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Redrow trading “resilient” despite planning delays and Brexit caution

The housebuilder reiterated that revenue, profit and cash generation will be "considerably more weighted than usual to the second-half"

Redrow plc - houses
Average selling prices were up slightly to £389,000

Housebuilder Redrow plc (LON:RDW) said trading in the first few months of its financial year has been “encouragingly resilient”, with sales rates and average selling prices little changed year-on-year.

Ahead of its annual shareholder meeting, the FTSE 250-listed group said the market was seeing “relatively weak demand” and prospects for housing and the wider economy were “in an unpredictable state” due to the uncertainty created by the general election on the already ambiguous Brexit situation.

But despite this, the sales rate per outlet per week was 0.67 in the 18 weeks since the start of July, compared to 0.64 last year, with average selling prices at £389,000 compared to £388,000 this time last year and the value of net private reservations up 2% to £598mln.

Reiterating guidance given alongside its results in September, Redrow said revenue, profit and cash generation will be “considerably more weighted than usual to the second-half” as outlet growth is being constrained by planning delays and its cautious pre-Brexit approach, plus the later timing of certain block completions in London.

“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,” said Redrow chairman John Tutte in the statement.

Tutte added: “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”.

Quick facts: Redrow PLC

Price: 441.4 GBX

LSE:RDW
Market: LSE
Market Cap: £1.55 billion
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