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Prices & Quotes - UK Markets - Redrow (RDW)

Risk Warning The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance.

Share Price:
Up 644.80p
Change Today:
3.40p
Market Cap:
2,270.92m
Sector:
Household Goods & Home Construction

Redrow warns of full year profits hit as it scales back London ops

By Frank Prenesti

Date: Tuesday 30 Jun 2020

LONDON (ShareCast) - (Sharecast News) - Housebuilder Redrow said annual profits would be "substantially" lower after scaling back its London operations and factoring in the impact of Covid-19.
Redrow said it turnover was expected to fall sharply to 1.34bn against 2.11bn last year and consensus forecasts of 1.46bn.

It completed 4,032 homes in the year to the end of June, down from 6,443 in the previous year, but the order book was at a record 1.42bn for the fiscal year starting in July, as construction would be second half weighted.

The company also called on the government to extend its controversial 'help-to-buy' scheme, which is due to end next March. Critics have argued that the mechanism, where buyers borrow up to 20% of a property's value from the government, has boosted housebuilders' profits and share prices while doing little to alleviate the country's chronic housing shortage.

They also believe it has artificially inflated house prices, defeating its primary purpose of getting first-time buyers on to the property ladder and made companies too dependent on it to generate profits.

"The prospects for the wider economy and its impact upon the new homes market remains uncertain," Redrow said on Tuesday.

"The timing of site closures due to Covid-19 towards the end of March had a profound impact upon the group's results in a year, which was budgeted to be disproportionately weighted to the end of the second-half," the company said.

Redrow said it was scaling back its London to focus on higher returning regional businesses and its higher-specification Heritage range of period-style arts and crafts homes.

Costs and related significant impairments associated with the scaling back of the London business will be provided for in the June 2020 accounts, the company said.

AJ Bell investment director Russ Mould said housebuilders had become "addicted" to the Help to Buy.



"Help to Buy has been a major boost to housebuilders' sales and there is a growing fear that many companies are too dependent on it. Take it away and housebuilders' earnings could potentially suffer, despite there being an imbalance between supply and demand causing a housing shortage in the country."



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Redrow Market Data

Currency UK Pounds
Price 644.80p
Change Today 3.40p
52 Week High 712.00p
52 Week Low 361.20p
Volume 237,687
Shares Issued 352.19m
Market Cap 2,270.92m

Performance Indicators

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What The Brokers Say

Strong Buy 11
Buy 0
Neutral 1
Sell 1
Strong Sell 0
Total 13
strong_buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Redrow Dividends

  Latest Previous
  Interim Interim
Ex-Div 25-Feb-21 n/a
Paid 09-Apr-21 n/a
Amount 6.00p 0.000p

Trades for 22-Jun-2021

Time Volume / Share Price
14:24 20 @ 644.80p
14:24 480 @ 644.80p
14:24 22 @ 645.00p
14:24 500 @ 644.80p
14:24 268 @ 645.00p

Redrow Key Personnel