Redrow order book hits record £1.5bn

Flintshire-based house building giant Redrow plc said on Friday its total forward order book is a record £1.51 billion and it expects turnover for 2022 to be about £2.1 billion.

Redrow chairman Richard Akers told the firm’s AGM in a statement: “We entered the new financial year with a robust housing market and trading has remained strong.      

The value of net private reservations in the 19 weeks to 5 November 2021 was 2% above the prior year at £672m (2021: £658m).

“The private revenue per outlet per week was £309k compared to £298k last year.

“Reservations per outlet per week for the period were a more normal 0.68 compared to the unusually high 0.75 last year.

“Help to Buy accounted for only 9% of private reservations in the period.

Our Heritage range of houses in great locations fits people’s requirements perfectly for quality, well designed homes with more space to live and work.

“This is increasingly reflected in the pricing of our homes and in combination with geographical and product mix, increasing desire of our customers to personalise their homes, and general house price inflation, has resulted in the average selling price of private reservations for the first 19 weeks being up 14% on the equivalent period last year at £453,000 (2021: £398,000).

As expected, the group has operated from an average of 114 outlets in the year to date (2021: 116).

“Due to the ongoing strength of the sales market, we continue to expect the average outlets for the full financial year will be 112, in line with the guidance we gave in September.

Despite the well publicised material shortages and supply interruptions facing the industry we are working successfully with our longstanding supply partners to ensure build output remains at normal levels.

“We estimate that overall build cost inflation will be c5% for the current financial year.

Homes turnover for the 19 weeks to 5 November 2021 was 4% below the exceptional level last year at £666m (2021: £690m) and the total forward order book is a record £1.51bn (2021: £1.48bn).

With the strength of our order book, ongoing sales rates and the increase in private average selling prices, we now expect our turnover for 2022 to be c£2.1bn, and our operating margin to be c19%.

During the period we have added 1,400 plots to our current land holdings and 95 plots to our forward land holdings (2021: 457 plots and 119 plots).

Our balance sheet remains strong and at the end of week 19 we had net cash of £297m (2020: £150m). We continue to expect to have net cash of around £200m at the end of June 2022.

As a result of our strategy to grow the business outside London, with a strong focus on our industry leading product and placemaking, we expect to deliver results in the 2022 financial year approaching those achieved in 2019.

Sir Michael Lyons will step down from the board today after almost seven years service.

“On behalf of the board I would like to thank Michael for his contribution throughout his tenure and, in particular, his stewardship of the Placemaking and Sustainability Committee which he chaired.”