UK’s biggest housebuilder uprates profits guidance

construction: Barratt to top expectations of financial analysts

Britain’s largest housebuilder has raised its full-year profit expectations after benefiting from sales of more expensive homes.

In a trading update, Barratt Developments – which has three divisional offices in Scotland including the East Scotland operation that has development sites in Fife and Perthshire – said it expected full-year pre-tax profits to rise from £682.3 million to around £765m in the year to June 30.

Analyst consensus had put the likely outcome at between £699m and £740m.

Barratt’s said its average selling price in the year had increased by 5.9% to £275,000 and total completions came in at 17,395, up marginally compared to 2016 and the highest level in nine years.

However, the firm also said it slowed the rate of land purchases, which was down from £1.1 billion to £957.2m, and reflected “our caution immediately following the EU referendum”.

“It has been another very strong year for the group both operationally and financially,” chief executive David Thomas said.

“We have delivered our highest number of completions for nine years, more than any other housebuilder, and continue to see a positive mortgage environment and strong consumer demand.”

Barratt said its total forward sales are valued at £2.1bn, equating to 9,762 plots.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Reports of the demise of the housebuilding sector in the wake of Brexit were greatly exaggerated.

“Put simply, Barratt Developments is selling more houses at higher prices, and that’s good for profits and shareholders.

“Of course, there are still potential banana skins.

“Brexit is a multi-year process and the housing market may not yet have witnessed the full impact of the decision to leave the EU.”

Shares in Barratt Developments closed 5p up at 589.50p yesterday.