Redrow down but not defeated
REDROW, one of the UK’s leading housebuilders, remains defiant in what it describes as “exceptional times”.
Despite a drop in pre-tax profit to £65.5m from to £121.1m on revenue down from £834.3m to £650.1m for the year to June 30, Redrow is confident that its strategy of prudence and new debt facilities will see it through the storm.
Its cash flow has benefited from a 22% reduction in administrative expenses equating to an annual cash saving of £15.1m.
Although development activity may have slowed Redrow is looking to the future and has increased its forward land bank to 26,150 plots from 24,900.
However, net reservations have slumped to a previously unknown low to 55% and forward sales by 45% and the company said that it remained difficult tp forsee how long the effects of the “credit squeeze” would continue.
Alan Bowkett, chairman of Redrow, said: “In these unprecedented market conditions we have moved quickly to prioritise cash flow and the reduction of cost.
“However, the severity and speed of the deterioration in the housing market in 2008 will impact on short term profitability and have necessitated an adjustment in strategy to one more highly focused on the management of cash flow and reduction of cost.”
Profit before tax was £65.5m compared to £121.1m for the year before.
Total dividend per share for the year of 9.3p paid on May 2 2008 (2007: 15.6p).
Average selling price influenced by product and geographic mix was £156,700 which was 2.1% lower than in the previous year (2007: £160,100).
Revenue from home sales was down 21.9% at £591m as compared with £757.0m in 2007.
