Shares in Barratt Redrow PLC (LSE:BTRW) fell 11% after it said adjusted profit before tax for the past year would be in line with market expectations, but that the market remained "challenging", hitting its guidance for the coming year.
A total of 16,565 home sales were completed in the year to 30 June, slightly below guidance, impacted by weak demand in London, though the average selling price increased to £344,000, compared to £323,000 aggregated before the merger.
The group confirmed £69 million in cost synergies from the Redrow acquisition, ahead of its original target, while net cash of £772 million was also ahead of expectations.
A share buyback programme of up to £100 million is to be launched today and completed over the year to June 2026.
"Against a challenging market backdrop, we have delivered a solid performance this year," said CEO David Thomas.
"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."
He said demand during the year was impacted by "consumer caution and mortgage rates not falling as quickly as hoped".
Forward sales at year-end stood at £2.9 billion, equating to 9,835 homes, up from £2.6 billion and 9,426 homes a year earlier. At 29 June, 67% of these homes were contractually exchanged.
For the coming year, site numbers are now expected to be roughly flat, whereas the company previously said it thought sites would grow in the 2026 financial year.
This led to new guidance of 16,600-17,200 completions for the year ahead, excluding joint ventures, which is around 3% below the average City analyst forecast.
The change is said to be due to planning difficulties.
Barratt Redrow shares fell 11% to 371p in early trading on Tuesday.
** Update: Adds share price and guidance details **