Barratt unveils record figures and special dividends
Douglas McLeod: ‘continued strong demand’
Housebuilder Barratt Developments announced a record first half performance with plans to return £350m in two separate special dividends in November 2018 and November 2019.
Russ Mould at AJ Bell said the market reacted with some frustration to a lack of margin guidance in a January trading update, so investors will be reassured to see a modest increase in the adjusted gross margin in these results.
“However, the unadjusted gross margin, reflecting legacy costs on commercial properties, fell. Investors should keep a close eye on levels of profitability as the market currently seems to be pricing in continuing expansion in margin.”
Barratt said revenue rose by 9.5% to £1.9bn in the six months to 31 December. Pre-tax profit increased by 6.8% to £342.7m.
Chief executive David Thomas, said: “There is high demand for new housing across the country.”
Douglas McLeod, managing director in Scotland, said: “We’ve seen continued strong demand in Scotland with some of the highest levels of completions we have ever delivered.
“With low interest rates and the continued, albeit reduced, support of Help to Buy, we expect demand for new housing to remain strong through the rest of the year.”