12th Nov 2021 10:23
(Alliance News) - Redrow PLC on Friday said trading has remained strong at the start of its new financial year, the UK housebuilder saying it is managing cost inflation by working with long-term suppliers and benefiting from its focus outside London.
The Ewloe, Wales-based company's last financial year ended on June 27. In the 19 weeks to November 5, the value of net private reservations was 2.1% above the prior year at GBP672 million versus GBP658 million. Private revenue per outlet per week was GBP309,000 compared to GBP298,000 last year. Average selling price of private reservations rose 14% on the equivalent period last year to GBP453,000 from GBP398,000.
During the period Redrow said it added 1,400 plots to its current land holdings and 95 plots to its forward land holdings compared to 457 plots and 119 plots, respectively, last year.
Homes turnover was 3.5% below the prior year's GBP690 million, at GBP666 million, but the total forward order book is a record GBP1.51 billion, up 2.0% from GBP1.48 billion a year ago.
Speaking to the company's annual general meeting on Friday, Chair Richard Akers noted the material shortages and supply interruptions facing the UK housebuilding industry, but said Redrow is working with long-term supply partners to ensure build output remains at normal levels. It estimates that overall build cost inflation will be 5% for the current financial year.
Looking ahead, Akers said Redrow now expects revenue for financial 2022 to be GBP2.1 billion, and its operating margin to be 19%. In the recent year, it posted revenue of GBP1.94 billion.
Net cash stands at GBP297 million, up from GBP150 million a year ago, and Akers said the company expects to have around GBP200 million in net cash at the financial year-end next June.
"As a result of our strategy to grow the business outside London, with a strong focus on our industry leading product and placemaking, we expect to deliver results in the 2022 financial year approaching those achieved in 2019," Akers said.
In financial year that ended in June 2019 - meaning well before the pandemic started - Redrow recorded pretax profit of GBP406 million on revenue of GBP2.11 billion.
Redrow shares were up 2.4% to 642.40 pence early Friday in London. The stock is up 12% so far in 2021.
By Tom Waite; [email protected]
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