Barratt Redrow delivers profit beat, but outlook still cautious

(Sharecast News) - Housebuilder Barratt Redrow delivered annual profits ahead of forecasts despite completions missing its initial guidance range, but pointed to ongoing market challenges and additional uncertainties ahead of the upcoming Budget. Chief executive David Thomas pointed to "limited growth in FY26", with private homebuyer confidence still "fragile given the continuing affordability challenges".

He said that, while the long-term sector fundamentals remain compelling, "it is vital that government policy is focused on reforming the planning system, removing barriers to investment and supporting purchasers, particularly first-time buyers, if the sector is to build the homes the country needs".

Adjusted pre-tax profit totalled £591.6m over the 12 months to 29 June, up 26.8% year-on-year and ahead of the £582.8m consensus estimate, helped by margin improvement and £20m of cost synergies around double the figure initially forecast.

Total home completions were up 18.3% at 16,565, though below the 16,800-17,200 guidance range given at its half-year results in February. However, revenues still surged 33.8% year-on-year to £5.58bn.

Barratt Redrow declared a final dividend of 12.1p, lifting the total dividend by 8.6% to 17.6p per share, compared with the 16.8p expected by analysts.

Looking ahead, the net private weekly reservation rate was broadly flat on last year at 0.55, while forward sales totalled 10,350 homes, down from 10,398, but at a value of £3.14bn, up from £3.02bn the year before.

The company expects to deliver total home completions of 17,200-17,800 over the current financial year.

"This also assumes a normal autumn selling season, our current expectation, however the extended period through to the Budget and related uncertainties around general taxation and that applicable to housing, has introduced additional risk," the company said.