Housebuilder Redrow expects turnover to drop more than a third this year, as the closure of its sites during lockdown had a “profound” impact on business.
In a trading update for the year ended 28 June, Redrow said turnover is expected to fall from £2.11bn last year to £1.34bn.
The group’s completions also slipped from 6,443 homes to 4,032 homes this year.
Redrow enters the new financial year with a record order book of £1.42bn, of which around 70 per cent in terms of revenue is contracted.
The timing of the pandemic and subsequent site closures had a “profound impact” upon the results since the year was “budgeted to be disproportionately weighted to the end of the second half”.
Why it’s interesting
Redrow is undertaking construction activities in a phased return to construction. Currently it is working across 124 developments and has 113 sales offices open.
However, the social distancing guidelines and lengthened build times will, Redrow said, continue to “impact the pace of output over the coming weeks.”
Redrow also points to shifting customer priorities due to the pandemic. The housebuilder said there is a “desire for more inside and outside space, wanting to live close to green spaces and having better home workspace.”
Despite a difficult year, the housebuilder said this change means it positions the business “to meet these changing customer priorities”.
Following a review, Redrow will scale-back its operations in London to focus on its Colindale Gardens development and target “the group’s future growth on the higher returning regional businesses and the Heritage product”.
However, the firm said it will “inevitably” continue to feel the effects of the pandemic, but remains confident it will deliver a “robust performance”.
What Redrow said
Executive chairman John Tutte said:
This has been a challenging period for the industry and prevented the Group from delivering another set of record results.
The business has however demonstrated its resilience throughout the crisis and I am immensely grateful for the dedication of my colleagues, the commitment of our wider-workforce and the continuing patience of our customers as we adjust to a new way of working.