Redrow chairman Steve Morgan rakes in £3m as annual profits double

Redrow unveiled a 91 per cent jump in full-year pre-tax profit to £132.6 million for the year to June

House prices in Luton have surged at more than double the 7.5 per cent annual price growth seen across the UK generally over the year (Getty)

Steve Morgan was £3 million richer today after the housebuilder he founded four decades ago produced a record set of results and doubled the dividend.

Redrow unveiled a 91 per cent jump in full-year pre-tax profit to £132.6 million for the year to June as the group expanded its London business and took advantage of the Government’s Help to Buy scheme to help buyers get on the ladder.

London will this year make up 20 per cent of its business and it contributed £124 million in sales.

Wolverhampton Wanderers chairman Morgan has just under 150 million shares in Redrow, so today’s final dividend is worth nearly £3 million to him.

He said: “The number of homes we built has increased by 27 per cent. While this is clear evidence of the success of our strategy it also shows the positive impact of the Government’s Help to Buy Scheme.”

Help to Buy accounted for 35 per cent of private sale completions.

Morgan added: “Help to Buy released the huge pent-up demand and it did what the Government set out to do by helping the north and the Midlands, particularly first-time buyers.”

The booming housing market has been hit by a slowdown in recent months, but Morgan said it was returning to normality. He said: “Last summer was extraordinary and it was not sustainable. This year we are seeing a calming down of the market.”

Sales hit a record £864.5 million, driven by the rise in completions and a 13 per cent increase in its average selling price to £239,500. The strong results and dividend hike have been long awaited by investors. The group started paying dividends again in February after a six-year break.

Morgan, who founded the group in Flintshire in 1974, left the firm in 2000 and returned in 2009. He bought Wolves in 2007 and his personal wealth is estimated at £650 million.

In 2012, he tried to take Redrow over in a £560 million bid with the help of private-equity firms Toscafund Asset Management and Penta Capital. But the bid, via his investment vehicle Bridgemere Securities which owns a 40 per cent stake, was unsuccessful after investors criticised the deal and the offer price of 152p a share. The shares rose 2.2p to 283.2p.

Peel Hunt analyst Clyde Lewis said: “Recent activity has returned to a more normal seasonal pattern, with summer activity dropping back. Build cost pressures remain in place, but land opportunities remain very good.”