LSE:RDW

Stock Analysis Report

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Executive Summary

Redrow plc focuses on housebuilding activities in the United Kingdom. More Details


Snowflake Analysis

Very undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Redrow's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RDW has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.6%

RDW

-3.6%

GB Consumer Durables

-1.9%

GB Market


1 Year Return

-30.3%

RDW

-18.0%

GB Consumer Durables

-16.2%

GB Market

Return vs Industry: RDW underperformed the UK Consumer Durables industry which returned -19% over the past year.

Return vs Market: RDW underperformed the UK Market which returned -14.8% over the past year.


Shareholder returns

RDWIndustryMarket
7 Day-3.6%-3.6%-1.9%
30 Day19.5%10.7%0.7%
90 Day-2.2%-3.3%-4.8%
1 Year-30.3%-30.3%-16.8%-18.0%-13.0%-16.2%
3 Year-25.0%-35.2%-14.0%-26.0%-9.4%-20.6%
5 Year12.5%-8.2%18.0%-8.9%13.5%-12.0%

Price Volatility Vs. Market

How volatile is Redrow's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Redrow undervalued compared to its fair value and its price relative to the market?

29.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RDW (£4.43) is trading below our estimate of fair value (£6.24)

Significantly Below Fair Value: RDW is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RDW is good value based on its PE Ratio (13.5x) compared to the GB Consumer Durables industry average (13.9x).

PE vs Market: RDW is good value based on its PE Ratio (13.5x) compared to the UK market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: RDW is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: RDW is good value based on its PB Ratio (0.9x) compared to the GB Consumer Durables industry average (1x).


Next Steps

Future Growth

How is Redrow forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

22.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RDW's forecast earnings growth (22.6% per year) is above the savings rate (1.2%).

Earnings vs Market: RDW's earnings (22.6% per year) are forecast to grow slower than the UK market (24.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: RDW's revenue (10.5% per year) is forecast to grow faster than the UK market (6% per year).

High Growth Revenue: RDW's revenue (10.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RDW's Return on Equity is forecast to be low in 3 years time (12.8%).


Next Steps

Past Performance

How has Redrow performed over the past 5 years?

8.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RDW has high quality earnings.

Growing Profit Margin: RDW's current net profit margins (8.4%) are lower than last year (15.6%).


Past Earnings Growth Analysis

Earnings Trend: RDW's earnings have grown by 8.2% per year over the past 5 years.

Accelerating Growth: RDW's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RDW had negative earnings growth (-65.6%) over the past year, making it difficult to compare to the Consumer Durables industry average (-41.5%).


Return on Equity

High ROE: RDW's Return on Equity (6.9%) is considered low.


Next Steps

Financial Health

How is Redrow's financial position?


Financial Position Analysis

Short Term Liabilities: RDW's short term assets (£2.7B) exceed its short term liabilities (£805.0M).

Long Term Liabilities: RDW's short term assets (£2.7B) exceed its long term liabilities (£303.0M).


Debt to Equity History and Analysis

Debt Level: RDW's debt to equity ratio (10.5%) is considered satisfactory.

Reducing Debt: RDW's debt to equity ratio has reduced from 24.7% to 10.5% over the past 5 years.

Debt Coverage: RDW's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: RDW's interest payments on its debt are well covered by EBIT (18.5x coverage).


Balance Sheet


Next Steps

Dividend

What is Redrow current dividend yield, its reliability and sustainability?

4.75%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate RDW's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate RDW's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RDW's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RDW's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: RDW is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RDW's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.8yrs

Average management tenure


CEO

Matthew Brennan-Pratt (45 yo)

0.25

Tenure

UK£461,000

Compensation

Mr. Matthew Brennan-Pratt has been Group Chief Executive at Redrow plc since July 01, 2020 and served as its Chief Operating Officer since April 01, 2019 until July 01, 2020. Mr. Brennan-Pratt served as Ch ...


CEO Compensation Analysis

Compensation vs Market: Matthew's total compensation ($USD605.83K) is below average for companies of similar size in the UK market ($USD1.76M).

Compensation vs Earnings: Insufficient data to compare Matthew's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
John Tutte
Executive Chairman1.5yrsUK£712.00k0.23%
£ 3.6m
Matthew Brennan-Pratt
Group Chief Executive & Executive Director0.25yrUK£461.00k0.026%
£ 396.0k
Barbara Richmond
Group Finance Director & Executive Director10.75yrsUK£467.00k0.16%
£ 2.5m
Graham Cope
Head of Legal & Company Secretary17.92yrsno data0.042%
£ 644.0k
Will Heath
Group Development Director8.75yrsno data0.0064%
£ 97.6k
David Bexon
Group Sales & Marketing Director6.33yrsno data0.0036%
£ 54.4k
Karen Jones
Group Human Resources Directorno datano data0.0040%
£ 60.6k
David Campbell-Kelly
Chairman of Northern Region13.25yrsno datano data
Mark Parker
Regional Chief Executive for Greater London0.83yrno datano data
Steve Greenhalgh
Managing Director of Lancashire Divisionno datano datano data

8.8yrs

Average Tenure

58.5yo

Average Age

Experienced Management: RDW's management team is seasoned and experienced (8.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Tutte
Executive Chairman1.5yrsUK£712.00k0.23%
£ 3.6m
Matthew Brennan-Pratt
Group Chief Executive & Executive Director0.25yrUK£461.00k0.026%
£ 396.0k
Barbara Richmond
Group Finance Director & Executive Director10.75yrsUK£467.00k0.16%
£ 2.5m
Vanda Murray
Independent Non-Executive Director3.17yrsUK£63.00kno data
Andrew Hewson
Senior Independent Director1.92yrsUK£73.00kno data
Michael Lyons
Independent Non-Executive Director5.75yrsUK£63.00kno data
Nicky Dulieu
Independent Non-Executive Director0.92yrUK£35.00kno data

1.9yrs

Average Tenure

60yo

Average Age

Experienced Board: RDW's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RDW insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Redrow plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Redrow plc
  • Ticker: RDW
  • Exchange: LSE
  • Founded: 1974
  • Industry: Homebuilding
  • Sector: Consumer Durables
  • Market Cap: UK£1.522b
  • Shares outstanding: 343.35m
  • Website: https://www.redrowplc.co.uk

Number of Employees


Location

  • Redrow plc
  • Redrow House
  • St. David's Park
  • Flintshire
  • Clwyd
  • CH5 3RX
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RDWLSE (London Stock Exchange)YesNew Ordinary SharesGBGBPJun 1994
RDWLBATS-CHIXE (BATS 'Chi-X Europe')YesNew Ordinary SharesGBGBPJun 1994
1HO1DB (Deutsche Boerse AG)YesNew Ordinary SharesDEEURJun 1994

Biography

Redrow plc focuses on housebuilding activities in the United Kingdom. The company acquires land; and develops and sells residential housing properties. Redrow plc was founded in 1974 and is based in Flints ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/21 22:10
End of Day Share Price2020/10/21 00:00
Earnings2020/06/28
Annual Earnings2020/06/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.