Pre-tax profit for the year to 30 June dropped to £140 million from £406 million as revenue fell 37% to £1.34 billion. The company swung from a net cash balance of £124 million to a net debt position of £126 million.
Redrow scrapped its final dividend, but added that, based on trading to date and its forward order book, it expected to resume dividend payments in 2021 when the business also hopes to return to a net cash balance sheet.
The company said it had experienced an encouraging start to the new financial year, with reservations up 12%.
‘POSITION OF STRENGTH’
'The Covid-19 pandemic had a profound impact upon the group's performance in the 2020 financial year but we entered the new financial year in a position of strength,' chief executive John Tutte said.
AJ Bell investment director Russ Mould said: ‘The market will hope that the company’s aim of returning to a net cash position by the end of the year is more than just wishful thinking as a return to the dividend list in 2021 is eyed.
‘Life may become a bit tricky for Redrow and its peers when the stamp duty holiday ends and eligibility for the Help to Buy scheme is narrowed next year.’
Davy analyst Colin Sheridan commented: ‘Redrow had flagged the reorganisation of its London operations previously, but the impairment combined with weaker margins from Covid have driven a big miss relative to our estimates. Current trading looks very strong, in line with commentary from peers.’
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