Barratt Redrow has lowered its completions expectations for the current financial year, despite its revenue increasing by 6.6% to just over £6bn in the year to 28 June.

The housebuilder saw its total completions rise by 5% to 17,667 homes, reaching the upper end of its guidance, while its adjusted operating profit, before the impact of PPA adjustments, increased by 0.6% to £598.1m.

However, in this period, its adjusted operating profit and the impact of PPA adjustments totalled £572.8m, falling by 7.1% year-on-year.

Barratt Redrow said its performance reflects its “proactive approach” taken to managing the business, including the use of sales incentives to maintain volumes, and rigorous management of its cost base.

It added this management of its cost base resulted in a significant reduction in its administrative expenses, helping to mitigate gross margin pressure.

Furthermore, the firm stated that the operational integration of Redrow completed during the year, with total expected cost synergies of £100m have been confirmed.

Barratt Redrow’s CEO, David Thomas, who has stepping down from his role, said: "In a tough market, we have driven a strong operational and financial performance, delivering 17,667 homes, ahead of last year, and adjusted profit before tax in line with market expectations. Alongside the delivery of planned synergies, the successful integration of Redrow has created a more efficient and agile business.

"It has been an enormous privilege to lead Barratt Redrow over the past decade. I would like to thank our talented and dedicated colleagues across the business whose hard work, commitment and professionalism have helped build the successful and resilient company we are today. I wish them every success for the future."

In its current trading, the firm said its net weekly private reservation rate from 29 June to 6 September was 0.62, up from 0.55 the year previously. Its forward sales at 6 September also rose to 11,200 with a valuation of £3.3bn.

However, Barratt Redrow has lowered its total house completions guidance from a range of 17,700 and 18,200 to between 17,500 and 17,900 homes.

It said this new guidance reflects continued planning delays and a consequent reduction to expected sales outlet openings.

Despite this, shares in Barratt Redrow increased by over 10%.

Investment director at AJ Bell, Russ Mould, stated that while the housebuilding sector has been shaken by unhelpful market conditions, the firm’s latest results suggest it is "built on solid foundations".

He concluded: "Full-year profit ahead of forecasts, a strong balance sheet and continuing benefits from the successful integration of Redrow were clear positives for the market to take away – and helped spark a relief rally in the stock.

"Less positively, margins are under pressure, and Barratt has scaled back its completions target for the current year thanks to planning delays. The industry has consistently signalled its frustration with this issue over several years, suggesting that recent reforms are yet to gain much traction.

"What Barratt needs is a shift in the geopolitical and macroeconomic backdrop which would allow for an easing of borrowing costs, boosting the availability and affordability of mortgages and thereby bolstering the confidence of prospective buyers. The latest update suggests Barratt should be resilient enough to ride out a testing period."

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