Citing a strong sales market and the ending of the stamp duty holiday, the housebuilding giant issued an optimistic trading update for the fiscal year that ended in June 2021.
The Deeside-based group said in a London Stock Exchange statement that the above factors had “resulted in homes turnover in the regional business being ahead of expectations.”
Redrow will be publishing its 2021 annual financial results in September.
The company expects £1.94bn turnover for 2021, with 5,620 legal completions. Last year, turnover was £1.34bn, marking a projected increase of £600m. It is not as much as two years ago, however, when turnover was £2.11bn. The group said it believed its 2022 turnover would be above £2bn.
Regarding 2021, the homebuilder stated that it concluded its fiscal year on 27 June with a return to a strong net cash balance of £160m. That figure is even greater than what the company posted pre-pandemic – in 2019 its net cash balance was £124m. That’s compared to a net debt of £126m from June 2020.
Sales had plummeted for Redrow during the pandemic, with the housebuilder reporting a 37% drop in annual revenue in 2020. The new figures show the group is returning to its 2019 strength.
Redrow stated that it estimates it will increase its operating margin from 11.1% last year to 15.5%. It also expects that the operating margin will improve to 18% in 2022 – marking a 39% increase from 2020.
Back in 2020, Redrow had said it would focus its future growth on the regions outside of London, including the North West. Its current schemes in the North West include 338 homes in Daresbury, 200 houses in Oldham and a potential 730 homes in Knowsley.
Redrow shares were up 12 pence the morning of the announcement.