Housebuilder Barratt Redrow (BTRW) delivered a disappointing H1 trading update, sending its shares down 7% or more. ‘A resilient performance in a subdued market’ was not what investors wanted to hear at this point.
| Share price: 360p (-7.6%) | PE: 15x |
| Market cap: £5.1bn | Yield: 4.25% |
Flat reservations
For the six months to December, home completions were 7,444, a 4% increase on the previous year. Average selling prices were £365,000, also up 4%, while operating profit was down 0.3% at £210 million.
Pre-tax profit for the period was down 13.6% at £200 million, while net cash amounted to £174 million. Although the Redrow acquisition is still bedding in, cost synergies are already in line with the company’s £100 million target.
Net private weekly reservations, a keenly-watched measure of activity, was virtually flat at 0.55 against 0.54 a year earlier. The firm flagged a lack of PRS (private rental sector) buyers and bulk deals for the lack of momentum in H1.
Since the start of 2026, net private weekly reservations have risen slightly to 0.59 but with no contribution from PRS buyers. Forward sales were 11,168 homes, with 7,277 either exchanged or contracted as of 1 February.
Depending on the Spring selling season, Barratt Redrow is still predicting total FY completions of 17,200 to 17,800. It also reiterated its financial guidance, with FY pre-tax profit seen between £558 million and £617 million.
Gleeson more upbeat
Today’s update from rival housebuilder MJ Gleeson (GLE) had a more upbeat tone, although the company still qualified the outlook. H1 home revenue was up 7.7% at £168.6 million but a strong Spring selling season is still ‘fundamental’, it added.
‘We delivered a robust performance in a subdued market and ended the half with a strong forward order book’, said CEO Graham Prothero. ‘We’re cautiously encouraged by open market buyer activity over the last five weeks’, added Prothero.
We suspect the market was looking for a more upbeat outlook from Barratt Redrow. Instead, this feels like ‘failure to launch’, and we don’t see analysts rushing to upgrade their numbers.
Gleeson was more positive, with a notable pick-up in net private reservations. The Homes business saw a big jump in forward orders, while the Land business is motoring with planning approvals aplenty.
However, both firms flagged the importance of the current Spring selling season to their FY performance. Bulls will just have to wait a bit longer for the buy signal.
Read the Barratt Redrow press release here: https://www.barrattredrow.co.uk/investors
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