According to an update from the housebuilder, the six months to January 2 2022 saw Redrow’s total completions decrease to 2,749 against H1’s 3,065, with private completions falling by 140 homes to 2,290.
Redrow says this was due to a reduction in apartment completions with its move out of London and outlet constraints in some areas due to “very high demand” and delays to planning.
Pratt highlighted the ongoing problem with stretched planning resources, with officers in demand from various other sectors. To a large business such as Redrow, the effect was simply “a delay. We have the resources”. However, “for the smaller guys, it is harder. We reply upon them as much as everyone else.”
On the government’s delayed planning reform, Pratt said that some of the measures proposed 18 months ago were more utopian and didn’t expect they would get through. However, the firm still supported the reforms’ direction in aiding housebuilders.
Pratt added: “Ultimately the government has reached a point where they need to think about what they’re going to do with [reform]. There’s still a chronic shortage of houses which drives house price inflation.”
Redrow increased its fire safety provision by £10 million to £36 million, due to the widened scope of affected buildings. This covers the estimated remediation of buildings for which the company is the principal contractor.
Pratt said Redrow was keen to work with government on addressing fire safety issues “but things have to be fair and proportionate”. The business predominately builds family detached houses. “Our buildings of 20 years ago were built by main contractors when we didn’t have the expertise," he said.
During its half-year, Redrow achieved a “record” first-half revenue, rising to £1,052 million from £1,041 million in the previous first half. This reflected strong demand “for the superior quality of our homes and developments”.
The company’s pre-tax profit during the half-year rose 17% to £203 million against H1 2021. Operating profit lifted 15% to £205,000, helping its operating margin return to a normalised level of 19.5%, one year ahead of previous guidance (H1: 17.1%).
It said that despite ongoing build cost inflation (it expects cost inflation of around 6% for the full financial year) the house price increases factored into its order book meant that its operating margin was likely to be similar for the full year.
The value of Redrow’s first half private reservations rose 6% to £884 million. Its private average selling price lifted 8% to £419,000.
