Shares in Britain's largest homebuilder rose 3% in early trade as investors welcomed its updated shareholder return policy, which promises more buybacks and only a nominal dividend as the stock trades at a discount to its tangible net asset value.
"Despite continued improvements in mortgage availability this year, consumer sentiment remained cautious, particularly after the start of the conflict in the Middle East... continuing to pressure affordability," the company said in a statement.
Barratt, like several other homebuilders, has curbed land spending, closed sales outlets, and cut costs as rising building costs and inflation risks linked to the Iran squeeze margins and increase caution and affordability concerns among British home buyers.
The new buyback also comes as Barratt prepares for a major leadership overhaul, with Dean Banks set to succeed David Thomas as CEO in September 2026.
The company forecast total home completions of 17,667 units for the year ended June 28, at the upper end of its previously forecast range and slightly ahead of market expectations. It expects to deliver 17,700 to 18,200 units in fiscal 2027.
Barratt expects to report annual adjusted pretax profit in line with market expectations of £559.5 million, citing careful use of home-buying incentives, rigorous cost management that partially offsets margin pressure, and reduced investment in land.
The company expects cost inflation of 3% to 4% in fiscal 2027, reflecting a slowdown in activity across the wider industry.
Barratt replaced its 2026 and 2027 interim ordinary dividends with share buybacks, save for a nominal 1p per share to be paid as an ordinary dividend following a review of its capital allocation.
($1 = 0.7458 pounds)
