Tue 13 May 2008
Spring sales slump spells further misery for industry
Two of the UK’s biggest housebuilders are taking action to restructure their firms in an effort to combat the current credit crisis.Redrow, the UK’s seventh largest housebuilder by market value, is set to unleash a cost-cutting programme, which will include job losses, after a bleak spring selling period, which the firm hopes will offset a gross profits margins fall. This follows reports that reservations for the firm’s properties have fallen by half than in the same period last year, a figure the firm attributes to its cautious use of part exchange and incentives.
“Site and office and overhead costs remain tightly controlled to reflect lower levels of activity, and we have made additional headcount reductions in the last few months,” the firm said today in a trading update. “Our strength in central procurement, coupled with our long-term partnering approach with our suppliers and sub-contractors is delivering build cost reductions.”
The company’s cancellation rates had been running at 20 per cent, a figure which had increased since Easter, the update added.
Meanwhile, Galliford Try also reported a sharp drop in sales in recent weeks as mortgage financial availability has been steadily reduced. It has attempted, it said in its interim management statement, to market its properties with more incentives at lower prices, but it warns that legal completions on its homes will fall short of expectations.
The firm predicts that its pre-tax profits for the year ending 30 June 2008 will be £60 million, as the growth of its affordable housing and regeneration section has helped the firm’s overall performance. Galliford Try is set to restructure its board later in the year, as Andy Sturgess (pictured), managing director of the building division, will retire in December, to be succeeded by Stuart Gibbons, currently managing director of Galliford Try Partnerships. Stephen Teagle will take on the role of managing director of the group’s affordable housing and regeneration division in July.
Alliance and Leicester has also reported a sharp dive in its mortgage lending throughout the first four months of 2008, and has written off £388 million in impairment charges.
Posted by Marc Da-Silva
in Alliance and Leicester, Andy Sturgess, Galliford Try Homes, News, Redrow, Stephen Teagle, Stuart Gibbons on Tue 13 May 2008
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