Shares in Barratt Developments fell this morning despite Britain’s biggest housebuilder reporting a strong start to the autumn selling season thanks to “high levels of consumer demand” across all regions.
Forward sales (including joint ventures) jumped by 20.7 per cent to £2.5bn across 11,033 plots in the 19 weeks to 8 November compared with £2.07bn the same time last year.
Net private reservations per week increased by 12.5 per cent to 261 while its sales rate increased to 0.70 net private reservations per active site per week, up from 0.63.
Chief executive David Thomas, who took over from Mark Clare earlier this year, said the company was trading well since the start of the new financial year and that there continued to be good consumer demand across the country, thanks to Help to Buy and attractive mortgage deals.
“Against the backdrop of a significant structural shortage of new homes in Britain, we have made a strong start to the year,” Thomas said.
“Operationally the business is performing well with strong sales, good control of input costs and continued land investment. Our targeted recruitment programme has delivered a further 250 new apprentices, graduates and trainees to the business.”
Liberum’s Charlie Campbell said "house prices are much more stretched than widely assumed” and warned that margins are likely to come under more pressure because of a “more vigilant regulator” and build cost inflation.
Barratt’s shares were down 1.48 per cent this morning at 567p, suggesting some profit taking by investors or reflecting Campbell's view that shares are already over valued.
Analysts at Davy said: "Barratt’s trading update this morning shows further evidence of a very strong autumn selling season in the UK. Sales rates have continued to rise compared to the previous year, and the company has now secured a formidable forward sales position."