Barratt bullish; Tesco makes progress
Barratt Developments reported that completions outside London are at their highest for nine years.
Taking account of lower demand in London 7,180 homes were built against 7,626 in 2015.
Profit before tax for the period is expected to be around £315m, about 7% higher than the comparable period in 2015 (£295m).
Total forward sales (including JVs) are up 15.8% against a strong prior year comparative at £2.3 billion (2015: £2.02bn), with wholly owned forward sales up by 35.2% to £2.2bn (2015: £1.6bn)
David Thomas, chief executive said: “This has been another good half year for the group.
“Consumer demand is strong benefiting from good mortgage availability and ongoing government support. Our healthy forward order book and this strong demand leaves us on track to deliver on our volume guidance for the full year.
“Our focus remains on maintaining good operational and financial performance, and delivering attractive shareholder returns. The fundamentals of the market are robust.”
Mr Thomas said the performance is supported by “ongoing healthy market conditions driving robust consumer demand”.
He said: “We continue to benefit from good mortgage availability and a supportive Government policy environment including Help to Buy (Equity Loan).”
Average net private reservations per week were 247 (2015: 246) for the period.
The company launched 83 developments in the period (including JVs) (2015: 63) and operated from an average of 374 outlets (including JVs) (2015: 386).
“We expect to see average outlet numbers remain broadly flat for the full year against the prior year,” said Mr Thomas.
Total average selling price increased by 3.9% in the period to c.£264k (2015: £254.2k), with private ASP up by 5.3% to c.£296k (2015: £281.1k) benefiting from mix as well as some underlying house price inflation.
Completions (including JVs) outside of London reached their highest levels in nine years, at 6,813 (2015: 6,784). The company saw stronger reservation trends, particularly in Scotland, the North of England, the North West and West Midlands.
The company has cut prices on some of is London sites after a slump in completions (including JVs) from 842 to 367 over the comparable periods.
This pre-announced reduction in the first half was primarily driven by the planned build programme between the first and second half impacting wholly owned site product availability.
Tesco making ‘strong progress’
Tesco has reported a 0.3% rise in like-for-like sales over the six-week Christmas period.
Food sale rose 1.3%, while sales of clothes and toys rose 4.3% and 8.5% respectively.
Chief executive Dave Lewis said: “We are very encouraged by the sustained strong progress that we are making across the Group.
“In the UK, we saw our eighth consecutive quarter of volume growth and delivered a third successful Christmas.
“Our fresh food ranges proved particularly popular, outperforming the market with great quality, innovative new products and even more affordable prices.
“Internationally, we have continued to focus on improving our offer for customers in challenging market conditions.
“We are well-placed against the plans we shared in October to become more competitive for customers, simpler for colleagues, and an even better partner for our suppliers, whilst creating long-term value for our shareholders.”