Barratt battling market conditions as Redrow merger edges closer



Mark Crouch, analyst at investment platform eToro, says: “Investors in UK housebuilders might be feeling a bit more optimistic following Labour’s election win. Higher interest rates have caused the UK housing market to stall over the last couple of years, and although mortgage demand looks to be gradually picking up, the ambitious targets set by the new government could be exactly what is required to get the market moving.


“In Barratt Developments latest trading update, the UK housebuilder announced profit forecasts for 2024 ahead of expectations. However, the company expects completed home builds to fall in 2025. Despite challenging market conditions, Barratt are not letting this impede their growth aspirations. Barratt’s proposed merger with Redrow received shareholder approval back in May and looks set to complete in the latter part of this year.  


“Barratt Redrow, as it will be known, will provide diversification for the business supporting a wider array of property offerings and will further strengthen what is already a robust balance sheet. Stabilising property prices and cooling inflation have gone some way in helping boost the outlook for Barratt into the second half of 2024. Still, Barratt and their peers remain at the mercy of interest rates, making the Redrow merger essential in laying foundations for future growth when interest rates eventually subside.”



Euros U-turn didn’t score highly for ‘Spoons



Adam Vettese, analyst at investment platform eToro, says: “Wetherspoons has seen sales grow once again, showing that the British love for the pub is still alive and well despite the increased cost of living. This growth however, represents a year-on-year slowdown, and whilst we had an extra bank holiday in the form of King Charles’ coronation last year, this year’s Euros didn’t have the added bonus of bringing in extra footfall. Wetherspoons broke with their own tradition to show live sport while the Euros have been on and it would appear that punters have tended to watch it elsewhere as we have not seen this reflected in the numbers.


“Whilst this may be a missed opportunity, it is fair to say that the company has still achieved sales growth amongst a difficult backdrop of labour and raw material prices which are significantly higher due to inflationary pressures. As these costs begin to ease, profitability should increase.”

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