Redrow returns to land market

Redrow has increased its land-buying activity in recent months, buying 18 sites since the start of 2010, the company said in a trading statement today.

The Deeside-based housebuilder said it would build 2,500 houses on the new plots, all of which had completed or terms were agreed. The company declined to say where the sites are located.

Net debt at the company is £50m, well within the bank facilities of £250m. Redrow said it expected net debt to rise over the coming months as the land bank grew.

Steve Morgan, Redrow founder and chairman, said: "We have been encouraged by sales activity since the start of the calendar year with sales rates per outlet comfortably ahead of the same period last year."

Morgan went on: "The average number of sales outlets has reduced to 72 during the period due to timing issues and the customary planning delays. However we expect this to represent a low point, with the number of outlets set to increase over the remainder of the calendar year."

House prices remain flat in 2010, Morgan said. Redrow will complete more than 2,500 houses in the full year.

Morgan added: "Given the uncertainties surrounding the election, the economic environment and continued restrictions on mortgage availability, we expect the market to remain challenging throughout 2010. Nevertheless, with our strong management team, re-focussed business, robust finances and the launch of The New Heritage Collection we are confident the business will continue to make progress."

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