Redrow anticipates rise in sales completions

The Deeside-based national housebuilder has released a trading update covering the period from 1 January to 17 April 2011.

In an interim management statement on the London Stock Exchange, Redrow said: "Sales activity since the start of the calendar year has been encouraging, with sales per outlet averaging 0.70 sales per week (2010: 0.65 per week) and cancellation rates remained consistent at 17%. Net private reservations for the financial year to date are up 2% to 1,819 (2010: 1,778). Our private order book at 17 April stood at £139m, 6% up on this time last year (2010: £131m). As a consequence, despite a slow first half, we expect legal completions for the full year to be marginally ahead of last year."

Redrow said house prices have been stable for over a year but its average selling price has seen "a healthy growth, predominantly due to the shift in product to the New Heritage Collection".

Redrow added it is looking to sell its business in Scotland because the operation there is not of sufficient scale to generate acceptable returns.

The statement said: "An Information Memorandum will be issued shortly to interested parties and we would hope to conclude a sale in the coming months."

Redrow said the average number of sales outlets were stable at 79 during the period, compared to 72 in 2010, and expects this to rise to 85 by the end of June, which is slightly down on previous guidance due to a number of planning delays.

Net debt has risen in the period to £80m, in comparison to the same period last year of £52m. Redrow said the rise was due to its ongoing investment in land and it is likely to rise further over the coming months as its land bank increases.

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