Barratt finishes the year strong despite Brexit

Added 7th September 2016

Barratt Developments delivered its highest total of housing completions since the global financial crisis and enjoyed increased demand for homes even after the Brexit vote, the company reported today.

 Barratt finishes the year strong despite Brexit

The residential property and development company said it had completed 17,319 homes during the year ended 30 June 2016, up 5.3% from the previous year.

And sales did not slump following the EU Referendum either, despite the hit the housing sector took that sent share prices of major developers tumbling by a considerable amount. Homebuyers reserved an average 0.75 homes a week since 1 July 2016, compared with 0.71 homes the year before.

Total sales were up 4.1% as of 4 September 2016, the group said, with affordable housing sales experiencing the most dramatic growth (38.1%) and generating £707.4m.

Although Barratt chief executive David Thomas said the “encouraging” sales trends since the start of the new financial year “underpin an increasingly ‘business-as-usual’ stance,” he said the group would “continue to monitor consumer, economic and other lead indicators closely following the EU referendum vote.”

Off the back of the heightened demand for homes, pre-tax profit grew significantly by 20.7%, reaching a record £682.3. The group was also able to end the financial year with a robust net cash balance of £592m.  

The UK housebuilder said its strong financial performance over the year also supported a dividend hike, bringing the total for the year up 21% to 18.3p per share. 

“We have started the new financial year in a good position, with £592m year-end net cash, a healthy forward order position and an experienced management team in place,” remarked Thomas.

“There remains an under-supply of new homes, strong government support including Help to Buy and a mortgage market willing to lend. As a result, we remain confident in the underlying fundamentals of both the housing sector and our business.”

Barratt’s share price fell by 2.33% on Wednesday despite the firm’s solid sales performance. The shares belonging to peers Persimmon, Berkeley Group Holdings and Taylor Wimpey similarly slid during morning trading, losing some of the ground gained on Tuesday.  

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