Barratt Redrow plans to return £400m to shareholders in its 2027 financial year, primarily through share buybacks, after delivering annual results in line with expectations despite a challenging housing market.

The housebuilder said it would replace its FY26 final and FY27 interim ordinary dividends with share buybacks, arguing this was the most effective way to create long-term shareholder value while its shares trade below tangible net asset value.

"We have proactively managed our business through a year of challenging market conditions and these pressures are ongoing. In that context and reflecting the significant discount to tangible net assets at which the shares are trading it has been appropriate to update our approach to shareholder returns and to capitalise on that discount for the benefit of our shareholders," the company said in a statement to the London Stock Exchange (LSE).

The news of the buyback announcement sent shares around 2% higher today.

The company completed 17,667 homes in the year to 28 June, at the upper end of its guidance, while adjusted pre-tax profit met market expectations.

The integration of Redrow had been completed and was ahead of schedule on cost savings, with cumulative synergies of about £73m delivered so far against a £100m target. It now expects average sales outlets of around 415 in FY27 and forecast home completions of between 17,700 and 18,200, with minimal house price inflation and build cost inflation of 3% to 4%.

Outgoing CEO David Thomas said: "The sector continues to navigate macroeconomic and geopolitical uncertainty, alongside industry headwinds and subdued customer demand, which have weighed on market sentiment. However, this means that given our performance and resulting balance sheet strength, deploying capital through an expanded share buyback programme is currently the most effective way to create long-term shareholder value."

It was announced in March that Thomas, who is retiring, will be replaced by Dean Banks as group CEO from 21 September. In another high level executive change, announced more recently on 19 June, Rebecca Napier has been appointed as CFO. Most recently CFO of Britvic, she will start on 3 August.

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