Barratt Developments (LON:BDEV) today dropped 17p to 396.3p in early morning trading despite the group announcing a 20% rise in profits. The fall came as the developer warned it was too early to draw conclusions regarding market conditions after Brexit.
Barratt announced that profit before tax increased 20% from £565.5m to £680m as well as completion rates rising 5.3% to 17,319. The increase in profit was a result selling prices increasing by 10.6% from £235,000 to £260,000.
Wholly owned forward sales climbed 18.7% from £1.60bn with forward group sales including joint ventures rising 0.5% to £1.76bn.
The group’s year end net cash stood at £590m up from £186.5m in 2015.
Despite the group declaring that it is in a ‘good position’, the company’s share price plunged alongside the likes of Taylor Wimpy and Persimmon in the immediate aftermath of the EU referendum vote as the housing sector was rocked with the uncertainty of a UK recession.
David Thomas, Chief Executive said:
“We have delivered another strong performance for the year. The disciplined growth in completion volumes reflects the strength of our sector leading build and sales teams.
Following the EU referendum, it is too early to say what the impact of the uncertainty facing the UK economy will be. The sector continues to receive focused government support, mortgage availability is good and there remains an undersupply of new homes. With a strong balance sheet and forward order book, and industry leading quality and customer service, we remain confident in the positive fundamentals of both the housing sector and our business.”
The group further stated that they are mindful of the greater uncertainty the UK economy now faces and that contingency plans are now in place to take the appropriate action if needed and they will continue to monitor the market closely.
The company is due to release it’s annual results on Wednesday 7 September 2016
At 2:40pm London time Barratt Developments traded at 402.20p, down 2.2%.
13/07/2016