Barratt Redrow
Barratt Redrow plc is a leading British housebuilding company formed by the merger of Barratt Developments plc, founded in 1958, and Redrow plc, established in 1974, which was completed in October 2024 following regulatory approval.[1][2]
The combined entity operates as the United Kingdom's largest residential property developer by volume, constructing homes across England, Scotland, and Wales under prominent brands including Barratt Homes, David Wilson Homes, and Redrow, with a focus on high-quality construction, customer satisfaction, and sustainable development.[3][1]
Since its inception through the parent companies, Barratt Redrow has delivered over 620,000 homes, achieving consistent 5-star ratings from the Home Builders Federation for 16 consecutive years and setting science-based targets for carbon reduction and biodiversity enhancement.[3][1]
Notable achievements include becoming the FTSE 100's top homebuilder and accelerating housing delivery amid market challenges, though the company has encountered significant costs exceeding £1 billion for remediating legacy building safety defects, including fire protection issues in developments like Ocean Village in Southampton.[3][4][5]
The merger, valued at £2.5 billion, faced scrutiny from the Competition and Markets Authority over potential local competition reductions but was approved after undertakings to maintain supply in affected areas.[6][2]
History
Origins and Growth of Barratt Developments
Barratt Developments was founded in 1958 by Sir Lawrie Barratt in Newcastle upon Tyne, initially operating as Greensitt Bros. before Barratt assumed control, with the primary aim of providing affordable private housing targeted at first-time buyers frustrated by high new home prices.[7][8] The company listed on the London Stock Exchange in 1968, marking its transition to a publicly traded entity.[9] From 1972, Barratt initiated rapid expansion through a series of acquisitions, including Manchester-based Arthur Wardle and Luton-based Janes, alongside forming new subsidiaries to build scale in the UK housebuilding market.[10][9] This phase drove significant growth, with turnover increasing from £99.3 million in 1977 to £163.2 million by 1979, and sales surpassing £300 million in 1982 while completing over 1,000 more housing units than competitor George Wimpey.[7] By the mid-1980s, amid rising land costs, the firm shifted strategy toward second- and third-time buyers, launching the Premier Collection featuring over 60 house types, and diversified into urban renewal projects, leisure properties, and international ventures such as the 1980 establishment of Barratt American Inc. in California.[7] The 1990s saw organic growth with consistent output increases, planning to elevate annual housing completions from 7,000 to 11,000 units by 2000, though the early decade brought challenges including reported losses in 1991 that prompted Sir Lawrie Barratt's return as chairman.[7] Leadership transitioned in 1997 with Barratt's retirement and Frank Eaton's appointment as CEO, culminating in sales of £1.79 billion by 2002.[7] Key acquisitions bolstered this trajectory, notably the 2007 purchase of Wilson Bowden PLC, which incorporated David Wilson Homes and enhanced Barratt's portfolio in high-quality family housing segments.[9] By this period, the company had constructed over 250,000 homes across its operations.[7]Founding and Expansion of Redrow
Redrow was founded in 1974 by Steve Morgan, then aged 21, as a small civil engineering firm in Rhyl, North Wales (Flintshire), after he secured a £5,000 loan from his father to acquire the employer facing closure.[1][11][12] The company name derived from Morgan's residential addresses, Redwood Drive and Harrow Drive. Initially focused on civil engineering projects, Redrow expanded into building contracting by 1978 and secured its first £1 million contract at Presthaven Sands in 1980.[11] In 1979, Redrow ventured into main contract building and initiated its first significant housing development in Denbigh, North Wales.[1] The firm formally entered the housebuilding sector in 1982 by establishing the Redrow Homes subsidiary, launching the 'Heritage' range of mid-to-upper market homes in 1983.[11] By 1985, housebuilding had become the core business, with expansion into the Midlands, South East, and South West of England.[12][11] Growth accelerated through targeted acquisitions, including Whelmar Homes in Lancashire in 1987, which enabled annual sales of 1,000 houses, and Costain Homes for £25 million in 1993, boosting capacity to 2,000 houses per year and extending reach into south-east England.[12][11] In 1994, following its listing on the London Stock Exchange and the sale of its construction division, Redrow refocused exclusively on housing, achieving 3,000 annual sales by the mid-1990s and introducing the Harwood Homes range; it entered the Scottish market in 1996.[1][12][11] By 1999, completions reached 3,100 homes annually, supported by a land bank exceeding 12,000 plots, with sales revenue at £341.6 million.[11] Subsequent expansion included the launch of the award-winning Heritage Range in the 1990s, delivery of the 50,000th home in 2006, and new divisions in London, Southern Counties, West Country, and South East in 2011.[1] In 2017, Redrow acquired Radleigh Homes to form the East Midlands division and recorded over 5,400 legal completions alongside peak turnover and pre-tax profits.[1] This period solidified Redrow's position as a national quality housebuilder through organic development and strategic land acquisition.[1][11]2024 Merger and Subsequent Integration
On 7 February 2024, Barratt Developments plc announced an all-share offer to acquire Redrow plc via a court-approved scheme of arrangement, valuing Redrow at approximately £2.52 billion and creating Barratt Redrow plc as the enlarged entity.[13][14] The transaction aimed to combine complementary land banks, brands, and operational strengths to enhance scale in the UK housebuilding sector, with Redrow shareholders receiving 1.44 new Barratt shares per Redrow share, representing a 33.7% premium to Redrow's undisturbed share price.[13] Redrow shareholders approved the scheme on 15 May 2024.[15] Regulatory hurdles included scrutiny from the UK Competition and Markets Authority (CMA), which initially imposed conditions but saw Barratt waive the CMA clearance requirement on 19 August 2024, enabling progression.[13][16] The High Court sanctioned the scheme on 20 August 2024, with the scheme becoming effective and the merger completing on 21 August 2024, after which Redrow shares were delisted and Barratt Redrow shares began trading under the ticker BTRW.[13][17] Post-completion, the CMA accepted binding undertakings from Barratt Redrow on 4 October 2024 in lieu of a full merger reference, addressing competition concerns in specific local markets through commitments on land disposals and site developments.[18] Integration commenced immediately after completion, with an initial target duration of 18 months, focusing on operational harmonization, cost efficiencies, and revenue opportunities while preserving the Barratt, David Wilson Homes, and Redrow brands.[17][19] Targeted annual cost synergies of £100 million were pursued through procurement savings, overhead reductions, and supply chain optimization, with restructuring costs estimated at £90 million for Redrow operations.[20] By April 2025, operational integration was nearing completion, and by the fiscal year ended 29 June 2025, synergies exceeded expectations, delivering £69 million in cost savings, including £15 million impacting FY25 profits and a further £45 million anticipated for FY26.[19][21] Revenue synergies advanced with 16 planning applications submitted for 45 identified incremental sales outlets by June 2025, though full realization depends on planning approvals.[22] Progress in 2025 included board changes effective April 2025 to support integration, such as appointments aligning leadership across the combined entity.[23] By September 2025, integration was described as largely complete, contributing to resilient performance amid market challenges like subdued demand and planning delays, though provisions increased due to site-specific issues uncovered during due diligence and integration reviews.[21][24] The process strengthened the group's land pipeline and financial position, with net cash at £772.6 million by June 2025, positioning Barratt Redrow for medium-term output of 22,000 homes annually pending supportive policy reforms.[21]Operations
Residential Housebuilding Activities
Barratt Redrow plc specializes in the development and construction of new residential homes across the United Kingdom, targeting private buyers with a focus on quality, service, and sustainability. The company's housebuilding operations encompass land acquisition, site planning, construction using both traditional and modern methods like timber framing, and sales of completed properties. These activities span a variety of housing types, including detached and semi-detached family homes, townhouses, and apartments, developed on greenfield and brownfield sites to meet diverse market demands.[3] In the financial year ended 29 June 2025, Barratt Redrow completed 16,565 homes, marking an 18.3% increase from the 14,004 completions achieved by Barratt Developments alone in the prior year, reflecting partial integration benefits from the 2024 merger with Redrow. The company maintains a forward sales pipeline supporting ongoing activity, with 9,835 homes sold as of 29 June 2025, of which 67% were under private reservation. Medium-term ambitions include scaling to 22,000 annual completions, leveraging combined land banks and operational efficiencies to address UK housing needs amid economic headwinds.[25][26][27] Sustainability integrates into core housebuilding practices through the "Building Sustainably" framework, which emphasizes energy-efficient designs, reduced carbon emissions, and innovative materials; for instance, the timber frame division produced kits for over 5,500 homes in 2025, enhancing build speed and environmental performance. Despite challenges such as budget uncertainties and elevated building safety remediation costs exceeding £1 billion for legacy issues, operations remain resilient, with adjusted gross margins at 15.7% in FY2025.[28][29][30][31]Brands, Product Ranges, and Market Positioning
Barratt Redrow plc maintains three distinct brands—Barratt Homes, David Wilson Homes, and Redrow—to serve varied customer segments in the UK housing market, from first-time buyers to premium purchasers and downsizers. This multi-brand approach broadens appeal, enables larger site developments with diverse offerings, and optimizes operational efficiency by reducing completion times and enhancing return on capital employed.[32][33] Barratt Homes targets entry-level buyers and young families with cost-efficient, modern homes emphasizing practical designs, open-plan layouts, flexible multi-purpose spaces, and energy-efficient features. The brand focuses on traditional housing, apartments, and urban regeneration projects suitable for starter and family homes. In the fiscal year ended 29 June 2025, it delivered 5,037 completions, generating £1.8 billion in revenue.[32][34][33] David Wilson Homes occupies the premium family housing niche, providing spacious properties with high-quality fixtures, generous living areas, and elegant styling for growing families and home upgraders seeking larger accommodations. It positions as a step above volume builders, offering enhanced specifications and design thoughtful for family needs. For FY25, David Wilson Homes achieved 8,008 completions and £2.3 billion in revenue.[32][33][35] Redrow specializes in executive and lifestyle homes with distinctive Arts and Crafts architecture, premium materials, and customizable extras, attracting downsizers and affluent buyers desiring quality and personalization. Product ranges include the Heritage Collection, blending traditional elements like high ceilings and architraves with modern functionality in three- to five-bedroom detached homes (e.g., The Oxford, The Richmond); the Inspired Collection for contemporary open-plan designs; and the Tailored Collection for luxury urban apartments. The Heritage Lifestyle sub-range offers adaptable three-bedroom homes with en-suites in every bedroom. Redrow contributed 3,520 completions and £1.5 billion in revenue in FY25.[32][36][33] Post-2024 merger, the brands' integration has facilitated £100 million in cost synergies by FY25, with further gains projected, while the diversified portfolio supports Barratt Redrow's medium-term target of 22,000 annual completions by catering to low-cost to high-end markets and improving site sales velocity.[33][37]
Geographic Presence and Development Strategy
Barratt Redrow plc operates exclusively within the United Kingdom, spanning England, Scotland, and Wales, with no international developments. The company maintains more than 30 divisional offices nationwide, supporting approximately 500 active construction sites as of the latest reports. Its regional footprint includes divisions covering East Scotland, West Scotland, North Scotland, Yorkshire (East and West), North East England, North Midlands, Manchester, West Midlands, Mercia, North West England, Southern counties, Northampton, East Midlands, South Midlands, Eastern Counties, Anglia, London (West and East), Kent, South East England, Southampton, Bristol, South West England, and South Wales. This extensive coverage enables targeted development in both urban and rural areas, from Aberdeen in the north to Plymouth in the south.[38] The company's development strategy emphasizes strategic land acquisition to secure opportunities in high-demand geographic locations aligned with long-term housing needs and market dynamics. Post-2024 merger, Barratt Redrow has integrated the complementary strengths of Barratt Developments and Redrow, aiming to accelerate annual home completions toward 23,000 units while prioritizing quality construction, customer service, and sustainability. This involves fostering partnerships for complex sites, investing in energy-efficient designs, and enhancing supply chain efficiencies to mitigate regional variations in completions, such as historically weaker performance in London compared to regional markets.[39][13][40] Sustainability forms a core pillar of the strategy, with commitments to net-zero carbon homes and community-focused developments that integrate green spaces and infrastructure improvements. The merged entity leverages its scale to influence industry standards, including proactive remediation of legacy building issues, while adapting to macroeconomic factors like interest rates and planning regulations that affect regional land availability. Overall, the approach balances volume growth with risk management, ensuring developments contribute to local economies through job creation and procurement from regional suppliers.[41][13]Financial Performance
Historical Revenue and Profit Trends
Barratt Developments, the larger of the two entities prior to the 2024 merger, recorded revenue of £5,321 million for the fiscal year ended 30 June 2023, reflecting a modest increase from £5,269 million in FY2022 amid recovering demand post-pandemic, though completions totaled 17,206 units, down slightly from prior peaks. Adjusted profit before tax stood at £882 million for FY2023, supported by gross margins of 21.2%, but pressured by elevated build costs and sales incentives. In FY2024, revenue declined sharply to £4,168 million due to higher mortgage rates, reduced buyer affordability, and economic uncertainty, with reported pre-tax profit falling 75.8% to £171 million; adjusted gross profit dropped to £689 million, highlighting margin compression from cost inflation and lower average selling prices.[42][43][44][45] Redrow, operating on a smaller scale, generated revenue of approximately £2,127 million in FY2023 (ended 2 July 2023), contributing to the combined pre-merger revenue of £7,448 million alongside Barratt's output; this marked a slight decrease from FY2022 levels, influenced by similar market headwinds including softening private reservations and increased land costs. Pre-tax profit for Redrow in the six months to December 2023 was £84 million, indicative of resilient but constrained margins amid rising material and labor expenses. Historical trends for Redrow mirrored broader UK housebuilding cycles, with revenue expanding from under £1.5 billion in FY2019 to over £2 billion by FY2022 before stabilizing and contracting amid the 2023 affordability squeeze.[46][47][48] Both companies exhibited long-term revenue growth from the post-2008 recovery, driven by pent-up demand, low interest rates, and schemes like Help to Buy, but faced cyclical downturns: a COVID-induced drop in FY2020 (Barratt revenue ~£3.4 billion), rebound through FY2022, and renewed pressure in FY2023-24 from inflation, supply chain disruptions, and regulatory burdens on legacy stock. Profitability trends aligned closely with revenue, though margins eroded over time due to fixed development costs, planning delays, and competitive pricing; Barratt's adjusted return on capital employed hovered around 20-25% in peak years like FY2022 before slipping below 10% in FY2024. These patterns underscore the sector's sensitivity to macroeconomic factors, with neither firm immune to UK-specific challenges like stamp duty changes and NIMBYism delaying sites.[49][42]| Fiscal Year (ended June/July) | Barratt Revenue (£m) | Barratt Adjusted PBT (£m) | Redrow Revenue (£m, approx.) |
|---|---|---|---|
| FY2020 | 3,420 | N/A | ~1,200 |
| FY2021 | ~5,000 | N/A | ~1,500 |
| FY2022 | 5,269 | ~1,000 | ~2,100 |
| FY2023 | 5,321 | 882 | 2,127 |
| FY2024 (pre-merger) | 4,168 | N/A (reported 171) | N/A |
Post-Merger Financial Metrics and 2025 Developments
Following the completion of the merger on August 21, 2024, Barratt Redrow's fiscal year ended June 29, 2025 (FY25) reflected initial integration benefits, with combined revenue reaching £5,578.3 million, a 33.8% increase from £4,168.2 million in FY24, partly attributable to Redrow's post-acquisition contribution of £1,538.0 million.[50] Home completions totaled 16,565 units, up 18.3% from 14,004 in FY24, though excluding joint venture (JV) completions of approximately 538 units, the figure was 16,027.[50] Adjusted profit before tax (PBT) before purchase price allocation (PPA) adjustments stood at £591.6 million, surpassing Bloomberg consensus of £582.8 million and reflecting a 26.8% rise from £385.0 million in FY24.[51] Merger-related cost synergies reached £69 million against an initial £100 million target, including £20 million flowing through the FY25 income statement and a further £45 million anticipated for FY26.[50] The year-end net cash position was £772.6 million, down from £868.5 million in FY24 reported basis due to dividend payments, share buybacks, and remediation investments.[50]| Key FY25 Metric | Value (£m unless stated) | FY24 Comparison (£m unless stated) | Change |
|---|---|---|---|
| Revenue | 5,578.3 | 4,168.2 | +33.8% |
| Adjusted PBT (pre-PPA) | 591.6 | 385.0 | +26.8% |
| Home Completions | 16,565 | 14,004 | +18.3% |
| Net Cash | 772.6 | 868.5 | -11.0% |