LONDON (Reuters) - Housebuilder Redrow reported a 50 percent rise in first-half profit, slightly above analyst expectations, and said it was cautiously optimistic for its second-half as the housing market stabilises.
Redrow (LSE: RDW.L - news) said on Tuesday profit before tax for the six months to end-December was 23 million pounds, compared to 15 million in the same period last year. Analysts expected the company to report a profit of 21 million pounds, Thomson Reuters data showed.
Redrow Chairman Steve Morgan, who led a failed takeover bid for the company last year, said improvements in Britain's mortgage market as well as a focus on margins had aided Redrow's performance.
He said the second half had started well, with reservations up 8 percent on the same period last year.
"Given the strong pipeline of new sites and the modest improvement in market conditions, I am cautiously optimistic that Redrow's strong recovery is set to continue.
"In line with this, we expect to propose a modest final dividend at the year end," he said.
Net debt rose to 65 million pounds from 14 million in the year-earlier period and would continue to rise in the second half, Redrow said, as it increases its landbank and pushes forward with developments in London's lucrative property market.
Redrow's results come after its larger rivals Persimmon (LSE: PSN.L - news) and Bovis Homes (LSE: BVS.L - news) posted full year profit increases of 52 percent and 69 percent respectively, reflecting how housebuilders have beaten a stagnant British housing market by building in the more affluent South and focusing on selling more expensive family homes rather than flats.
The company said it had completed 1,202 homes over the six months, up from 1,168 over the same period in 2011, and that its average sales price rose 9.8 percent to 224,000 pounds.
It added 939 plots to its land bank over the first-half, taking the total to 13,295.
Shares in Redrow, which have risen over 60 percent since last June, closed at 195.8 pence on Tuesday, valuing the company at 712.8 million pounds.
(Reporting by Clare Hutchison and Brenda Goh, Editing by Rosalba O'Brien)