A mixed trading update from Barratt Redrow PLC (LSE:BTRW) weighed on the housebuilding sector on Tuesday as it guided to lower volumes for the year ahead, citing persistent market headwinds and planning delays.
Shares in the FTSE 100 group fell 7% to 371p after the update confirming profit for the year to June in line with market expectations but volumes missed prior guidance due to soft demand in London.
For the 2026 financial year, the merged group expects completions of 16,600-17,200, roughly 3% below analyst estimates.
The company said outlet numbers would remain flat due to slower-than-expected progress in the planning environment.
Analysts at Peel Hunt described the revised outlook as a result of “weaker consumer [demand] and slower outlet growth,” forecasting a 10-15% cut to consensus profit expectations for FY26.
The broker also flagged £248 million in additional building safety charges, including £80 million related to fire safety issues at four buildings in the Southern region.
UBS noted that adjusted EBIT margins rose around 60 basis points in FY25 to 10.4%, helped by £15 million in cost synergies from the acquistion of Redrow.
But analysts at the Swiss bank agreed that the new FY26 guidance implied a downside to existing consensus forecasts, which it put at around 12-13%, and that build cost inflation and operational costs would continue to weigh.
Stifel highlighted improved sales rates and a growing forward order book but acknowledged the disappointment over outlet growth.
The broker remains constructive longer term, citing Redrow's contribution to volumes and margin recovery.
Barratt Redrow also confirmed a £100 million share buyback programme would begin immediately and be completed by June 2026.
The update weighed on other housebuilders, with Persimmon PLC (LSE:PSN) down 1.6%, Taylor Wimpey PLC (LSE:TW.) and Crest Nicholson PLC (LSE:CRST) each falling around 1.2%, and Bellway PLC (LSE:BWY) and Berkeley Group Holdings PLC (LSE:BKG) shedding 0.6%. Vistry Group PLC (LSE:VTY) rose 1.2%.