Barratt brushes off property market worries with record profit haul

Housebuilding giant Barratt Developments has defied property market worries to deliver another set of record annual profits.

The group unveiled an 8.9% rise in pre-tax profits to £909.8 million for the year to June 30 after house sales reached an 11-year high – up 1.6% at 17,856.

It comes despite a slowdown in the wider housing market as Brexit uncertainty has seen buyers and sellers put off moving house.

However, the new homes market has been largely shielded so far thanks to the Government’s Help to Buy initiative designed to help first-time buyers.

Barratt chief executive David Thomas noted “increased economic and political uncertainty”, but said the group’s strong order book would stand it in good stead.

Shares in the group fell 3%, with analysts at Liberum saying the “shadow of a Brexit-induced slowdown continues to hang over the sector”.

Barratt reported 12,911 homes on its forward order book, up from 12,648 a year earlier, although it said orders by value had dipped to £3 billion from £3.1 billion.

The company also confirmed a fall in the average private selling price over 2018-19, down 5% to £312,000 due to changes in the mix of homes sold, which it said was partly offset by some underlying house price inflation.

The group reiterated that sales by volume were expected to be towards the lower end of its medium-term target range this year, although this is in line with market expectations.

Mr Thomas said: “Whilst there is increased economic and political uncertainty, we begin the new financial year with a strong forward order book, balance sheet and cash position which we believe provides us with the resilience and flexibility to react to potential changes in the operating environment in full-year 2020 and beyond.”