Redrow plc (LON:RDW) has today provided an update on the impact of the COVID-19 pandemic on its business, along with the measures it is taking to manage the risks to its stakeholders.
Our main priority is to safeguard the well-being of our workforce and customers. Sites currently remain open with strict precautions in place including enhanced levels of cleaning, additional hygiene facilities and social distancing. Our My Redrow online portal enables customers to interact remotely with us online and our centralised systems are supporting many of our colleagues to work from home.
Trading for Redrow has remained resilient in the first 12 weeks of the second half to 20 March 2020, with the value of net reservations up £121m at £525m compared to last year. The weekly reservation rate per outlet has averaged 0.86 against 0.72 last year over the same 12 week period. Our order book is very strong, currently standing at over £1.4bn. Last week net private reservations were in line with the previous year at 95 plots, but visitors to site were substantially down and the cancellation rate increased. As the Government’s escalating measures to contain the spread of the virus take effect, it is inevitable our sales rate will be seriously impaired over the coming weeks and build output will be significantly affected by labour and material shortages. We also expect outlet openings to slip as local authorities delay planning committee meetings.
We have a strong balance sheet together with £250m of committed facilities and we are working proactively to protect our cash flow. Net debt currently stands at £116m and we expect this to reduce substantially over the coming month as a high volume of homes legally complete. We have put on hold activity in the land market and we are working to actively reduce our work in progress levels across our sites.
Given the ongoing uncertainty, Redrow have also decided to cancel the 10.5p interim dividend amounting to £37m which was due to be paid on 9 April 2020 to holders of ordinary shares on the register at the close of business on 6 March 2020. Once we have more certainty over the impact on the industry and our business we will make an announcement over future dividend distributions together with an update on trading.
We are reassured by the measures the Government are putting in place to help businesses. During these unprecedented times we remain focused on delivering quality homes whilst at the same time doing everything we can to protect and support our customers, colleagues and subcontractors.