Barratt Developments boss cashes in £3.3m of shares
The boss of house builder Barratt Developments has cashed in more than a third of his shares in the company, pocketing £3.3 million.
Chief executive David Thomas sold the 500,000 shares at 6,597.8p each on Tuesday, leaving him with just 823,188 remaining.
His decision to sell up comes less than a month after he told the stock market the company expected profits for the year to be higher than expected.
Investors tend to watch for directors selling shares, with some seeing it as a sign that the share price may have peaked.
Shares fell 1.26% after Mr Thomas’s share sale was revealed to the stock market.
A spokesman for the company said: “This transaction is purely to balance personal investments, and David Thomas retains 800,000 shares in the company.
“Barratt’s recent trading update demonstrated strong momentum within the business, and there has been no change to guidance.”
The shares have recently been trading at 12-year highs – levels not seen since just before the 2008 financial crisis – as Barratt, and its rivals, benefited from the Government’s Help To Buy schemes and low interest rates.
But at Barratt, strong results earlier in July, despite saying it expected record profits of around £910 million, with strong profit margins and extra homes being built, investor reaction was muted.
Russ Mould at AJ Bell said at the time: “Housebuilders look to be enjoying a last hurrah.
“The muted market reaction… suggests some scepticism over the company’s ability to build on this achievement and could also reflect the fact that the better than expected performance is seemingly flattered by a large one-off sale to a joint venture partner.
“For now, the party goes on for the industry to a soundtrack of cheap mortgages, strong market dynamics and Help to Buy support.
“However, companies need to ensure they have the buffer of a strong balance sheet for when the music stops and the lights come back on.”