Trading Statement

Redrow PLC
07 July 2006

7 July 2006


REDROW PLC



PRE-CLOSE TRADING UPDATE


Redrow plc is issuing the following pre-close trading update in advance of its
preliminary results announcement for the twelve months ended 30 June 2006, which
is scheduled to be released on 12 September 2006.


ANALYST PRESENTATION


Redrow plc hosted a presentation for analysts at 6.00 pm on Thursday 6 July.
The presentation covered trading and financial performance for the year ended
June 2006, the Group's progression in the development of its land bank and its
strategy for delivering growth.


Copies of the presentation are available from the Redrow website
www.redrow.co.uk


DELIVERING GROWTH


In the last twelve months, Redrow has made demonstrable progress in its strategy
to deliver growth and shareholder value.


Our objectives are to:


  • Grow our core Signature and In the City business through our existing
    regional structure
  • Develop the future potential for additional income streams from our Mixed
    Use and Regeneration activities
  • Deliver 2,000 Debut homes per annum by the end of 2010


In 2005/06 we have:


  • Increased our legal completions by 8%
  • Increased our current land bank by over 20%
  • Continued to develop our forward land bank with planning applications for
    over 6,500 plots on 10 major sites anticipated over the next 18 months
  • Secured additional mixed use opportunities at Bristol and Plymouth
  • Commenced construction on our first Redrow Regeneration project at Barking
    with all 246 residential units forward sold
  • Delivered over 200 Debut legal completions, with planning secured for over
    1,100 homes to date



TRADING UPDATE


Legal completions for the financial year ended June 2006 increased by 8% to
4,735 (2004/05: 4,372).  This increase reflected continued growth in the Group's
Signature product, which was 9% ahead of the previous year at 4,027 units (2004/
05: 3,703), together with the first significant number of legal completions from
the new Debut range.  213 Debut units were legally completed in the period,
marking the first full year of contribution towards Redrow's objective of
delivering 2,000 Debut units per annum within five years which we announced in
2005.  The number of In the City units completed was in line with expectations
at 495 (2004/05: 667).


The average selling price in the year to June 2006 for the Signature range at
approximately £166,000 was in line with last year (2004/05: £166,200).  The
average selling price for the In the City legal completions was approximately
£160,000 (2004/05: £207,400) and was below the level of last year due to product
and geographic mix, with the legal completions last year including units at the
higher priced Odyssey development in London Docklands.  Overall, taking these
factors into account, coupled with the inclusion of the 213 Debut units with an
average selling price of approximately £79,000, the Group's average selling
price was approximately £161,000 (2004/05: £172,400).  Operating margins in the
first half of 2005/06 for the Homes' operations were 17.4% and we anticipate the
full year position will be broadly similar.


Our Homes' operations turned in a strong second half performance, benefiting
from our strategy of increasing legal completions.  This delivered an
approximate 12% increase in turnover as compared with the same period last year
and we expect operating profits in Homes to be marginally ahead of the
corresponding period last year.


The sales market for the financial year as a whole was more robust than last
year, with the last six months in particular showing improved levels of customer
confidence.  Total reservations in the Homes' business of 4,529 were 13% ahead
of the previous year.  As we planned, the level of forward sales was allowed to
reduce but nevertheless still remains ahead of historic norms and stood at 1,772
at the end of the financial year (June 2005: 1,978).


We continued to make good progress on a number of Mixed Use and Regeneration
schemes.  Disposals at Buckshaw Village and the completion of the sale of Aspect
in Altrincham are likely to deliver a result marginally ahead of the originally
anticipated break-even position for Mixed Use and Regeneration.  There is
encouraging further interest for the coming year at Buckshaw Village, together
with significant early enquiries for the retail and office space on our recently
acquired mixed use schemes at Bristol and Plymouth.


In January 2006, Redrow Regeneration secured a redevelopment project in the
centre of Barking, Essex.  Contracts have now been exchanged for the sale of all
246 residential units being built in Phase 1 of the scheme and the first units
are expected to legally complete in the Summer of 2007, with the scheduled
completion of Phase 1 by December 2007.  We are now progressing the planning of
Phases 2 and 3.  Good progress continues with Network Rail on the opportunities
to regenerate Watford Junction and Guildford railway stations.


In the short term we expect our Mixed Use and Regeneration activities to be
broadly neutral in terms of profit generation but in the medium term there is
the potential to derive significant benefit from both activities, providing
additional profit streams for Redrow.


The Group continued to invest in expanding its land bank.  The current land bank
increased by over 20% in the year and at the end of June stood at 21,000 plots
(June 2005: 17,300).  Over the last twelve months, some 8,400 new plots were
brought into the current land bank and this provides a strong position for
Redrow to grow volumes in the future.   At June 2006, there were 16,750 plots
(June 2005: 15,800) in the owned land bank with planning and we had
significantly increased the plots controlled under contract from 1,500 to 4,250.


The investment in land is reflected in the debt position as at 30 June 2006 of
approximately £130m (June 2005: £103.2m) which includes the cash payment of £59m
in respect of the previously announced acquisition of 1,250 plots and related
commercial development land in Bristol.  The strong financial position of the
Group provides further opportunity to continue investment in our land bank to
grow our business.


Overall, we expect the trading results for the year ended June 2006 to be
broadly in line with our previous expectations.


As a result of a matter that has arisen on a development in Jersey, built on
behalf of Redrow and which was construction completed in 1999, the Group intends
to provide £2m in its accounts for the twelve months ended June 2006.  This
provision was not envisaged at the time of the interim results announcement in
March 2006 and it is the Board's view, after taking appropriate professional
advice, that a significant proportion of this sum should be recovered by the
Group in due course.  However, in line with the requirements of IAS 37, a
provision will be carried in the accounts until such time as recovery of monies
is made.


OUTLOOK


The sales market is performing more strongly than at the same point a year ago
although pricing remains competitive.  Transactions have been at higher levels
albeit that the market is now following its usual seasonal pattern as we run
into the summer.  We expect to see some modest house price inflation over the
next twelve months which we anticipate will be sufficient to mitigate the impact
of build cost increases.


The current economic environment and outlook leads the Group to believe that the
twelve months to June 2007 should see continued growth in the level of legal
completions in line with expectations.  This is supported by our forward sales
position and the quality and effectiveness of our land bank which provides
Redrow with the capability to continue to deliver growth in both our core and
Debut products.  On Debut we are well placed to deliver significant growth and
expect to increase output to 500 units in the new financial year, with planning
in place for nearly 900 Debut homes as at June 2006.  We remain on course to
meet our 2005 objective of delivering 2,000 Debut homes per annum within five
years.


The strength and quality of Redrow's forward land bank provides the potential to
significantly enhance the Group's current land holdings to support further
growth.  Redrow anticipates that by December 2007 planning applications will
have either been concluded or will be running on 10 major forward land sites
totalling over 6,500 plots.  This total includes our share of the major site at
Bishopton in Scotland where we have just submitted a planning application,
jointly with BAE Systems, for 2,500 homes and 1,500,000 sq ft of employment and
community development.


The last twelve months has marked significant progress in delivering our growth
strategy.  Through the quality of our current and forward land banks we are
positioned to increase the output in our core product.  We have made good
progress in the development of additional income streams through mixed use and
regeneration activities.  Debut goes from strength to strength and we are on
track to meet our objective of delivering 2,000 Debut homes per annum within
five years.  Redrow is well positioned to continue to deliver value to its
Shareholders.



Enquiries:


                                                 Redrow plc

Neil Fitzsimmons, Chief Executive                020 7404 5959 (7 July)
David Arnold, Group Finance Director             01244 520044 (thereafter)



Patrick Handley/Nina Coad                        Brunswick  020 7404 5959




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