Barratt Redrow launches £400m share buyback after push by major investor

Barratt Redrow has launched a £400m share buyback programme after a campaign by one of its biggest investors.

The housebuilding giant published a full-year trading update this morning, which revealed an increase in completions and said that profit would meet expectations for the year, as well as announcing the buyback.

The announcement came after Phoenix Asset Management Partners, which owns 5% of Barratt Redrow’s shareholdings as its third largest investor, earlier this month urged the firm to embark on an “aggressive” buyback programme, threatening to “escalate” action if it did not.

In a 430-page document, Phoenix argued Barratt Redrow shares were undervalued, warning of the possibility of a takeover if action was not taken and outlining the case for buying back as much as £1bn of shares a year.

In an update for the 52 weeks to 28 June 2026, Barratt Redrow reported 17,667 home completions, up 5% from 16,826 the year prior. 

Adjusted profit before tax in line was reported to be within expectations. Company-compiled consensus for profit was £559.5m, with a high of £576m and a low of £537m.

David Thomas, chief executive, said the sector was continuing to “macroeconomic and geopolitical uncertainty, alongside industry headwinds and subdued customer demand”.

“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,” he said.

It announced its intention to return £400m to shareholders in FY27, primarily through share buybacks.

Phoenix founder Gary Channon welcomed the announcement, saying fellow shareholders had reached out to him indicating their support of his proposal and adding that Phoenix have “had interactions with the Barratt Redrow board”.

“The board’s decision to return capital through buybacks, while the shares trade so far below their worth, is a step forward for shareholders,” he said.

“Every share bought back creates lasting value for those who remain. We remain of the view that the quantum should be based upon cash generation and not constrained by accounting earnings. We look forward to continuing to engage with the board.”

Duncan Ferris, investment writer at Freetrade, said Barratt Redrow will be hoping the £400m paid to shareholders “will keep them sweet as continued housing market weakness leaves the business in a tricky spot.”

He said the firm’s “operational performance looks solid”, with the impact of Redrow’s integration “stronger than anticipated”.

However, he noted that the “sales environment remains fraught”, with the firm’s order book weaker than last year and incentives remaining elevated.

Net private reservation rate improved to 0.64 compared to 0.63 for FY25, however forward sales were down from £2.92bn to £2.82bn.

Ferris said the buyback would soothe investors spooked by the firm’s half-years, when falling profits and a dividend cut saw share prices drop “to depths not plumbed since 2013”. 

According to a Peel Hunt note, Barratt Redrow shares have fallen 26% in the year to date, in line with the wider sector.

But Ferris noted that the buyback scheme had “come at the expense” of ordinary dividends. 

“Hoovering up its heavily discounted shares makes sense from a capital allocation perspective, but it may test the patience of income investors,” he said.

Barratt Redrow’s trading update comes ahead of the publication of its annual results on 16 September 2026.

Barratt Redrow has been undergoing leadership changes recently, with its chief financial officer stepping down in January and long-time chief executive David Thomas retiring in March.

Last month, it announced that Rebecca Napier would take over as CFO in August, and Dean Banks would take over as CEO in September.