Redrow reports 10% higher reservations but says that profitability will be lower for first half.
Housebuilder Redrow has announced that profitability for the six months to December 2005 will be lower than the same period last year. Shares fell 2.4% on the news, slipping 11p to 455p.
Redrow blamed the fall on the increased proportion of sales in its low-cost Debut range, and the lower number of sales at its In the City developments.
It said that profits would be weighted towards the second half of the financial year because of a gradual easing of pressure on margins.
Chairman Robert Jones announced at the company AGM that the housebuilder's large land bank had enabled it to increase its number of sales outlets, which it expects to top 120 in spring 2006.
He said: “Redrow was positioned to manage the period of adjustment to a normal housing market by building a strong forward sales position and increasing the number of sales outlets.”
Jones added the company had sold over 60% of the current financial year’s anticipated legal completions.
On 5 January 2006 Redrow will issue a trading update for the six months ending 31 December 2005.