Housebuilder confident of delivering another year of ‘excellent results’

John Tutte

Housebuilder Redrow said it is “well-positioned and focused to deliver in these turbulent political times” as the UK prepares for a General Election and the Brexit process continues.

In a statement ahead of its annual general meeting this morning the group, based in Ewloe, near Chester, said that trading in the first 18 weeks of the current financial year has remained “encouragingly resilient, despite ongoing Brexit uncertainty and relatively weak demand in the wider housing market”.

Chairman John Tutte will tell shareholders later today: “The value of net private reservations in the first 18 weeks to 1st November, excluding a £119.5m PRS sale at Colindale Gardens, was 2% ahead of last year at £598m (2019: £588m).

“Including that sale, the value of private reservations is up 22% at £717m. The sales rate per outlet per week on a like-for-like basis (excluding the PRS sale) was 0.67 compared to 0.64 last year.”

Redrow’s average selling price of private reservations for the first 18 weeks was virtually the same as last year, excluding the PRS sale, at £389,000, compared wth £388,000 previously.

Mr Tutte said will reveal that outlet growth continues to be affected by planning delays and the cautious approach to land acquisition the group has adopted during this unceasing period of economic and political uncertainty.

The group is currently operating from 128 outlets, compared with 129, however, it remains on-track to operate from an average of 131 outlets this financial year.

Mr Tutte will also tell shareholders: “As highlighted in September, the combination of constrained outlet growth and the timing of block completions in London, will result in revenue, profit and cash generation being considerably more weighted than usual to the second-half.

“This, together with the strength of current trading, has positively resulted in a record overall order book of £1.3bn, an eight per cent increase on this time last year.”

The balance sheet remains strong with net debt currently standing at £32m (2018: net cash £132m). The primary reason for the movement is the £218m of cash returns to shareholders in the past 12 months, including the ‘B share’ payment.

The chairman will conclude: “The further uncertainty created by the General Election and the impact this will have on the terms of the UK’s withdrawal from the EU, leave the prospects for the economy and housing market in an unpredictable state.

“However, the group is well-positioned and focused to deliver in these turbulent political times: we have an award-winning product that is attractive to a broad range of buyers, a disciplined approach to operations, a robust balance sheet and a strong forward order book.

“We are also pleased to have announced today the appointment of Nicky Dulieu as a non-executive director. Nicky’s extensive knowledge of retailing and customer service will complement the existing board’s wealth of experience.

“I am confident that, providing trading conditions remain stable, Redrow is on course to achieve another set of excellent results.”