Barratt shares (LON: BDEV) surged over 6% on Wednesday’s opening after the housebuilder revealed strong sales.
Despite the strong sales, the effects of the COVID-19 pandemic still hit, with pre-tax profit plunging 45.9% to £491.8m in the first half of the year.
The COVID-related costs for the housebuilder have been £74m. These are made up of safety costs, non-productive site costs and site-based employee costs.
Barratt will not propose an ordinary dividend for 2020.
“While Covid-19 has had a significant impact on our results, our priority has been to keep our people safe, mitigate the effect of the pandemic on our business and be able to emerge from the crisis in a resilient position,” said David Thomas, the chief executive.
“Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism.
“We are now renewing our focus on our medium term targets, on leading the industry in quality and service and on supporting jobs and economic growth by building the homes the country needs.”
Susannah Streeter from Hargreaves Lansdown commented: “Barratt’s full year results out today show just how badly the coronavirus hit the house builder…But all of Barratt’s operational sites reopened by 30 June, and since then customers have been flocking back to showrooms. The pent up interest has inevitably also been fuelled by the stamp duty holiday and the company says a robust financial position means that the firm is entering the new financial year with ‘cautious optimism’.”
Barratt shares (LON: BDEV) surged +6.90% and are trading at 538.36 (0908GMT).