Redrow closes sites and seeks help from banks

Flintshire-based house builder Redrow plc said on Friday it is closing down all its sites and offices and is seeking help from its banks and the UK government’s COVID-19 Corporate Financing Facility.

In a stock exchange statement, Redrow said: “Many of our office-based colleagues have been working from home and earlier in the week we closed our sales centres.

“We also reduced our workforce on sites to target our construction operations on plots that are due to complete over the coming weeks.

“However, it has become increasingly impracticable as our supply chain has been significantly impacted in recent days, as a result the board has now decided to go further and commence with immediate effect, an orderly and safe closure of all of our sites and offices.

“We have a strong balance sheet with total net assets of c. £1.6bn.

“Despite this, as a consequence of the board’s decision to close sites, and the need to retain some flexibility through a prolonged period of inactivity, the company has commenced discussions with its syndicate of six banks in respect of additional committed banking facilities over and above the current £250m revolving credit facility.

“It is our intention to increase the additional ‘accordion’ facility of £50m that is available to us to £100m.

“We have also submitted an application to the Bank of England for eligibility for the Government’s COVID-19 Corporate Financing Facility.

“We are continuing to work proactively to protect our cash flow, and in addition to the measures we announced earlier in the week, we will immediately commence ‘furloughing’ a significant proportion of our employees under the Government’s Job Retention Scheme.

“When there is a return to normality in the supply chain, and we are satisfied it is safe for our workforce to return to work, we will reopen sites and recommence production with an initial focus on fulfilling our substantial order book that stands at £1.4bn of which £0.9bn is contracted.”

Redrow executive chairman John Tutte said: “These are unprecedented times.

“The actions we have announced today will give us the flexibility to manage the business through this turbulent period to ensure we are ready to resume production when it is safe to do so.”