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Redrow returns to pre-covid numbers

Redrow chief govt Matthew Pratt

Within the 53 weeks to third July 2022 Redrow accomplished 5,715 new houses (2021: £5,620) producing income of £2.14bn and pre-tax revenue of £246m.

Revenues have been 10% forward of the earlier 12 months (2021: £1.94bn) and likewise £300m forward of the earlier document 12 months of 2019 (£2.11bn).

Pre-tax revenue was down on 2021’s £314m consequence due to an distinctive cost of £164m and a non-exceptional cost of £10m associated to fireplace security remediation work, having signed the federal government’s constructing security pledge in April.

Underlying revenue earlier than tax was up 31% on the 12 months to £410m, which was additionally again to the pre-covid document degree (2019: £406m).

The 12 months additionally noticed robust money technology with web money at third July 2022 of £288m (June 2021: £160m).

Chairman Richard Akers mentioned: “Given rising inflation and better rates of interest it’s not stunning the buoyant housing market has moderated lately and demand has returned to traditionally common ranges. It’s on this foundation now we have ready our medium time period plan and we’re assured our well timed funding in land, mixed with robust demand for our Heritage houses, will help our continued progress. As well as, our opening order ebook of over £1.4bn has put us in a superb beginning place for the 2023 monetary 12 months. In consequence, the enterprise is effectively positioned to ship one other set of robust outcomes.”

Chief govt Matthew Pratt had a pop on the ongoing political turbulence: “The housing business is topic to intense authorities stress and a quickly shifting regulatory agenda,” he mentioned. “The upheaval in Westminster, with one other current change of housing minister, is unhelpful. That is notably the case in an business which advantages from a long-term strategic method to housing.”

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Nevertheless, he stays optimistic for the new-build housing market. “The basics of the market stay good. Rates of interest, regardless of current will increase, are at traditionally low ranges; mortgage availability is excellent and employment ranges are robust.

“We’re effectively conscious of the challenges of the rising value of residing. It is clear our high quality new houses may have a rising and extra level of differentiation from the second hand market round vitality effectivity.”

Charlie Huggins, head of equities at Bristol-based funding service Wealth Membership, commented: “Home costs have proved remarkably strong because the pandemic struck, buoyed by pent-up financial savings and low-cost mortgages. Redrow, like different house-builders, has gushed money on this surroundings and is incomes large margins in addition.

“Redrow’s premium high quality housing is resonating strongly within the present surroundings, with the ‘race for house’ supporting demand for bigger, household houses. However, make no mistake – the most important motive for Redrow’s success is excessive home costs, and the overall power of the housing market.

“That’s one thing over which it has no management, and the massive unhealthy wolf of recession could possibly be about to blow away the nice instances.

“Rising home costs in recent times imply house consumers are having to borrow extra to get on the housing ladder. Mix that with rising rates of interest, which finally imply costlier mortgages, and the affordability of property may fall considerably. If rates of interest maintain rising, it’s arduous to see how the housing market could be immune.

“That is the sort of surroundings the place you discover out which house-builders have constructed their success on a base of bricks, and that are about to have their sticks and straw blown away by.”

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