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Barratt to beat expectations with 12% profits rise

12 Jul 17 House-builder Barratt Developments says that its profits will be even better than the market had been expecting.

Chief executive David Thomas
Chief executive David Thomas

For the year to 30th June 2017 Barratt Developments expects to report profit before tax of around £765m, which is 12% ahead of the previous year’s £682m, and also ahead of market expectations. (Previous forecast estimates were in the range £699m-£740m.)

Barratt, Britain’s largest house-builder, also narrowly increased its unit volume output in the past financial year to 17,395 units including joint ventures (FY 2016: 17,319). This was the highest level of completions in nine years.

In a trading statement today the Barratt board said that it expects to deliver the financial targets set in 2014 of 20% gross profit margin and 25% return on capital employed. Year-end net cash stood at £720m (30th June 2016: £592m), ahead of guidance, driven by strong performance and the timing of land and working capital payments

Chief executive David Thomas said: “It has been another very strong year for the group both operationally and financially. We have delivered our highest number of completions for nine years, more than any other housebuilder, and continue to see a positive mortgage environment and strong consumer demand.

“In March we were recognised as a five star builder by the Home Builders Federation for the eighth year in a row and we are determined to lead the industry in quality and service as we drive operational improvements through the business.”

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