Earnings call transcript: Barratt Redrow Q2 2025 shows resilient cash position

Barratt Redrow PLC reported its second-quarter earnings for 2025, highlighting a strong balance sheet despite challenges in home delivery and market conditions. The company recorded a net cash position of £772 million and announced the commencement of a £100 million share buyback program. According to InvestingPro data, the company maintains more cash than debt on its balance sheet, with a healthy current ratio of 4.53. The stock, however, saw a slight dip of 0.6% to 377.3, reflecting cautious investor sentiment amid a challenging London market and rising build costs.

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Key Takeaways

• Barratt Redrow delivered 16,565 homes, falling short of its guidance.
• The company maintains a robust cash position with £772 million.
• A £100 million share buyback program is set to begin.
• Integration of RedRo acquisition is complete, with significant cost synergies realized.
• The London market remains challenging due to affordability issues.

Company Performance

Barratt Redrow’s performance in the second quarter of 2025 was mixed. While the company maintained a strong cash position and completed the integration of its RedRo acquisition, it delivered fewer homes than anticipated. The challenging market conditions, particularly in London, where affordability is a significant issue, have impacted performance. Nevertheless, the company’s strategic initiatives, including a share buyback and targeted home delivery, underscore its resilience.

Financial Highlights

• Delivered homes: 16,565, below guidance.
• Net cash: £772 million.
• Upcoming share buyback: £100 million.
• Cost synergies from RedRo acquisition: Over two-thirds realized.

Market Reaction

Barratt Redrow’s stock price fell by 0.6% to 377.3 following the earnings release. The stock has experienced significant pressure, down nearly 11% in the past week and trading at a P/E ratio of 35.37. InvestingPro analysis indicates the stock is in oversold territory, with a notable 4.59% dividend yield. The stock is trading near its 52-week low, reflecting investor caution amid the company’s missed home delivery target and ongoing challenges in the housing market. The slight dip in stock price suggests a tempered reaction from investors, who may be weighing the company’s strong cash position against market uncertainties.

Outlook & Guidance

Looking ahead, Barratt Redrow is targeting the completion of 22,000 homes annually from its 32 divisions and 500 outlets. With revenue growth of 4.78% in the last twelve months and analysts projecting continued sales growth, the company expects build cost inflation to range between 1-2% in FY 2026 and aims to achieve £45 million in cost synergies. The company is also focusing on consumer incentives and anticipating that planning reforms will positively impact the market.

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Executive Commentary

CEO David Thomas expressed confidence in the company’s medium-term targets despite current challenges. He stated, "We are targeting the delivery of 22,000 homes a year from 32 divisions and around 500 outlets." He also acknowledged the temporary nature of planning delays, emphasizing the company’s commitment to achieving its goals.

Risks and Challenges

• Supply chain disruptions could impact build timelines.
• Market saturation in certain regions may affect sales.
• Macroeconomic pressures, including interest rate changes, could influence buyer affordability.
• Rising build costs may squeeze margins.
• Planning delays could hinder project completions.

Q&A

During the earnings call, analysts inquired about the company’s strategies to overcome planning delays and the impact of potential legislative improvements. Questions also focused on the London market’s challenges and the company’s approach to building safety provisions, which total £229 million. Executives addressed these concerns by highlighting ongoing efforts to manage overhead inflation and improve mortgage market conditions.

Full transcript - Barratt Redrow PLC (BTRW) Q4 2025:

Conference Moderator: Hello, and welcome to the Barrett RedRoad PLC Full Year Trading Update Conference Call. Today’s call is being recorded. I will now hand you over to David Thomas, Group Chief Executive Officer, to begin today’s conference. Please go ahead, sir.

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: Good morning, everyone, and thank you for joining us on our full year trading update call. Here with me this morning, as usual, I have Mike, our CFO. And first of all, I’d like to start by thanking all of our employees, subcontractors and our suppliers for their continued commitment and hard work. In February, at our Capital Markets Day, we set out our medium term guidance and our strategy for getting there. As a reminder, using the strength of our three leading brands, our land pipeline and our operational experience and expertise, we are targeting the delivery of 22,000 homes a year from 32 divisions and around 500 outlets.

Whilst we have experienced some temporary delays on completions and planning in recent months, we have delivered adjusted profit before tax in line with consensus, and we remain confident in our medium term targets and in a long term demand for our high quality homes. So starting with trading. On private reservation rates, we were comfortably ahead of last year on both a reported and aggregated basis. As guided, we operated from an average of four zero five active sales outlets across the year. While the government’s national planning reforms are positive, they are yet to come into law, and we have continued to see some planning delays at a local level.

As a result, several outlets forecast to open in the 2026 have been pushed into the first half of FY twenty twenty seven. So we expect a broadly flat outlet position in FY twenty twenty six compared to FY twenty twenty five. However, these are temporary delays, and we remain confident in our medium term target of completing 22,000 homes per year across around 500 active sales outlets. We delivered 16,565 homes across the year, two thirty five homes below our guidance range. This is a short term timing issue, which does not impact our medium term guidance and broadly was due to 300 fewer completions than expected of PRS and multiunit sales in London.

These homes will be delivered in FY 2026. Meanwhile, we are pleased that we have delivered adjusted profit before tax in line with consensus, which is testament to our team’s commitment to drive efficiencies and cost synergies. We expect completions in FY 2026 will be between 234,800, helped by our order book, which is up over 4% on last year, but tempered by the challenges that I’ve mentioned in the planning system and the broadly flat sales outlet position. The Retro integration is progressing well with more than twothree of the £100,000,000 cost synergies target already confirmed. Progress is also being made on revenue synergy sites.

We have already submitted 16 of the 45 identified incremental outlets for planning approval, five of which have already been granted. As demonstrated by these positive outcomes on both cost and revenue synergies, our teams are making rapid and meaningful progress towards our targets. In line with our previous guidance, we expect build cost inflation to be around 1% to 2% in FY 2026, inclusive of procurement synergy savings. In FY 2025, our charge in relation to adjusted items will be approximately GBP $229,000,000. Around

Mike, Chief Financial Officer, Barrett RedRoad PLC: GBP

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: 102,000,000 of these costs relate to the retro transaction itself and the subsequent reorganization and restructuring taking place to unlock cost synergies. We are also recognizing our CMA commitments charge of GBP 29,000,000. And the remaining GBP 98,000,000 is weighted to legacy property provision charges, of which there are really two key points to draw out. The majority of the provision charge is centered on two developments. The first is in our southern region, where a fire safety issue has been identified in four buildings, accounting for £80,000,000 of the provision uplift.

The second is related to a large site in London, where action is already being taken and where an uplift in the provision of GBP 18,000,000 is required to complete the remediation. In addition, as we flagged at the half year, we have been reviewing the design of concrete frames at RedRoll’s legacy properties given our previous experience in this area. This review has resulted in the identification of five developments, which are now in scope for investigation. And we have made an adjustment of $106,000,000 net of deferred tax, which under IFRS three creates a fair value adjustment at the acquisition date. We are tackling these problems head on.

And as ever, our Building Safety Unit is working hard to ensure all effective buildings are assessed and remediated diligently and effectively. We are also very focused on recovering costs from third parties in respect of issues around fire safety and reinforced concrete frames. Our successful Supreme Court case in May has clarified the responsibility of companies in the supply chain, and we will seek to recover costs wherever possible. We finished the year with a strong balance sheet and net cash of $772,000,000. As announced in February, the next tranche of our share buyback program of at least 100,000,000 per annum will commence shortly.

Our commitment to industry leading quality and service has remained at the heart of what we do and is vital with a more challenging market backdrop. Once again, our site managers won more Pride and the Job Awards for the highest standards in homebuilding and build quality than any other housebuilder for the twenty first consecutive year, with 115 awards across the business. And for a sixteenth year, we have been recognized as a five star housebuilder, further extending our unmatched record. So to conclude, despite the shortfall in completion numbers, the financial performance of the business has remained solid, and we start FY 2026 in a strong position. We are already seeing benefits from the Redro acquisition, with cost synergies being delivered ahead of schedule, a new divisional structure in place and revenue synergies progressing well.

We look forward to the new planning legislation, unlocking permissions at a local level, and we continue to drive growth over the medium term. We lead the industry on customer service and build quality, delivering high quality developments across our three leading brands, which in turn put us in a unique position to rapidly accelerate volume in the medium term. Thank you, and we will now be very happy to take questions.

Conference Moderator: Thank And up first, we have a question from Ainsley Lammon from Investec.

Ainsley Lammon, Analyst, Investec: Just two questions for me, please. First of on the planning, just a bit more color, if you could, on what’s actually kind of been frustrating there, where the visibility was. Obviously, you targeted getting back to kind of FY ’twenty four sites. And looking forward, when would you expect some of those kind of frustrations and obstacles to lift? Is it the legislation being passed?

I mean when should we expect the planning to really start to ease on the ground? And then the second question, just on I think you say in the statement, you think there’s some need for demand side support to ease the constraints of the private homebuyers. Just wondered what you meant by that explicitly. Obviously, you’ve had the mortgage guarantee scheme be announced recently this week. Any views on that?

Do you think that’s sufficient? Or do you think the market needs more on the demand side? Just interested to hear your views there.

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: Okay. Thank you. And, Ainsley, I’ll just cover both of those. So I think in terms of planning, really, positive thing is, and we’ve said previously, that we see that the planning changes that the government are proposing are very positive through the national planning policy framework and through the planning and infrastructure bill. So these are very, very positive changes, but the reality is that the planning and infrastructure bill is not yet in law and won’t be in law until the autumn of this year.

So we would then expect there to be a fairly rapid rapid improvement. And I think if you go from a July start in 2024, the autumn is probably a little later than we would have anticipated as we came through 2024. But generally, the direction of travel is positive. For local authorities beyond those legislative changes, they have no real reason to make changes at this point in time. And therefore, we have seen delays in terms of where we expected to receive planning approvals to allow us to then get on-site.

And as we outlined in the statement this morning, we see that impacting FY 2026 in terms of delivery, but clearly, it’s a delayed effect into FY ’27. In terms of demand side support, look, we’ve said that there is a case for a government backed demand side support, But we recognize that, that is the decision of the government and therefore two things. First of all, that is largely around affordability and therefore, there are challenges for the consumer, particularly in areas like London and the Southeast. I think for ourselves, we recognize that there’s got to be self help from the industry, and we previously outlined the offers that we’re putting in place for consumers. So for example, deposit match.

We continue to look at whether we can do anything from a shared equity point of view, And we push hard for second and subsequent time bars in terms of our part exchange offer. So we recognize that those offers and incentives are very, very important for us to have for our potential customers. And

Conference Moderator: we’re moving on to a question from Peter Arjose Adejon from Morgan Stanley. Please go ahead.

Peter Arjose Adejon, Analyst, Morgan Stanley: Thank you. Good morning. I just have two questions. The first is just around in terms of the building blocks for FY ’twenty six. So you’re guiding to roughly flat volumes in FY ’twenty six and then we see house price and build cost inflation offsetting each other.

There are puts and takes on earnings into next year. Synergies are positive, but then some costs on National Insurance. So can you just help us with the building blocks for FY 2026 profit before tax? Is there scope to grow this modestly year on year? And then the second question is just around the building safety provisions.

So if you could just help to talk in detail about these provision increases and help us to understand if there are other potential costs we need to think about. Maybe in other words, is this a precursor of more to come perhaps? Or what underpins your confidence that this is very discrete to these sites you’ve identified? Thank you.

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: Good morning. Thank you. And I think Michael will take both of those questions.

Mike, Chief Financial Officer, Barrett RedRoad PLC: Good morning, Peter. Thanks for those. I mean, think on the first point on FY 2026, you’ve actually done quite a good job of outlining the building blocks there. So if we think about volumes, clearly, we’ve delivered just over 16,500 homes this year. And our guidance for next year is between 234,800.

So at the midpoint, that would be an uplift of about 1,000 homes. And really, you think about that, given flat outlet numbers and we’re not really expecting any change in sales rates in terms of market demand, really that uplift will come partly from the units that we’ve rolled over that David talked about earlier from FY twenty twenty five into FY 2026. And we also have the benefit of twelve months of REDRA in our numbers in FY 2026 compared to 10 for the current year. So again, that gives us a bit of an uplift there. So that’s the volume side.

As you say on house price inflation, where we’ve been seeing in the spring underlying house price inflation running at about 1%, I think that has softened slightly as we’ve come into the end of the year, so probably running slightly below 1% now. And in terms of build cost inflation, our guidance at 1% to 2% is, you know, sort of still in place. That’s still how we see it coming through. That does include some modest benefits from procurement synergies in the build cost inflation numbers. But to be honest, in FY 2026, that is very modest.

It’s only a few basis points really. But we would expect that, that will broadly play a draw. And then as you rightly say, we expect an incremental GBP 45,000,000 of cost synergies coming through that will be offset. Obviously, we’ll have a full year of RedRow overhead. We’ll have the national insurance annualization in that number as well.

So you can sort of put those building blocks in place coming down from volume and take a view on what the profit before tax number will be. And so then moving on to provisions, there are really, I guess, three moving parts in what we’ve announced this morning. But the first point I’d make is that in the overall portfolio that we’ve previously been provided for, actually the cost position on that portfolio has been stable through the year. So we haven’t seen material movements in that portfolio. And of the sort of four zero eight buildings that we have within that active portfolio, about a third of those buildings are in the process of closing down the remediation where we’ve actually been through the process and we’re coming out the other end.

So I think on the core, we’re actually, you know, we’re making good progress and we have a good handle on the costs there. There are three things that have happened in the year that we’re discussing this morning. So the first is the development down on the South Coast where we’ve had a fire risk assessment done by the building owner during the second half and that showed us that some remediation work is required about development of four buildings. Now we estimate the cost of that work to be about £80,000,000 and from the work we’ve done, we’ve looked at the, you know, the build typology, the designers, the contractors and that kind of thing and we think that the particular characteristics of that development means that there’s no wider issue in the portfolio that is contained in that one development. The second movement is $18,000,000 which is in relation to development in South London, where we were already doing remedial work both for fire safety and reinforced concrete frame and really the scope and cost of that development has increased during the half as we progress through the work.

So again, I don’t think that signals any wider issue in the portfolio that is specific to that development and those buildings that we’re working on there. And then the third movement is the reinforced concrete frame provision that we’ve taken in relation to the retro portfolio. Now that’s £150,000,000 provided in the opening balance sheet. And what’s happened there is since we acquired the business in October, we’ve been able to do some very detailed engineering analysis of Red Bull buildings that were designed by the same design firm that we know we’ve had issues with in our portfolio. So we’ve been doing that work since October.

We flagged at the half year that that was ongoing and we were doing some investigation. But the nature of the investigation is actually some quite detailed computer modeling and engineering analysis that does take several months to complete. So we’ve formed a view of that as we’ve come through the second half. There are five developments where we think there is remediation work to be done. And our estimate is based on the initial work that we’ve been able to do and also our experience on other developments in our own concrete frame portfolio.

And we estimate the cost of the works to be GBP 150,000,000. So we provided that into the opening balance sheet. So hopefully that helps you understand the different moving parts in the portfolio and also why we don’t believe there is any wider issue on costs in the underlying portfolio. These are specific issues that we think are contained. Thank you

Peter Arjose Adejon, Analyst, Morgan Stanley: very much. Thanks,

Mike, Chief Financial Officer, Barrett RedRoad PLC: Mike.

Conference Moderator: Thank you. And from Citi, we now have Amy Gala with our next question. Please go ahead.

Amy Gala, Analyst, Citi: Yes, thank you. Just two questions from me as well. First one was a follow-up in planning. Can you give us some color as to how many sites or outlets are currently pending planning permissions? Or are you in that sort of bucket where you have seen meaningful delays so we can understand the magnitude of this?

The second question was on as a follow-up on the outlet point. On the revised assumptions, how many outlets do we plan to now open in FY ’twenty six? And the last one was just on the legacy cladding work. Do we have a more clearer time line as to when do we plan to when do we complete bulk of the works? Is it in the next three years?

Or is it longer tail that we now need to kind of factor in, in terms of the overall completion of this legacy cladding work?

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: Okay. So Amy, first of all, good morning. I mean I think in terms of planning, I mean I’ll pick it up generally in terms of planning outlets. And I’m sure that Don can talk to you offline in terms of any more specific numbers. And I’ll also just talk briefly about legacy cladding, and Mike will pick up in terms of FY 2026.

So I think in terms of planning out, as you know, we’ve always disclosed our planning approvals over a six month or a twelve month period. And if we’re running on 400 outlets, we’re expecting outlet numbers to rotate on, let’s say, roughly a four year basis. And therefore, I think it’s reasonable to be thinking somewhere in the order of 80 to 100 outlets are in planning at every different point in time. And that may vary in terms of the amount of strategic land that we have coming through. And as you know, over the last few years, we’ve increased the size of our strategic land portfolio, and therefore, we will probably have a slightly higher weighting of numbers in the planning system at this point in time in terms of outlets.

And that is part of the issue that’s playing out, as we touched on towards the end of twenty twenty six, is that there is just a lot of stuff coming through planning, not just for Barrett Red Roll, but for the industry generally, there is a lot of stuff coming through planning. In terms of cladding, I mean, Mike’s talked about the way we’re progressing through the portfolio. And our sense is that a lot of this will play out in terms of getting on to sites, getting work undertaken and cash flows over the next two or three years. So I think that’s the way I would tend to look at it from a cash perspective.

Mike, Chief Financial Officer, Barrett RedRoad PLC: Yes. And just picking up on outlet openings. I mean I think we’re expecting something in the region of 130,000,000 to open during the course of FY twenty six.

Conference Moderator: Thank you. Thank you. And our next question now comes from Christopher Millington from Deutsche Bank. Please go ahead.

Christopher Millington, Analyst, Deutsche Bank: Thanks very much. Good morning, everyone. First one, I’d just like to ask is just following up on the provision point and just kind of where we are now with regard to provisions for concrete frames. And would all those provisions relate to the one party ACOM, which obviously got notified on that court case, and therefore, you’re pursuing recovery. So I’d just like to know kind of how much potentially you can recover there.

Next one is just about admin costs and the sort of inflationary pressures you’re seeing there. And then I’d love to hear a little bit more about London, which you obviously pulled out in the statement as being a little bit weaker than the other markets.

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: Chris, hi, good morning. So if Mike picks up in terms of concrete frames, AECOM and such like, and also in terms of the admin costs, and I’ll just start off in terms of London. So I think just by way of overview, Chris, I mean, our London business, if you went back four or five years ago, we were up around 2,000 completions in London. Our London business is very substantially smaller, and we also give the completion numbers on a half year and a full year basis. The business is substantially smaller than it was previously.

So that’s kind of the first point. The second point is that London has got challenges around affordability. And, you know, we’ve talked about this previously. That is playing out in terms of substantially reduced first time buyer numbers within the London business. And that has been the case since the 2022 when we saw the sort of short term change in interest rates.

That does not look to be a particularly improving position in terms of that affordability equation in London. So we recognize, as I touched on earlier, that we’ve got to continue to try to put offers in front of the consumer that make that more attractive. So deposit matching, we’ve looked a little bit and we launched a product last year of rent before you buy. As I mentioned, we’re looking at is it possible to launch our own shared equity product. So all of these things we are looking at.

And then I think the second part of it is that the private rental market, build to rent private rental, while that continues to be a reasonable market in the regional marketplace, again, over the last couple of years in London, that has been a much more challenging market in terms of securing deals and securing deals at sensible prices. And we we flagged this time, which I think was just unusual, in that we had quite a bit of difficulty closing down international sales. So nothing specific spread over a large number of buyers, but it was quite a difficult cause. But we do expect that the majority of those will come through in the first quarter of FY twenty six.

Mike, Chief Financial Officer, Barrett RedRoad PLC: So Chris, let me pick up the other two parts of the question. So on concrete frame, I mean, we’re making good progress through the rest of the portfolio there. And as I said earlier, you know, in terms of what we previously provided, we’re confident in those costs. I think the nature of the concrete framework is that it does take a little bit of time to work through, you know, the actual remediation. But in terms of the cost and the scope of work that we’re doing, we’re confident in the numbers that we have.

In terms of AECOM, you’ll remember that last year we announced there was a couple of developments in London that had been designed by a different design engineer where we have work to do. And actually it’s in relation to that engineering firm that we’ve been investigating the Red Rock portfolio. So, you know, overall, I think we are comfortable with the position that we currently are in. In terms of overhead inflation, I mean, look, as you say, there is some upward pressure on costs. We’ve had the national insurance increase come through.

We’ll annualize that in FY 2026. And obviously, we’ve got the usual levels of salary inflation and so on coming through. We do have the benefit of $45,000,000 of cost synergy benefits coming through as well in FY 2026. So overall, we’re expecting the overhead number to significantly increase. And obviously, we’re doing everything we can to manage that as we go through the year.

Christopher Millington, Analyst, Deutsche Bank: Okay. Thank you very much.

Conference Moderator: Thank you. And up next, we have Alison Son from Bank of America. Please go ahead. Your line is open. Thank you.

Two questions from my side. So can you remind us how big is your presence in the London for the overall portfolio? And the second, I think you just mentioned that you’re looking to a possibility of launching your own share equity product. Any more color on that front? Thank you.

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: Hi, good morning. So if I take those off. So first of all, in terms of how big is London, well, we I touched on it before. The largest our London business has ever been has been around 2,000 completions per annum. So we’ve gone from a position of it being in excess of 10% of our overall completion volumes to being more in a range of kind of 5% to 7%.

So substantial reductions in terms of the London business over a period of time. And as I said, I mean, clearly, London in particular, because of affordability, has been a more challenging market. And we made a decision going back probably now six or seven years ago that we would develop primarily in Zone 3 to 6, in some ways, trying to address that more affordable product in the marketplace. But nonetheless, for a lot of first time buyers, it’s still a challenging backdrop. In terms of shared equity, so we’ve seen shared equity products launch in the market.

One of our peers launched a shared equity product going back two or three months ago. We’re keen, if we do it, to try and do something where it’s not on our balance sheet. So we’re working in conjunction with third parties, which I think is more likely to be the delivery mechanism. And I think it just comes back to that broad category of self help. I mean, we’ve been clear that we do think that there could be support, particularly in markets where affordability is a greater challenge, that there could be a government program of support beyond the mortgage indemnity guarantee.

But the reality is we’ve also got to ensure that we are putting forward everything we can to attract consumers into the market. So therefore, equity for first time buyers, rent before you buy, which is something that we trialed last year, deposit match and then for check-in time movers pushing hard on programs like part exchange has all got to be part of the consumer offer.

Conference Moderator: And we now move on to our next question, which comes from Markus Cole from UBS.

Mike, Chief Financial Officer, Barrett RedRoad PLC: I’ve got two questions as well. The first one is just on how should we think about the cash flow moving parts in FY 2026? And the second one is where do you expect total provisions to close at the end of FY twenty twenty five? Thank you. Hi, Marcus.

Let me yes, let me pick both of those up. So in terms of cash flows, I think we’ve talked about our land spend this year being something in the order of GBP $850,000,000 and GBP 16,000,000. I’d expect to see that step up next year to probably about GBP 1,000,000,000 or a touch over GBP 1,000,000,000. And in terms of legacy property spend, which is obviously one of the other big moving parts, this year we’ll spend probably around $130,000,000 on building safety. And we’d expect to spend probably another $100,000,000 on building safety as we come through the year next year.

We will be investing money in the ground in terms of infrastructure and WIP as we work towards those outlet openings into FY 2027. And so, you know, on a net basis, we’d expect something like closing cash of 300 to $400,000,000 as we come through to the end of next year. And then in terms of the provisions, I think we’ll give you the number slightly later. The key moving parts on that are, as I say, that we spent $130,000,000 during the course of this year. And you’ll see that we’re increasing provisions by $229,000,000 in relation to the additional costs that we’ve announced this morning.

Okay. Thank you very much.

Conference Moderator: Thank you. From JPMorgan, we now have Staime Bikhava with our next question. Please go ahead.

Staime Bikhava, Analyst, JPMorgan: Good morning. Thanks for taking my questions. Just two on my side. One would be on incentives. Can you just remind us where we are now?

And what would you need to see in the market to reduce this from current levels? And then secondly, on landfill taxes. There’s been some news flow on this recently. Kind of any view that you have or preliminary impacts that could mean for the business? Yes,

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: fine. I mean, I think if I I’ll pick up both of those. I mean, I think in terms of incentives, we’ve said before that we’re running at a level, but probably a little above 6% in terms of incentives levels. I mean there are restrictions on incentive levels in terms of the Council of Mortgage lending guidelines. So therefore, generally, percent is the restriction in terms of cash incentives, 1% to two percent on noncash incentives.

So beyond 6% on any particular development, then there would tend to need to be a movement in headline prices and a sort of reset either up or down in relation to headline prices. I would say that incentive backdrop has been fairly stable, but against the first quarter was a little better than second quarter in terms of the calendar year, but reasonably stable in terms of incentives. In terms of landfill tax, I know that there’s been a lot of publicity about that over the last couple of days. So I think we’ve we’ve said before, and I’m sure everyone understands that sending things to landfill is not seemed to be a good thing, and we’ve published previously that around 3% of all of our waste will go to landfill. I think the government are looking to try to effectively penalize people for sending things to landfill.

There’s a consultation out presently, and, you know, I think the implementation plan is as we move towards sort of 2030 and beyond. So we’ll obviously respond to that consultation. But the overall point being that we do understand that sending less to landfill seems to be a positive thing, and therefore, in certain cases, industries need to change practices, and we’ll just keep that position under review.

Conference Moderator: And we now take a question from Charlie Campbell from Stifel. Please go ahead. Your line is open.

Charlie Campbell, Analyst, Stifel: Yes. Good morning. Questions left for me, if I can. So the first one is on mortgages, clearly, of the rules around availability changing. Just wondering if you’ve seen any effects of that yet or whether it’s sort of too early.

And then land availability, I just sort of wondered sort of what is the sort of the situation for buying land at the moment, seeing good availability and how is pricing evolving on that land?

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: Charlie, hi, good morning. Yes, if I put those up, I mean, I would say that mortgages under the sort of different rules around mortgages that we have seen are gradual change, a gradual relaxing to rules. I I don’t think any of these rule changes individually are significant, but the reality is that collectively, they are freeing up mortgage availability. And whether it be on higher loan to value levels or freeing up another lending criteria. Clearly, we see it as being positive.

Now we obviously recognize there’s got to be a balance. We don’t want mortgage lending. Nobody wants mortgage lending to get to a position where there aren’t controls in place. So I think it’s got to be a balance. But all of those changes are positive and will clearly help the overall market backdrop.

In the same way as the government program in terms of the mortgage indemnity program, I mean, clearly, that helps. But I think you can see from the numbers that, that’s not a game changer. That is just a very mild positive in terms of the way it contributes to the marketplace, primarily because of pricing and affordability. It’s to have a game changer, you’ve got to have something that’s very different from a pricing and an affordability perspective. In terms of land availability, I would just describe it as good.

You’ve seen our approval numbers. We published them again this morning. So we’ve got strong approval numbers in FY 2025. And in FY 2024, we weren’t in the market for the whole year. So the reality is across what is effectively an eighteen month period, we’re very, very pleased with our land intake.

I think that the only thing that I would call out in our land intake has been that we are more focused on larger sites, so particularly sites where we can triple brand and therefore bringing in sites that are seven and fifty thousand units, we’ve undertaken a number of those transactions during the year, firstly. And then secondly, as we previously announced, we did a deal in Scotland to buy a block of land in Scotland, which we think positions our business in Scotland very well, but that has obviously enhanced numbers during the year.

Conference Moderator: Thank you. And as there are currently no further questions in the queue, I would now like to hand the call back to you, Mr. Thomas, for any additional or closing remarks.

David Thomas, Group Chief Executive Officer, Barrett RedRoad PLC: Yes. Thank you very much. Thank you, everyone, for dialing in, and we will be back with full year results on the September 17. And we’re also around during the course of today if anyone’s got any follow-up questions. Thank you very much.

Conference Moderator: Thank you for joining today’s call. Ladies and gentlemen, you may now disconnect.

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