Barratt set for bumper year amid record completions
Housebuilder Barratt Developments said it expects full year profit to reach the top end of market expectations as it forecasts its highest rate of completions this year since the financial crisis.
Supported by strong demand for homes, low borrowing costs and government schemes, such as Help to Buy, Barratt sees total completions at 17,350 for the year – the highest level in nine years.
As a result, fiscal year 2017 pre-tax profit is likely to meet the upper end of estimates of £733 million, it said in a trading update today.
Total forward sales, including joint ventures, on 7 May were 12.7% higher on the same time a year ago at a value of £3.2 billion, compared to £2.8bn last year. This equated to 12,822 plots, up from 11,605 plots in 2016.
Since the start of the year to 7 May, the company has launched 46 new developments, including joint ventures.
Barrat’s overall sales rate edged up to 0.8 from 0.78 last year as net private reservations per average week rose to 299 from 282.
The group said it continued to see upward momentum in private average selling prices, helped by house price inflation and changes in its mix.
Chief executive David Thomas said: “This has been another strong period both operationally and financially for the group. We remain firmly committed to delivering industry leading build quality and customer service, recognised by the award of the Home Builder Federation’s maximum five star customer satisfaction rating for the eighth consecutive year.
“Our controlled approach to growth means we are on track to deliver 17,350 completions in the year, the highest number of completions in nine years. This, combined with the strong market backdrop, means we now expect full year profit before tax to be at the top of the range of current analyst estimates.”