Redrow on track, cuts 40% of workforce

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Date: Wednesday 09 Jul 2008

LONDON (ShareCast) - Housebuilder Redrow says it expects to meet expectations for the full year despite a sharp increase in cancellations and as it slashes 40% of its workforce.

"The UK housing market continues to be severely affected by the credit squeeze," said Redrow in a company statement.

It added, "Confidence is now also being influenced by concerns about the future for house prices and interest rates."

The group said it sold 3,925 homes in the year to 30 June, a decline of 19% from the same period the year before. The average selling price dropped 2% to £157,000.

Second half reservations fell as much as 55% while cancellations increased significantly, the group said, as mortgage availability dropped.

"We have experienced an unprecedented decline in the fortunes of the UK housing market in a very short period of time," the group added.

"Cancellations have increased significantly in the last quarter and in particular in recent weeks as customers have not been able to secure mortgage offers to proceed to exchange of contracts and legal completion," it said.

Group forward sales at 30 June were 45% lower than the year before at 1,189 while net debt stands at £225m.

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