Redrow talks up 'resilience' amid market uncertainty

Redrow said on Wednesday that for the first 18 weeks of its current financial year, trading had remained “encouragingly resilient”, despite ongoing Brexit uncertainty and relatively weak demand in the wider housing market.

The FTSE 250 housebuilder, which was holding its annual general meeting, said the value of net private reservations in the first 18 weeks to 1 November - excluding a £119.5m private rented sector sale at Colindale Gardens - was 2% ahead of last year at £598m.

Including that sale, the value of private reservations was up 22% at £717m.

The company’s sales rate per outlet per week on a like-for-like basis, again excluding the private rented sector sale, was 0.67, compared to 0.64 last year.

Redrow chairman John Tutte said the average selling price of private reservations for the first 18 weeks was “virtually the same as last year”, excluding the Colindale Gardens sale, at £389,000.

“Outlet growth continues to be affected by planning delays and the cautious approach to land acquisition we have adopted during this unceasing period of economic and political uncertainty,” Tutte told shareholders.

“The group is currently operating from 128 outlets, [down from] 129.

“However, we remain on-track to operate from an average of 131 outlets this financial year.”

As the company highlighted in September, Tutte said the combination of “constrained outlet growth” and the timing of block completions in London would 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 8% increase on this time last year.”

Redrow also reported a “strong” balance sheet, with net debt currently standing at £32m, compared to net cash of £132m a year ago.

The firm said the primary reason for the movement was the £218m of cash returns to shareholders in the last 12 months, including the 'B share' payment.

“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,” Tutte explained.

“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.”

Redrow also announced the appointment of Nicky Dulieu as a non-executive director on Wednesday.

Tutte said Dulieu’s “extensive knowledge” of retailing and customer service would complement the existing board's experience.

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

As at 0846 GMT, shares in Redrow were flat at 611p.