Barratt's first-half profits rise but builds fewer homes

Barratt Developments (LON:BDEV) has been another notable Footsie risers after the company reported an 8.8-percent rise in pre-tax profits for the first half of its financial year.

The group said that as of now, trading remained strong following record total forward sales as of February 19, totaling £3.018 billion, up 17 percent year-on-year, with January resting at 16 percent to £2.3 billion.

The strong performance for the six months to end-of-December were attributed to a boost in house completions outside of London, with completions in London remaining in line with previous expectations.

Amid the announcement, shares in Barratt Developments plc have been performing well up 2.24 percent as of 10.36AM (GMT).

Britain, especially London, is suffering from a housing crisis where not enough homes are being built to sate demand.

"Whilst we have increased volumes across the United Kingdom by 55 per cent in the last five financial years, we have maintained our commitment to build quality and customer service and we are the only major housebuilder with the Home Builders Federation 5 Star Customer Satisfaction Award".

London's leading shares edged higher in early Wednesday trading, with Lloyds Bank and housebuilder Barratt the top gainers after posting big profit rises.

In London, there continued to be some headwinds in the high-end market, but Barratt said it has supplemented its private sales with other sales agreement, including a build and sale agreement on a "bespoke development" of 39 apartments for a total value of GBP47.0 million.

The company said completions outside the capital were at the highest level for nine years.

The group is paying an interim dividend for this year of 7.3p, up 21.7% on the 6.0p paid at the same stage last year.

Barratt Developments Plc rose to the highest since the day of the Brexit vote after the company said it plans special dividends of 175 million pounds ($218.2 million) this year and again in 2018. Its total forward sales as at February 19 were up 17% on the prior year at GBP3.02 billion.

  • Zachary Reyes