Housebuilder Barratt Redrow posted annual profits ahead of forecasts despite completions missing its guidance.
The company blamed the slip in hitting its target on ongoing market challenges and other uncertainties ahead of the upcoming Budget.
Chief executive David Thomas pointed to “limited growth in FY26”, with private homebuyer confidence still “fragile given the continuing affordability challenges”.
He said that, while the long-term sector fundamentals remain compelling, “it is vital that government policy is focused on reforming the planning system, removing barriers to investment and supporting purchasers, particularly first-time buyers, if the sector is to build the homes the country needs”.
Adjusted pre-tax profit came in at £591.6m for the 12 months to 29 June, up 26.8% year-on-year and ahead of the £582.8m consensus estimate. Revenue surged 33.8% to £5.58bn.
The figures were helped by an improved margin and £20m of cost synergies that were almost double the initial forecast.
Total home completions were up 18.3% at 16,565, though below the 16,800-17,200 guidance range given at its half-year results in February.
The company expects to deliver total home completions of 17,200-17,800 over the current financial year.
The board is recommending a final dividend of 12.1p, raising the total dividend by 8.6% to 17.6p, compared with the 16.8p expected by analysts.
Market reaction
The housebuilding sector is nervous about the impact of the upcoming Budget, says Russ Mould, investment director at AJ Bell.
“It is notable to see Barratt Redrow voice its concern about the impact of uncertainty ahead of this fiscal event. The timing of the Budget, so late in the year, means the autumn property selling season could be plagued by people deciding to stay put until there is more clarity on taxes.
“Barratt achieving its guidance on completions for the current financial year is contingent on buyer confidence coming through this period without serious impairment. Like a lot of individuals and businesses, it will be crossing its fingers ahead of 26 November.
“The company’s results themselves were solid enough and didn’t contain any major surprises. Importantly, the integration of the Barratt and Redrow businesses is progressing well.
“However, like much of its peer group, Barratt can only lay the foundations ahead of what it will hope are better market conditions to come, and perhaps even some support from Government.
“A healthy increase in the dividend is a signal of confidence and the company can lean on its robust balance sheet and healthy landbank.”
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