Barratt sales fall | Man Utd shares slide | Beeks upbeat
Britain’s largest housebuilder Barratt Developments has flagged difficult trading conditions in the coming months after posting a fall in annual profit and forward sales.
High mortgage rates and a squeeze on household budgets were blamed for the slowdown. The company said it expected average sales sites to reduce by around 6% in the current fiscal.
Forward sales stood at £2.44 billion at the end of last month, down 36% from a year earlier.
The builder posted pre-tax profit of £884.3 million for the year ended 30 June, just ahead of analysts’ consensus of £882m.
Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club, commented: “Barratt is doing everything it can to weather the storm, reducing costs and stepping back from the land market. But like all housebuilders, it has limited control of its own destiny and needs market conditions to improve.
“The outlook for Barratt is murky at best right now. Cracks are starting to appear in the housing market, and while interest rates should be close to peaking, first time buyers remain under enormous pressure.
“Until there is greater clarity on the future path of interest rates it seems unlikely market conditions will significantly improve.”
Samuel Mather-Holgate, of Mather & Murray Financial, said: “Barratt are the latest house builder to announce results and they look to be the best of a bad sector.
“They have reinforced the view of the construction sector that uncertainty in politics and monetary policy are making it difficult to forecast next year’s financials, but 2023 didn’t look too shabby for Barratt in relation to its competitors.
“It’s clear that inflation in the sector squeezed margins, but revenue and profits held up and were mainly comparable to the previous year. This is a set of figures that the management can be proud of.”
John Choong, equity and markets analyst at investing comparisonplatform, InvestingReviews, said: “Despite the incredible headwinds the housing market has faced over the past year, and an “ineffective planning system”, Barratt has managed to pull off an impressive showing.
“Home completions dropped by a relatively small 3.9%, which is a decent number compared to its peers. While the outlook remains volatile and uncertain, and mortgage affordability remains a challenge, there’s room for optimism if inflation continues to fall along with gilt yields.”
Manchester United shares suffered their biggest one-day fall after a weekend report that the club’s US owners will take it off the market.
Its shares fell by more than 18% in New York yesterday after the Mail on Sunday reported that no potential buyer had matched the club’s asking price, thought to be £10 billion.
The US-based Glazer family announced in November it was considering selling the Premier League club.
However, prospective bidders Sheikh Jassim of Qatar and British billionaire Sir Jim Ratcliffe hadve not come close to offering that amount, the paper said.
Beeks Financial Cloud
Markets technology company Beeks Financial Cloud said revenue for FY23 is expected to be over 20% higher than FY22, delivering underlying EBITDA growth of over 35% and underlying profit before tax growth of approximately 10% against FY22.
In the second half of the year, the Braehead-based company achieved a positive free cash flow position in line with management’s stated strategy, with unaudited net cash of £4.41m at the period end (H1 23: net cash of 3.35m; FY 22: net cash of 7.86m).
The company’s pipeline of opportunities for each of its offerings is significant and growing, it said in a trading update.
Exchange Cloud remains a potentially transformational opportunity, with significant traction with both existing and new customers, although contracts of this size will take time to convert, it said.
Gordon McArthur, CEO, commented: “FY23 was a year of double digit growth and one in which we continued to expand the pipeline across each of our offerings.
“With two Exchange Cloud contracts now secured following the addition of the JSE in the year, and many more in discussion, we remain confident in the opportunity ahead.
“We have entered the new year with high levels of revenue visibility and strong momentum and thus remain in line with management expectations for FY24, with further upside potential from new client wins.”
A lack of earnings upgrade overshadowed WH Smith’s positive trading update, causing shares in the retailer to stumble 94p, or 6.3% to 1390p.
Investors switched into B&M European Value Retail whose shares rose 9.25p, or 1.7%, to 557p as analysts believe its acquisition of up to 51 Wilko shops “is expected to enhance the company’s presence and growth potential”.
The FTSE 100 was down for a third day in a row, 11.79 points to 7,426.14.