Barratt Redrow on track for £90m of synergies

23rd Oct 2024 07:22

(Sharecast News) - Barratt Redrow highlighted "more stable" market conditions on Wednesday, as it said integration of the two businesses has begun "at pace" and that it expects to deliver cost synergies of at least £90m.

The company - formed from the £2.5bn merger of Barratt Developments and Redrow - said optimisation of the divisional office network was under way, with collective consultation on five potential divisional closures announced earlier this week.

In its first update as a combined business, Barratt Redrow said total home completions for FY25 are expected to be between 16,600 and 17,200. This includes around 600 home completions from joint ventures.

In the medium term, the housebuilder plans to return 22,000 total home completions.

The housebuilder said that while customer demand continues to be sensitive to the wider economy, it is beginning to see more stable market conditions, with increased mortgage availability and affordability.

"It will take some time for customer confidence to fully recover from the macroeconomic headwinds faced over the past two years, but we are encouraged by the solid trading we have experienced over recent weeks," it said.

"Long-term housing market fundamentals continue to reflect a significant imbalance between housing supply and demand. The new Government has demonstrated that it is committed to improving the planning system and addressing funding challenges in the affordable housing sector. Whilst these supply-side reforms will also take some time to be fully implemented, we are confident that they will help to unlock permissioned land supply and the delivery of more high-quality, sustainable homes across the country."