Barratt Developments Sees Decline in Pretax Profit, Raises Full-Year Guidance
Barratt Developments records a decline in pretax profit and revenue, but reports an increase in reservations and revises full-year sales guidance upward.
By Joe Hoppe
Barratt Developments, a leading house-builder, reported a decline in pretax profit due to a challenging macroeconomic environment, with sales taking a hit. However, the company has revised its full-year guidance upward as demand begins to recover.
For the half-year period ending on December 31, Barratt Developments recorded a pretax profit of £95.2 million ($119.9 million), compared to £501.5 million from the same period last year. This decrease can be attributed to a 28.5% decrease in home completions and a lower margin.
Revenue also experienced a decline, falling from £2.78 billion to £1.85 billion.
In light of these results, the board declared an interim dividend of 4.4 pence per share, down from 10.2 pence in the previous year.
Barratt Developments reported a decrease in forward sales as of January 28, with 8,760 homes sold compared to 10,854 during the same period in the previous year. The total value of these sales amounted to £2.27 billion, down from £2.665 billion.
However, there is some positive news in terms of reservations. From January 1 to January 28, the average net private reservations per active outlet per week increased to 0.60, improving from 0.49 in the equivalent period in January 2023.
Despite the challenging market conditions, Barratt Developments has upgraded its full-year sales guidance. The company now expects to deliver between 13,500 and 14,000 homes for the full year, compared to the previous guidance of 13,250 to 14,250 homes.
It is worth noting, however, that the ultimate outcome for the full year will depend on the market's performance during the crucial spring selling season.