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Investing.com -- Barratt Redrow (LON:RDW) said it expects to deliver full-year 2025 (FY25) profit in line with market expectations and highlighted progress in its Redrow integration.
However, the U.K. homebuilder’s FY26 guidance and reported home completions fell short of expectations, as renewed affordability concerns weighed on private buyer demand, pushing its shares down over 8% in early trading.
Total (EPA:TTEF) home completions declined 7.8% to 16,565, slightly below its guidance of 16,800 and 17,200 homes, due to weaker-than-expected activity in London, particularly from international buyers and PRS investors.
The average selling price (ASP) rose to approximately £344,000, with private ASP up nearly 3% to £380,000.
Reservation rates improved, reaching 0.64 net private reservations per outlet per week, up from 0.55A in FY24. Forward sales rose sharply to £2.92bn, equating to 9,835 homes, compared to £2.64bn a year earlier.
The group operated from an average of 405 active outlets in FY25 and expects this to remain broadly flat in FY26.
Barratt Redrow expects home completions in fiscal 2026 to range between 17,200 and 17,800 units, including 600 from joint ventures, or 16,600 to 17,200 excluding JVs. The midpoint of that guidance is about 3% below consensus expectations of 17,377, according to RBC Capital Markets.
The company also expects its average number of sales outlets to remain broadly flat next year, citing planning delays, compared to previous expectations for 8% growth.
"The Group faces headwinds as it enters FY2026. Planning delays will temper site numbers which implies volumes in FY2026 will be lower than our previous expectations," RBC Capital Markets analysts commented.
"We expect the share price to be weak today as the market reacts to lower guidance for FY2026," they added.
The integration of Redrow is progressing well, the company said. The company has confirmed £69m in cost synergies, ahead of its target of at least £100m. Around £15m was realised in FY25, with another £45m expected in FY26.
Adjusted items for FY25 totaled £229m, including £98m in new legacy property charges and a £29m CMA-related commitment.
Net cash stood at £772m at year-end, with £700m in undrawn credit. Dividend policy remains unchanged, with a buyback of £50m completed in H2 and another £50m planned.
“Against a challenging market backdrop, we have delivered a solid performance this year,” said CEO David Thomas, and added that the company is “already seeing tangible benefits from the Redrow acquisition.”
He reaffirmed the group’s medium-term ambition to build 22,000 homes annually, citing the combined strength of its three brands, robust land pipeline, and operational scale.
Barratt Redrow also announced that Senior Independent (LON:IOG) Director Jock Lennox will step down after the annual general meeting on 5 November 2025. He will be succeeded by Nicky Dulieu as Senior Independent Director and Jasi Halai as Audit & Risk Committee Chair.
Geeta Nanda will chair the new Sustainability Committee from 1 August, while Nigel Webb will take over as Chair of the Safety, Health and Environmental Committee.