Redrow gives cautious outlook as trading conditions deteriorate

Source: Stock Market Digital

Date :13/05/2008 11:26:14

Leading UK housebuilder Redrow Plc paints a bleak picture for the housing market as it reveals a "marked increase" in cancellation rates since Easter.

Redrow, the UK's seventh largest housebuilder by market value, said Tuesday trading conditions had deteriorated to an even greater extent than forecast in late February, with legal completions in the current financial year now likely to be ten percent lower than estimates made at that time.

It said cancellations had been running at just over 20 percent, but added there had been a pick up since Easter as nerves over the health of the property market intensified.

Net reserves

In a trading update, Redrow added: "It is becoming increasingly difficult to predict accurately reservation and cancellation rates." It said net reservations so far this calendar year were nearly 50 percent below the level seen at the same stage a year ago.

Redrow said the downturn partly reflected its cautious approach to the use of part exchange and shared equity or deferred consideration incentives.

May 13, 2008