Good morning, everyone, and thank you for joining us today, both here in the room and online, for what will be a full morning. Some points of housekeeping before I hand over to David. There are no fire drills planned today, so for everyone here, please follow directions from UBS staff, or follow me, because I'll be going rapidly if there is a fire alarm this morning. Also, if I could please ask if you have your phones with you, switch them off, please, or turn them to silent. We're hoping to run through the results and cover questions on the half year within the hour today to give everyone time to step back across to the atrium where we've got members of our sales team here today, as well as senior members across the Barratt Redrow business.
So we'd like you to have time to be able to chat with them. So we aim to finish at basically 9:30 A.M., and then we're going to be back in here at 10:00 A.M. But basically, with that, I will now hand over to David, and thank you for being here. Cheers.
Hi, good morning, everyone. Thank you, John. Welcome to all of you. As John said, we're going to be here for the morning, so buckle in, so as normal, I'm going to start off with an overview of the half year, then have a look at current trading, and then have a look at our kind of short-term priorities looking forward. Mike is then going to follow with the financials, so as you know, it would normally be Steven that would follow me, but by popular demand, Mike is going to follow with the financials and is going to really get into explaining some of the complications around the Redrow combination, looking at how we've dealt with purchase price allocation and the related fair value exercise, and then Steven's going to talk through our operational performance, looking to really focus on the comparable performance.
So I think you can see that there's quite a lot to cover. As John said, we're going to cover it in an hour, and so after Steven, we'll go straight into Q&A. So just looking at the first half in overview, I mean, we've had a really good operational performance. It's definitely been a more steady market, but we're really pleased with the way that the business has performed and what we've delivered over the six-month period. And as ever, I'd just like to acknowledge the really hard work from all of our employees, but also from our subcontractors and our supply chain partners. I think we recognize that it is a real team effort to be able to deliver the results that we deliver over a six-month or a twelve-month period. So total home completions at 6,846, 10.9% ahead of Barratt on a reported basis last year.
Adjusted pre-tax profit was 6.4% ahead of Barratt reported at GBP 167.1 million, but this included GBP 50.4 million of purchase price allocation impacts and more to follow from Mike on that. Then excluding these, our adjusted profit before tax would have been GBP 217.5 million, up some 38% on the Barratt reported in HY24. ROCE, at 8.1%, was primarily impacted by the decline in profitability in the year. We retain a strong net cash position at almost GBP 459 million, and that's been maintained notwithstanding GBP 171 million of dividends paid and GBP 46.5 million spent on the remediation of legacy buildings. I'm also pleased to announce an increase in our interim dividend, which has moved ahead by 25% to 5.5 pence.
We're really delighted to have completed our combination with Redrow, which legally completed in August, and we obtained CMA clearance in October, and our integration is really in full flight and progressing well. Just on current trading in brief, since the 30th of December, we've seen a continuation of what is really solid reservation trends. This is really great news for us as a business that we've seen this stabilization certainly over the last nine months, and that's just reflected again in current trading. 0.6 for the period from the beginning of the second half through to the 2nd of February, in line with the combined trading performance over the same period last year. While the reservation rate is identical, this year we had no PRS or bulk sales, whereas last year we did. On a net basis, we're around 5% improved year on year.
Our average active outlet position is 414. That's very much in line with our September standalone guidance, and that remains unchanged, where we expect to see about a 9% decline now, including Redrow for the year. We're 82% forward sold with respect to FY25 private completions. Again, very much in line with what we would expect and in line with the prior year. Looking to sort of full year position in terms of completions, we're narrowing the guidance range from our AGM update in October, so guiding now at 16,800 to 17,200 total home completions and moving the lower end up by 200 homes. I'm also very pleased to announce that we expect adjusted PBT, excluding the PPA adjustments, which Mike will come on to, will be towards the upper end of the current consensus range.
And then lastly for me, just moving on to what we kind of describe as short-term priorities. We are very, very focused in terms of delivering the benefits from the combination of Barratt and Redrow. In terms of cost synergies, also in terms of the revenue synergies, and in terms of the overall integration of the businesses, both on an operational and a systems basis. Therefore, immediate focus on cost synergies. We are very pleased to have upgraded our guidance on cost synergies this morning from the original GBP 90 million to GBP 100 million. Secondly, really focusing on putting in place the plans to deliver the revenue synergies through the 45 sites that we have identified, and they will come through to provide contribution over the next two or three years. Also looking at how we can buy land with our one, two, three brand strategy.
We believe it gives us a lot of flexibility in the market in terms of how we can approach the land market, and particularly as we've flagged previously, the ability to buy significantly larger sites than either business would have bought in their independent positions. And then thirdly, and always a focus that we recognize and look to improve our industry leadership. Industry leadership around build quality, customer service, and sustainability. I think these are absolutely the hallmarks of how we deliver on our promises to our customers. And then fourthly, we want to ensure that we continue to operate with strong financial disciplines and balance sheet strength. This is something that we want. It's something that we know that our shareholders and our wider stakeholders want, and it is a key strength of our business. Thank you, everyone.
As I said, I will now hand over to Mike, and we'll be back for Q&A. Thank you.
Thanks, David. Morning, everybody. I'm under no illusions I'm not here by popular demand, but here goes anyway. I'm going to start with our reported results for the half, and as you know, there's many moving parts there. What we'll then do is move on to strip out some of the noise and look at the underlying trading position. If I start then on a reported basis with our numbers on this slide, this includes Redrow's trading performance from acquisition on the 21st of August through to the 29th of December. As David said earlier, adjusted profit before tax for that period for the half was GBP 167.1 million. That's 6.4% ahead of our reported position last year. Adjusted earnings per share at 9.3 pence was 21.2% lower.
And based on dividend policy at the current cover of 1.75 times adjusted earnings, we'll pay an interim dividend of GBP 0.055, which is up 25% on last year's GBP 0.044. We ended the half with GBP 459 million of net cash, slightly ahead of our forecast, which was really due to the timing of some land payments around the half-year end. So moving on then to our sort of underlying trading performance. And on this slide, half-year 2025 results exclude the impact of the purchase price accounting adjustments, which are really just accounting timing differences and almost all non-cash items. And it also includes an accounting policy alignment impact of GBP 14 million in the current period. And we've put a more detailed slide in the appendices that helps you sort of reconcile those numbers through.
In the half year 24 comparative period, we've included Redrow's trading performance from the 24th of August 2023 to the 31st of December, but we haven't aligned accounting policies for that period, so what you can see here then is total home completions were down 12% on the prior year, and that was in line with expectations as a result of lower outlet numbers during that period. Adjusted gross profit was down 8.6% at GBP 386.6 million, but the adjusted gross margin was flat at 17%, and that reflects a mixture of site mix, the moderation of build cost inflation, and the positive mix effect of newer land coming into production. I'll touch on that again in a few minutes. In half year 25, the accounting policy adjustments reduced this margin by 60 basis points, and adjusted operating profit was 37 million lower at GBP 211.8 million.
Really, that's mainly the volume impact of operational gearing coming through. After interest and tax charges, adjusted EPS was GBP 0.12 on this basis, and that's used to calculate the interim dividend for the half, and that's slightly lower than the GBP 0.137 on a comparable basis. Overall, we're pleased with the performance of the group through the first half, as David said, despite the reduced volume, and we're particularly positive to see gross margins stabilizing. Moving on then to the purchase price accounting adjustments, and this slide explains in some detail the fair value adjustments that we made to the balance sheet that we acquired. Really, there are two fair value adjustments that we should dwell on. The first is on inventories, which on a net basis increased the value of inventories acquired by GBP 104.3 million. There are three elements to that adjustment.
First of all, under the accounting standards, we have to market value land options, which we would normally carry on the balance sheet at cost, and that resulted in an uplift of GBP 72 million to their value. Really, this adjustment reflects the options planning prospects and proximity to exercise. Secondly, we wrote down undeveloped land by GBP 60.5 million, and that's reflecting reductions in land prices over the past few years since that land was acquired by Redrow. Then thirdly, we uplifted land and work in progress on in-flight developments by GBP 93 million, and there we're recognizing the value that had been added through the build process to the stage of completion at the point that we acquired the Redrow business. A net GBP 104.3 million uplift.
The second key fair value adjustment is an increase in the Redrow building safety provision of GBP 39 million, and that's not recognizing any change in the risk profile of the portfolio, but under the accounting rules, we have to bring contingent liabilities onto the balance sheet, and as you know, normally they don't meet the threshold for recognition. So after recognizing the Redrow brand value at GBP 231.8 million, the residual goodwill was GBP 259 million. Now, in terms of forward guidance, we expect these fair value adjustments to unwind to the income statement reasonably quickly over the next two years, and there will be impacts to adjusted profit before tax this year of between GBP 85 million and GBP 95 million, and next year of GBP 15-25 million.
So moving on then to the adjusted operating margin bridge, and here we've separated the main moving parts and starting with some numbers on the Barratt operations. So first of all, as I said, the impact of lower completion volumes was a margin reduction of 150 basis points relative to half year 2024. Now, positively, we saw a small benefit from the net inflation position with flat build costs and underlying sales prices slightly ahead year on year across the Barratt operations. A focus on our completed developments in the year resulted in lower charges on a year on year basis, and that contributed a further 60 basis points to margin in the half. And then Gladman also had a better year on year performance as obviously the land market is beginning to pick up.
Other changes to the sales mix, the impact of administrative expenses making up the final 140 basis point improvement year on year, taking the Barratt adjusted operating margin to 9.8%. And then we had a net 50 basis point impact from Redrow in the first half, and really that was driven by a combination of reduced completion volumes in the Redrow business, changes to the sales mix, and also that accounting policy alignment to Barratt accounting policies that I mentioned earlier. So this resulted in adjusted operating margin before purchase price adjustments of 9.3%, and then taking into account the purchase price adjustments, a 210 basis point reduction to the 7.2% that we reported this morning. So moving on now to look at adjusted administrative expenses and adjusted items.
Adjusted admin expenses were up by 24.7% in the half to GBP 175.7 million, but really that was driven all by the first time recognition of the Redrow administrative expenses. Our expenses here included a salary increase of around 3%, but also a further reduction in sundry income, and we offset these costs through lower IT development spend. We moved into the deployment phase of our new CRM platform, for example, and also our continuing recruitment freeze. We had two adjusting items in the half. First, the Redrow transaction costs of GBP 35.5 million. That took our total deal costs to around GBP 60 million. And then secondly, reorganization and restructuring costs of GBP 14.4 million, which relates to the initial divisional office closure program that we previously announced.
Overall, we still expect costs relating to the delivery of the deal synergies to remain around the GBP 78 million pound mark that we announced back in February 2024, and looking forward to the full year, I'd expect adjusted administrative expenses of around GBP 400 million pounds, and that will include the initial GBP 10 million pound of cost synergy benefits that we expect to realize, so moving on to building safety, and with no additional charges for building safety across our portfolio in the period, the main movement here is the recognition of the Redrow portfolio within our numbers. Across the combined portfolio, 28 buildings were added from Redrow with our portfolio and the Barratt business being 263 buildings.
And I'm pleased to be able to highlight further progress in dealing with the portfolio with 193 or two-thirds of these buildings now either at the tender, mobilization, or active remediation stage, and our experience and visibility of potential future costs continues to improve. In relation to Scotland, as has been the case for a while, still no conclusion to the ongoing discussions there on the required scope of remediation, and so we're still providing for the Scottish buildings on the same basis as England and Wales. So moving on now to look at cash flow in the period, and the key movement here really is the significant amount of cash spent on land and work in progress as we begin to invest ahead of opening the new sales outlets that we're planning over the next few months.
And that really underpins the next phase of growth that we'll talk about later this morning. I've already touched on our progress on building safety with GBP 46.5 million spent in the half, and we expect another GBP 100 million to be spent in the second half of the year, although the timing of payments that we expect to make to the Building Safety Fund remain uncertain. After including the cash acquired from Redrow and the payment of the final dividend for the last financial year, the net outflow in the period was GBP 410 million.
So now I'd like to update on the position of the combined group's land bank, and this chart includes the gross margin on Redrow's land within our land bank at its fair value, and as usual, the margin here is based on our current view of sales prices and build costs, so we're making no assumptions here about future inflation or improved sales rates in these numbers. The total land bank now has an estimated gross margin of 18.3%, with the Barratt portfolio at 18.7%, slightly up on June, and Redrow at 17.6%, but before the impact of fair value, the Redrow portfolio would have been at 18.4%. It's very similar to Barratt. 42% of the land bank plots have an estimated gross margin of more than 20%, and that's broadly consistent with the position we outlined at the end of the last financial year.
Over the coming year or two, as we flagged back in September, it remains likely that margin recovery will be gradual, so we're not currently seeing any material benefit from sales prices, and although bill costs have stabilized, clearly they aren't reducing. We're therefore focused on opening more sales outlets and optimizing our brand strategy and our house type range to drive completion growth, which will improve operational gearing and give us better fixed cost coverage to improve our margins overall. Before I finish, let me update on some key pieces of guidance for the full year. As David mentioned, we've narrowed the range this morning on our full year completions to 16,800 to 17,200, and with confidence in the outlook, we're also upgrading expectations for profit before tax towards the upper end of the consensus range.
Then to highlight some additional points, we expect our fair value adjustments to reduce operating profits by between GBP 80 million and GBP 90 million for the full year and add approximately GBP 5 million to our interest costs, which really relates to the discounting impact on building safety provisions. The accounting policy alignments will further reduce operating profits by between GBP 25 million and GBP 30 million, and all of these items really are non-cash in nature. Then we expect our land activity to continue at pace, spending between GBP 0.9 billion and GBP 1 billion for the full year, FY25. Then finally, we expect to report net cash at the end of the year of between GBP 500 million and GBP 600 million. Finally then, to summarize, I think we're feeling confident in the outlook for the combined group. Trading remains robust, and the inflation position looks reasonably stable in the short term.
We're focused on delivering cost synergies and growth from the combined group, and we'll touch on that later this morning. And finally, we're able to demonstrate our confidence in delivering on these plans by narrowing the range of completion guidance, increasing our profit expectations, and also commencing a share buyback program shortly. So with that, let me hand over to Steven, who's now going to take you through our operational performance.
Thank you, Mike. And good morning, everyone. So today I'll take you through the operational numbers around our first half performance. I'll be comparing our figures as Barratt Redrow with the aggregated Barratt and Redrow performance over the equivalent time frames in the previous half year period. Our sales performance is detailed here on slide 18. Our wholly owned private reservation rate at 0.6, combining Barratt throughout the half, and Redrow from the 22nd of August was one-third ahead of the 0.45 delivered in the comparable period in HY24. The more stable economic and political backdrop certainly helped, as did the less volatile mortgage lending environment. Customer demand is still highly sensitive to mortgage rates, but customers have benefited from relative mortgage rate stability, sharply in contrast with the rising rate backdrop of July and August 2023.
Our sales through alternative channels around both PRS and other multi-unit sales generated 0.06 of the HY25 reservation rate. We operated from an average of 397 sales outlets in the half, and this was 11.6% lower than the comparable period, but very much in line with our guidance back in September when we flagged a 9% decline for Barratt on a standalone basis. We opened 42 outlets in the half, and we were selling from 426 sales outlets at the end of December. We expect average sales outlets will be approximately 9% lower across FY25 when compared with the 443 aggregated position across FY24. Looking to our outlet position in FY26, we expect outlet growth, particularly in the fourth quarter of FY25 and through FY26. This will support planned average sales outlets for Barratt Redrow ahead of FY24 levels in FY26.
Finally, on the slide, we've detailed the absolute movements in our private order book in HY25, both prior to and following the acquisition of Redrow, as well as the comparatives. Our private order book at 5,296 homes at the half year end was 13.2% ahead, but partly a function of completion timings. Most pleasing, though, our private reservations across Barratt Redrow saw a circa 1% year on year improvement in underlying pricing across the half. Here in slide 19, we've detailed the private reservation mix, and there's just a couple of points to highlight. Firstly, around the private rental sector and other multi-unit sales, this channel represented 10% of private reservations, slightly down on the 12% share in HY24, with activity in unit terms essentially flat and reservations very much deal timing dependent. Secondly, you can see the continuing recovery in demand from the first-time buyers.
They accounted for 31% of reservations in HY25, up from 27% in HY24, with most of this gain coming through in the Barratt branded reservations. Turning to home completions on slide 20, and again comparing with the aggregated comparatives, we delivered 6,846 total completions in HY25, 12% lower than HY24. Completions from alternative channels, PRS and multi-unit sales delivered 419 units, or 6% of our wholly owned home completions compared with 10% the last half year. This reduction is more around timing, and we anticipate close to 10% of completions will come from PRS and other multi-unit sales for the full year. On pricing, here we've given you the various moving parts to help you with your modeling, but I'd just highlight, applying our analysis of like-for-like matching house types and size, we estimate underlying pricing was essentially flat in the period.
House price movements were relatively tightly banded across the country, with our West, London, and Scottish divisions seeing slightly better house price movements, but with Central and East both slightly weaker. In terms of bridging from flat to the reported 1.5% decline in the underlying private sales price, excluding PRS and multi-unit sales, this reflects lower completions from London this year and changes in site mix. The increase in the average selling prices from our PRS and multi-unit sales reflects both geographic and product mix of home completions. The group's overall wholly owned average selling price increased by 4.1%. Turning now to our land bank on slide 21, we delivered a solid level of land approvals during the half, approving 7,727 plots across 45 sites and more than replacing the wholly owned completions at 6,574.
Reflecting lower completions as well as the time taken for approvals to feed through to land purchase, the duration of our owned and controlled land bank has grown to 5.6 years of supply. Importantly, more than 69% of our combined owned land bank had detailed planning consent at the year end. We also made good progress driving conversions from our strategic land bank in the half, with 1,904 plots converted into our owned and controlled land bank. With the very positive changes to planning policy, as well as government's clear commitment to build more homes across the country, we have a huge opportunity to unlock consented plots from our strategic land bank that encompasses more than 148,000 plots. As such, our planning teams are incredibly active as we look to submit plan applications and unlock land, which will deliver both growth and future margin opportunities.
So in summary, we've delivered a good operating performance in HY25 across the combined Barratt Redrow operations. As Mike mentioned earlier, adjusting for the fair value accounting requirements, we actually delivered a gross margin of 17%, flat on the aggregated performance of Barratt Redrow over the same period in HY24. While we didn't include a slide on build costs, I can reiterate, as you would have spotted on Mike's guidance slide, we continue to expect build costs will be broadly flat for FY25. And we are active, but we remain both selective and disciplined in our approach to land. So with that, we're now going to move to the front table and take your questions on the half year results before we move to the atrium for coffee.
We've also built in significant time for questions around our future strategy, growth, and capital allocation, which will be covered in more detail in the capital markets update starting at 10:00 A.M. So with that, it'd be great to have your questions on the first half.
Can you compare for us?
Yes.
Thanks, everyone. We're probably going to try, as Steven mentioned there, try and finish by 10:00 A.M. I'm going to start with questions from the room. Just a flag for those who are online, there is a question box on there. If you'd like to raise a question online, please do so as well. But we'll open in the room. Please, when you get the mic, it's directional, so please talk into the front end of it and give your name and your organization. Thank you very much. We'll start with Gregor on the front row.
Thank you, Gregor Kuglitsch from UBS. So a few questions. I'll try not to go sort of into the sort of longer-term piece too much. I guess we'll cover that later. But so on the cost piece, appreciate your guidance for this year, but I guess this year's almost sort of done. So the question is sort of where are you seeing current tenders and, I suppose, a little bit of an early view into the second half of this calendar year and, I guess, FY26 on your cost piece, please. The second question is around, and I appreciate you may cover that later, but I look on slide 21, your land bank is still kind of 84,000 plots. I think if you look at your medium-term targets, I guess it implies an absolute decline, right?
If we do the math on three and a half years, is that what you're saying? And do you think that can be achieved quite quickly, or is it sort of actually now you fill the hopper with the strategic, which you flagged, and then it sort of comes down in due course? I guess sort of a sequencing question there. I'll leave it there. Thank you.
Okay, Gregor, thank you very much. So if I start on costs and then I'll pass over to Steven, who can just talk, go into a little bit more detail in terms of what we're seeing. And then if I start on land, then I'll pass over to Mike. I thought you were actually going to answer the question as well, Gregor. But yeah. So just in terms of what we're seeing in relation to costs, I mean, I would say that, as Steven said, we're very confident with costs through to June 2025. We've been very consistent in our guidance around costs, and there isn't anything to alter in the position to June 2025, firstly. Secondly, we're obviously having wholesale discussions with the supply chain as a result of the combination with Redrow.
Thirdly, we're not seeking to be large for the sake of being large, but the reality is we are a big home-building business, and therefore our relationship with the supply chain is very, very important. So I'll pass over to Steven in a minute, and he'll expand on that. And then Mike will pick up in terms of land bank, but I think the short answer on the land bank would be yes. I mean, we're saying that we're guiding to 22,000 completions in the medium term. We want to be a depth of land bank of around three and a half years, but inevitably, it's not going to be exactly linear, and therefore we've got land that will be coming into the business. But Mike can touch on that a little bit more. Steven, just in terms of costs.
Yes, I mean, if you sort of look at the backdrop we're coming from, we've probably got the most stable material price period than we've had in the last four or five years even. We've had a pretty torrid time in 2022, 2023, 2024. So as we guided in September, we sort of guided to flat pricing over the year, and that's what we are confident we will deliver. We've had pressures, but the leverage with the combination is certainly helping in those pressures. We're clearly a substantial builder, substantially large in the market. And materials for the current year, generally a fix. We've got most of the materials are sort of fixed price. We've got some movement expected around end of quarter three on timber, but we expect that to sort of negotiate that backwards beyond our year. We're also seeing longer fixed price periods coming from our suppliers.
As you know, we've said in previous years that we've struggled to get three-month and six-month pricing, certainly. So that's a trend that we're starting to see longer-term fixed price materials coming through, which is helpful. But as a major player, we're pretty confident we'll hold the prices for the current year. There is some pressure into 2026, but at the moment, we're not having any requests which are pushing that out at the moment. So we're probably pretty low, if any.
I think on land, Greg, I mean, we said back this time last year that land would be one of the strengths of the combined group in terms of the number of different routes we've got to source land. So the relationships with agents and so on across the country, we've got a really good strategic land portfolio, and then we can leverage Gladman as well. And obviously, the planning changes that government are proposing will make that really good. We're still planning to buy land through the period. We will expect the land bank to reduce from five years to around three and a half as we go through the next few years. We'll touch on that later this morning. But equally, we expect to be spending GBP 1 billion-GBP 1.3 billion on land on an annual basis over the next few years. So both things will be happening.
We'll be replenishing the land bank. We'll be bringing strategic land through the pipelines, as the planning rules ease, and we'll get to three and a half years in the medium term.
Thank you.
If you just go to Clyde behind, and then we'll work our way along. Thank you.
Thank you, Clyde Lewis at Peel Hunt. Three, if I may. One, I suppose, sort of staying on land, and it'd be fascinating to hear your take on sort of what's happening around land prices. And then the second one linked to that is sort of, again, your drive to find bigger sites. How is that going? Is that looking better or tougher? And the third one was really around that reservation improvement figure, the 0.6 against the 0.57 that we've seen since the start of this year. We strip out the bulk. What would you pin that down to? Is it a little bit of a surge for first-time buyers trying to get in before the stamp duty window shuts, or is it a more general improvement? Or again, is there some other regional or product mix that's particularly driving that?
Okay, so thanks, Clyde. If I start off in terms of land, and then I'll pass over to Steven, and Mike will pick up in terms of reservation rates and kind of what we're seeing. So look, I think first of all, in terms of land, we've really flagged that during calendar 2024, we were very clear in terms of our intake numbers. And I think in calendar 2024, we had a really good 12-month period on land intake. So we came from a standing start, and quite a lot of the industry came from a standing start. And we've been really pleased with what we've seen in terms of intake. So the availability of larger sites is very real. I mean, there's lots of reasons why local authorities would favor larger sites. And we clearly have capacity and capability to take on larger sites.
So let's say 600 plots and upwards, whereas historically, we might have had a second look at that type of site and maybe thought about bringing in another partner. Redrow would definitely have had a second look at that type of site and thought about bringing in another partner. So we are seeing good opportunities in terms of larger sites. And I think once you go beyond 1,000 plots, I think there's very few participants who are in the market at that level. So we do see that we're advantaged in that situation. And then in terms of the other point for us to Steven on, I would say that we've always talked about and monitored very carefully offers made to offers accepted. And I say we're not seeing anything unusual there in terms of typically we'd maybe run at a ratio of around four offers made to one accepted.
I mean, clearly, you don't want to be one in one, and you don't want to be one in ten. So staying somewhere in that range tells us that we're about in the right sort of place from a pricing point of view. Steven, do you want to add?
Yeah, we're having a very good run on land. You have to bear in mind prior 18 months from middle of last year, there was very, very few people in the market. So a lot of the land was held back. It's been coming through in the last sort of 12 months. So we've seen a good flow of land. In particular, we are actually seeing a lot of large sites, the sort of 450, 500, 600, 700 sites, which is ideal for triple branding in high-quality locations. The other thing to mention there is that we've got a lot of strategic land, which we're taking the opportunity in the current environment to make a lot of plan applications.
So we've got something like, thinking of this year, we'll have towards 100 applications running for strategic land to take advantage of the window of opportunity the government is providing for land to come through. A lot of those sites are pretty large sites, ranging 400, 500, 600 units again. So a lot of potential to pull through land. And we find ourselves very, very competitive in that sort of larger 250, 300 unit type site, which a lot of competitors don't enter that market. The small, medium enterprises tend to be in the 100, 150 category up to that size, whereas over 300, it certainly reduces the level of competition and ideally suited to our model.
And then just picking up reservations then, Clyde. So I mean, it's been pretty solid trading since Christmas. It's been good week-to-week performance. As Steven said, we have seen more activity from first-time buyers across the first half. But in terms of the Stamp Duty change, I mean, that had been flagged for quite a long time. And actually, since Christmas, we wouldn't really have had any stock to sell for the end of March anyway. We're selling out beyond March. So I don't think that's having much of an impact on current trading. I think that is underlying demand improving. Interest rates are more stable. I think customers have probably got a bit more confidence in the interest rate outlook. So that's sort of underpinned by general demand, I would say.
Great. And Aynsley.
Thanks very much. Aynsley Lammin down here from Investec. I've just got three quick ones. So first of all, any guidance? I may have missed this, but on land creditors for the year-end. Secondly, been kind of increased chatter around potential Help to Buy or demand stimulus in the market. Just you're generally quite well plugged into these things. Anything you can add, your expectations or thoughts on that? And then thirdly, just on incentives and pricing. Obviously, reservations holding up, as you say, but just interest where incentives are trending.
Okay, thanks, Aynsley. So Mike will pick up in terms of land creditors and incentives. It's really good sharing this, actually, because if you don't fancy them, you can just give them away. So just on Help to Buy, it's very clear that there is no demand-side stimulus in the market. And if you looked back over the last 30 years, the market has essentially operated with demand-side stimulus. So we've said that we still see affordability as being a challenge. And I think that the government would recognize that affordability is a challenge, particularly in certain geographies. But I think from our perspective, we are planning on the basis that the government will not implement any demand-side stimulus. And therefore, I think it's two things. How can we best present our portfolio of brands? How can we attract the most interest?
What offers can we put in place for the customer? And some of that's about self-help, the extent to which we are prepared to fund incentive levels, the extent to which we are prepared to develop products that will offer more for the consumer. So I think it's very much for ourselves in the industry at this point. It's about self-help, but recognizing that there are affordability challenges at a national level.
Yeah, so on land creditors' end, no explicit guidance. I mean, I think it will be slightly at a higher level than we've seen at the half year. So if you think about it as kind of GBP 600 million-ish, I think the reason we haven't given explicit guidance at this stage, as Steven said, is there's a lot of land coming through in the second half, a lot of moving parts in those deals.
So that number may move around a little bit depending on the deals. We'll touch later this morning on how I'm sort of thinking about that in the medium term in a bit more detail. And then in terms of incentives, I mean, really, I think pretty flat in terms of use of incentives. Customers are still quite deal-driven. So no real change to the position there. We're obviously in a stronger market. We'll be looking at that very carefully as we go through the next few months. But no real changes, to be honest, in the last few months.
Great. Sorry, actually, just Cedar on the front there, if you could. Sorry. Come back over to Chris.
Thanks very much. Cedar Ekblom from Morgan Stanley. I just wanted to go back to the point on self-help and then take that back to the strategic land. Do you believe that in your strategic land, you have the right profile of plots to support a volume recovery in the absence of demand stimulus, taking into account the fact that you need to potentially play to more affordable homes and sort of delivering into government's agenda? So just talk a little bit about the strategic land and whether that's aligned with potentially a different type of house volume recovery versus what we've seen in previous cycles. And then the second question, can you just talk to developments in PRS? I think you guys decided to go into PRS yourselves.
I know it's a medium-term program, but just give us an update on where we are with the PRS efforts for your business. Thank you.
Yeah, sure. Thanks, Cedar. So I'll talk about the strategic land and then Mike will pick up in terms of PRS. I mean, I would say in terms of strategic land, really two points. One is broadly, I would say that the strategic land is kind of aligned with the existing businesses, whether it be Barratt, David Wilson, Redrow. And therefore, the profile and locations of land will be aligned with the existing business, firstly. Secondly, in general, the strategic land sites are larger. So I would say that the Barratt portfolio, roughly on a per-site basis, is probably 50% to 75% larger than the average operational site, as the second point. And then thirdly, I think that addressing the market conditions isn't necessarily all about addressing affordability.
I mean, we recognize that affordability is very important, but I think there are other opportunities in terms of second-time movers where you could see that the market has been a bit more stable for second-time movers and also downsizers. So I think this is the key thing about being able to appeal to the whole consumer base is that when there's really challenges of affordability with the first-time buyer, it's quite difficult to have products that bring the first-time buyer into the market. As we've touched on this morning, the first-time buyer position has improved a little, but it's still running well below where it was, say, two years ago.
And then if I pick up on PRS, and so as you know, we've got two or three key partners on PRS that we've been developing with over the last few years. We still see it as being a core part of our mix going forward, but not to any sort of extreme levels. We'll talk about the medium-term plans for that later on. I'd expect to be about 1,000 units of PRS this year, which is broadly in line with where we expect it to guide. And I mean, the reason we like it is because as part of our return on capital improvement journey, adding PRS to a site, even if it's only 50 or 100 units, can really improve the asset turn and help us to build it through faster. So it does have a role to play for us going forward.
But it's only ever going to be a sort of minor part of the tenure mix overall for us. And really, we want to stick to most of the relationships being through a few key partners where we can build really deep and long-lasting relationships.
Thank you. I think Chris will work around the row here and then pass back. Thank you.
Morning, everyone. Yeah, Chris from Deutsche . I just wanted to ask for a bit more detail on what the planning environment's been like for you most recently. Steven, you mentioned you put a lot of applications in. I'm just wondering if you're starting to see some evidence of the government's actions taking an impact. Next one I wanted to ask was really your thoughts around the Building Safety Levy and whether or not you've had much more engagement with the government with regard to timing and how it's going to configure. And the final one's just about the share buyback. Why GBP 50 million? Why now? Is this a part of an ongoing program? Can you just talk around your thought process there?
Yes. Okay. So Mike will pick up on the share buyback, and if I talk generally about planning and pass to Steven, and I'll give you a few comments in terms of the Building Safety Levy. So just on planning, I mean, I think if we took ourselves back 12 months ago, we are just in a fundamentally improved position from a planning perspective. We had a situation 12 months ago where essentially planning was being rolled back and had been rolled back over a period of time so that it was becoming less and less effective, and I think we're in the complete reverse of that position now, but with further accelerations in terms of the changes that are proposed. So in terms of the changes to the National Planning Policy Framework, we would see that as being kind of universally positive.
A very, very clear message has been delivered to the local authorities, but it will take time for that to filter through in terms of planning outcomes, and we always said that from the election that you can't be looking for significant changes pre the middle of 2025. I mean, it's not going to flow through until then, and Steven will touch a bit on what we're seeing, and then before I pass to Steven, just in terms of the Building Safety Levy, we don't agree with the Building Safety Levy. We've been very clear about that position. I think the industry has been very clear about that position. The industry has been asked to contribute in at least three different ways, and we see it as being disproportionate, but all we can do is make our views on it clear.
The building safety levy clearly has not yet been implemented. They're still looking at exactly how it will be implemented. But it's gone from something that was expected originally to be apartments only to now something that is on an industry-wide basis. So we'll just need to see how it plays out in terms of the actual implementation. The only positive is that it is being implemented at kind of an above-the-line level so that it should become part of the land value mechanism in that it is clearly a direct cost of build as opposed to, say, the corporation tax charge that we received where there's no prospect of recovery from that position in terms of the economic model. Steven, just in terms of planning?
In terms of planning, I mean, there's not a lot of improvement we've seen at the moment, as you'd expect. But in terms of policy backdrop, it's the best it's probably been in a generation. So we're very, very positive about the planning. And decisions are starting to come through which reflect that. The government has made it clear about what the policies expect. And we're starting to see local authorities are now starting to reflect positive decisions, bearing in mind that they will know that if it goes to appeal, it'll get approved. Or they're better off calling in the application, dealing with it rather than losing control and ending up with something that they don't particularly want. So there's a lot more cooperation with the local authorities. We're starting to see that.
I think, yeah, I mean, there's a lot of talk about the number of planners that are going to be recruited into the system. But I think the biggest thing from our point of view is the planning reform bill where they're going to take a lot of the administrative day-to-day incidental stuff away from the planning officers and allow the planning officers to concentrate on the major applications, which will expedite them without any doubt. And I think the only final thing to say is that, well, the planning appeal system currently is being very effective. We've got a lot of appeals going through, and we're having a high degree of success. Our current success rate is probably somewhere between 75% and 80%, which is higher than it's been for some time. So planning backdrop, very positive. And we expect some big improvements to come through going forward.
And then on the buyback, so it's a minimum of GBP 100 million per annum. So the 50 is only because we're looking at the second half of this year. I mean, I'd see that as being a sign of the confidence that we've got in delivering the plan for the combined group. And obviously, we'll talk more about that later this morning. We're looking at the cash generation over the medium term. And we've deliberately framed it as a minimum of GBP 100 million so that we have some flexibility in that program over time. And we'll look at that sort of as we go through the next few years. But really, from our perspective, as we sit here today, it means we can invest in growing the business through land. It means we can take advantage of sort of tactical opportunities.
We still think there's the opportunity to return some cash on top of that as well.
Thank you.
We're going to run tight on time. Glynis, and then we will try and get to the back. Otherwise, we may have to do overflow in the CMD questionnaire. Thanks.
Johnson, Jefferies. I think I can be relatively brief. The Gladman mix in the margins, how should we think about that going forward? Can that continue to add to the margin? Or is Gladman now making the kind of margin which you expect? I'm assuming there's a lumpiness there, so any kind of guide. The 100 sites that you've, I think you said, are in planning strategic land. What would that historically have been at? What proportion of sites do you have in strategic land? Any kind of context for how that 100 sits? And then just in terms of the strategic land, just want to check. I've not got Matthew in front of me. Harrow, is that included in strategic land? Has that been added into Gladman? Does that sit separately? Just in terms of just the numbers to make sure we've got the full amount of strat land.
Okay. Fine. So I think that Mike will pick up in terms of the Gladman margin. And I would say that Harrow, any sites in Harrow that are strategic will be included in the strategic land numbers for the group, i.e., not Gladman, but the group strategic land numbers. And Steven, do you want to just talk about the comparables?
Yeah. In terms of comparables, Glynis, I mentioned currently we've got something like 44 planning applications submitted on strategic sites, and we've got 52, 53 actually in preparation. So we'll have the thick end of 100 planning applications in for strategic land. Clearly, we've got a lot of other planning applications in for our infill land. So this is just our strategic land portfolio. If you put that into context, in a good year, historically, we'd be making somewhere in the region of 15-20 planning applications for strategic sites. So there's a fantastic window of opportunity, and clearly, we're taking advantage of that sentiment.
Gladman, I mean, Gladman's had a tough couple of years, as you would imagine, given the land backdrop. Vicky's actually the CEO of Gladman's here today, so you can grab her for coffee in the atrium. Just given her PDR, I would expect a bit more margin improvement to come from Gladman over the next couple of years. Seriously, it's been a tough couple of years for that business. It's delivered what we expected in terms of plots coming through to Barratt from Gladman that we expected at the time of acquisition. I think it's performed really well, actually, through that tough market period. Clearly, as we look at the next year or two, given the planning backdrop, given the uptick in land activity from the other house builders as well as ourselves, then clearly, Gladman has been really well positioned to play into that.
So again, we're pleased with how it's performing, and we're very confident about its delivery.
Lovely. Yeah. Basically, if we can go to Will Jones. Just look at that. There we go. Nope.
Thank you. Will Jones, Redburn Atlantic. Three quick ones, please. Appreciate we're short on time. The first, just the fourth quarter outlet openings, the visibility you've got over those, and the quantum, because I think it's quite a big number that's due. Second, private ASP in the order book, I think it's 400, up from 375 last year. Just some understanding of that, please, with prices flat. And the last one was just your experience on affordable housing in the Section 106 side, just given the struggles of HAs. Thanks.
Okay. Well, thank you. If I pick up in terms of affordable housing, so I mean, I think it's well documented, the challenges that the housing associations have in terms of the squeeze on building safety costs, the cash impact of that, the remediation of their properties, and the rental settlement, and the challenges they have around the rental settlement. So I think that it's not a good position, but we're not seeing it really impacting us in terms of current year. So the reality is that we won't have as many HAs bidding, and therefore, pricing on affordable housing may not be so good. But the key thing for us is, have we got a buyer for the affordable housing, and can we continue to build and complete on the development?
We are very hopeful that the settlement that is offered to the HAs in the current year from government will be a much improved settlement, and therefore, this blockage in relation to 106 will be kind of eliminated on a go-forward basis. Mike, do you want to pick up on outlets and private ASP?
Yeah, sure. So I mean, in terms of outlets, well, clearly, we've said that outlets begin to open from this point. So we've got quite a big program coming through. I'd expect something like 50 to open in the second half of the financial year. And really, the guidance we've given going out slightly further is that FY26 outlets will be slightly ahead of FY24. On a pro forma basis, I think the average was 443 outlets for FY24. So that will give you a sense of the direction of travel. And then ASP, I mean, we've sort of disclosed the ASP numbers. I think there's been a little bit of underlying house price inflation on a like-for-like basis, as we've seen, and then some mixed effects coming through. So at the moment, we'd expect those trends to sort of continue probably from here.
I think there will be an opportunity to come back again later. I think basically, we're going to break for coffee now. There are no questions online. Please, you're welcome to go back to the atrium. I think, Keith, a couple of things to flag. Over in the atrium, we will have Jody, who's a sales representative from Redrow, Claire from David Wilson, and Kinder from Barratt. So for anyone who wants to understand a little bit more in terms of just a bit about the brands and the differentials, please do go and chat to them over coffee, and we've also in the room got key members of the team in terms of specialists, so in the world of land, Vicky's been mentioned already. Victoria's here. Phil Barnes and Julian Larkin. In terms of the lending market, Adrian MacDiarmid is here with us.
Oliver, who many of you met in the world of innovation. And Stephen Kinsella is also here, who is in charge of our MADE Partnership business. So please do grab them during coffee. But also, we'll all be here at the end of the CMD.