16th Sep 2020 08:30
(Alliance News) - Redrow PLC on Wednesday reported a plunge in earnings for financial 2020 but said trading activity since the start of the new financial year has been encouraging.
Shares in the FTSE 250-listed housebuilder were trading 2.6% lower at 444.20 pence each on Wednesday morning in London.
For its financial year ended June 30, Redrow posted pretax profit of GBP140 million, a 66% drop from GBP406 million recorded the year prior. The fall in profit was blamed on the Covid-19 pandemic as well as costs and impairments in connection with the scaling back of the London business.
Revenue fell 37% to GBP1.34 billion from GBP2.11 billion, with completions also down 37% from 6,443 units due to the lockdown.
No dividend was proposed in an effort to conserve cash. However, the Chester-based company said it expects to resume payouts in 2021, following its decision in March to cancel its interim dividend. For comparison, a final dividend of 20.5p was paid for financial 2019, taking the total payout to 60.5p.
Looking ahead, Redrow noted it has seen encouraging trading since the start of the new financial year, with a record order book of GBP1.42 billion, up from GBP1.02 billion a year ago.
"The group is well-placed to deliver a robust performance. We have completed substantially more homes in the first few weeks of the new financial year than during the same comparable period last year whilst maintaining a record order book," said Executive Chair John Tutte.
Tutte added: "This, combined with reduced investment in London, will deliver strong operating cash flow over the coming months to support our regional growth plans and, subject to market conditions, allow dividend payments to resume in 2021".
Cash held as at June 28 was GBP44 million.
By Ife Taiwo; [email protected]
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