Redrow plc (LON:RDW) announced the orderly and safe closure of all of its sites on 27th March 2020 and decided not to reopen until it was safe to return to work and it could rely upon a functioning supply chain. Since then, the Government have made it clear they would like to see construction sites operating provided they can do so safely with stringent social distancing measures in place.
Redrow is now satisfied these conditions can be met over the next two weeks and therefore intends to commence mobilising sites week commencing 11th May 2020 with a phased return to construction on 18th May 2020. Mobilisation will include putting robust social distancing protocols and physical measures in place.
We have developed rigorous social distancing protocols that will be supported by strict arrangements to ensure they are consistently applied. In particular, we will have an e-learning module for all Redrow employees, induction videos for contractors, appointed Covid Supervisors for each site and enhanced signage and PPE.
Additionally, our advanced IT systems allow us to communicate remotely with our contractors and customers. Our tablet-based quality management system records and monitors work and directly notifies contractors of any issues that need to be addressed. Our My Redrow portal gives customers access to make appointments, to complete reservations online and to choose options and upgrades.
Throughout the past month, we have been working closely with our material suppliers to understand their production plans and liaising with our sub-contractors to ensure all the resources we need will be available to match our phased return to construction.
Returning to normal trading
Net reservations have been running at very low levels since the lockdown was imposed. Important to a return to more normal trading conditions will be a relaxation of the Government’s ongoing advice about moving home, which currently recommends deferring any move unless there is no alternative, and the reopening of sales complexes that remain closed under lockdown restrictions. We will be guided by our customers to judge if it is safe for them to move.
Strong Balance Sheet and Order Book
Redrow has a strong balance sheet. In the month of April, the business generated £62m of cash from legal completions. In addition, as part of our measures to protect our cash flow, a number of land payments have been successfully deferred into 2021 and later. As a result, net debt at the end of June is now expected to be c.£200m. We have recently extended our Revolving Credit Facility to £350m and we have been accepted as an issuer under the Government’s CCFF with an issuer limit of £300m. We also have an order book of over £1.3bn, of which £0.9bn is contracted.
John Tutte, Redrow Executive Chairman said, “The safety and welfare of our workforce and customers is our main priority. I am grateful to my colleagues and our supply chain partners for the exceptional work they continue to undertake to ensure we can make a measured, responsible and safe return to work next month”.
