Feb 11 (Reuters) - Britain's largest homebuilder Barratt Redrow reported a 13.6% fall in first half adjusted pre-tax profit on Wednesday amid a subdued demand environment in the industry. The company
UK's Barratt Redrow cuts dividend as building costs squeeze margins
Barratt Redrow's Financial Performance
By Raechel Thankam Job
Dividend Reduction Details
Feb 11 (Reuters) - Britain's largest homebuilder Barratt Redrow cut its interim dividend and reported lower first-half profits, sending its share price down more than 8% on Tuesday, while saying it could absorb some of the higher costs that have squeezed margins.
Market Conditions and Future Outlook
UK homebuilders face a sluggish market as costs have outpaced price rises. The negative effect is to an extent offset by steadier mortgage rates and reservation levels and CEO David Thomas said the company could weather some cost increases.
Impact of Government Reforms
"We don't need significant house-price inflation to maintain margins, we can cover 2% build-cost inflation with less than 1% house-price growth," Thomas told Reuters in a telephone interview.
Sales and Completion Projections
DIVIDEND CUT DISAPPOINTS AS BARRATT SCALES BACK
The builder cut its interim dividend to 5 pence per share from 5.5 pence a year ago after it reported a 13.6% decline in adjusted pre-tax profit to 199.9 million pounds for the six months ended December ($273.58 million).
"Given Barratt Redrow's status as one of the highest distributing housebuilders, (the cut) may disappoint shareholders, although it may also bring the company more into line with peers," Oli Creasey from Quilter Cheviot said.
Barratt Redrow said it did not expect any meaningful impact until mid-2026 from the British government's planning reforms that became law late last year and are meant to ease development approvals.
The company has scaled back its land approvals, guiding to approve only 10,000-12,000 plots this fiscal year, down from prior replacement level intake of roughly 17,000.
CEO Thomas said Barratt Redrow did not expect an acceleration in the rate of sales, but that completion volumes should increase, and the company also intended to increase the number of outlets for marketing properties to 425-435 in fiscal 2027 from 409 at the end of last year.
The company forecast adjusted pre-tax profit for the year ending June within the consensus range of 558-617 million pounds and reaffirmed its home completions target.
($1 = 0.7307 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Mrigank Dhaniwala and Barbara Lewis)
