Barratt Redrow (BTRW) Trading Update summary

Operational performance and trading

• Net private reservation rate increased to 0.58 per active outlet per week, up 5.5% year-on-year, with first-time buyer activity stabilizing and part exchange usage rising to 16% of private reservations.

• Total home completions reached 14,004, at the upper end of guidance but down 18.6% from the prior year, reflecting lower demand and a reduced order book in H1.

• Average sales outlets fell 5.7% to 346, with a forecasted 9% decline in FY25, but outlet numbers are expected to recover in FY26.

• Order book at year-end comprised 7,239 homes, down 19.5% in units and 14% in value to £1.9bn; private average selling price in the order book declined 2.2%.

• Average selling price declined to £307k, with private ASP down 6.4% to £344k, influenced by house price reductions and product mix.

Financials and cost management

• Adjusted profit before tax for FY 2024 is expected to be slightly ahead of previous expectations.

• Net cash at year-end stood at approximately £865m, down from £1,069.4m, reflecting disciplined working capital management.

• Additional adjusted item charges of £192m were reported, mainly for legacy properties, building safety, and Redrow transaction fees.

• Build cost inflation was around 5% for FY 2024 and is anticipated to be broadly flat in FY 2025.

• Cash land spend in FY 2024 was £680m, down from £823m in FY 2023, but is expected to increase significantly in FY 2025 due to accelerated land approvals.

Land and site strategy

• 58 new sites approved in FY 2024, equating to 12,439 plots, with future land spend anticipated at £647m.

• Site numbers are expected to dip by around 9% in FY 2025 but recover to FY 2024 levels in FY 2026, supported by recent land buying momentum.

• No acceleration in land buying is required for site recovery, as many new sites are already in the portfolio and scheduled to open.

• Land acquisitions continue to meet strict hurdle rates, maintaining discipline despite a competitive market.

• Land creditors decreased to £473m, with expectations for an increase in FY25 as land approvals accelerate.