Revenue remained steady in the year to July
Redrow has posted better than anticipated results for the year but warned of a difficult market ahead with profit set to be cut in half in 2024.
The housebuilder reported an income of 拢2.13bn in its full-year results for the year to 2 July 2023, only slightly down from the 拢2.14bn and higher than had been anticipated when the firm released its interims earlier this year.
Chief executive Matthew Pratt said the accounts, published this morning were 鈥渟trong鈥� in the face of 鈥渃ontinuing political and economic headwinds鈥�.
Underlying pre-tax profit was down from 拢410m to 拢395m, which was attributed primarily to the cost of inflation exceeding house price inflation in the year.
According to Pratt, build cost inflation was as high as 8% in some cases, although he said these pressures had 鈥渟ince eased鈥�, predicting build cost inflation to be around 4% in the new year.
Statutory pre-tax profit was actually up from 拢246m to 拢395m, due to an exceptional item worth 拢164m incurred in 2022.
The firm鈥檚 dividend to shareholders in the year was 22p per share, which totalled 拢108m.
Over the past 12 months, the business has cut roughly 165 positions 鈥� through redundancies and a hiring freeze 鈥� and closed two regional businesses.
Looking forward to next year, Redrow anticipated profit to be almost cut in half, with the forecasted figure put between 拢180m and 拢200m. Revenue was also expected to drop to between 拢1.65bn and 拢1.7bn.
This is based on a sales rate in line with the 0.46 per outlet per week recorded in this year, although the first 10 weeks of the new financial year saw the firm record a rate of just 0.34.
鈥淵ou do expect that as we head into the autumn period, we might see a better sales rate. We certainly hope to see some better sales in the next spring,鈥� said Pratt.
鈥淚 think it鈥檚 fair to say we鈥檝e seen a very sharp shock in terms of the economy with regards to mortgage rates and I think you can鈥檛 ignore the fact that that has had an effect on the market.鈥�
Speaking ahead of the House of Lords debate on nutrient neutrality rules, Pratt said Redrow were not heavily impacted by the rules, something he attributed more to 鈥渓uck than judgement鈥�.
The Labour Party is expected to oppose the government鈥檚 proposed deregulation of rules around nutrient neutrality, which are intended to protect waterways at risk from pollution.
According to the House Builders Federation, nutrient rules are blocking the development of 150,000 rules but Pratt said the source of pollution related more to farms than housing.
He described criticism of commercial housebuilding as 鈥渕isdirected鈥� and said it 鈥渟eems to be another area where they seem to be placing the blame somewhere where it is not our fault鈥�.
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