Housebuilder to abandon flats for fewer, larger house types in bid to return to profit
Redrow Homes has announced it is to switch focus from flats to family homes following a pre-tax loss of £140.8m in its preliminary results for the 12 months to 30 June 2009.
Turnover more than halved to £301.8m at the housebuilder, after a year of falling sales and price discounting, while restructuring costs accounted for £96.6m of the pre-tax loss.
Following a strategic review by returning chief executive Steve Morgan, the housebuilder said it would be focusing on family homes rather than flats and starter homes.
To accommodate the larger homes, Redrow said it would reduce the number of plots on its land from 14,900 to 12,500.
The firm said it would be reducing house types from 80 to 32 and be launching a traditional housing collection in January.
Legal completions over the period were down 46% to 2,113 units, while average selling price fell 12% to £137,400. Gross margin fell from 18.5% to 1.8% before exceptional costs.
On an upbeat note, Redrow said that sales were now experiencing an upturn and were “comfortably ahead of the same period last year”.
The housebuilder said its net debt of £214.6m was well within its banks' lending facilities.