Barratt speeds up house building in ‘strong’ results

The boss of Barratt Developments has said his business is ready to weather potential challenges in 2020, as he presented a “strong” set of results in the first half of the year.

David Thomas said that conditions would depend on the transition away from the EU, and how any potential future deal looks.

But, regardless, Barratt has “resilience and flexibility to react”.

It comes as Mr Thomas maintained the company’s outlook in line with expectations.

The business completed 8,314 new homes in the first half of the financial year, a 9.1% rise on the same period in 2018.

Over the six months, revenue grew 6.3% to almost £2.3 billion, while profit before tax jumped 3.7% to £423 million.

“We have achieved a strong first half performance, delivering continued volume growth and making good progress against our medium term targets,” Mr Thomas said.

“We have made a good start to our second half and with substantial net cash, a well-capitalised balance sheet and strong forward sales, the outlook for the full year is in line with our expectations.”

David Madden, an analyst at CMC Markets, said the company might be looking for good news from next month’s budget.

“The company has benefited greatly from the help-to-buy scheme, and it is banking on further assistance from Westminster, especially on the back of the Tory party win at the back end of last year,” he said.

The company’s growth was driven in part by a strong performance in Cambridgeshire and outer London, it said.

The company also took a £17.8 million hit from having to remove cladding from older buildings.

Cladding was thrown into the spotlight after it was found to be a major cause why more than 70 people were killed in London’s Grenfell Tower in 2017.

The government later said that any cladding on buildings more than 18 metres high must be re-examined to see if it was safe, even if it passed under previous regulation.

“Approved inspectors signed off all of our buildings, including the cladding used, as compliant with the relevant building regulations during construction and on completion,” Mr Thomas said.

He added: “Further to continuing and evolving Government advice on the cladding of multi-storey buildings, we continue to work with building owners and management companies on the assessment and review of buildings we have constructed.”