Interim Management Statement

RNS Number : 9181B

Redrow PLC

24 April 2012

 

Redrow plc                                                                                                    

24 April 2012

Interim Management Statement

Redrow plc is releasing the following Interim Management Statement regarding trading for the period from 1 January 2012 to 20 April 2012.

Sales activity since the beginning of January has been encouraging, particularly against the backdrop of a strong first quarter of calendar 2011.

The volume of net private reservations for the 16 week period to 20^th April was 843 homes, up 2% on a like for like basis and 9% including London.  The Average Selling Price of private reservations for the period was up 12% at £207k excluding London and up 20% at £223k including London.  The value of the private net reservations for the period was £188m, up 14% on a like for like basis and 32% including London.

We broadly welcome the recently announced NPPF and the Government's commitment to housing a rising population.  However there are a number of areas where lack of clarity leads to some ambiguity.  We do not expect to see the planning process speed up in the short term, as there are many varying interpretations regarding what is sustainable development, windfalls, the extent of the additional buffer to the 5 year housing land supply and the local interpretation of the effective use of brownfield land.  As a result, we anticipate that the appeals process will be heavily utilised for the next two years until some clarity on these and other issues is obtained.

In March, we launched our first major Central London development (One Commercial Street) in Asia.  The response was excellent with over 50 apartments being sold. 

The number of active outlets has increased from 73 at the end of December to 76 currently, and we continue to expect to have 80 active outlets at the end of June 2012.  Overall house prices remain stable, as they have been for some time now.

We have had a good run of forward land planning successes, which will deliver around 3,000 plots to the current land bank.  The land, which is spread over eight locations, will be drawn down over the next 12-18 months. 

Harrow Estates has been particularly active in the year to date with a number of new sites purchased at a total cost of £50m.  The largest of the sites is the former Woodford Aerodrome in Cheshire, where pre-planning consultations are currently taking place with a view to an application for a Garden Village for 800 homes.

Net debt has risen during the period to c.£120m (2011: £80m) due to ongoing investment in land.  We continue to expect net debt to increase during the remainder of the calendar year.

The long needed builder and Government backed NewBuy Scheme was launched in March 2012 providing Mortgage Indemnity Guarantees (MIGs) to enable customers with low deposits to obtain 95% loan to value mortgages for new build homes.  As we have previously commented, the success or otherwise of this scheme will be entirely dependent on the lenders offering mortgages at competitive interest rates relative to the risks they are taking.  At present the rates being offered by the lenders are disappointing and as a consequence, the take up of the scheme to date has been limited.

Outlook

The current UK economic outlook appears stable and we have had the long awaited introduction of NewBuy albeit that it has got off to a slow start.   Our sales per outlet are at the top end of industry comparables and like for like reservations are ahead of last year.  The overseas launches of our first major Central London site have been well received and we expect our active outlets to be on target at the end of June.  As a consequence, we expect this year's results to continue to show good progress.

NOTE:  "Like for like" excludes the Company's Scottish business, which was sold in June 2011 and London.

Enquiries:

Redrow plc

Steve Morgan, Chairman                                              01244 527411

Barbara Richmond, Group Finance Director                  01244 527411

Tulchan Communications

Susanna Voyle/Lucy Legh                                             020 7353 4200

There will be an analyst and investor meeting at 10.00 am in the Conference Room at JP Morgan Cazenove, 20 Moorgate, London, EC2R 6DA.  Coffee will be served from 9.45 am.

A live audio webcast and slide presentation of this event will be available at 10.00 am on www.redrow.co.uk.  Participants can also dial in to hear the presentation live at 10.00 am on [phone] Conference ID: 916173.

Playback will be available by phone until 3 May 2012 on 020 7031 4064 Access Code: 916173.

 

END

 

 

IMSPGUCWCUPPUAC