Barratt makes record £835m profit

 

The UK’s largest housebuilder, Barratt Developments makes record pre-tax profit of £835.5m in the year to June 2018  up 9.2 per cent from a year earlier and built 17, 579 homes in 2017-2018, the highest in the past decade. Their revenue rose 4.8 per cent to £4.9bn. More than 40 per cent of the company’s sale was supported by the government’ Help to Buy Scheme, which provides state-backed equity loans that allow people to buy a new-build property with a deposit of as little as 5 per cent. Housebuilders wanted the government to continue the scheme beyond 2021.

David Thomas CEO of Barratt said, “The new build market is growing strongly and we are in a positive place as an industry”.

Demand for new build houses soared although according to Berkley Group, whose share gained 0.8 per cent, another top -10 housebuilder who focuses on London and the south-east making little use of Help to buy scheme “ The market in London and surrounding areas lack urgency, and London remains constrained by high transaction costs, restrictive income multiple limits on mortgage borrowing and prevailing economic uncertainty,  with not knowing what is going to happen after Brexit”.

Barratt’s share closed flat, as they plan to pay out a final dividend of 17.9p a share plus a special dividend of 17.3p a share, bringing total payouts for the full year to 43.8p a share, up 5 per cent from last year.