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Housebuilder Barratt hits record-breaking annual profits amid decline fears

POSTED ON 19 SEPTEMBER 2018

 

Last year the company sold its highest number of buildings in a decade – 17,579 homes – but experts say Brexit and interest rates dim the outlook

 

Barratt’s annual pre-tax profits were up 9.2% to £835.5m while revenue increased 4.8% to £4.87bn. Selling 17,579 houses in the 12 months to June 30th, was a rise of 1.1% on the previous year’s sales.

The average selling price on completion increased by 5% to £288,900, while forward sales were up 11.1% to £3bn.

Barratt has claimed that market conditions remain favourable, and that the availability of mortgage finance and the government’s Help to Buy scheme continue to support “robust consumer demand”.

Despite recent reports that Help to Buy will be eliminated in 2021, Barratt’s outlook remains positive.

Chief executive David Thomas has said: “The group has had another outstanding year delivering a strong operational and financial performance, and our highest volumes in a decade.

“As the UK’s largest housebuilder, we are helping to address the country’s housing shortage – creating jobs and supporting economic growth whilst continuing to lead the industry in quality and customer service.”

Senior analyst at Hargreaves Lansdown, Laith Khalaf, places Barratt’s record-breaking profits in the context of a worried housing market overall.

He said: “Barratt Developments has sold more houses at higher prices, and that’s led to record profits for the housebuilder.

“Despite this strong performance, the share price has lost almost a fifth of its value since the start of the year.

“That’s because the market is worried about three things which are out of Barratt’s control – Brexit, interest rates and Help to Buy.

“Unemployment is currently at a record low, but clearly there are concerns that withdrawal from the EU may not be an entirely smooth ride, and that puts a dampener on stocks like Barratt, which are plugged into the domestic economy.”

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