Profits collapse at Barratt as it looks to complete Redrow mega-deal

Profits at Leicestershire housebuilding giant Barratt Developments have collapsed, just weeks before it is due to complete its £2.5bn mega-deal to buy counterpart Redrow.

For the year to the end of June this year, Barratt saw its profits fall to £170.5m – down from £705.1m in 2023.

Total home completions also fell, down 18.6% to 14,004, and revenue was down 21.7% to £4.16bn.

Despite this, Barratt says home completions are at the “upper end” of its expectations for the year against a challenging economic backdrop.

Barratt’s deal to buy Redrow completed on August 21. It is currently working with the Competition and Markets Authority (CMA) to address the findings of its Phase 1 competition review which is expected to complete by mid-October 2024.

David Thomas, chief executive of Barratt Developments said: “We are pleased to have delivered total home completions at the upper end of our expectations for the year, despite the challenging backdrop. I am grateful to our skilled and dedicated teams of employees, sub-contractors and suppliers for continuing to deliver high quality homes that people want to live in. We were delighted to complete the acquisition of Redrow plc in August and are now working constructively with the CMA to finalise competition clearance so that we can begin the integration process

“Whilst demand continues to be sensitive to mortgage affordability, and reduced land buying activity during the past two years has had a near-term impact on the number of outlets we are operating from, we are well-positioned to meet the strong underlying demand for new homes of all tenures in the UK. We welcome the Government’s proposed reforms of the planning system as one of the key levers to increase housebuilding, drive economic growth and tackle the chronic undersupply of high-quality, sustainable homes.”