Final Results

RNS Number : 8126Y

Redrow PLC

10 September 2009

 

Thursday September 10 2009

Redrow plc

Preliminary results for the 12 months ended 30 June 2009

      Financial performance

• Group revenue of £301.8m (2008: £650.1m), with decline driven by volume and price reductions in housing market

• Legal completions 46 per cent down at 2,113

• Average selling price 12 per cent lower at £137,400

• Gross margin of 1.8 per cent (2008: 18.5 per cent) before exceptionals

• Pre-tax loss from trading operations before exceptionals of £44.2m (2008: £65.5m profit)

• Exceptional charges of £96.6m, related to Group restructuring and review of the carrying value of land and work in progress

• Pre-tax loss of £140.8m (2008: £193.9m loss)

• Net debt of £214.6m (2008: £223.3m); in line with plans and well within facilities

• New financial year started positively with total sales comfortably ahead of the same period last year

      Operating highlights

• Group clearly refocused on new strategy under Steve Morgan, Chairman, who rejoined the business in March 2009

• Full review of product and land bank undertaken

• Group returned to traditional focus on great product and excellence in land buying

  • Return to heritage in family housing, away from apartments and starter homes

  • Housing types reduced from 80 to 32

  • New Heritage Collection to be launched in January 2010, with historical architectural theme, more spacious open-plan interiors and high specification

  • Land owned with planning reduced from 14,900 plots to 12,500 partly as a result of replans

  • Land team again fully engaged in considering new opportunities

• Major cost reduction programme achieved

• Board strengthened with appointment of independent Deputy Chairman and two new Non-Executive Directors

Financial results

	2009	2008
Legal Completions	2,113 homes	3,925 homes
Average Selling Price	£137,400	£156,900
Revenue	£301.8m	£650.1m
(Loss)/Profit before tax and exceptional items	(£44.2m)	£65.5m
Loss before tax – continuing operations	(£140.8m)	(£193.9m)
Net Debt	£214.6m	£223.3m
Net Assets	£293.5m	£404.6m
Gearing	73%	55%

Steve Morgan, Chairman of Redrow plc, said:

'While I am delighted to be back at the helm of Redrow it is intensely disappointing to me to have to report the worst set of trading results in the Company's history.  I am determined to ensure that this will not be repeated and, along with the rest of the management team, am clearly focused on steering the business back to delivering the sort of robust performance that it has delivered in the past.

Clearly the results we are announcing today come on the back of a downturn in the home building industry unlike any other in recent history. Our immediate task is to rebuild our margins and return to profitability. I am confident that the actions we have taken in reviewing our product and land bank are the first steps on this road.

We are now in a position to move forward from an appropriate base and assuming we experience stability in the market, we do not foresee further net write-downs being required. We anticipate that we will need to invest carefully and strategically to enhance our land bank and we continue to keep our capital structure under review to ensure that we are well placed to secure new land capable of generating improved financial returns.

With the introduction of The New Heritage Collection and our refocus on family housing, we are confident that in time we will re-establish Redrow as one of the market leaders in our sector.'

Enquiries:

Redrow plc

Steve Morgan, Chairman                         01244 520044

David Arnold, Group Finance Director      01244 520044

Tulchan Communications

Susanna Voyle/Lucy Legh                       020 7353 4200

There will be an analyst and investor meeting at 8.30am at JPMorgan Cazenove, 20 Moorgate, London, EC2R 6DA.  A live audio webcast and slide presentation of this event will be available at 8.30am on www.redrowplc.co.uk.  Participants can also dial-in to hear the presentation live at 8.30am on [phone] or UK Toll Free 0800 358 7375.

Playback will be available by phone until 24th September 2009 on the following dial-in numbers:

[phone]

UK Toll Free 0800 358 2189

US Toll Free 1 866 676 5865

Passcode 271257# 

CHAIRMAN'S STATEMENT

It is with mixed emotions that I write this Chairman's Statement, my first since returning to the Board. On the one hand, I am delighted to be back at the helm of Redrow, the Group I founded 35 years ago. On the other hand, it is intensely disappointing to me to have to report the worst set of trading results in our Company's history. I am determined to ensure that this will not be repeated and that we will steer the business back to delivering a performance consistent with being one of the leaders in the house building industry.

Financial Results

In the financial year ended 30 June 2009, Group revenue reduced by 53.6% to £301.8m (2008: £650.1m) which was almost entirely attributable to the volume and price reductions experienced during the dramatic decline in the housing market. Group legal completions of 2,113 homes were 46% lower than the prior year (2008: 3,925) and our average selling price showed a reduction of 12% to £137,400 (2008: £156,900). Gross margin declined from 18.5% to 1.8% principally as a consequence of the impact of house price reductions and the slow rate of sales. The pre tax loss from trading operations before exceptionals for the period was £44.2m (2008: £65.5m profit), the first trading loss in Redrow's history. Our immediate task as we move forward is to rebuild our margins and return to profitability.  

Post exceptionals of £96.6m the pre tax loss was £140.8m. The exceptional charge of £96.6m reflects both the impact of the radical restructuring of the Group required in response to market conditions and the review undertaken of the carrying value of land and work in progress in our balance sheet. This latter element required additional net realisable value provisions in the year of £96.5m, further details of which are provided in the Business Review. 

Net debt of £214.6m (Dec 2008: £269.1m; June 2008: £223.3m) was in line with our objectives and well within our available committed facilities of £425m. Gearing at 30 June 2009 was 73% (Dec 2008: 73%; June 2008: 55%) and reflected the reduction in net assets to £293.5m (June 2008: £404.6m) resulting from the reported loss. We anticipate that we will return to generating positive operating cash flow in the year ahead, funding the planned continued reduction in our debt levels by June 2010. 

Background

Throughout 2008 and into the early part of 2009 the house building industry was hit by a downturn unlike any other in recent history. The speed of the decline in sales and prices required Redrow to take swift and dramatic action. The business was restructured, several regional offices were closed and the number of employees was reduced from 1,321 at June 2007 to 652 in April 2009.  

With the benefit of hindsight, mistakes were made in the Group's land acquisition policy. During 2005 very little land was purchased as it was perceived at that time that the land market had peaked. This proved not to be the case and management embarked on a 'catch-up' during 2006 and 2007, resulting in a disproportionate element of the land bank being bought at the peak of the market. Unfortunately the combination of this policy and further falls in house prices during the year, has resulted in further provisions being required in this year's financial results. We are, however, now in a position to move forward from an appropriate base and assuming we experience stability in the market, we do not foresee further net write-downs being required.

With house prices having fallen by around 25% from peak, it is encouraging to see that the market has steadied over the last six months. The price adjustment has made new homes once again very affordable, which has resulted in strong buyer demand. Reservations during the first 10 weeks of the financial year are up 72% over the same period last year.  

Mortgage availability remains the biggest single constraint to the housing market recovery, with down valuations by surveyors acting for the mortgage lenders being an ongoing problem. Cancellation rates are running at around 18%, with the majority of these cancellations occurring as a direct result of surveyors' down valuations. Whilst there has been some improvement in both mortgage availability and valuation issues in recent weeks, these two factors remain the most significant obstacles to a recovery in the market.  

Future Strategy

Having stepped down from the Board in November 2000 and reduced my holding in the Company to around 6%, I re-built my stake to 29.9% during 2008 and the early part of 2009 and approached the Company to re-join the Board. I returned to the Company on 23 March 2009, with a clear focus upon the steps we needed to take. My first objective has been to review two key elements of our business strategy, which are critical to our future success - our product and our land bank.  Redrow's historic success has been attributable to a great product, differentiated from its competition, and excellence in land buying; I intend to re-establish both elements within our business.  

In recent years, the Company has moved away from its heritage in family housing towards apartments and starter homes. This has led to a reduction in the Group's average selling price, taking it from amongst the highest in the sector to the lowest. In the financial year ended 30 June 2009, 45% of our legal completions were apartments and 5% from the low average selling price Debut range. Given the reduction in demand and balance of product mix within our legal completions, the average selling price was £137,400 (2008: £156,900).  

There remains a legacy of around 700 In the City apartments or Debut range product, which is either stock or where we are committed to build, the majority of which we expect to be sold in the new financial year. As a result, the average selling price for the new financial year will once again be diluted by the inclusion of this lower selling price product. Nevertheless I expect the average selling price for the current year to be somewhat ahead of last year.

Redrow's product in recent years has been barely distinguishable from its competitors. When I returned I inherited in excess of 80 standard house types. Working with our inߛhouse design team the product range has been completely redesigned, reducing the core house types to just 32, with a strong focus on family housing. This new range will be called The New Heritage Collection, which, as the name suggests, will incorporate an historic architectural theme, yet with spacious open-plan interiors and a high specification designed for today's modern living. The Redrow team is tremendously excited by the new range and it is our intention to introduce it to our developments during the autumn months, in readiness for a full launch in January 2010.

Land

In line with our shift in emphasis towards two storey family housing, a thorough review of our land bank has been instigated with the intention of identifying how we could increase the proportion of traditional product, moving away from apartments and three storey homes. As a consequence of this review, our current land bank, which had reduced to 14,200 as a result of trading, was reduced by a further 8% to 13,100 plots, due to the re-planning. This re-planning of sites is ongoing, with some Local Authorities more supportive of the change than others. Nevertheless we feel it is appropriate to pursue this strategy. As a result of the reߛplanning exercise and land write-downs the Group's average plot cost now stands at £23,000. When the impact of residual In the City apartment schemes, Debut product and social housing to which we have allocated a nil land cost is taken into account, the average plot cost increases to approximately £27,000.

Our land teams are once again fully engaged in considering new land opportunities. At the present time, however, there is something of a stand-off in the land market between vendors and buyers. Some land owners are typically holding back from selling land because of unrealistically high expectations, whereas land purchasers are looking for financial returns which embrace the risk premium appropriate for the current market. As confidence that house prices have stabilised spreads, this gap between the two should close and activity in the land market will slowly recover.  

Board

On 19 August 2009 we appointed Alan Jackson, Debbie Hewitt and Paul Hampden Smith to the Board as Non-Executive Directors. Alan joins as Deputy Chairman and Senior Independent Non-Executive Director. I am delighted to have strengthened our Board with these appointments and look forward to working with them as we move the Group forward.  

In line with the announcement made at the time of my return to the Company, it is envisaged that a Chief Executive or Chief Operating Officer will be appointed during the course of the current financial year.

During the year Neil Fitzsimmons stepped down as Chief Executive and Alan Bowkett stepped down as Chairman. Subsequent to the year end, in August, Malcolm King, Bob Bennett and Denise Jagger, stepped down to make way for the new Non-Executive Directors. I would like to thank Neil, Alan, Malcolm, Bob and Denise for their past efforts.

People

In what has been a tumultuous period for the Company, I would like to express my sincere gratitude to all the Redrow team for their dedication and commitment to the business. This team embraces a very broad group, ranging from our employees through to sub-contractors and suppliers. During this period we have lost many excellent members of the team through the restructuring programme and we hope that the stability we see emerging allows them to rejoin our industry very soon.

Health and Safety has remained an absolute priority for us during this downturn and as we start to increase construction we need everyone across the organisation to continue to support this important objective. We were delighted to win a gold RoSPA for the fourth year running. 

Outlook

The new financial year has started positively, with the total sales position comfortably ahead of the same period last year. We recommenced construction generally across our sites in the last quarter of our financial year and have stepped up the pace of build to ensure we have appropriate stock levels to meet the autumn markets. By the end of December we expect to launch 12 new sites, which we had previously held back due to market conditions.

We have taken extensive steps to refocus our owned land bank to meet our future needs and to correctly assess its value in the current market. We anticipate that we will need to invest carefully and strategically to enhance our land bank and we continue to review our capital structure to ensure that we are well placed to secure new land capable of generating improved financial returns.

With the introduction of The New Heritage Collection and our refocus on family housing, we are confident that in time we will re-establish Redrow as one of the market leaders in our sector.

Steve Morgan

Chairman

BUSINESS REVIEW

Sales Market

The housing market during the twelve months ended 30 June 2009 was marked by two distinct periods. The first half of our financial year to December 2008, was a continuation of the extremely weak trading environment experienced in the previous financial year. During this six month period house prices, as measured by the Halifax House Price Index, fell by 10.8%, whilst mortgage approvals were 72% lower in monetary terms than the prior year.  Redrow's experience mirrored these statistics, with reservations 48.5% lower than the comparative period in the prior year at 853 units (H1 08: 1,657).

The start of the new calendar year brought about greater stability in the market with pricing pressure moderating significantly. House price indices, mirroring our own experience, registered only modest declines at the beginning of the year before recovering over the last few months.  

Mortgage availability remains very constrained in an historic context, with overall mortgage approvals in the six months to June 2009 64% lower than the same period in 2007. The availability of mortgages and the continued practice of down valuation of properties by surveyors acting for mortgage lenders remain the biggest obstacles to a significant recovery in the housing market.

Reservations in the second half of the financial year were down slightly on the same period last year, but more importantly our net sales of private houses were 19.5% ahead. Whilst some of this improvement was attributable to an underlying increase in the number of homes sold, the more significant driver was a markedly lower level of cancellations, which reduced from 37% to 21% as buyer confidence started to return.  

During the financial year, Redrow had an average of 87 active outlets, 13% lower than the previous year. New sites were held back to preserve cash in the very weak markets, resulting in active outlets declining steadily to 75 as at 30 June 2009. A number of new developments and new phases on existing developments will be launched during the new financial year and we expect to maintain our average outlets throughout the period at similar levels to those at 30 June 2009.

The Group's forward sales position at 30 June 2009 stood at 1,147 homes (June 2008: 1,189 homes) but within this the level of private sales was 22.0% higher than the previous year, at 600 homes (June 2008: 492 homes).

Revenue

Group revenue was £301.8m, 53.6% lower than the previous financial year (2008: £650.1m), principally as a result of the significant reduction in legal completions and average selling prices.

Residential legal completions totalled 2,113 (2008: 3,925) which was in line with our expectations. Social housing completions, which represented both s106 planning contributions and sales to Housing Associations, were 19% of total legal completions (2008: 15%). This increased proportion was a result of the acceleration, where appropriate, of construction of the social element of housing developments. We envisage that the new financial year will see an increase in the proportion of private legal completions.

The relative weakness of the different market segments within the housing market influenced the sales of our products. The buy to let and first time buyer markets were profoundly impacted by the reduction in mortgage availability, the requirement for much higher deposits and more stringent lending criteria. As a consequence, legal completions of our In the City, Regeneration apartment schemes and Debut homes suffered to a greater extent than that of our mainstay Signature homes, which have a stronger base in family housing and the trade-up market. Our future strategy will see more focus on the family housing market.

Legal Completions	Private	Social	Total 2009	2008	Reduction
Signature	1,453	387	1,840	3,038	-39%
In the City/Regeneration	149	18	167	462	-64%
Debut	100	6	106	425	-75%
Total	1,702	411	2,113	3,925	-46%

Reflecting the significant weakness in the housing market, the Group's combined private/social average selling price reduced by 12.4% to £137,400 (2008 : £156,900). The average selling price of private legal completions stood at £143,700 (2008: £167,900) which we expect to increase modestly in the new financial year as a consequence of product mix changes, assuming the housing market remains stable. In the medium term, our strategic focus on family housing is expected to progressively increase the Group's average selling price of private homes.

Land sales were down significantly in the financial year as a consequence of the virtual disappearance of any meaningful land market. Sales that were achieved were mainly to Housing Associations and Local Authorities and totalled £3.4m (2008: £29.3m). The commercial market was also badly affected although we did sell the retail investment at the Regeneration scheme at Barking and an office investment at Lichfield. Overall, commercial turnover totalled £8.1m (2008: £5.4m). Opportunities for further residential land sales, the disposal of existing commercial stock and surplus offices will be pursued during the new financial year, but ultimate success will depend on an improvement in the residential land and commercial markets.

Gross Profit

We estimate that the dramatic correction in the housing market since the middle of 2007 has seen our overall selling prices decline by around 25% from their peak. This impact, combined with the significant reduction in sales volumes, has had a profound impact upon the Group's profitability.

Whilst we moved very swiftly to reduce costs across all areas of activity, overhead and site-related marketing costs increased significantly as a proportion of revenue. Despite sales and marketing costs reducing during the year by 39% over the previous year, they nevertheless increased as a proportion of revenue from 3.2% to 4.2%. Similarly, at a site level, we targeted significant reductions in stock and stopped production across many sites. However, we continued to incur a residual level of fixed costs that, in turn, had a detrimental impact upon our gross margin. Overall, our gross profit before exceptional items reduced to £5.4m (2008: £120.5m) and our gross margin was 1.8% (2008: 18.5%). 

Overheads

In July 2008 in response to the deteriorating markets, we announced the closure of our North West office near Warrington and Southern office in Basingstoke and significantly reduced headcount across the Group. With the continued decline in the housing market experienced in the run up to Christmas 2008, we subsequently announced the closure of our Yorkshire office at Wakefield and South Midlands office at Northampton and made further Group-wide reductions.  

From employee numbers of 1,154 at 30 June 2008, we reduced our headcount to 652 in April 2009.  

Since April 2009 we recommenced construction activity in a carefully controlled manner across all our existing developments and several new sites, which were previously 'mothballed'. As construction has increased we have gradually started to recruit again, in many cases approaching staff who were made redundant previously. This recruitment is largely site-based but also encompasses some positions at a managerial level to ensure we can appropriately control the growth in activity.

We considered and implemented broader actions across our employee base to control cost. Bonus schemes were reduced in respect of the maximum award achievable and in July 2009 salaries were generally frozen for their second successive year.

Board costs were also reduced during the year, following Steve Morgan's return to Redrow, initially as Deputy Chairman and, subsequently, from 30 June 2009 as Chairman. Steve is contracted to provide three days' services per week, although since returning he has committed a much greater level of his time to the business.  

Administration costs before exceptional items were 22.8% lower at £27.8m (2008: £36.0m).

Operating Loss, Financing Costs and Joint Ventures

The Group reported an operating loss of £22.4m (2008: £84.5m profit) before exceptional items and financing costs.  

Average bank debt for the financial year ended 30 June 2009 was approximately £20m lower at £258m (2008: £278m). Money market interest rates fell significantly during the period, with the average of 3 month money market rates standing at 2.6% (2008: 6.0%). However, the level of facility fees and higher margins incurred on the Group's refinancing in September 2008 meant that the underlying net interest charge increased to £21.6m (2008: £18.0m). This figure includes £1.7m relating to the imputed interest charge arising on land creditors (2008: £3.1m).

The 50% share of the Joint Venture to re-develop Watford Junction Railway Station holds certain rights and land assets which are viewed as important to the success of this scheme. Although progress was made in negotiations with various stakeholders, development of this project is not expected in the near term. Redrow's share of the loss during the period after interest and tax was £0.2m (2008: £1.0m).

The loss before tax from continuing operations and before exceptional items was £44.2m (2008: £65.5m profit).

Exceptional Items

During the financial year a number of one-off costs were incurred relating to the restructuring of the Group, including the Board changes announced in March 2009, and the further provisions required in relation to the carrying value of land and work in progress. Partially offsetting these costs was a significant pension credit which arose as a consequence of both changes made to the defined benefit section of the pension scheme which capped increases in pensionable salary and also as a consequence of the redundancies during the year. These exceptional items are summarised below:

	£m
Redundancy costs arising on Group restructuring	4.3
Impairment for surplus offices	1.2
Pension curtailment credit (non-cash)	(14.5)
March 2009 Board restructuring (incl. advisory fees)	2.4
Net realisable value provision against land and WIP	96.5
Provision against onerous contracts	6.7
Total exceptional costs	96.6

Restructuring Costs

The significant reduction in headcount following the redundancy and office closure programme instituted gave rise to a cash cost of £4.3m. In addition, £1.2m was provided in relation to the carrying value of those premises we have identified as available for sale. The Company's actuary has calculated that following the capping of increases in pensionable salaries together with the impact of redundancies, a significant pension curtailment credit arose which amounted to a net £14.5m. This does not have a direct cash impact upon the Group's financial position but is reflected in the reduced liabilities within the defined benefit section of the Group's pension scheme arising from these scheme changes and reduced active membership. The number of active members in this section of the pension scheme fell from 240 at 1 July 2008 to 157 at 1 July 2009.

The cost of the Board restructuring agreed in March 2009 was £2.4m including the Company's advisory costs in relation to Board changes following Steve Morgan's return. The figure also includes the compensation payment made to Neil Fitzsimmons for loss of office in relation to his stepping down as Chief Executive.

Net Realisable Value Provisions and Provisions Against Onerous Contracts

The continued downturn in the housing market experienced during the year has required the Directors to once more review the carrying value of land and work in progress. In respect of the previous financial year, the Directors had undertaken a detailed review of the net realisable value of all the Group's land holdings as at 30 June 2008. This applied to both plots in development, or which the Group was committed to develop (referred to as Type 1 plots) and that element of the land bank where no commitment to develop had been made (referred to as Type 2 plots). The Board has adopted a similar approach at 30 June 2009 and once more engaged external professional advice to support this review process.  

The gradual improvement in the stability of the housing market seen over the last six months, combined with the Group's progress in line with its debt objectives, has enabled development to commence on 'mothballed' sites and new phases on existing land holdings to be started. This in turn has allowed approximately 5,300 plots to be transferred from Type 2 to Type 1 plots. The remaining plots categorised as Type 2 now largely constitute sites where either the planning consent and product is not in keeping with the Group's future strategic direction or later phases of large sites which, in both cases, Redrow would be willing to exchange or sell to liberate capital.

	Plots
	June 2009	June 2008
Type 1	9,300	5,400
Type 2	3,200	9,500
Total	12,500	14,900

The net realisable value of the Type 2 sites has been assessed on the basis of the estimated proceeds that could be realised from their sale in the open market. Given the very limited level of activity in the land market over the last twelve months, this has been estimated by assessing the likely level of financial return appropriate for developers in the current market in order to impute a land value. This work was supported by the external valuers. The net realisable value provision recognised in the financial year ended 30 June 2009 in respect of Type 2 plots has resulted in an exceptional charge of £56.5m. This additional provision reflected the downward movement in pricing, together with an assessment of costs to complete the developments. More than offsetting this charge was a net provision release totalling £145.4m which almost exclusively related to the reclassification of Type 2 to Type 1 plots. The net exceptional credit recognised during the financial year in respect of Type 2 plots was £88.9m. The total net realisable value provision in respect of the Type 2 land as at 30 June 2009 was £116.5m (June 2008: £218.1m).

Following the transfer of the majority of Type 2 plots to Type 1, 74% of the Group's owned land bank with planning now constitutes Type 1 plots. The net realisable value of these plots was estimated by comparing our assessment of selling prices against cost of completion. Whilst the housing market has remained relatively stable for the last six months, we remain concerned that there is a risk of further modest fluctuations in house prices and have therefore included an allowance for such a pricing environment. In addition, the provision allows for costs based upon a slower rate of sale, more consistent with our experience during the financial year ended 30 June 2009. We have also included an estimate of cost relating to direct overhead expenses attributable to the process required to achieve the legal completion of a home. These factors, taken together with the transfer of plots from Type 2, have resulted in an exceptional charge recognised in the year of £185.4m. When this is netted against the exceptional credit of £88.9m arising on Type 2 plots, the net exceptional cost in respect of net realisable value provisions in the financial year ended 30 June 2009 was £96.5m. The net realisable value provision as at 30 June 2009 in respect of Type 1 plots was £202.9m (June 2008: £41.3m).  

The net realisable value provisions will continue to be reviewed at future reporting dates to assess their appropriateness in the context of prevailing market conditions and the re-assessment of net realisable value and costs. On the basis of the carrying value of land and work in progress as at 30 June 2009 and the prevailing market conditions, the Directors do not believe any further net writedown of inventory will be required.  

During the financial year ended 30 June 2009, the Group successfully re-negotiated contractual commitments on future land purchases and also saw a number of contracts lapse. However, the Directors have provided £6.7m against a number of contracts viewed as onerous.

Loss Before Tax and Earnings per Share

The Group is reporting a loss before tax and after exceptional items of £140.8m (2008: £193.9m). The basic loss per share from continuing operations before exceptional items was 19.3p (2008: 28.8p of earnings). The basic loss per share from continuing operations including exceptional items was 62.8p (2008: loss of 86.3p).

Land

	June 2009	June 2008
Current Land
Owned with planning	12,500	14,900
Contracted plots	630	1,550
Current land bank	13,130	16,450
Forward Land
Owned without planning	400	900
Options    -     allocations	9,000	8,700
-     realistic prospect	13,400	16,550
	22,800	26,150

The Group's land holdings comprises of both a current and forward land bank. As at 30 June 2009, the current land bank consists of 12,500 plots owned with planning (June 2008: 14,900) and 630 contracted plots (June 2008: 1,550 plots). The owned land is reflected in our balance sheet, together with deposits in respect of contracted land, land for commercial development and sundry land holdings, including forward land without planning. As at 30 June 2009, land in the Group's balance sheet was £299.9m (June 2008: £385.4m).

We responded to the downturn in the housing market by curtailing our land buying activities and as a result the level of land controlled under contract reduced to 630 plots (June 2008: 1,550). It was only in June 2009, when greater stability emerged, that we contracted and completed on our only new site purchase of the year which was on deferred terms. Including other sites where we had contractual commitments, we purchased a total of 778 plots during the year at a cost of £45.0m. The number of plots within our owned land bank has been influenced by the re-planning exercise undertaken following our strategic focus back to family housing. The level of apartments and three storey housing has been reduced and, overall, plot numbers have reduced by 8%. Within our owned land bank as at 30 June 2009, we had 23 sites with planning not currently on sales release which represent a source of new outlets for Redrow. 

As at 30 June 2009, the net realisable value provision against land and work in progress was £319.4m (June 2008: £259.4m) with £270.5m against land and £48.9m against work in progress. The average plot cost of the owned land bank after NRV provision and taking into account all the plots in the Group's land bank was £23,000 (June 2008: £25,100). However, if the impact of the residual In the City apartment schemes, Debut product and social housing (to which we have allocated nil land value) is taken into account, the average plot cost of the balance of the land bank increases to £27,000 which is more indicative of the plot cost of future private legal completions.

Our forward land portfolio is an important long term source for Redrow. We look to secure sites under option which will provide a pipeline of potential future land supply, under which the purchase price is fixed by reference to a contractual discount to the open market value at the date of purchase. This discount recognises our skills in the promotion of land through the planning system. Fees and costs relating to the promotion of forward land are fully provided against as incurred so there is no associated balance sheet risk if the site is not subsequently developed. Option payments are also fully provided against as incurred and, as a consequence, there is no value relating to options included in the Group's net assets as at 30 June 2009.

We achieved notable success at a long held forward land site at Liverpool where we were granted an outline planning consent for 450 units in October 2008. This is now included in our current land bank. We also own forward land without a planning consent representing 400 plots (June 2008: 900 plots).

We have reviewed our forward land bank under option as at 30 June 2009 which amounted to 22,800 plots (June 2008: 26,150 plots). The reduction is in line with a fresh assessment of both viability and planning prospects.

Work in Progress 

The Group's focus during the first half of the financial year and continuing up to March 2009, has been on reducing stock levels and the construction of sold plots, or completing build to an appropriate point in the construction process. As a consequence of this action we successfully reduced our stock levels of completed homes by over 500 to 435 homes.  

In the nine months to March 2009 we built the equivalent of just 630 homes, excluding the Group's In the City and Regeneration apartment schemes. However, with evidence of greater stability in the housing market we increased construction activity more generally in the final quarter of our financial year with our construction output increasing to an annualised rate of 1,600 homes. This has continued into the new year and is now more in line with our budgeted completions.  

As at 30 June 2009, work in progress was £268.4m (June 2008: £368.0m), which includes £2.8m attributable to 26 owned part-exchange properties (June 2008: £13.7m, 92 properties). Part-exchange continues to represent a very small component of the Group's marketing proportion.

During the year, the sale of new build property using shared equity as an incentive became more prevalent in the market place. Whilst we had, historically, used deferred consideration and shared equity within our low average selling price Debut range, we had not previously used this across the business. In the year ended 30 June 2009 we did introduce this on a targeted basis as an aid to sell stock properties, supplemented by the Government's HomeBuy Direct scheme. As at 30 June 2009, receivables in respect of shared equity and deferred consideration incentives totalled £4.0m (June 2008: £3.5m). With the successful reduction in stock levels achieved in the last financial year, we have now largely withdrawn the shared equity incentive and its use is principally focused on Debut and HomeBuy Direct homes.

Creditors

Land creditors have, historically, represented an important source of funding for land purchases. However at the peak of the housing market it did become more difficult to obtain deferred payment terms. In the current weaker land market we expect to see more land purchases contain a larger element of payment deferral. This structure will assist in the Group's objective of increasing the speed of its capital turn and improving its return on capital employed.

As at 30 June 2009, land creditors had reduced to £53.4m (June 2008: £92.6m) of which £27.1m is due for payment within one year (June 2008: £68.5m). This reduction in land creditors and the associated land payments made during the year influenced the relatively modest reduction in net debt achieved during the period. In addition, the level of trade payables due within one year reduced significantly from £111.0m at June 2008 to £86.0m at June 2009. This movement, which absorbed cash generated by operations, was a function of the marked impact the slowdown in construction activity had on trade creditors. Redrow has endeavoured to abide, throughout the markets of 2008 and 2009, by agreed payment terms with its supplier and sub-contractor partners, recognising their important role to the business.

Net Debt and Cash Flow

Net debt reduced to £214.6m at 30 June 2009 (June 2008: £223.3m, December 2008: £269.1m). The pace of reduction in net debt has been managed over the last financial year to ensure that appropriate levels of headroom remain within the Group's banking covenants to allow investment into land and work in progress in the new financial year.

In the financial year ended 30 June 2009 there was a cash outflow from operations of £12.1m (2008: £21.6m inflow) and this reflected the operating loss for the year which was almost entirely offset by a net reduction in working capital. Cash generated from the reduction in inventory was £189.6m (2008: £232.8m). As a result of both payments in respect of land commitments and the marked reduction in build activity on site which resulted in a reduction in amounts owed to sub-contractors and suppliers, there was a cash outflow of £75.2m in respect of trade and other payables (2008: £46.7m).  

We continue to anticipate a cash inflow from operations during the course of the new financial year which is expected to lead to a reduction in net debt by 30 June 2010. As at 30 June 2009, there were 325 completed stock homes at the Group's In the City schemes at Hemisphere and Jupiter. Together with the 136 new homes nearing build completion in the Tower phase at the Regeneration scheme at Barking, there exists a continued opportunity to liberate cash from this element of work in progress. Land cash commitments for the new financial year at 30 June 2009 were at a lower level than the same stage last year with £35m of these commitments falling due for payment in the new financial year. Furthermore, the significant reduction in trade creditors as a result of the significantly lower level of construction activity in the financial year ended 30 June 2009 is also anticipated to reverse as build increases. 

The net cash inflow from operating activities was £7.4m (2008: £20.8m outflow) which reflected the receipt of £40.4m in tax, offset by interest paid of £20.9m.

Financing and Treasury Management

As a UK based house builder, the main focus of Redrow's financial risk management lies with the management of liquidity and interest rate risk. Financial management is conducted centrally using policies approved by the Board.

Liquidity and Facilities

Liquidity risks are managed through the regular review of cashflow forecasts and by maintaining adequate committed banking facilities to ensure adequate headroom.

During the year, in September 2008, the Group successfully concluded its bank refinancing to replace facilities which were due to mature in Autumn 2009. The new facilities consist of an unsecured £175m amortising term loan scheduled to be fully repaid by March 2011 and an 

unsecured £275m credit facility. The facilities agreed in September 2008 have a suite of covenants and pricing appropriate to the market conditions prevailing at that time and which are considered competitive today having been negotiated prior to the further significant tightening in the banking market which followed the collapse of Lehman Brothers.  

In addition to the committed facilities, the Group also has further uncommitted bank facilities which are used to assist in day to day cash management.

The Group keeps its facilities under constant review and maintains regular contact with its banks and advisors to ensure that its facilities remain appropriate to strategic and operational objectives and market conditions. 

Interest Rate Risk

The Group is exposed to interest rate risk as it borrows money at floating rates. The Group's interest rate risk arises primarily from long term borrowings and in order to manage the risk, the Group enters into simple risk management products, almost exclusively interest rate swaps. All interest rate swaps are sterling denominated and these are not used for speculative or trading purposes.

Pensions

The Group provides funded defined benefit pension arrangements and funded defined contribution arrangements within its pension scheme. The defined benefits section of the pension scheme is closed to new entrants.

The formal triennial valuation of the defined benefits section of the pension scheme as at 1 July 2008 was concluded in July 2009. As part of this process the Group recognised that, whilst the defined benefit pension arrangements were viewed by members as an attractive and valuable benefit, increasing costs arising from longer life expectancy, falling interest rates and poor returns on assets potentially made future funding unsustainable. After consultation with the active members of the defined benefit section of the scheme, it was agreed that from 1 July 2009 increases in pensionable salary will be limited to the lower of base salary increases, increases in inflation, or 2.5%. This action enabled the Group to keep the defined benefits section open to future accrual for current members whilst ensuring Group costs are appropriately controlled.

As at 30 June 2009, the Group financial statements showed a £2.8m surplus (2008: £0.2m deficit) in respect of the defined benefit section of the pension scheme, as calculated on an IAS 19 basis. Amounts credited against income in the year included a £14.5m curtailment benefit net of past service cost, as a result of the impact of the changes to scheme benefits and redundancies arising from the restructuring programme undertaken by the Group during the year.

Tax

During the year the Group received refunds on corporation tax previously paid of £40.4m. This reflected the refund of on-account corporation tax payments for the year ended 30 June 2008 and refunds arising from the carry back of losses which arose in the year ended 30 June 2008 against profits made and taxed in the year ended 30 June 2007.

As a consequence of the difficult trading conditions in the year and further net realisable value provisions, the Group reported a post tax loss for the year ended 30 June 2009. The Group's tax rate for the year was 28.7% and the expected effective rate for 2009/10 is 28.0%. A deferred tax asset is carried in relation to the pre tax losses at 28.0% for use against future profits and is considered to be fully recoverable.

Dividends

No dividends have been proposed in respect of the financial year ended 30 June 2009 (2008: 9.3p per share) and it is not currently envisaged that a dividend will be proposed in the new financial year. Once the housing market's recovery is more broadly based and the business has re-established a sustainable earnings stream, the Board will consider the resumption of dividend payments, maintaining a suitable coverage ratio.

People

We know that our objectives can only be achieved through the contribution of our people. Whilst we have had to downsize to match our overheads to the prevailing market conditions we have recognised the need to develop and motivate our remaining workforce to ensure we retain their skills for the upturn. It has therefore remained a key part of our strategy to continue to invest in quality training and development for our employees.

We have again provided training opportunities for all levels of employees. Our in-house training facility completed around 1,500 training days during 2008/2009, involving 631 employees. The fourth year of our Redrow Site Manager Accreditation Programme produced a further 5 Assistant Site Managers, bringing the total number of graduates to 36.

We are particularly pleased that Syd James, a successful Assistant Site Manager from the 2007 programme has been promoted to running his own site and was awarded an NHBC Quality Award this year.

We have, for the first time, worked with the NHBC to offer NVQ Level 4 to our Site Managers and the first group of 8 managers are progressing well through the programme.

Recognising the success of our partnership with the NHBC in achieving Construction NVQs, we are currently piloting both Levels 2 and 3 in the Sale of Residential Property for a group of 11 Sales Managers and Sales Consultants. This will build on the success of the in-house Sales Accreditation Programme and confirms the importance to Redrow of high quality customer service.

Health and Safety continues to be at the forefront of our business and we are delighted to report that Redrow has secured a Gold Award for the fourth year running from the Royal Society for the Prevention of Accidents (RoSPA).  Our total number of accidents reduced by 75% with 12 injuries (2008: 49) requiring reporting under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR).

We do of course remain disappointed that during our restructuring we have had to say farewell to many colleagues who have made a positive contribution to Redrow. We thank them for their past commitment and wish them success in future opportunities. We hope to re-employ as many of them as possible as market conditions improve. Our remaining employees recognise the changed landscape of the industry and we have implemented a pay freeze for the vast majority of them.

It is of course vital that we provide incentives to our employees to share in the future success of our business and we will continue to operate our SAYE Scheme which is open to all employees. Following shareholder approval we introduced an HM Revenue and Customs Approved 

Company Share Option Plan last year under which we awarded share options to Directors and Senior Managers within the business.

Summary

The future strategy of the business has been clearly defined: Redrow is returning to its historic strength in family housing built around a core range of housetypes. We have re-designed our product and are currently rolling out the New Heritage Collection across our developments in order to launch across the Group from 1 January 2010. We are replanning our owned land bank to increase the focus on family housing. We will look for opportunities to expand our land portfolio at appropriate financial returns in the new financial year and continue to keep our capital structure under review.  With the gradual recovery of the economy and the measures we have taken to set a new direction for our business we believe we are well placed to drive significant improvement to our future financial returns.

Consolidated Income Statement

		12 months ended 30 June
		2009 pre- exceptional item	2009  exceptional item	2009 Total	2008 pre- exceptional  item	2008 exceptional item	2008 Total
	Note	£m	£m	£m	£m	£m	£m
Revenue		301.8	-	301.8	650.1	-	650.1
Cost of sales		(296.4)	(103.2)	(399.6)	(529.6)	(259.4)	(789.0)
Gross profit/(loss)		5.4	(103.2)	(97.8)	120.5	(259.4)	(138.9)
Administrative expenses		(27.8)	6.6	(21.2)	(36.0)	-	(36.0)
Operating (loss)/profit before
financing costs		(22.4)	(96.6)	(119.0)	84.5	(259.4)	(174.9)
Financial income		3.8	-	3.8	4.5	-	4.5
Financial expenses		(25.4)	-	(25.4)	(22.5)	-	(22.5)
Net financing costs		(21.6)	-	(21.6)	(18.0)	-	(18.0)
Share of loss of joint ventures after
interest and taxation		(0.2)	-	(0.2)	(1.0)	-	(1.0)
(Loss)/profit before tax from
continuing operations		(44.2)	(96.6)	(140.8)	65.5	(259.4)	(193.9)
Income tax credit/(expense)	2	13.4	27.0	40.4	(19.5)	75.4	55.9
(Loss)/profit for the period from
continuing operations		(30.8)	(69.6)	(100.4)	46.0	(184.0)	(138.0)
Discontinued operations		-	-	-	(1.9)	-	(1.9)
(Loss)/profit for the period		(30.8)	(69.6)	(100.4)	44.1	(184.0)	(139.9)
(Loss)/earnings per share from
continuing operations
Basic earnings per share	4	(19.3p)		(62.8p)	28.8p		(86.3p)
Diluted earnings per share	4	(19.3p)		(62.8p)	28.8p		(86.3p)
(Loss)/earnings per share including
discontinued operations
Basic earnings per share	4	(19.3p)		(62.8p)	27.6p		(87.5p)
Diluted earnings per share	4	(19.3p)		(62.8p)	27.6p		(87.5p)

Consolidated Statement of Recognised Income and Expense

		12 months ended 30 June
		2009	2008
		£m	£m
Effective portion of changes in fair value of interest rate
cash flow hedges		(4.2)	(0.4)
Deferred tax on change in fair value of interest rate cash
flow hedges		1.2	0.1
Actuarial (losses) on defined benefit pension scheme		(11.9)	(8.3)
Deferred tax on actuarial (losses) taken directly to equity		3.3	2.3
Net (expense) recognised directly in equity		(11.6)	(6.3)
(Loss) for the period		(100.4)	(139.9)
Total recognised income and expense for the period		(112.0)	(146.2)

Consolidated Balance Sheet

			As at 30 June
			2009	2008
		Note	£m	£m
Assets
Intangible assets			0.3	0.4
Plant, property and equipment			14.5	22.7
Investments			2.1	2.0
Deferred tax assets			76.7	32.4
Derivative financial instruments			-	0.5
Retirement benefit surplus			2.8	-
Trade and other receivables			6.3	5.4
Total non-current assets			102.7	63.4
Non-current assets available for sale			3.9	-
Inventories		5	566.3	755.9
Trade and other receivables			13.9	13.5
Derivative financial instruments			-	0.8
Current income tax receivables			-	35.5
Cash and cash equivalents		8	17.5	127.1
Total current assets			601.6	932.8
Total assets			704.3	996.2
Equity
Issued capital		9	16.0	16.0
Share premium			58.7	58.7
Hedge reserve			(2.1)	0.9
Other reserves			7.9	7.9
Retained earnings			213.0	321.1
Total equity		10	293.5	404.6
Liabilities
Bank loans		8	165.2	337.5
Trade and other payables		6	26.3	24.1
Derivative financial instruments			0.7	-
Deferred tax liabilities			1.4	1.0
Retirement benefit obligations			-	0.2
Long-term provisions			8.9	2.1
Total non-current liabilities			202.5	364.9
Bank overdrafts and loans		8	66.9	12.9
Trade and other payables		6	135.3	213.8
Derivative financial instruments			2.2	-
Current income tax liabilities			3.9	-
Total current liabilities			208.3	226.7
Total liabilities			410.8	591.6
Total equity and liabilities			704.3	996.2

Consolidated Cash Flow Statement 

			12 months ended 30 June
			2009	2008
		Note	£m	£m
Cash flow from operating activities
Operating (loss) before financing costs			(119.0)	(174.9)
Depreciation and amortisation			2.6	2.1
Adjustment for non-cash items			(13.3)	(10.4)
Operating (loss) before changes in working capital
and provisions			(129.7)	(183.2)
(Increase)/decrease in trade and other receivables			(0.6)	13.7
Decrease in inventories			189.6	232.8
(Decrease) in trade and other payables			(75.2)	(46.7)
Increase in employee benefits and provisions			3.8	5.0
Cash (outflow)/inflow generated from operations			(12.1)	21.6
Interest paid			(20.9)	(18.0)
Tax received/(paid)			40.4	(24.4)
Net cash from operating activities			7.4	(20.8)
Cash flows from investing activities
Acquisition of plant, property and equipment			(0.4)	(2.4)
Proceeds from sale of plant, property and equipment			2.1	3.1
Interest received			2.7	1.8
Payments to joint ventures - continuing operations			(0.3)	(1.0)
Payments from joint ventures - discontinued operations			-	0.6
Net cash from investing activities			4.1	2.1
Cash flows from financing activities
Issue of bank borrowings		7	218.0	266.5
Repayment of bank borrowings		7	(337.5)	(99.0)
Issue costs of bank borrowings			(5.6)	-
Dividends paid		3	-	(27.3)
Proceeds from issue of share capital			-	0.6
Net cash from financing activities			(125.1)	140.8
(Decrease)/increase in net cash and cash equivalents			(113.6)	122.1
Net cash and cash equivalents at the beginning of the
period			114.2	(7.9)
Net cash and cash equivalents at the end of the period		8	0.6	114.2

NOTES 

1.     Accounting Policies

a.    Basis of Preparation

The above results and the accompanying notes do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. 

The auditors have reported on the Group's statutory accounts for the year ended 30 June 2009 under s495 of the Companies Act 2006, which do not contain a statement under s498 (2) or s498(3) of the Companies Act 2006 and are unqualified. The auditors have reported on the Group's statutory accounts for the year ended 30 June 2008 under s235 of the Companies Act 2006, which do not contain a statement under s237(2) or s237(3) of the Companies Act 1985 and are unqualified. The statutory accounts for the year ended 30 June 2008 have been delivered to the Registrar of Companies and the statutory accounts for the year ended 30 June 2009 will be filed with the Registrar in due course. 

The audited consolidated financial statements from which these results are extracted have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, IFRIC interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The accounting policies set out below represent an extract of the policies set out in the consolidated financial statements. The principal accounting policies have been applied consistently in the periods presented.

b.    Exceptional Items

Exceptional items are those which, in the opinion of the Board, are material by size or nature,

non-recurring and of such significance that they require separate disclosure.

Exceptional items are summarised below:

		2009	2008
	Note	£m	£m
Cost of sales
NRV provision inventories (i)	5	96.5	259.4
Onerous contract provision (ii)		6.7	-
		103.2	259.4
Administrative expenses/(credits)
Redundancy and termination costs (iii)		4.9	-
Board restructuring costs (iv)		1.8	-
Impairment- surplus offices (v)		1.2	-
Pension curtailment gain (vi)		(14.5)	-
		(6.6)	-
Total		96.6	259.4

(i)    This represents further provisions in respect of the net realisable value of inventories.

(ii)    The Group successfully renegotiated a number of contracts during the year ended 30 June 2009. £6.7m has been provided in respect of contracts in place at 30 June 2009 viewed as onerous.

(iii)    This represents the redundancy and termination costs resulting from the significant reduction in employee headcount during the year ended 30 June 2009. It includes the compensation payment made to Neil Fitzsimmons in relation to his stepping down as Chief Executive.

(iv)    This represents the Company's advisory costs in respect of the Board restructuring agreed in March 2009 and in relation to Board changes following Steve Morgan's return.

(v)    As a result of the restructuring during the year ended 30 June 2009, the Group identified four office properties as surplus to requirements and £1.2m was provided in relation to the carrying value of these properties identified as non-current assets available for sale.

(vi)    This curtailment gain includes £3.4m as a result of the redundancies of a significant number of defined benefit pension scheme members during the year ended 30 June 2009 and £11.6m as a result of the pensionable salary capping agreement. This is offset in part by a £0.5m past service cost.

c.    Inventories

Inventories are stated at the lower of cost and net realisable value less cash on account.

Cost comprises land and associated acquisition costs, direct materials and subcontract work, other direct costs and those overheads (based on normal operating capacity) that have been incurred in bringing the inventories to their present location and condition, excluding borrowing costs.

In order to better assess net realisable value as at 30 June 2009, the Group has differentiated its inventories into two categories:

    i)    Type 1 - land where generally the construction of homes had commenced at the year end and which was generally short to medium term in its development horizon. This category also includes undeveloped land on which housebuild had not commenced at 30 June 2009 but which the Group believes it is more likely to develop than to sell undeveloped.

    ii)    Type 2 - land where housebuild had not commenced and land could be identified as a distinct parcel. This land is more generally medium to long term in time horizon and the Group believes it is more likely to be sold undeveloped.

Net realisable value for land where construction of homes had commenced at the year end (Type 1) was assessed by estimating selling prices and cost (including sales and marketing expenses), taking into account current market conditions.

The net realisable value of land where housebuild had not commenced (Type 2) and is more likely to be sold undeveloped was assessed by re-appraising the land using current selling prices and costs for the proposed development and assuming an appropriate financial return to reflect the current housing market conditions and the prevailing financing environment. This net realisable value represents valuing the land at the amount the Group estimates it could be sold for at the balance sheet date less estimated costs necessary to make the sale.

This provision will be closely monitored for adequacy and appropriateness as regards under and over provision to reflect circumstances at future balance sheet dates. This will include consideration of the continued appropriateness of the allocation of sites between Type 1 and Type 2. Any material change to the underlying provision will be reflected through cost of sales as an exceptional item.

2.    Income Tax (credit)

	12 months ended 30 June
	2009 pre-exceptional  item	2009 exceptional item	2009 Total	2008 Total
	£m	£m	£m	£m
Current year
UK Corporation Tax at 28.0%
(2008: 29.5%)	-	-	-	(27.2)
(Over) provision in respect of prior year	(1.0)	-	(1.0)	(0.1)
	(1.0)	-	(1.0)	(27.3)
Deferred tax
Origination and reversal of temporary
differences	(12.4)	(27.0)	(39.4)	(28.6)
Total income tax (credit) in income statement	(13.4)	(27.0)	(40.4)	(55.9)
Reconciliation of tax (credit) for the year
Loss for the year	(44.2)	(96.6)	(140.8)	(193.9)
Tax on total loss at 28.0% (2008: 29.5%)	(12.4)	(27.0)	(39.4)	(57.2)
(Over) provision in respect of prior year	(1.0)	-	(1.0)	(0.1)
Tax effect of share of losses in joint
ventures	-	-	-	0.4
Expenses not deductible for tax purposes
net of rolled over capital gains	(0.1)	-	(0.1)	0.1
Short term temporary differences	0.1	-	0.1	0.9
Tax (credit) for the year	(13.4)	(27.0)	(40.4)	(55.9)

3.    Dividends

			12 months ended 30 June
			2009	2008
			£m	£m
Amounts recognised as distributions to equity
holders in the period:
2007 final dividend paid of 7.8p per share			-	12.5
2008 interim dividend paid of 9.3p per share			-	14.8
			-	27.3

4.    (Losses)/earnings per share

The basic (losses)/earnings per share calculation for the year ended 30 June 2009 is based on the weighted number of shares in issue during the period of 160.0m (2008: 159.9m) excluding those held in trust under the Redrow Long Term Incentive Plan, which are treated as cancelled.

Diluted earnings per share has been calculated after adjusting the weighted average number of shares in issue for all potentially dilutive shares held under unexercised options.

12 months ended 30 June 2009

	Losses	No. of shares	Per share
	£m	millions	pence
Basic earnings per share for continuing operations
pre-exceptional item	(30.8)	160.0	(19.3p)
Effect of share options and SAYE	-	-	-
Diluted earnings per share for continuing operations	(30.8)	160.0	(19.3p)

	Losses	No. of shares	Per share
	£m	millions	pence
Basic earnings per share for continuing operations
after exceptional item	(100.4)	160.0	(62.8p)
Effect of share options and SAYE	-	-	-
Diluted earnings per share for continuing operations	(100.4)	160.0	(62.8p)

12 months ended 30 June 2008

	Earnings	No. of shares	Per share
	£m	millions	pence
Basic earnings per share for continuing operations
pre exceptional item	46.0	159.9	28.8p
Effect of share options and SAYE	-	-	-
Diluted earnings per share for continuing operations	46.0	159.9	28.8p

Basic earnings per share including discontinued operations is 27.6p (diluted - 27.6p).

	Losses	No. of shares	Per share
	£m	millions	pence
Basic earnings per share for continuing operations
after exceptional item	(138.0)	159.9	(86.3p)
Effect of share options and SAYE	-	-	-
Diluted earnings per share for continuing operations	(138.0)	159.9	(86.3p)

Basic earnings per share including discontinued operations is (87.5p) (diluted - (87.5p)).

5.    Inventories

		As at 30 June
		2009	2008
		£m	£m
Land for development		299.9	385.4
Work in progress		251.1	350.6
Stock of showhomes		15.3	19.9
		566.3	755.9

Of the net realisable value provision of £319.4m (2008: £259.4m), £270.5m (2008: £223.4m) is attributed to land and £48.9m (2008: £36.0m) is attributed to work in progress.

The net realisable value provision movement is analysed below:

	Type 1	Type 1	Type 2	Type 2	Total	Total
	£m	£m	£m	£m	£m	£m
As at 1 July 2008		41.3		218.1		259.4
Utilised during the year		(23.8)		(12.7)		(36.5)
Created during the year	46.9		56.5		103.4
Reclassified during the year	139.4		(141.9)		(2.5)
Released during the year	(0.9)		(3.5)		(4.4)
		185.4		(88.9)		96.5
As at 30 June 2009		202.9		116.5		319.4

6.        Land Creditors    

        (included in trade and other payables)

		As at 30 June
		2009	2008
		£m	£m
Due within one year		27.1	68.5
Due in more than one year		26.3	24.1
		53.4	92.6

7.    Borrowings and loans

		12 months   ended 30 June
		2009	2008
		£m	£m
Opening net book amount		337.5	170.0
Issue of bank borrowings		218.0	266.5
Repayment of bank borrowings		(337.5)	(99.0)
Closing net book amount		218.0	337.5

At 30 June 2009, the Group had total unsecured bank borrowing facilities of £455.5m, representing £425.0m committed facilities and £30.5m uncommitted facilities.

8.        Analysis of net debt

		As at   30 June
		2009	2008
		£m	£m
Cash and cash equivalents		17.5	127.1
Bank overdrafts		(16.9)	(12.9)
		0.6	114.2
Bank loans - current liabilities		(50.0)	-
		(49.4)	114.2
Bank loans - non-current liabilities		(165.2)	(337.5)
		(214.6)	(223.3)

9.    Share capital

		As at   30 June
		2009	2008
		£m	£m
Authorised
330,000,000 ordinary shares of 10p each		33.0	33.0
Allotted, called up and fully paid		16.0	16.0

		Number of ordinary
		shares of 10p each
Movement in the period was as follows
At 1 July 2008			160,012,013
Share options exercised			535
At 30 June 2009			160,012,548

10.    Reconciliation of movements in consolidated equity

		12 months ended   30 June
		2009	2008
		£m	£m
(Loss) for the period		(100.4)	(139.9)
Dividends on equity shares		-	(27.3)
Other recognised income and expense relating
to the period (net)		(11.6)	(6.3)
Shares issued at a premium		-	0.6
Movement in LTSIP/SAYE		0.9	(0.3)
Net decrease in equity		(111.1)	(173.2)
Opening equity		404.6	577.8
Closing equity		293.5	404.6

11.    Shareholder Enquiries

The Registrar is Computershare Investor Services PLC. Shareholder enquiries should be 

addressed to the Registrar at the following address:

Registrars Department

The Pavilions
Bridgwater Road
Bristol

BS99 6ZZ

12.    Annual General Meeting

The Annual General Meeting of Redrow plc will be held at St. David's Park Hotel, St. David's Park, Flintshire on 4 November 2009, commencing at 12.00 noon. A copy of this statement is available for inspection at the registered office.

 

END

 

 

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