Redrow carries pounds 350m tag for spring flotation

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The Independent Online
REDROW, one of the UK's largest privately owned housebuilders, is planning a spring flotation, expected to value the company at up to pounds 350m.

For chairman and chief executive Steve Morgan, one of the launch's biggest headaches will be deciding how to spend the pounds 100m he will raise from reducing his stake from 98 per cent to just over 50 per cent.

Despite the fact that, together with his remaining shares, Mr Morgan will be worth almost pounds 300m, he said yesterday that he would not know what to do if he stopped running the company he set up 20 years ago with a pounds 5,000 loan from his father.

Originally a trench-digging and pipe-laying contractor, Redrow did not expand into housebuilding until the early 1980s.

Now operating from seven regions, Redrow expects to achieve 2,000 completions in the year to June, putting it in the middle range of quoted companies. It has a land-bank of 6,700 plots, in the books at pounds 11,400 each, or 13.5 per cent of average selling price, a low proportion by industry standards.

Having pulled out of building houses in the South-east of the country in 1988, the company returned to the region last year with the acquisition of Costain Homes, the housing operation of the troubled contractor.

As well as the core housebuilding operation, Redrow has a small commercial property arm and a construction division. Mr Morgan said the emphasis would remain with housing and no speculative commercial developments would be considered.

A hotel built by the group in Wales is to be transferred into Mr Morgan's private interests before the flotation, which is tentatively set for April or May.

Redrow's interim figures for the six months to December showed an 81 per cent increase in pre-tax profits from pounds 6.8m to pounds 12.3m. Completions during the period jumped from 636 to 1,153.

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