Housebuilder's trading statement warns of poor expected performance for 2009

Housebuilder Redrow has said sales in September and October this year were “extremely fragile” due to limited mortgage availability.

In a trading statement this morning it added that the outlook for 2009 was “very weak”.

The last two months' trading saw:

- A 45% fall in net reservations from 2007

- 38 net reservations from 93 sales outlets

- A cancellation rate of 21%

- £300m net debt at end of October, a figure in line with expectations.

On the upside, it said there was a “modest seasonal upturn” in trading in September and October and that cashflow was on track.

Charlie Campbell, an analyst at Liberum Capital, said: “Cashflow is the key measure for investor confidence at the moment and it bodes well for the sector.”

Redrow added that the residential land market was “inactive” but it was exploring “a number of non-residential opportunities” for parts of its landbank.

Rachael Waring, an analyst at Panmure Gordon, said the statement was broadly in line with forecasts. She said: “We believe pricing is worse than our expectations at this stage of the cycle, constrained by low levels of mortgage liquidity and low consumer confidence.”

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