Housebuilder Barratt Developments has forecasted a record rise in annual profits this morning, as it presses ahead with a plan to withdraw itself from Central London’s subdued property market.
The FTSE 100 developer, which said today it has been making good progress on its strategy to exit Central London, is set to report pre-tax profits of £910m in the 12 months to 30 June 2019, trumping some City estimates and rising from £835m in the previous year.
A strong close to the year and a boon from joint ventures were among the reasons cited by the UK’s largest housebuilder firm for the improved performance, which comes as Britain’s housebuilders battle Brexit-related uncertainty and rising costs.
However, analysts at Shore Capital recommended a “Sell” rating on Barratt shares, saying: “That Barratt is talking up numbers when the rest are talking them down is likely to have a near term positive impact but we would be cautious.
“There is no dramatic turnaround here or the likelihood of some strong move opposite to the peer group. The macro situation is weakening and the house builders can be expected, largely, to move at the same direction at the same time.”
Barratt also said it had delivered its highest number of completions for eleven years, as well as making further improvements to its margin and becoming the only major housebuilder to be awarded a 5 Star rating for customer satisfaction for ten years in a row.
Average selling prices in the period are estimated by Jeffries to have fallen “down markedly” by roughly nine per cent, reflecting the lower levels of London homes in the mix.
Chief executive David Thomas said in a statement this morning that “it has been another very good year for the group both operationally and financially”.
He added: “We begin the new financial year with a strong forward order book and cash position, continued focus on the delivery of operational improvements across our business, and an ongoing commitment to deliver the highest quality homes across the country.”