Trading Update

RNS Number : 1734A

Redrow PLC

22 March 2017

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

Redrow plc ("Redrow")

22 March 2017

Trading Update

Further to the announcement on 8 February 2017 of Redrow's interim results for the six months ended 31 December 2016, Redrow is pleased to announce that its trading and performance continues to be robust, as a consequence of a record order book and a further increase in legal completions, combined with better than anticipated increases in average selling prices.

Given the strong year-to-date performance the Board is confident that Redrow is on track to deliver at least £306 million Profit Before Tax for the financial year ending 30 June 2017, an increase of 22% compared to the prior financial year of 2016.

As required by Rule 28.1(a) of the City Code on Takeovers and Mergers (the "Code"), PricewaterhouseCoopers LLP ("PwC"), as reporting accountants to Redrow, and Barclays Bank PLC, acting through its Investment Bank ("Barclays"), as financial adviser to Redrow, have each provided the reports required under that Rule, both of which are set out in Appendix 1 to this announcement.

The person responsible for arranging the release of this announcement on behalf of Redrow is Graham Cope, Company Secretary.

Enquiries:

Redrow plc Steve Morgan, Chairman Barbara Richmond, Group Finance Director	[phone]
Barclays Bank PLC, acting through its Investment Bank (Financial Adviser and Corporate Broker to Redrow) Alisdair Gayne Mark Todd Tom Macdonald	[phone]
Instinctif Partners (PR Adviser to Redrow) Mark Garraway Helen Tarbet James Gray	[phone]

Further information

Barclays Bank PLC, acting through its Investment Bank ("Barclays"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting for Red and no one else in relation to the matters referred to in this announcement, and will not be responsible to anyone other than Red for providing the protections afforded to clients of Barclays nor for providing advice in relation to this announcement or any other matter referred to in this announcement.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise. The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available, subject to certain restrictions relating to persons resident in certain jurisdictions, for inspection on the Redrow website (www.redrowplc.co.uk) by no later than 12 noon (London time) on the business day following this announcement. For the avoidance of doubt, the content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Forward looking statements

This announcement contains forward looking statements concerning the financial condition, results of operations and businesses of Redrow. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements expressing expectations, beliefs, estimates, projections and assumptions, including as to future potential cost savings, synergies, operations, results and prospects. These forward looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "would", "estimate", "expect", "intend", "may", "will", "potential", "on track" and similar terms and phrases. There are a number of factors that could affect the future operations of Redrow and could cause the results of operations of Redrow to differ materially from those expressed or implied in the forward looking statements included in this announcement. Readers should not place undue reliance on forward looking statements. Each forward looking statement speaks only as of the date of this announcement. Redrow does not undertake any obligation to publicly update or revise any forward looking statement as a result of new information, future events or otherwise, except to the extent legally required.

Appendix 1

Redrow Profit Forecast Statement

A.    Redrow Profit Forecast Statement

Paragraph 2 of this Announcement contains the profit forecast statement for the twelve month period ending 30 June 2017 (the "Redrow Profit Forecast Statement").

A copy of the Redrow Profit Forecast Statement is set out below.

Given the strong year-to-date performance the Board is confident that Redrow is on track to deliver at least £306 million Profit Before Tax for the financial year ending 30 June 2017, an increase of 22% compared to the prior financial year of 2016.

Further information on the bases of belief supporting the Redrow Profit Forecast Statement including the principal assumptions and sources of information, is set out below.

Bases of belief, key assumptions and sources of information

In developing the Redrow Profit Forecast Statement, Redrow Directors made the following assumptions: 

Factors outside the influence or control of the Redrow Directors:

•              There will be no material change in the economic or political environment that would materially affect the Redrow group during the forecast period to 30 June 2017;

•              There will be no material changes in market conditions over the forecast period to 30 June 2017 in relation to either customer demand or competitive environment, including the availability of mortgage finance, house prices, interest rates or legislative or regulatory requirements;

•              There will be no material adverse events that will have a significant impact on the financial performance of the Redrow group, including adverse weather events or natural catastrophes that affect key products, supply chain or markets or construction process;

•              There will be no material supply chain disruptions or other business interruptions, including industrial disputes;

•              There will be no material changes to the prices of raw materials or components from those currently prevailing and/or anticipated by the Redrow Directors;

•              There will be no material change in the Redrow group's labour costs, including medical and pension and other post-retirement benefits driven by external parties or regulations;

•              There will be no material impact on the Redrow group arising from litigation; and

•              There will be no material change in the control of the Redrow group.

Factors within the influence or control of the Redrow Directors

•              There will be no major corporate acquisitions or disposals prior to 30 June 2017; and

•              There will be no material change in the operational strategy or current management of the Redrow group before 30 June 2017.

Reports

As required by Rule 28.1(a) of the Code, PwC, as reporting accountants to Redrow, and Barclays, as financial adviser to Redrow, have provided the reports required under that Rule. Each of PwC and Barclays has given and has not withdrawn its consent to the publication of its report in the form and context in which it is included.

B.    Report from PwC

The Directors

Redrow plc

Redrow House, St. David's Park, Ewloe

Flintshire

CH5 3RX

Barclays Bank PLC (the "Financial Adviser")

5 The North Colonnade

London

E14 4BB

22 March 2017

Dear Sirs

Redrow plc

We report on the profit forecast comprising the statement by Redrow plc (the "Company") and its present subsidiaries and joint ventures (together the "Group") for the year ending 30 June 2017 (the "Profit Forecast"). The Profit Forecast and the material assumptions upon which it is based, are set out in section A of Appendix 1 of the trading update issued by the Company dated 22 March 2017 (the "Trading Update").

This report is required by Rule 28.1(a)(i) of the City Code on Takeovers and Mergers issued by the Panel on Takeovers and Mergers (the "City Code") and is given for the purpose of complying with that Rule and for no other purpose.

Responsibilities

It is the responsibility of the directors of the Company (the "Directors") to prepare the Profit Forecast in accordance with the requirements of the City Code.

It is our responsibility to form an opinion as required by Rule 28.1(a)(i) of the City Code as to the proper compilation of the Profit Forecast and to report that opinion to you.

Save for any responsibility which we may have to those persons to whom this report is expressly addressed and for any responsibility arising under Rule 28.1(a)(i) of the City Code to any person as and to the extent therein provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Rule 23.2(b) of the City Code, consenting to its inclusion in the Trading Update.

Basis of Preparation of the Profit Forecast

The Profit Forecast has been prepared on the basis stated in section A of Appendix 1 of the Trading Update and is based on the unaudited interim financial results for the eight months ended 28 February 2017 and a forecast for the four months to 30 June 2017. The Profit Forecast is required to be presented on a basis consistent with the accounting policies of the Group.

Basis of Opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included evaluating the basis on which the historical financial information included in the Profit Forecast has been prepared and considering whether the Profit Forecast has been accurately computed based upon the disclosed assumptions and the accounting policies of the Group. Whilst the assumptions upon which the Profit Forecast are based are solely the responsibility of the Directors, we considered whether anything came to our attention to indicate that any of the assumptions adopted by the Directors which, in our opinion, are necessary for a proper understanding of the Profit Forecast have not been disclosed or if any material assumption made by the Directors appears to us to be unrealistic.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Profit Forecast has been properly compiled on the basis stated.

Since the Profit Forecast and the assumptions on which it is based relate to the future and may therefore be affected by unforeseen events, we can express no opinion as to whether the actual results reported will correspond to those shown in the Profit Forecast and differences may be material.

Opinion

In our opinion, the Profit Forecast has been properly compiled on the basis stated and the basis of accounting used is consistent with the accounting policies of the Group.

Yours faithfully

PricewaterhouseCoopers LLP

Chartered Accountants

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated investment business.

C.    Report from Barclays

The Board of Directors

Redrow plc

Redrow House, St. David's Park, Ewloe

Flintshire

United Kingdom

CH5 3RX

22 March 2017

We report on the Redrow Profit Forecast Statement (the "Statement") made by Redrow plc ("Redrow") on 22 March 2017 (the "Announcement") for which the Board of Directors of Redrow (the "Redrow Directors") are solely responsible under Rule 28.3 of the City Code on Takeovers and Mergers (the "Code").

We have discussed the Statement with the Redrow Directors. The Statement is subject to uncertainty as described in the Announcement and our work did not involve an independent examination of any of the financial or other information underlying the Statement.

We have relied upon the accuracy and completeness of all the financial and other information provided to us by or on behalf of Redrow, or otherwise discussed with or reviewed by us, and we have assumed such accuracy and completeness for the purposes of providing this letter.

We do not express any view as to the achievability of the Statement.

We have also reviewed the work carried out by PricewaterhouseCoopers LLP and have discussed with them the opinion set out in the Announcement.

This letter is provided to you solely in connection with Rule 28.1(a)(ii) of the Code and for no other purpose. We accept no responsibility to Redrow, its shareholders or any person other than the Redrow Directors in respect of the contents of this letter. No person other than the Redrow Directors can rely on the contents of this letter, and to the fullest extent permitted by law, we exclude all liability (whether in contract, tort or otherwise) to any other person, in respect of this letter, its contents or the work undertaken in connection with this letter or any of the results that can be derived from this letter or any

written or oral information provided in connection with this letter, and any such liability is expressly disclaimed except to the extent that such liability cannot be excluded by law.

On the basis of the foregoing, we consider that the Statement, for which you as the Redrow Directors are solely responsible, has been prepared with due care and consideration.

Yours faithfully,

Barclays Bank PLC, acting through its Investment Bank

 

END

 

 

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