Morgan lands pounds 100m from Redrow sale
Wednesday 12 March 1997
Mr Morgan said the main purpose of the sale was for family investment reasons. He denied it was linked to his move last year to Jersey for personal tax reasons even though he will avoid a capital gains bill of up to pounds 40m on the deal because of the Channel Island's generous tax regime.
"There is no tax gain to be made by selling now," he insisted. "The business has come on greatly in the last 12 months and I feel it is not really appropriate for one shareholder to own more than 50 per cent of a public company."
The sale will see Mr Morgan's stake in Redrow, held via his Bridgemere Holdings company, cut from just under 60 per cent to about 35 per cent. Some 54 million shares will be placed by stockbrokers BZW and Cazenove with institutional investors.
Shares in Redrow fell 5.5p to 169.5p on the news, valuing Mr Morgan's total investment at pounds 220m.
Mr Morgan, who floated Clwyd-based Redrow on the stock market in 1994, stressed that neither the share sale nor his move to Jersey reduced his commitment to Redrow, of which he remains chairman.
"I wanted to sell more at the time of the float in May 1994, but conditions in the housebuilding industry then did not really allow it," he added.
Day-to-day running of Redrow is in the hands of Paul Pedley, managing director, who is also selling a small parcel of 475,000 shares, worth pounds 805,000 at last night's close
News of Mr Morgan's share sale came as Redrow released interim figures for the six months to December showing a 36 per cent rise in pre-tax profits to pounds 16.4m on sales 29 per cent ahead at pounds 123m. Earnings per share rose from 3.9p to 5.2p while the interim dividend was raised from 1.1 to 1.2p. Housing completions totalled 1,317 units in the half, up from 1,082, with the average selling price rising more than 5 per cent to pounds 93,200, mainly reflecting an increase in the average size of house sold.
Mr Morgan noted that although house price inflation had been strongest in the South-east, a ripple effect was now being seen across the country. "As a result there is every reason to believe the current market is sustainable," he said.
Mr Morgan is credited as one of the few housebuilders who called the top of the market in 1988 and 1989, selling the company's entire landbank before the recession and the housing crash hit the whole sector in the early 1990s.
Four years ago he returned to the market with the purchase of Costain Homes for pounds 70m, which expanded Redrow from its base in the North-west of England into the South-east.
Mr Morgan denied his well-publicised move to Jersey, where he reportedly paid pounds 6.5m to buy the Trinity Manor estate, was linked to fears that an incoming Labour government would increase the top rate of income tax. "I'm not a political animal," he maintained.
- 1 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 4 Tennis fan suing Australian Open organisers for 'failing to shade spectators' during Murray match
- 5 This crazy skiing video will leave you feeling queasy
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
Mother of newborn Baby No 59 trapped in sewer pipe told Chinese police she 'heard crying' when she raised alarm
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
AirAsia QZ8501: Black box reveals warning alarms 'screamed' before crash, as more bodies recovered from near fuselage of jet
Rob Lowe hits out at White House decision not to meet Israeli leader
British Muslim leaders outraged after Eric Pickles says followers of Islam should 'prove their identity'
UK terror fears: My jihadist son returned from Syria mentally scarred – now he is being ignored
Nigel Farage: NHS might have to be replaced by private health insurance
Billy Crystal: 'Stop shoving gay sex scenes in my face'
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
David Cameron says anyone criticising Eric Pickles' letter to Muslims 'really has a problem'
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...