The Deeside-based housebuilder recorded strong demand in regions outside London in the first four months of its financial year, with the value of unit reservations in the regions up 17% year-on-year as of 30 October.
The group is implementing a strategy to “focus its future growth in the regions”, a position that means it is “well-positioned to capitalise on the evident shift in buyer priorities [away from London] as a result of lockdown experiences,” Redrow said in a trading update today.
“This, combined with our disciplined approach to operations, a healthy balance sheet and a strong forward order book, creates a solid platform for the future and puts Redrow on course to deliver a robust set of results this financial year,” it said.
Redrow also plans to resume dividend payouts to shareholders after stalling them during Covid-related uncertainty earlier in the year.
Net cash as of 30 October stood at £115m against net debt of £32m at the same time in 2019, and the company said it expects to be cash-positive for the rest of the financial year based on its present “strong balance sheet”.
The value of all net private reservations in the 18 weeks to 30 October was 5% ahead of last year at £630m, with demand in the regions especially strong. Pricing has also remained firm, up 2% on average from last year’s figure “with modest gains in the region”, Redrow’s statement added.
Homes turnover for the four months was up 48% to £657m, and “the strong performance has not depleted” the total forward order book, which remains close to record levels at £1.5bn, a 10% increase on the year-earlier period.
Redrow’s chairman John Tutte said: “We entered the new financial year [on 30 July] in a position of strength and this has been reinforced with strong trading since the start of the year.“There has been resolute demand for homes with more space to live and work as customers reflect on their lockdown experiences.”
He added: “Our build teams are operating safely and normally in accordance with our Covid protocols and we expect them to continue to do so throughout the current lockdown.”
“However, ongoing planning delays are affecting the rate at which outlets are coming on-stream during a period when closures have come forward due to the strong sales rate.”
Redrow’s latest North West scheme, at Little Sutton near Ellesmere Port, aims to add a third phase of 256 homes to the development, following the completion of a 170-home first phase and the ongoing construction of a 272-home second phase.
The company also recently acquired a plot to deliver a smaller scheme of 34 homes in Chorley.