Earnings

Housebuilder Redrow says demand 'robust' despite Brexit, profit jumps

Redrow CEO: Investors are after clarity on Brexit
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Redrow CEO: Investors are after clarity on Brexit

British housebuilder Redrow said on Tuesday demand for new homes was proving "robust" in the face of Britain's planned exit from the European Union, after it posted better-than-expected 21 percent growth in full-year pre-tax profit.

The demand for new homes was driven by a competitive mortgage market and the government's "Help to Buy" scheme, aimed at boosting home ownership among first-time buyers, Redrow said.

"There is no doubt that clarity over Brexit and the future of Help to Buy would improve market sentiment," Chairman Steve Morgan said, amid media reports that the Help to Buy scheme could be shelved because of fears it is pushing up house prices.

Construction workers stand on apartment balconies at the Lexicon residential building site in London, UK
Chris Ratcliffe I Bloomberg via Getty Images

While there are signs of a slowdown at the top of the UK housing market, Redrow and other new-home builders have also been propped up by low interest rates.

Redrow's profit jump comes as Britain's real estate market deals with Brexit uncertainty and inflation eroding house prices. The possibility of Britain crashing out of the European Union without a deal has exacerbated problems.

Redrow, which constructs homes in England and Wales, said pre-tax profit rose to 380 million pounds ($488.34 million) in the year ended June, from 315 million pounds a year earlier.

Analysts expected full-year pre-tax profit of 360.78 million pounds, according to Thomson Reuters I/B/E/S.

Redrow, which was founded in 1974 in North Wales as a small civil engineering business, said it had started the current year with an order book of 1.14 billion pounds, 110 million pounds higher than a year earlier.