Redrow reports strong orders in spite of ‘Help to Buy’ decline

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Redrow PLC (LON:RDW) said housing orders remain ‘very strong’ and it expects revenues to rise back above GBP2bn in the current year.


“The continuing strong sales market combined with the tapering of the stamp duty holiday at the end of June has resulted in Homes turnover in the regional businesses being ahead of expectations,” said the builder in a trading update.


Revenues in the year to the end of 27 June will be GBP1.94bn, with the number of completions at 5,620, the FTSE 250 group said, adding the numbers were helped by GBP43mln private rented scheme (PRS) and the sale of land.


Both are well ahead of last year but still below 2019’s pre-pandemic turnover of GBP2.1bn and completions of 6,442.


Operating margins in the year just ended will be in excess of 15.5% (2020: 11.1%, 2019: 19.5%), with the order book in line with June 2020 at GBP1.43bn


Redrow added that this financial year had also started well.


“The group has entered the 2022 financial year with a very strong order book and the sales market remains robust,” said the statement.


“As a result, despite the earlier completion of the PRS block referred to above, the group expects 2022 turnover to be above GBP2bn. The operating margin is expected to improve to around 18%.


Reservations are up while revenues from each site are running at GBP288,000 per week on average against GBP246,000 two years ago, which Redrow said was in spite of a sharp decline in ‘Help to Buy’ deals.


Net cash at the year-end was GBP160mln.

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