certainly a boost there for income investors.