Hampshire housebuilder reports solid performance at FY25

Barratt David Wilson Homes Southampton division, which is based in Hedge End and is currently building Pebble Walk on Hayling Island, Harbour Place in Bedhampton and Forest Walk in Whiteley, is part of Barratt Redrow.

Highlights from the Group’s trading update include:

Highlights

• Net private reservations per active sales outlet(1) per week of 0.64 (FY24: 0.58R and 0.55A) including 0.08 (FY24: 0.08R and 0.06A) from the private rental sector and other multi-unit sales.
• Total home completions for FY25 were 16,565 (FY24: 14,004R and 17,972A) including 538 from JVs (FY24: 536R&A).
• Adjusted profit before tax and before Redrow purchase price allocation (‘PPA’) adjustments, expected to be in line with market expectations(2), reflecting some margin improvement and initial cost synergies.
• Performance also underpinned by our strong balance sheet position with year-end net cash, ahead of our expectations at c.£772m (30 June 2024: £868.5mR and £1,164.5mA).
• Estimated adjusted item charges are expected to be c.£229m (FY24: £214.5mR, £222.5mA). Estimated second half charges consist of legacy property charges of c. £98m, acquisition related reorganisation and restructuring costs of c. £52m and CMA commitments costs of c. £29m.
• Adjustment to the Redrow opening balance sheet fair value to reflect £150m of legacy property liabilities in relation to reinforced concrete frame. Net of deferred tax, goodwill has increased by c. £106m.
• Integration is continuing at pace with our new divisional structure in place. We have confirmed £69m of cost synergies against our target of at least £100m. Approximately £15m of cost synergies are included in FY25 profits with a further benefit of £45m expected in FY26.
• 115 Pride in the Job awards received, more than any other housebuilder for the 21st consecutive year.
• In FY26, reflecting current market conditions and a revised expectation of broadly flat average sales outlets, we anticipate total home completions in a range of 17,200 to 17,800, including c. 600 completions from our JVs.

Matthew Paine, Managing Director at Barratt David Wilson Homes Southampton division, commented:

“Against a challenging market backdrop, we have delivered a solid performance this year. Our adjusted profits are in line with market expectations, despite home completions being slightly below our guided range, mainly due to the impact of fewer international and investor completions than expected in our London businesses. We are already seeing tangible benefits from the Redrow acquisition, with cost synergies being delivered ahead of schedule, a new divisional structure in place and revenue synergies progressing well.

Although demand during the year has been impacted by consumer caution and mortgage rates not falling as quickly as hoped, there remains a long-term structural under-supply of housing in this country. Our increased scale, three market-leading brands and strong land pipeline put us in a unique position to rapidly accelerate volume delivery as consumer confidence strengthens and the benefits of planning reform materialise at a local level. We remain confident in our medium-term ambition to deliver 22,000 high-quality homes a year, and in the long-term demand for our high-quality homes.”