17 September 2025
If you are covering the latest results from Barratt Redrow, please find below a comment from Oli Creasey, head of property research at Quilter Cheviot:
“Barratt Redrow’s full year results have come in broadly in line with expectations, with profit-before-tax around 2% higher than forecasts. Operationally, the company has made some progress in the last year, with it managing grow both its margins and earnings per share, but slightly frustrating for management is the accounting requirement to adjust these figures down as a result of last year’s merger with Redrow – the so-called “Purchase Price Allocation Adjustments” – which has pulled the operating margin back to 9.0% (flat year-on-year), and resulted in a 10% drop in earnings per share compared to last year as well.
“Management has stated that they anticipate limited growth in the housing market in 2026, although their own volume guidance for next year suggests 6% growth in sales (guidance is unchanged at 17.2-17.8k sales). The company’s reservation rate (sales per outlet per week) for the period after the financial year end (July-August) is 0.55x, low but in keeping with seasonal trends and largely unchanged versus last year (0.56x).
“Net cash is down year-on-year but still high at £773m, large enough to support the £100m ongoing buyback and a 9% increase to the dividend. Guidance is for cash to reduce to £400-500m this time next year.
“The company has kept sales volume guidance unchanged for 2026. However, management has noted that the announcement of the autumn budget late in November may impact the traditionally high-volume autumn selling season, with would-be buyers potentially holding off to see the outcome of the budget before committing. The company has also set out a wish list from the Government, with three key areas that it feels need to be addressed via government policy: planning reforms, removing barriers to investment, and notably support for purchasers, particularly first-time buyers. A return of the Help 2 Buy scheme, or something similar to support those first-time buyers, would likely be transformative for the housing market, and housebuilders in particular, but there are no clear signs that it is on the Government agenda for the time-being.”
