Brexit starting to bite at housebuilder Redrow

PA

Housebuilder Redrow has warned that Brexit uncertainty has started to eat into its sales, even as it posted record half year profits.

The group reported a 9% rise in sales to £970 million in the six months to December 31, while pre-tax profit rose 5% to £185 million.

However, Redrow said that sales were “negatively affected” towards the end of the calendar year as a result of the “political uncertainty surrounding Brexit” and the effect of high stamp duty tax.

This, the firm added, has disrupted the normal “trade-up/down-sizing market”, with sales for the first five weeks of 2019 down from £166 million to £156 million.

The housing market, particularly in London and the South East, has slowed markedly since the Brexit vote as the economy stutters and demand plummets.

Nevertheless, completions increased by 12% to 2,970 in the period and the total order book rose 11% to a record £1.2 billion.

Outgoing chairman Steve Morgan said: “The market during the run-up to the festive period and the first two weeks of 2019 was subdued by macroeconomic and political uncertainty.

“However, sales over the last three weeks have bounced back with reservations running at similar levels to last year’s strong market activity.”

Mr Morgan, who founded the company, is to retire at the end of March and chief executive John Tutte will become executive chairman following his departure.

He has been chairman of Redrow for two stints – the first from 1974 to 2000, and then since 2009.

He said on Wednesday: “It is nearly 45 years since I founded Redrow and when I step down as chairman next month it will be exactly 10 years since I returned to the business. I am proud of the legacy I leave behind having completed over 6,000 homes for the first time in 2018 and handed over our 100,000(th) Redrow home last October.”