Housebuilder, Redrow, has announced that it has put on hold its activity in the land market and introduced measures to reduce work in progress as the firm takes measures to tackle the impact of the coronavirus pandemic.
The firm said that site visitors were substantially down last week and cancellations up. It expects its sales rate to be “seriously impaired over the coming weeks and build output will be significantly affected by labour and material shortages. We also expect outlet openings to slip as local authorities delay planning committee meetings.”
The housebuilder has cancelled its 10.5p interim dividend amounting to £37 million which was due to be paid on April 9 2020.
Redrow said trading had remained resilient up until March 20 with a weekly reservation rate per outlet averaging 0.86 against 0.72 last year over the same 12 week period.
But it added: “Last week net private reservations were in line with the previous year at 95 plots, but visitors to site were substantially down and the cancellation rate increased. As the government's escalating measures to contain the spread of the virus take effect, it is inevitable our sales rate will be seriously impaired over the coming weeks and build output will be significantly affected by labour and material shortages. We also expect outlet openings to slip as local authorities delay planning committee meetings.
“We have a strong balance sheet together with £250 million of committed facilities and we are working proactively to protect our cash flow. Net debt currently stands at £116 million and we expect this to reduce substantially over the coming months as a high volume of homes legally complete. We have put on hold activity in the land market and we are working to actively reduce our work in progress levels across our sites.
“We are reassured by the measures the government are putting in place to help businesses. During these unprecedented times, we remain focused on delivering quality homes whilst at the same time doing everything we can to protect and support our customers, colleagues and subcontractors.”