Barratt Redrow starts hunt for supply chain savings

Aaron Morby 2 weeks ago
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Newly-formed house building giant Barratt Redrow is looking for big savings as it seeks to consolidate its enlarged supply chain.

Barratt Redrow CEO David Thomas says cost savings will be delivered at pace
Barratt Redrow CEO David Thomas says cost savings will be delivered at pace

Following formal clearance of the Barratt takeover of Redrow at the start of this month, chief executive David Thomas confirmed plans to find £90m in cost savings.

A review of procurement and consolidation of the supply chain is expected to squeeze £34m or 38% of the targetted efficiencies.

He said cost saving efforts would be centred on optimising procurement for Redrow’s business while working with supply chain partners to unlock additional procurement savings.

Also the house builder said it had started consultations to close five divisional offices as part of a broader plan to shut nine divisional offices across the country.

Activities at a further 32 divisions would also re-aligned as part of the consolidation of Redrow into the Barratt housing business.

Optimising the divisional office structure is expevted to unearth a further £33m or 37% of the £90m target.

The final balance of £23m of savings is expected to come from consolidation of duplicated central and support functions, which will include the rationalisation of board positions and senior management as well as PLC and other third-party related costs.

Total home completions for Barratt Redrow are expected to be between 16,600 and 17,200 units for 2025.

Thomas said: “This is an exciting new chapter for our business. Barratt Redrow is uniquely well-positioned to meet the need for new homes of all tenures across the country.

“We have superior scale, with a differentiated multi brand offering that can be deployed across our strong combined land portfolio.

“We begin this journey with a strong balance sheet, a solid forward sales position and the ability to add significant value through cost and revenue synergies.

“We look forward with confidence to delivering a smooth and efficient integration process, and to capturing the enhanced growth opportunities ahead of us.”

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