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Barratt Redrow PLC on Tuesday predicted adjusted profit in line with market expectations, though home completions fell short of its guidance, and it warned that UK planning reforms are taking longer than hoped to take effect.
The Leicestershire-based housebuilder also announced plans for a £100 million share buyback. The stock was down 8.4% to 381.40 pence in London on Tuesday morning, the worst performer in the FTSE 100 index, which itself was marginally higher.
Total home completions for the financial year that ended June 30 amounted to 16,656, down from last year’s 17,972. The comparison figure includes houses built by Redrow prior to its acquisition by Barratt in the autumn of last year. Barratt Developments alone achieved 14,004 completions in financial 2024.
Barratt Redrow said the decline in completions reflected ‘fewer international and investor completions than expected’ in its London business.
Barratt Redrow had predicted home completions between 16,800 and 17,200 for the financial year just ended.
‘We have seen some improvement in mortgage market competition and availability, but underlying private sales activity has remained sensitive to consumer caution, driven by the economic backdrop and the ongoing affordability challenges faced by homebuyers. The London housing market has been particularly challenging with weak demand from both domestic and international homebuyers,’ Barratt Redrow said.
For financial 2026, Barratt Redrow anticipates total home completions in a range of 17,200 to 17,800, including around 600 completions from joint ventures.
Barratt Redrow said recent planning reforms in the UK are ‘taking time to be fully embedded at a local planning authority level and continuing adverse planning decisions and delays mean that we now anticipate average sales outlets, including JVs, will be broadly flat in FY26.’
In financial 2025, the company operated from an average of 405 active sales outlets.
Barratt Developments acquired housebuilding peer Redrow in August of last year, beginning its integration in October.
Chief Executive David Thomas said: ‘We are already seeing tangible benefits from the Redrow acquisition, with cost synergies being delivered ahead of schedule, a new divisional structure in place and revenue synergies progressing well.’
Barratt Redrow expects to report adjusted pretax profit, before Redrow purchase price allocation adjustments, in line with the market view. It puts consensus at £582.6 million.
‘Integration is continuing at pace with our new divisional structure in place. We have confirmed £69 million of cost synergies against our target of at least £100 million. Approximately £15 million of cost synergies are included in FY25 profits with a further benefit of £45 million expected in FY26,’ it said.
But the company expects to take adjusted item charges of around £229 million in financial 2025 with estimated second half charges consisting of legacy property charges of £98 million, acquisition-related reorganisation and restructuring costs of £52 million, and Competition & Market Authority commitment costs of £29 million. The CMA cleared the merger of Barratt and Redrow in October last year but demanded some undertakings to alleviate competition concerns in Shropshire.
CEO Thomas said the recent years saw a solid performance against a ‘challenging’ market backdrop.
Net private reservation rate per active outlet per week in the financial year increased by 16% to 0.64 from the aggregated performance of 0.55 for Barratt and Redrow in the comparable period.
The company also announced a share buyback up to £100 million to be completed by the end of June next year.
The company intends to declare an ordinary dividend, in line with stated policy, with dividend cover of 1.75 times adjusted financial 2025 earnings per share before planning performance agreement fair value adjustments.
Barratt Redrow will release its full annual results on September 17.
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