Redrow land bank continues to grow
Redrow's regional order book for private sales is up 25%, the company said as it prepared to hold its annual general meeting on Monday St David's Park Hotel, Ewloe, Flintshire.
The total order book stands at £465m, with London slowing due to completion of current projects which have sold out in the capital.
Since the start of the financial year Redrow added 1,500 plots across 14 sites to its current land bank. There are now 16,914 plots with planning permission, owned and contracted.
Steve Morgan, chairman, will present the following statement to shareholders at the AGM today: "As I reported in my preliminary statement in September, the high demand for new homes generated by the launch of the Government's Help to Buy scheme in 2013 has, this summer, reverted to a more normal level of activity. This, combined with a lack of availability on many of our sites due to the strong sales position, produced a sales rate per outlet per week for our regional businesses of 0.65, compared to the abnormally high rate of 0.87 in the summer of 2013. During the last 10 weeks we have experienced a traditional autumn market and the sales rate, excluding London, was 0.68, in line with last year.
"In London our developments on release are almost fully sold out and therefore, due to the timing of the launch of our new developments, year-to-date private reservations are 22 compared to 86 last year.
"Cancellation rates remain at historically low levels. The average selling price of private reservations in the year to date is 4% ahead of the same period last year at £284,000, due to both geographical mix and limited house price inflation.
"Whilst the planning system at a strategic level has improved over recent years, obtaining detailed consents and clearing countless unnecessary conditions remains a significant constraint on new outlet openings and growth. In addition, political posturing ahead of next year's General Election is already having a detrimental impact on the time taken to grant planning permissions in many parts of the country.
"Due to the phasing of land purchases and legal completions, our net debt has reduced from £173m in June to c£120m currently. We expect net debt to be c£150m at the end of December 2014. Our balance sheet remains strong, leaving us well placed to continue to invest in new sites."
Shares in Redrow fell 3p to 270p, valuing the business at £998m.