Redrow warns about interest rate uncertainty

Redrow sounded a note of caution about the state of the UK housing market when it reported its interim results this week.

Neil Fitzsimmons, the firm’s chief executive, said it had had strong sales for the first nine weeks of the year but uncertainty over interest rates could hit the market.

He said: “People are expecting another interest rate rise, so they’re including that in their calculations. Our caution is if the next rise is not seen to be the peak.” However this prospect has faded after the turbulence on the stock market last week and this.

Despite the flurry of mergers and acquisitions in the housebuilder sector, Fitzsimmons said the Redrow board was under no pressure to buy. He said: “I don’t see it as something we have to do. If the right opportunity came along we would look at it.”

Redrow will also undergo a restructuring. It wants to become more cost efficient and will also reorganise its management structure from 1 July.

The housebuilder also announced that Paul Pedley, the Redrow’s executive deputy chairman, will retire on 30 September, after 22 years at the company.

Redrow reported a 1.7% increase in pre-tax profit to £54m for the six months ending 31 December. Its strategic landbank increased 12% to 16,850 plots compared with 2005. Turnover rose 8% to £366m.

• Wilson Bowden posted a modest rise in pre-tax profit in its last set of financial results before becoming part of Barratt.

Profit before tax increased 1.9% to £220.5m for the year ending 31 December. The results were affected by some one-off costs, including £1.8m linked to the sale and £1.2m in reorganisation costs. Completions increased 9.1% to 5,486 homes while group revenue grew 8.2% to £1.3bn.