Trading update shows value of private reservations down 25%
Redrow expects its results for the current financial year to be at the lower end of its previous predictions because of a 鈥渟ubdued鈥� autumn market.
When the housebuilder announced its most recent full-year results in September, it forecast a halving of profit in 2023/24, with the figure expected to be in the range of 拢180m and 拢200m.
Revenue was also expected to drop to between 拢1.65bn and 拢1.7bn.
In a trading update published this morning to accompany the firm鈥檚 annual general meeting, Redrow said its results should remain within that guidance range.
鈥淗owever, with the lower than anticipated sales rate due to the more subdued autumn housing market they are more likely to be towards the lower end of the range,鈥� it said.
Chairman Richard Akers said the housing market had 鈥渞emained subdued鈥� with the value of net private reservations in the 18 weeks to 3 November standing 25% below the prior year.
Gross private reservations per outlet per week for the period were 0.49 compared to 0.63 last year.
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鈥淭he business has had to adapt to this more difficult trading environment in terms of build rate and operating costs,鈥� Akers said.
An elevated rate of chain breakdowns, due to difficulties with mortgages lower down the chains, has caused the cancellation rate for the year to date to rise to 25%, up from 22% in the last financial year, it added.
Redrow forecast build cost inflation of 7% for the current financial year.
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