Redrow made a strong case against Brexit-induced panic in a trading update this morning ahead of its annual results.
The housebuilder said it expects pre-tax profits to be at the top end of analysts’ forecasts at £240m, compared to £204m in 2015.
In the North West, Redrow announced that it had received more than 1,500 visitors to four developments over the weekend, calling homebuyers “defiant” despite the Brexit result. Redrow said that available homes in Prestwich, Stockport, Fazakerley and Ledsham had been sold “within minutes”, and that one prospective customer, 25-year-old Sean Miley, a civil servant in Liverpool, had spent the night in his car in order to get to the front of the queue.
Shares in the FTSE-250 housebuilder collapsed by as much as 75% to 100p at one point on Friday morning before recovering ground and are now trading at 300p, compared to 426p on Thursday.
In a statement to the stock market Redrow said: “Although it is too early to tell whether Brexit will have any effect on future sales, initial feedback is that sites remain busy, reservations continue to be taken and, indeed, we witnessed long queues and strong reservations at new sites launched last weekend. The fact remains that there is a long term underlying demand for new homes following decades of under supply. This chronic shortage of housing leaves market fundamentals unchanged.”
Turnover for the financial year totalled a record £1.38bn, 20% up on 2015 (£1.15bn). The number of homes legally completed increased by 17% to 4,716 (2015: 4,022), with private completions increasing by 12% to 3,882 (2015: 3,451). The average selling price of private homes was £328,500 (2015: £297,300).
Dave Bexon, Redrow’s group sales and marketing director, said: “After Friday’s headlines that housebuilding would be one of the sectors impacted by the UK’s vote to leave the European Union, it was refreshing to see that demand for our homes was as high as ever, if not more so.
“We had queues forming in Prestwich from 5.30am and saw 250 visitors in one day alone. At the other end of the M62 in Liverpool we had someone sleep outside our Redbridge Park development in Fazakerley to secure the new home they wanted. Around 160 people attended the launch weekend here and all four available properties sold quickly.
“While last week’s EU referendum result has thrown the country into political turmoil and a degree of economic uncertainty, our experiences over the weekend suggest that the housing market can – and will – prosper. The fact remains that after decades of undersupply the UK faces an acute housing crisis and we believe this will continue to fuel the demand for new homes.”
The Deeside-based group will publish its results for the year to June 2016 on 6 September 2016.