Building firm set to beat profit targets
Barratt Developments’ shares rose after the company said it would beat profit targets.
For the year ended June 30, Barratt sold 17,579 homes, up from 17,395 the year before, which the housebuilder said was its highest number of completions in 10 years.
Profit before tax is expected to come in at £ 835 million, up nine per cent from £ 765.1 million, and beating market expectations of £ 812 million.
In early morning trading, Barratt’s shares were up 2.61 per cent or 12.6p to 495.6p.
The value of Barratt’s forward order book rose 1.5 per cent from £ 2.14 billion to £ 2.18 billion, representing 10,155 plots.
The average selling price of a Barratt home was around £ 289,000 over the year, up from £ 275,200 in the prior year, with affordable housing making up around a fifth of sales.
David Thomas, Barratt’s chief executive, said: “It has been a very good year for the group both operationally and financially with strong customer demand for our high quality new homes across our business.
“We begin the new financial year with a healthy forward order book, a strong cash position and a continued focus on delivery of operational improvements across our business.”
Robin Hardy, analyst at Shore Capital Markets, said that while Barratt was beating expectations, there was reason to remain cautious about the housebuilder’s outlook. Prices are weakening across the market, with the rate of price inflation now below two per cent.”