Redrow and Inland Homes, site closures have had a “profound impact” on Redrow’s year-end results, with Inland Homes’ revenue affected in response to lockdown restrictions during its six month period.
Issuing a trading update for the year ending June 28 2020 ahead of the announcement of its annual results in September, Redrow said that its year had been budgeted to be “disproportionately weighted” to the end of the second half.
Adapting to new Covid-19 protocols had affected the number of homes completed during the last few weeks of the financial year, the company added. During the year to June, it completed 4,032 homes against 6,443 the previous year, with turnover anticipated to be £1.34 billion against last year’s £2.11 billion.
During the period, Redrow secured 4,222 private reservations with a value of £1.61 billion (2019: £1.67 billion).
In the five weeks since re-opening its sales offices from May 18, it has achieved a net sales rate per outlet per week of 0.56 compared to 2019’s 0.59. Redrow said this reflected “strong pent-up demand, especially from buyers using the government’s Help to Buy scheme”.
The firm is cutting back its London activities following a review of its divisional businesses, concentrating on its Colindale Gardens scheme. It said it planned to focus future growth “on the higher returning regional businesses” and its Heritage product.
Making these provisions, combined with Covid-19’s impact, would “substantially” lower profit for 2020, Redrow added.
But the housebuilder entered its new financial year with a “record” order book of £1.42 billion (2019: £1.02 billion).
Meanwhile, Inland saw its revenue affected close to the end of its six month period to March 31 2020, with the business seeing the sudden loss of five significant land sales.
Revenue was £59.6 million against the £51 million achieved in the company’s six-month comparable period to 31 December 2018.
Inland made a pre-tax loss of £7.2 million against a pre-tax profit of £5.5 million during the comparable period.
The business made 56 private home sales compared to the previous period’s 79. These homes sold at an average selling price of £241,000 (31 December 2018: £235,000).
Its net private reservation rate per active sales outlet of 0.71 unit per week, it said, reflected the “political certainty achieved following last year’s general election”.
During the 12 weeks from April 1, the company achieved 52 gross reservations and six cancellations, producing 46 net reservations from five active outlets.
Terry Roydon, Chairman, said: “Despite the current challenges, there remains an underlying shortage of high quality, affordable housing across the UK and we are seeing demand returning for our land assets and expertise.”