Barratt Redrow (BTRW) Trading Update summary

Trading performance and market environment

• Private reservation rate of 0.62 was slightly ahead of last year, with overall reservation rate down 3% due to timing of multi-unit sales; net private reservation rate (excluding PRS/MUS) rose 1.6% to 0.62, indicating stable demand.

• Private order book increased by 3% in the quarter, with private home order book value up 3.3% to £2,243.1m, despite a 3.5% volume decline.

• 93% of FY25 completions are forward sold, with total forward sales at £3,138.6m for 10,245 homes.

• Affordable housing reservations remain subdued, but medium-term PRS market participation is expected to grow.

• Incentive levels remain stable at around 6%, with customers remaining deal-focused.

Build costs, pricing, and synergies

• Build cost inflation is expected to be broadly flat for FY25, with 1%-2% inflation anticipated for FY26, aided by procurement synergies.

• Procurement teams are harmonizing buying terms to unlock cost synergies, targeting £100 million per annum; integration on track to deliver £100m in cost synergies.

• Underlying house price inflation is running at about 1% year-on-year, enough to broadly offset build cost inflation.

• Most materials are UK-sourced, with minimal exposure to overseas cost volatility.

• Labor inflation is running ahead of materials, with labor costs at the upper end of the 1%-2% range.

Integration and operational progress

• Redrow integration is progressing well, with nine divisional office closures and divisional office rationalization and head office integration on track.

• Migration of Redrow onto group systems is set to begin shortly, aiming for 45 incremental sales outlets by FY28.

• Planning applications have been submitted for nine of 45 targeted incremental sales outlets.

• Share buyback program is ongoing, with £17m of a £50m buyback completed and year-end net cash expected between £500 million and £600 million.

• Company maintains five-star homebuilder status for the 16th consecutive year.