Redrow shares up on new debt facility

By Simon Meads

LONDON (Reuters) - Housebuilder Redrow said it had secured a new 450 million pound debt facility to 2011, sending its shares up more than 9 percent.

The company also announced a near halving in annual profit and said it would not pay a final dividend in order to preserve cash following the sharp decline in the housing market, which it expects to remain tough for the foreseeable future.

Redrow said in its results statement on Tuesday that it had agreed a new covenant package appropriate to the current trading environment.

Chief Executive Neil Fitzsimmons told Reuters the effective interest rate on its debt was around 6.5 percent last year, but was probably "going to move up a couple of percent for 2008-09".

Pretax profit before exceptional items was 65.5 million pounds in the year to end-June, down from 121.1 million the year before, on revenues down 22 percent to 650 million pounds.

Redrow said it had reviewed the value of its land and work under progress, resulting in a 259.4 million pound exceptional charge.

In a note to investors, Hargreaves Landsdown analyst Keith Bowman said Redrow had counterbalanced the negative news of landbank writedowns with the good news regarding the negotiation of new banking facilities.

Redrow shares stood 9.1 percent higher at 207 pence at 11:30 a.m.