Barratt Redrow reports in-line full-year profit, confirms medium-term outlook

Barratt Redrow (LON:RDW) reported adjusted FY25 profit meeting market expectations despite a 7.8% drop in home completions to 16,565 units, impacted by London market weakness. This was offset by improved reservation rates, a sharp rise in forward sales to £2.92 billion, and confirmed £69 million in cost synergies from the Redrow acquisition. Looking ahead, the company projects FY26 completions of 17,200-17,800, maintains a robust £772 million net cash position, and plans further share buybacks, reiterating its medium-term ambition of 22,000 homes annually amidst a challenging market.

Analysis

Barratt Redrow reported a resilient full-year 2025 performance, with adjusted pre-tax profit expected to meet market expectations despite operating in a challenging housing market. The company faced a 7.8% decline in total home completions to 16,565 units, slightly underperforming guidance due to specific weakness in the London market from international buyers and PRS investors. This volume reduction was offset by a favorable pricing environment, with the average selling price (ASP) increasing to approximately £344,000 and the private ASP rising nearly 3% to £380,000. Forward-looking indicators are positive, evidenced by an improvement in net private reservation rates to 0.64 per outlet per week and a substantial increase in the forward order book to £2.92 billion. The integration of Redrow is progressing ahead of schedule, with £69 million in cost synergies now confirmed and £45 million expected to be realized in FY26. Financially, the company maintains a robust position with £772 million in net cash and is actively returning capital to shareholders through a planned £50 million share buyback, supplementing a completed £50 million repurchase. The outlook for FY26 is constructive, with completion guidance set for 17,200 to 17,800 homes and build cost inflation projected at a manageable 1–2%.

Key Decisions for Investors

• Investors should monitor the company's ability to execute on its FY26 completion guidance of 17,200-17,800 homes and realize the projected £45 million in Redrow integration synergies, as these are key drivers for near-term earnings growth.
• The strong balance sheet, with £772 million in net cash, and the commitment to a further £50 million share buyback provide a degree of valuation support and signal management's confidence, which may appeal to value and income-focused investors.
• While forward orders and reservation rates show improvement, the stated weakness in the London market from specific buyer cohorts serves as a reminder to watch for signs of broader macro headwinds or persistent softness in key regional markets.