Barratt Redrow (BTRW) H2 2024 earnings summary

Executive summary

• Delivered solid operational performance despite an 18.6% drop in completions, softer pricing, and moderating build cost inflation, with ROCE and profitability declining year-over-year.

• Maintained a strong net cash position of £868 million after significant dividend payments and legacy property remediation spend.

• Reservation rates for the current trading period are 38% ahead of the prior year, reflecting improved market stability.

• Focused on driving revenues, home affordability, expanding private rental sector participation, and controlling build activity and costs.

• Redrow plc acquisition completed in August 2024, pending CMA clearance for integration.

Financial highlights

• Revenue fell 21.7% to £4,168.2m; adjusted operating profit was £376.6m, down 56% year-over-year.

• Adjusted EPS at 28.3p, down 57.9%; adjusted operating margin fell 720 bps to 9.0%.

• Net cash at year-end was £868.5 million, down 18.8% year-over-year.

• Dividend per share reduced by 51.9% to 16.2p, in line with policy.

• Adjusted items included £214.5 million for building safety and Redrow transaction costs.

Outlook and guidance

• FY 2025 completions expected between 13,000 and 13,500, including around 600 from joint ventures; affordable mix in high teens.

• Build costs anticipated to be broadly flat in FY 2025; adjusted admin expenses guided at ~£310m.

• Land spend for FY 2025 expected at around £800 million; net cash forecasted at £500 million by year-end.

• Margin recovery expected to be gradual, with no material short-term improvement absent stronger sales rates.

• Focus on expanding sales outlets to drive completion growth from FY26.