Barratt upbeat despite Brexit caution as profits set to rise 20%

Housebuilder Barratt Developments has said profits will rise 20% this year but cautioned that it is too early to say what the economic impact of Brexit will be.

The company said annual pre-tax profit will increase to £680 million, up from £565.5 million last year and in line with expectations.

Barratt said: "Following the EU referendum, we are mindful of the greater uncertainty now facing the UK economy. Consequently, the immediate outlook for our industry is less clear and it is too early to draw any conclusions regarding market conditions from the short trading period since the referendum.

"We had contingency plans in place and we have taken appropriate measures to reduce our risk, such as reassessing land approvals, as we continue to monitor the market."

Since the vote, Barratt's share price has fallen more than 25% as economists warn of a slowdown that could end up hitting the housing market.

Nevertheless, over the past year the group completed 17,319 new homes, an increase of 5%, and Barratt's average selling price rose 10.6% to £260,000.

Richard Hunter, head of research at Wilson King Investment Management, said: "Barratt has delivered a defiant message in a trading statement which is both punchy in terms of metrics and upbeat in outlook.

"Profit for the year is expected to be strongly ahead, underpinned by a noticeable improvement in completions and average selling prices."