Redrow buoyant as housing market surge continues

HOUSEBUILDER Redrow has reported an increase in sales activity as the housing market resurgence continues at pace.

In an interim management statement covering the 17 week period to April 25, the Flintshire-based group – headed by Wolverhampton Wanderers owner Steve Morgan –  said the positive sales market it experienced in 2013 has continued into the new calendar year. 

In line with its plan to increase the delivery of new homes to meet this demand, the group operated from an average of 92 outlets in the period, a 12% increase on last year (2013: 82).

As a result, net reservations for the 17 week period were up 17% at 1,280 (2013: 1,091).  This equates to a sales rate of 0.82 per outlet per week, an increase of 5% on last year.

The average selling price of private reservations for the financial year to date was £289k, 16% higher than last year (2013: £249k), mainly due to an increasing proportion of sales in London and the South East.  

The average selling price of private legal completions for the same period was £272k (2013: £226k).  Legal completions in London are progressing well and we expect this division to contribute c.£120m of turnover in the current financial year.
 
Redrow said it had secured a further 11 sites since the half year, comprising 1,300 plots, and it has agreed terms on a “significant number” of other opportunities. 

“The Government’s announcement of the extension of the Help to Buy scheme to 2020 provides a stable platform to increase our investment in new sites and grow our output,” it said.
 
Net debt at 25 April 2014 was £153m, compared to £149m at the end of December 2013.  Redrow expects net debt to be c.£200m at the end of June 2014.
 
The group expects to show further good progress for the full year.