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Barratt Redrow PLC on Wednesday announced plans to return £400 million to shareholders in the new financial year, as it reported a ‘solid’ end to financial 2026 with home completions at the top end of guidance. The Leicestershire, England-based housebuilder plans to complete a £386 million share buyback by July 2 next year and pay a 1 pence per share dividend, worth the remaining £14 million, in financial 2027 to take advantage of the ‘material discount’ to its tangible net asset value. Since its interim results in February, Barratt noted that its share price discount to TNAV of 433.4p per share, as of December 29, has widened to 36% from 9%. The FTSE 100-listing said this presents an opportunity to ‘optimise shareholder returns’ through additional share buybacks, in preference to dividends. Barratt still intends to return 50% of adjusted net income to shareholders annually, which will be supplemented by an additional share buyback. Barratt said it expects future share buybacks will be prioritised as the preferred method of returning capital to shareholders. Barratt paid a total dividend of 17.6p per share for the 2025 financial year, including a 5.5p interim dividend and a 12.1p final payout. The move comes shortly after shareholder Phoenix Asset Management Partners urged the firm to pursue an ‘aggressive’ share buyback programme. The first tranche of the buyback, to be managed by Barclays Bank PLC, will commence immediately and will end no later than market close on December 31. Shares in Barratt Redrow were up 2.8% to 286.00 pence each in London on Wednesday. The news came alongside a trading update for the 52 weeks that ended June 28. Home completions totalled 17,667, at the upper end of guidance of 17,200 to 17,800, and higher than 16,565 completions in the year prior. This includes 566 homes from joint ventures and 3,774 affordable homes. Adjusted profit before tax is expected to be in line with company-compiled market consensus of £559.5 million, which would be up 15% from £488.3 million a year prior. Net private reservation rate was slightly ahead of last year at 0.56 per outlet per week from 0.55, despite increased uncertainties and escalation in mortgage rates. The reservation rate was 0.50 for the final quarter, down on-year from 0.52. Incentives moved higher from last October due to UK government budget-related uncertainty and have remained at broadly this higher level through the remainder of financial 2026, Barratt said. ‘To sustain the momentum in our sales rate and based on current market conditions, we expect incentives to remain at their current level in FY27,’ the firm warned. The total average selling price for the recent financial year was £352,000, up 2.3% from £344,200 in financial 2025. Chief Executive David Thomas said Barratt put in a ‘solid performance in a challenging market,’ noting that ‘macroeconomic and geopolitical uncertainty, alongside industry headwinds and subdued customer demand’ have weighed on market sentiment. Year-end net cash was steady at £772 million, ahead of April guidance, while the forward sales book slipped to £2.82 billion, representing 9,728 homes, from £2.92 billion and 9,835 homes a year earlier. For financial 2027, Barratt anticipates total home completions of 17,700 to 18,200, including 600 completions from joint ventures, minimal house price inflation and total build cost inflation of 3% to 4%. It expects to deliver incremental cost synergies of £53 million in financial 2026, £3 million ahead of previous guidance, taking cost savings to date to £73 million of the target of £100 million. The balance will be delivered in large part in financial 2027. The firm expects to have 415 average sales outlets in operation across financial 2027, down from prior guidance of 425 and 435, reflecting an acceleration in sales outlet closures and the continued slow pace of planning. ‘Despite the backdrop, we are very well positioned. Redrow has been successfully integrated and is delivering the synergies planned and we continue to target further cost savings,’ CEO Thomas said. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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