Housebuilders scrap dividends as uncertainty grows

Housebuilder Redrow has warned that measures to slow the spread of the coronavirus will mean an “inevitable” hit to sales and output in the coming weeks and has cancelled its dividend. In a stock exchange update, the company said trading during the 12 weeks to 20 March had been resilient. But it added that during the past week visitors to sites were “substantially down” and the cancellation rate rose. “As the government’s escalating measures to contain the spread of the virus take effect, it is inevitable our sales rate will be seriously impaired over the coming weeks and build output will be significantly affected by labour and material shortages,” the company said. “We also expect outlet openings to slip as local authorities delay planning committee meetings.” Redrow said it has £250m in committed funding facilities and expects its net debt of £116m to fall in the coming months as new homes complete. But given the market uncertainty, the company cancelled its 10.5p interim dividend, saving it £37m. Separately, Scottish housebuilder Springfield Properties said in its own update that although the virus has not yet affected its completions or reservations, it has noted a request by first minister Nicola Sturgeon to close construction sites across Scotland. “Further guidance is expected to be given by the Scottish government on this matter and the group will update the market in due course,” it added. Springfield has also scrapped its dividend of 1.4p, or a total of £1.4m, citing “the rising level of uncertainty as to how the situation will develop”.   To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette