Barratt Redrow shares rise as it talks of a ‘much more stable trading environment’
Britain’s biggest housebuilder has struck a more optimistic tone than its rivals and told shareholders that it will make more money this year than most had expected.
Barratt Redrow has seen “solid customer demand” in recent months, particularly since the start of the new year. As a result, the FTSE 100 developer expects profits in its current financial year, which runs until the end of June, to be “towards the upper end of market expectations”.
The consensus among City analysts was that Barratt would deliver an annual adjusted pre-tax profit of £542 million. The group now thinks profits will be closer to the most bullish estimates of £588 million.
“Compared to 12 months ago, there’s a far more positive backdrop,” David Thomas, chief executive, said. “We’ve seen a much more stable trading environment; house prices have been stable or slightly up and interest rates have fallen with a forecast that rates will fall further. Clearly that is helpful if you’re thinking about moving.”
Barratt Redrow delivered 6,846 homes between July and December 2024, 12 per cent fewer than in the same period of the previous year. That was because it has fewer developments open — 397 versus 449 a year ago.
“The sites we bought in 2024 will then come through planning this year and next, so in the [financial] year to June 2026, site numbers will recover,” Thomas said.
Half-year revenues increased by 23 per cent to £2.28 billion from £1.85 billion, while pre-tax profits rose by a similar percentage to £117.2 million from £95.1 million.
Reservation rates in the first half picked up by a third to 0.6 reservations per site per week, where they have remained in recent weeks, even with the dip in consumer confidence and a small increase in mortgage rates.
