Housebuilder boosts share price with plan to return money to shareholders
Shares in Redrow leapt 5% in early trading as the firm announced the launch of a £100m share buyback programme designed to boost the value of existing shares.
The £2.1bn turnover housebuilder said it had reviewed the cash needs of the business to achieve its growth plans and concluded that it has “sufficient funds to enter into a capital return programme of up to £100 million”.
It said that it had decided to do this in the form of a share buyback programme, “given the current share price”.
Redrow has a policy of allocating a third of its earning to pay a regular dividend, and today said the “primary capital allocation policy of the Company is to grow the business”. However, it said that “any material amount of surplus cash beyond those needs is intended to be returned to the Company’s shareholders.”
Redrow reported a net cash inflow of £128m in the year to July 3 2022, with a net cash balance at that date of £288m.
The firm reported pre-tax profit of £203m on turnover of £1.05bn in half year results for the six months to January 2.
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