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Barratt doubles profits
SHARES in Britain’s largest residential property builder Barratt dipped slightly today after the firm reported doubling its profits inside 12 months but announced its full year dividend would be set “conservatively”.
Barratt Developments, which was founded by the late North-East property tycoon Sir Lawrie Barratt, managed to overcome a difficult construction market to report expected pre-tax profits of £45m in the six months to December 31.
The figure is up a whopping 108 per cent on the previous year, and the firm had simultaneously managed to slice its net debt from £542.2m in 2011 to £332m by end of the period, the company said in a trading update ahead of its interim results report on February 27.
The firm, which trades under the Barratt Homes and David Wilson Homes brands, expects to clear its debt by June 2015.
But the dividend news saw Barratt's share price drop by more than 2.5 percent on the London Stock Exchange in early trading, although the price had rallied to less than a one per cent drop by close of trade.
Mark Clare, chief executive of Barratt, said: “This has been a good first half performance. Pre-tax profit has more than doubled, net debt was significantly lower than the prior year, and we have started the second half with a strong private forward order book up by over 35 per cent.
“In addition, we have been investing for the future, successfully securing higher margin land both in the South-East and across the rest of the country that will drive further profit growth.
Following completion of 5,085 units, group revenues for the six months to December 31 will be around £950m.
The house builder is also due to get a financial boost from the Bank of England's Funding for Lending Scheme, which aims to help more people access mortgages with UK banks.
It is hoped as credit for property becomes increasingly easier to access, demand will rise.
Barratt also announced that it has acquired two new development sites in London it claims to have a development value of £400m and will create 1,000 new homes in the capital.