Redrow dividend pledge extended

HOUSEBUILDER Redrow is extending a pledge to increase its annual dividend by 20% for another year despite conceding that the housing boom is at an end.

The company plans to reward shareholders in 2006 as well as the rise next year - as previously promised - after posting record full-year results today.

Chief executive Paul Pedley said: 'We want to send out a very strong message about our confidence in the business.'

Pre-tax profits rose 17% to £124.1m on turnover of £670.3m in the year to 30 June, the top end of City expectations.

Redrow's average selling price climbed almost 5% to £154,700. This year's dividend will be 9p, up from 7.5p.

Redrow has a forward sales book of nearly £400m after deciding to sell homes earlier in the build programme.

Pedley said that demand was still high despite the Bank of England's recent spate of interest rate increases.

He predicts that house prices in the South will rise by between 1% and 3% over the next 12 months as the market cools.

'What we are seeing is a very gentle and soft landing and a sustainable market going forward,' he said. 'I don't think there is a lot left in terms of further interest rate increases.'

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