Interim Results
Redrow PLC
28 February 2008
Thursday 28 February
Redrow plc
Interim Results for the six months to December 2007
• Profit before tax of £35.8m (2006/07: £54.7m) from continuing operations
• Group legal completions at 2,111 (2006/07: 2,214)
• Homes average selling price maintained at £162,800 (2006/07: £162,400)
• High quality forward land increased to 25,750 plots
• Strong balance sheet with gearing at 40% (Dec 2006: 35%)
• Net assets per share of 367.9p at 31 December 2007
• Completed disposal of interest in Framing Solutions joint venture
• Interim dividend per share increased by 19% to 9.3p (2006/07: 7.8p)
Alan Bowkett, Chairman of Redrow plc, said:
'Visitor levels have increased in the New Year but the markets in which we are
operating are clearly challenging. Redrow is very focused upon the key elements
of our business with tight control of cost and cash flow. We are continuing to
differentiate our business through a strong product offer to our customers and
are pursuing our long term approach to sourcing land.
We have an experienced and committed management team to position Redrow to
capitalise on the opportunities that will arise when confidence improves.'
Enquiries:
Redrow plc
Neil Fitzsimmons, Chief Executive 0207 404 5959
David Arnold, Group Finance Director 01244 520044
Brunswicks
Patrick Handley / Jayne Rosefield 0207 404 5959
There will be an analyst and investor meeting at 09:00 BST. A live audio webcast
and slide presentation of this event will be available at 09:00 BST on
www.redrowplc.co.uk. Participants can also dial-in to hear the presentation live
at 09:00 on +44 (0)20 8609 1270.
The full half-yearly financial report for the half year ended 31 December 2007
will be available on www.redrowplc.co.uk.
Playback will be available by phone on 0800 358 2189 or 020 8609 0289 passcode:
204876#.
CHAIRMAN'S STATEMENT
Introduction
As has been well reported, the condition of the UK housing market has clearly
been affected by the combined effects of higher interest rates and the credit
squeeze since the autumn of 2007. This has resulted in significantly slower
sales activity across the housing market and the new homes industry.
In Redrow, we continue to be focused upon the key elements of our business with
particular attention to the tight management control of cost and cash flow. We
are continuing with our strategy to differentiate our business through the
delivery of a strong product offer that embraces good design and specification
for our customers. In conjunction with this we are pursuing our long term
approach to sourcing land opportunities at higher margins for the medium term
benefit of our business.
Group Results
In the six months ended December 2007, Group turnover was £353.1m (06/07:
£387.7m). Group legal completions were 2,111, a reduction of 4.7% on the
corresponding period in the last financial year. Profit before tax from
continuing operations was £35.8m (06/07: £54.7m) and earnings per share on the
same basis were 15.8p (06/07: 24.0p). Basic earnings per share were 14.6p (06/
07: 23.8p).
The Board anticipates proposing a 20% increase in the full year dividend in line
with its previous commitment. An interim dividend of 9.3p per share will be
paid to shareholders on 2 May 2008, representing an increase of 19% (06/07:
7.8p).
Homes
The Homes business legally completed 1,960 new homes in the period (06/07:
2,214) at an average selling price of £162,800 (06/07: £162,400). Turnover from
home sales was £319.1m (06/07: £359.6m) reflecting the reduced volume of legal
completions which was a consequence of the sales environment in which we were
operating.
Our business is focused on creating value either through the development of
sites ourselves or through the release of value through land sales which are now
separately disclosed within turnover. The 2006/07 results have been restated to
reflect this disclosure but there is no impact upon the earnings for either
period. In the first six months, turnover relating to land sales was £6.8m (06/
07: £21.5m) taking total turnover in the Homes business to £325.9m (06/07:
£381.1m).
The gross profit on the sale of homes declined to £59.0m (06/07: £74.2m) which
was a result of both the lower number of completions and profitability per home.
We have previously highlighted that margins would weaken due to the impact of
the higher cost of land on more recently acquired sites but gross margins also
came under pressure as pricing became more competitive and selling costs
increased. On some sites where construction was nearing completion we
accelerated sales to save site overheads in response to the market conditions.
Strong management of cost coupled with the benefits of last year's
reorganisation to make our structure more efficient helped reduce overheads in
our Homes operations to £19.9m (06/07: £22.7m). Reported overheads also
benefited by £1.8m from the impact of a lower share price on long term
management bonuses. Overhead recovery was slightly improved at 6.2% of home
sales turnover (06/07: 6.3%) despite the lower levels of activity. Operating
margins from home sales were 12.3% as compared with 14.3% in the corresponding
period in 2006/07.
Activity in the land market reacted to the prevailing sales environment and we
became more selective in our land disposals. Profits from land sales in the
first half were below our anticipated level at £2.8m and were £5.0m lower than
in the corresponding period last year. We have exchanged contracts to sell land
which leads us to a current expectation that full year land sale profits will be
at a similar level to last year (06/07 full year: £15.1m).
The operating profit in the Homes business for the six months to December 2007
was £41.9m (06/07: £59.3m).
Mixed Use & Regeneration
Our Mixed Use & Regeneration activities performed slightly ahead of our
expectations, with turnover of £27.2m (06/07: £6.6m) and an operating profit of
£2.4m (06/07: £2.2m). Redrow Regeneration legally completed 151 homes as it
finished Phase 1 of the Barking Town Square development. Phase 2 is now under
construction and comprises 272 new homes and 40,000 sq ft of commercial space.
The first revenues from this phase are expected in 2008/09 with 123 units sold
and 22,000 sq ft of the commercial space already pre let. We currently expect
our joint venture company established to redevelop land at Watford Junction
railway station to submit a planning application in the next twelve months.
As regards Mixed Use activities, we are currently constructing 24,000 sq ft of
offices in the first phase of our scheme at Lichfield and further units are
under construction at Buckshaw Village, Chorley. At both locations interest in
the available units remains encouraging although we expect no significant
contribution in the second half. We also have future opportunities for
commercial income streams at Vision in Devonport, Cheswick in Bristol and
Stratford upon Avon.
Discontinued Activities - Framing Solutions
We announced in September 2007 our intention to exit the Framing Solutions joint
venture which manufactured and erected light steel frames for use in residential
construction. In line with this objective we completed the disposal of our
interest in this business on 3 January 2008 and as a consequence a post tax loss
of £1.9m associated with this discontinued operation is reflected in the first
half results with no further impact expected.
Profit for the Period
Group operating profit from continuing operations before financing costs was
£44.9m (06/07: £61.7m).
Financing costs in the period at £8.7m (06/07: £6.9m) were virtually unchanged
from the second half of the last financial year but were higher than the first
half of 2006/07 reflecting a combination of higher interest rates and average
debt levels. We expect the second half interest charge to be at a broadly
similar level to the first half.
After deducting £0.4m representing Redrow's share of the loss in its joint
ventures after interest and taxation, the Group's profit before tax from
continuing operations was £35.8m (06/07: £54.7m). The tax rate on continuing
operations for the full year is expected to be 29.5% and as a consequence,
profit for the period from continuing operations was £25.2m (06/07: £38.3m).
Taking into account discontinued operations, reported profit for the period was
£23.3m (06/07: £37.9m).
Balance Sheet and Return on Capital Employed
The net debt level at the end of December 2007 of £238.0m (Dec 06: £189.2m) was
lower than had been anticipated at the time of our Preliminary Results
announcement in September as a consequence of our cautious approach to land
acquisition. During the last six months net debt increased by £60.4m. The
investment in land increased by £5.2m to £646.6m but as a consequence of our
limited activity in the land market, land creditors reduced by £31.6m and we
expect a further reduction in the second half as we anticipate remaining
selective in completing acquisitions of new sites.
Investment in site infrastructure, coupled with construction momentum from the
summer months relative to the sales rates we experienced in the autumn, resulted
in work in progress increasing during the period by £25.2m to £358.3m. Our
management of work in progress relative to rate of sale is an important focus
and construction activity has been reduced where appropriate for the second half
of our financial year. We carefully control our exposure to part exchange
properties and at December 2007 this investment was only £10.2m as compared with
£9.8m at June 2007.
The Group's capital employed was £826.2m (Dec 06: £725.6m) of which £17.5m
related to Mixed Use and Regeneration as we continued to carefully manage our
investment in speculative commercial development and we completed Phase 1 of the
Barking Town Square development in Redrow Regeneration. We will see some
increase in the second half as we move forward with construction on Phase 2 of
this development.
Return on capital employed for the six month period based upon continuing
operations was 11.2% (06/07: 18.0%). Our land acquisition strategy coupled with
the controls within the business on work in progress continue to be focused on
reducing capital employed in the context of the markets in which we are now
operating.
Land Bank
Redrow remains committed to a long term approach to sourcing development
opportunities. As at the end of December, the forward land bank stood at 25,750
plots (Dec 2006: 25,000) which were either allocated or have a realistic
opportunity to secure planning. Opportunities with the prospect of short term
conversion to the current land bank at Exeter, Taunton, Lydney, High Wycombe,
Northampton and Kettering comprising over 2,300 plots continue to progress
through the planning system.
The major regeneration of the former Royal Ordnance site at Bishopton to the
west of Glasgow for some 2,500 new homes and over 100 acres of commercial and
mixed use space which we are promoting jointly with the owner BAE Systems was
confirmed as a Community Growth Area during the period by the Scottish
Executive.
We continue to adopt a prudent accounting approach for our forward land by fully
providing for all option and pre-development costs until the land has a planning
consent and is acquired by us. Consequently the balance sheet does not
recognise the potential value of the options within our forward land bank.
Option agreements are effective tools for securing long term supply for the
benefit of the business at market values prevailing at the time of acquisition.
Acquisition of land in the current market was marked by a selective approach
focused on financial returns, high quality locations and strong product mix. We
were able to take advantage in the market to secure improved terms which should
benefit the business in the future. The Group's current land bank was 19,900
plots at the end of December (Dec 2006: 21,200 plots), of which 16,300 plots
(Dec 2006: 16,850 plots) were owned with planning with the remainder of 3,600
plots (Dec 2006: 4,350 plots) generally controlled under contract awaiting the
grant of a planning consent. Within our Homes business the average plot cost at
the end of December 2007 increased to £39,200 (Dec 2006: £33,300), reflecting
both the product mix and geographic location with an increased proportion of our
land bank in the southern part of England.
Competition in the land market is softening in many areas as developers assess
the future direction of the housing market. Our strategy over the coming months
will be to remain careful in terms of commitments to new acquisitions until the
position regarding the housing market becomes more certain and to position
ourselves to be able to take advantage of better margin opportunities as these
arise. We anticipate trading from a similar number of outlets in 2008/09 as in
the current financial year.
Product and Cost
A key objective in our business is to use our broad product range to provide
attractive and sustainable homes for buyers through our design led approach as a
point of differentiation. We continue to promote the use of core housetypes to
drive efficiency in our construction process, enhance quality and ensure tight
management of build cost without impairing the quality of the offering to our
customers.
Our strength in central procurement has held like for like housebuild cost
increases over the last twelve months to less than 1% and we are constructively
engaging with our business partners to reduce our cost base without devaluing
the quality of our
product. Sub-contractor rates are responding to the current market environment.
We are exercising close control over site and office overhead costs to ensure
we operate efficiently and effectively.
Sales Market
Sales in the six months to December 2007 were affected by the market conditions
and the Group forward sales of 1,694 new homes (Dec 2006: 1,871) were just under
10% lower than at the corresponding date last year.
The interest rate reductions that took place in December and February are
welcome. Visitor levels and website activity have picked up in the New Year
with cancellation rates showing some improvement as compared with the autumn
market. However, prospective buyers are cautious and sales are being affected by
the tightening in mortgage availability. Our short term focus remains on
implementing sales strategies that are appropriate to each site with a marketing
approach that provides reassurance to prospective customers.
Based on our current assessment of the more challenging housing market, we
anticipate legal completions for the Group in the financial year to June 2008
being just over 3% lower than our previous expectations, resulting in a 10%
reduction as compared with last year. Reflecting the competitiveness of the
sales market, net selling prices after incentives are under pressure which will
lead to some further weakening in gross margins from home sales over the second
half.
Prospects
We continue to promote our long term approach to land acquisition whilst in the
short term we exercise caution in the current land market. We are focused on
delivering products that offer a mix of homes appropriate to each location and
which will appeal to our customer base. The benefits that good design and
specification brings to our business in delivering value and in making our
product attractive to our customers are integral parts of our heritage which
will stand as points of differentiation for Redrow.
Our overall expectation remains that 2008 will present a more difficult trading
environment than the industry has experienced for many years with lower levels
of confidence in the housing market. It is difficult to assess when confidence
will improve as this will depend upon a number of factors including the cost of
borrowing, mortgage availability and general economic conditions. However, the
fundamental need to increase the supply of new homes in the UK remains a key
element in Government policy and is a positive for our future. We have an
experienced and committed management team to address the challenges we currently
face. Our strategy remains to position Redrow to capitalise on improvements in
our markets and to take advantage of the opportunities that will arise when
confidence returns.
Alan Bowkett
Chairman
Responsibility Statement
The Directors confirm that, to the best of our knowledge:
(i) this condensed set of financial statements has been prepared in accordance
with IAS 34, as adopted by the European Union;
(ii) the interim management report contained herein includes a fair review of
the information required by DTR 4.2.7 (indication of important events during the
first six months and a description of the uncertainties for the remaining six
months of the financial year) and DTR 4.2.8 (disclosure of related party
transactions and changes therein).
The Directors of Redrow plc are listed in the Redrow plc Annual Report and
Accounts for the year ended 30 June 2007.
By order of the Board
Neil Fitzsimmons David Arnold
Chief Executive Group Finance Director
27 February 2008 27 February 2008
Consolidated Income Statement (Unaudited)
12
months
6 months ended ended
31 December 30 June
Restated Restated
2007 2006 2007
Note £m £m £m
Revenue 2 353.1 387.7 834.3
Cost of sales (287.6) (302.4) (651.3)
Gross profit 65.5 85.3 183.0
Administrative expenses (20.6) (23.6) (46.4)
Operating profit before financing costs 2 44.9 61.7 136.6
Financial income 2.1 0.3 1.6
Financial expenses (10.8) (7.2) (16.9)
Net financing costs 2 (8.7) (6.9) (15.3)
Share of loss of joint ventures after 2 (0.4) (0.1) (0.2)
interest and taxation
Profit before tax from continuing operations 2 35.8 54.7 121.1
Income tax expense 2, 3 (10.6) (16.4) (36.1)
Profit for the period from continuing operations 2 25.2 38.3 85.0
Discontinued operations 12 (1.9) (0.4) (0.6)
Profit for the period 2 23.3 37.9 84.4
Earnings per share from continuing operations
Basic earnings per share 5 15.8p 24.0p 53.3p
Diluted earnings per share 5 15.8p 23.9p 53.2p
Earnings per share including discontinued operations
Basic earnings per share 5 14.6p 23.8p 52.9p
Diluted earnings per share 5 14.6p 23.7p 52.8p
Consolidated Statement of Recognised Income and Expense (Unaudited)
12 months
6 months ended ended
31 December 30 June
2007 2006 2007
£m £m £m
Effective portion of changes in fair value of interest rate
cash flow hedges (1.2) 0.4 1.3
Deferred tax on change in fair value of interest rate cash 0.4 (0.1) (0.4)
flow hedges
Actuarial gains/(losses) on defined benefit pension scheme 0.2 (2.4) 5.8
Deferred tax on actuarial gains/(losses) taken directly to (0.1) 0.7 (1.7)
Equity
Net expense recognised directly in equity (0.7) (1.4) 5.0
Profit for the period 23.3 37.9 84.4
Total recognised income and expense for the period 22.6 36.5 89.4
Consolidated Balance Sheet (Unaudited)
As at As at
31 December 30 June
2007 2006 2007
Note £m £m £m
Assets
Intangible assets 0.4 0.3 0.3
Plant, property and equipment 24.6 25.7 24.6
Investments 1.7 2.5 3.7
Deferred tax assets 3.6 3.6 3.4
Derivative financial instruments 0.1 0.5 0.6
Retirement benefit surplus 7.1 - 6.1
Trade and other receivables 4.7 1.4 4.1
Total non-current assets 42.2 34.0 42.8
Inventories 6 1,020.3 915.0 988.7
Investments 0.9 - -
Trade and other receivables 18.4 33.2 28.5
Derivative financial instruments 0.5 0.3 1.1
Cash and cash equivalents 9 2.5 3.6 12.2
Total current assets 1,042.6 952.1 1,030.5
Total assets 1,084.8 986.1 1,073.3
Equity
Issued capital 10 16.0 16.0 16.0
Share premium 58.3 56.3 58.1
Hedge reserve 0.4 0.6 1.2
Other reserves 7.9 7.9 7.9
Retained earnings 505.6 455.6 494.6
Total equity 11 588.2 536.4 577.8
Liabilities
Bank loans 9 209.9 177.1 169.7
Trade and other payables 7 31.2 37.3 48.8
Deferred tax liabilities 3.0 1.5 3.0
Retirement benefit obligations - 2.6 -
Derivative financial instruments 0.1 - -
Long-term provisions 2.2 4.5 3.4
Total non-current liabilities 246.4 223.0 224.9
Bank overdrafts and loans 9 30.6 15.7 20.1
Trade and other payables 7 205.4 197.4 233.8
Derivative financial instruments 0.1 - -
Current income tax liabilities 14.1 13.6 16.7
Total current liabilities 250.2 226.7 270.6
Total liabilities 496.6 449.7 495.5
Total equity and liabilities 1,084.8 986.1 1,073.3
Consolidated Cash Flow Statement (Unaudited)
12 months
6 months ended ended
31 December 30 June
2007 2006 2007
Note £m £m £m
Cash flow from operating activities
Operating profit before financing costs 44.9 61.7 136.6
Depreciation and amortisation 0.9 1.1 2.3
Adjustment for non-cash items (2.2) (3.5) 3.1
Operating profit before changes in working 43.6 59.3 142.0
capital and provisions
Decrease/(increase) in trade and other 9.5 (8.3) (6.3)
receivables
Increase in inventories (31.6) (65.4) (139.1)
(Decrease)/increase in trade and other payables (45.4) 1.4 49.6
Decrease in retirement benefit provision and (2.2) (5.9) (15.7)
other provisions
Cash generated from operations (26.1) (18.9) 30.5
Interest paid (8.6) (5.6) (13.9)
Tax paid (13.1) (17.3) (35.2)
Net cash from operating activities (47.8) (41.8) (18.6)
Cash flows from investing activities
Acquisition of plant, property and equipment (1.7) (2.9) (5.2)
Proceeds from sale of plant, property and 0.8 - 2.6
equipment
Interest received 1.5 0.1 0.9
Payments to joint ventures - continuing operations (0.2) - (1.8)
Payments to joint ventures - discontinued operations (0.4) (0.4) (0.5)
Net cash from investing activities - (3.2) (4.0)
Cash flows from financing activities
Issue of bank borrowings 8 139.0 87.5 170.0
Repayment of bank borrowings 8 (99.0) (42.0) (132.0)
Issue costs of bank borrowings (0.1) - (0.1)
Purchase of own shares - (0.5) (0.5)
Dividends paid 4 (12.5) (13.9) (26.3)
Proceeds from issue of share capital 0.2 0.1 1.9
Net cash from financing activities 27.6 31.2 13.0
Decrease in net cash and cash equivalents (20.2) (13.8) (9.6)
Net cash and cash equivalents at the beginning
of the period (7.9) 1.7 1.7
Net cash and cash equivalents at the end 9 (28.1) (12.1) (7.9)
of the period
NOTES (Unaudited)
1. Accounting Policies
The above results, Responsibility Statement and accompanying notes are extracted
from the condensed consolidated half-yearly financial information for the half
year ended 31 December 2007. These results do not comprise statutory accounts
within the meaning of Section 240 of the Companies Act 1985. Statutory accounts
for the year ended 30 June 2007 were approved by the Board of Directors on 10
September 2007 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under Section 237 of the
Companies Act 1985.
The half-yearly financial statements have been prepared using accounting
policies and presentation consistent with those applied in the preparation of
the Group's consolidated financial statements for the year ended 30 June 2007,
apart from the following changes:
a. Revenue Recognition
Sales of residential land holdings have historically not represented a material
part of the Group's strategy and, because of this, have not been included within
revenue for the Homes' business. With the increased focus on optimising the
Group's land bank through land sales and swaps which may form a more frequent
part of ordinary trading for Redrow, we have amended our revenue recognition
policy to include residential land sales revenue within revenue for the Homes'
business. The change in accounting policy does not affect reported cash flows
and earnings. The impact is to increase reported revenue by £6.8m (2006:
£21.5m).
b. Financial Instruments
The Group adopted IFRS 7 'Financial Instruments: disclosures' on 1 July 2007.
IFRS 4, 'Insurance Contracts', revised implementation guidance, is effective
when an entity adopts IFRS 7. As this half-yearly report contains only
condensed financial statements, and as there are no material financial
instrument related transactions in the period, full IFRS 7 disclosures are not
required at this stage. The full IFRS 7 disclosures, including the sensitivity
analysis to market risk and capital disclosures required by the amendment of IAS
1, will be given in the annual financial statements.
c. New Standards
In addition to the above the following new standards, amendments to standards or
interpretations are mandatory for the first time for the financial year ending
30 June 2008:
IFRIC 10, 'Interims and Impairment', effective for annual periods beginning on
or after 1 November 2006. This interpretation has not had any impact on the
timing or recognition of impairment losses as the Group already accounted for
such amounts using principles consistent with IFRIC 10.
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial year ending 30 June 2008
and have not been early adopted.
IFRIC 14, IAS 19 - 'The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction' effective for annual periods beginning on or
after 1 January 2008.
2a. Segmental information - Income
12 months
ended
6 months ended
31 December 30 June
Restated Restated
2007 2006 2007
£m £m £m
Revenue
Homes - home sales 319.1 359.6 757.0
- land sales 6.8 21.5 38.6
325.9 381.1 795.6
Mixed Use & Regeneration 27.2 6.6 38.7
353.1 387.7 834.3
Homes - gross profit 61.8 82.0 174.7
Homes - administrative expenses (19.9) (22.7) (45.0)
Homes - operating profit 41.9 59.3 129.7
Mixed Use & Regeneration - operating profit 2.4 2.2 6.6
44.3 61.5 136.3
Add back share of joint venture operating losses 0.6 0.2 0.3
Operating profit before financing costs 44.9 61.7 136.6
Net financing costs (8.7) (6.9) (15.3)
36.2 54.8 121.3
Share of loss of joint ventures after interest and taxation (0.4) (0.1) (0.2)
Profit before tax from continuing operations 35.8 54.7 121.1
Income tax expense (10.6) (16.4) (36.1)
Profit for the period from continuing operations 25.2 38.3 85.0
Discontinued operations (1.9) (0.4) (0.6)
Profit for the period 23.3 37.9 84.4
2b. Segmental information - Balance Sheet
As at As at
31 December 30 June
2007 2006 2007
£m £m £m
Segment assets
Homes 1,066.7 955.4 1,018.3
Mixed Use & Regeneration 25.2 28.4 43.2
Framing Solutions - share of joint venture 0.9 1.8 1.8
1,092.8 985.6 1,063.3
Elimination of inter-segment items (10.5) (3.1) (2.2)
1,082.3 982.5 1,061.1
Cash and cash equivalents 2.5 3.6 12.2
Consolidated total assets 1,084.8 986.1 1,073.3
Segment liabilities
Homes 245.1 239.5 269.8
Mixed Use & Regeneration 7.4 6.9 21.4
252.5 246.4 291.2
Elimination of inter-segment items (10.5) (3.1) (2.2)
242.0 243.3 289.0
Borrowings 240.5 192.8 189.8
Consolidated total liabilities 482.5 436.1 478.8
Current income tax liabilities 14.1 13.6 16.7
Total equity 588.2 536.4 577.8
3. Income Taxes
Income tax expense is recognised based on management's best estimate of the
weighted average annual income tax rate expected for the full financial year.
The estimated average annual tax rate used for the year to 30 June 2008 is
29.5%, taking into consideration the reduction in the corporation tax rate from
30% to 28% from 1 April 2008.
4. Dividends
12 months
ended
6 months ended
31 December 30 June
2007 2006 2007
£m £m £m
Amounted recognised as distributions to equity
holders in the period:
2006 final dividend paid of 8.7p per share - 13.9 13.9
2007 interim dividend paid of 7.8p per share - - 12.4
2007 final dividend paid of 7.8p per share 12.5 - -
12.5 13.9 26.3
The Directors have declared an interim dividend of 9.3p per share (2006: 7.8p)
which was approved by the board on 27 February 2008. This gives an interim
dividend of £14.9m (2006: £12.4m) which will be paid on 2 May 2008 to
shareholders whose names are on the Register of Members at the close of business
on 7 March 2008. The shares will become ex-dividend on 5 March 2008.
In accordance with IAS 10 'Events after the Balance Sheet Date' the interim
dividend has not been included as a liability as at 31 December 2007.
5. Earnings per share
The basic earnings per share calculation for the 6 months ended 31 December 2007
is based on the weighted number of shares in issue during the period of 159.8m
(2006: 159.4m) excluding those held in trust under the Redrow Long Term
Incentive Plan, which are treated as cancelled.
Diluted earnings per share has been calculated after adjusting the weighted
average number of shares in issue for all potentially dilutive shares held under
unexercised options.
6 months ended 31 December 2007
Earnings No. of shares Per share
£m millions pence
Basic earnings per share for continuing operations 25.2 159.8 15.8
Effect of share options and SAYE - 0.1 -
Diluted earnings per share for continuing operations 25.2 159.9 15.8
Basic earnings per share including discontinued operations is 14.6p (diluted -
14.6p).
6 months ended 31 December 2006
Earnings No. of shares Per share
£m millions pence
Basic earnings per share for continuing operations 38.3 159.4 24.0
Effect of share options and SAYE - 0.4 (0.1)
Diluted earnings per share for continuing operations 38.3 159.8 23.9
Basic earnings per share including discontinued operations is 23.8p (diluted -
23.7p).
12 months ended 30 June 2007
Earnings No. of shares Per share
£m millions pence
Basic earnings per share for continuing operations 85.0 159.5 53.3
Effect of share options and SAYE - 0.4 (0.1)
Diluted earnings per share for continuing operations 85.0 159.9 53.2
Basic earnings per share including discontinued operations is 52.9p (diluted -
52.8p).
6. Inventories
As at As at
31 December 30 June
2007 2006 2007
£m £m £m
Land for development 646.6 576.5 641.4
Work in progress 358.3 323.8 333.1
Stock of showhomes 15.4 14.7 14.2
1,020.3 915.0 988.7
7. Land Creditors
(included in trade and other payables)
As at As at
31 December 30 June
2007 2006 2007
£m £m £m
Due within one year 61.4 52.9 75.4
Due in more than one year 31.2 37.3 48.8
92.6 90.2 124.2
8. Borrowings and loans
12 months
6 months ended ended
31 December 30 June
2007 2006 2007
£m £m £m
Opening net book amount 170.0 132.0 132.0
Issue of bank borrowings 139.0 87.5 170.0
Repayment of bank borrowings (99.0) (42.0) (132.0)
Closing net book amount 210.0 177.5 170.0
At 31 December 2007, the Group had total unsecured bank borrowing facilities of
£525.0m, representing £480.0m committed facilities and £45.0m uncommitted
facilities.
9. Analysis of net debt
As at As at
31 December 30 June
2007 2006 2007
£m £m £m
Cash and cash equivalents 2.5 3.6 12.2
Bank overdrafts and loans
- current liabilities (30.6) (15.7) (20.1)
(28.1) (12.1) (7.9)
- non-current liabilities (209.9) (177.1) (169.7)
(238.0) (189.2) (177.6)
10. Share capital
As at As at
31 December 30 June
2007 2006 2007
£m £m £m
Authorised
330,000,000 ordinary shares of 10p each 33.0 33.0 33.0
Allotted, called up and fully paid 16.0 16.0 16.0
Number of ordinary
shares of 10p each
Movement in the period was as follows
At 1 July 2007 159,827,039
Share options exercised 58,682
At 31 December 2007 159,885,721
11. Reconciliation of movements in consolidated equity
12 months
6 months ended ended
31 December 30 June
2007 2006 2007
£m £m £m
Profit for the period 23.3 37.9 84.4
Dividends on equity shares (12.5) (13.9) (26.3)
Other recognised income and expense relating
to the period (net) (0.7) (1.4) 5.0
Shares issued at a premium 0.2 0.1 1.9
Movement in LTSIP/SAYE 0.1 (0.1) (1.0)
Net increase in equity 10.4 22.6 64.0
Opening equity 577.8 513.8 513.8
Closing equity 588.2 536.4 577.8
12. Discontinued operations - disposal of interest in joint venture
On 3 January 2008, the Group completed the disposal of its interest in its
Framing Solutions joint venture. The loss on disposal has been included in the
half-yearly results for the period and disclosed accordingly as discontinued
operations. Financial information relating to the business for the period is as
follows:
12 months
6 months ended ended
31 December 30 June
2007 2006 2007
£m £m £m
Revenue 1.6 1.8 3.9
Expenses (2.2) (2.3) (4.8)
Loss before tax (0.6) (0.5) (0.9)
Tax on loss 0.2 0.1 0.3
Loss after tax on discontinued operations (0.4) (0.4) (0.6)
Loss on disposal (2.0) - -
Tax on disposal 0.5 - -
(1.5) - -
Share of loss after interest and taxation on
Framing Solutions joint venture (1.9) (0.4) (0.6)
Investing cash flows for discontinued operations amounted to an outflow of £0.4m
in the period.
The Group reported net loans outstanding at December 2007 with Framing Solutions
of £nil (December 2006: £1.2m, June 2007: £1.4m).
The Group undertook transactions with its Framing Solutions joint venture in the
normal course of business during the financial period. This consisted of the
purchase of lightweight steel frames totalling £2.4m (2006: £2.9m). At the end
of the period, the balance owed to Framing Solutions by the Group was £1.7m
(2006: £1.5m).
13. Shareholder Enquiries
The Registrar is Computershare Investor Services PLC. Shareholder enquiries
should be addressed to the Registrar at the following address:
Registrars Department
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 3rd January 2025
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