AUS
NZ
UK
CA
USA
IND
Summary
- The company has a healthy forward sales position with over 90 per cent inventory sold for the FY 2021
- The company’s order book swelled by 14 per cent year-on-year to 13,588 homes during the first half of FY 2021
- Shares of Barratt development were up by 4.5 per cent from previous day price close and closed at GBX 720 on Friday
UK’s leading housebuilder Barratt Developments Plc (LON: BDEV) has revised its sales forecast upwards for the year 2021. The Footsie-listed housebuilder observed huge demand for new homes post lockdown. The surge in demand can be attributed to the ‘help-to-buy scheme’ and stamp duty holidays announced by the government to boost the sector.
Besides, the remote working culture induced by the pandemic has brought significant changes to one’s lifestyle during the lockdown. This has also led to an increase in demand for bigger homes. Shares of Barratt development were up by 4.5 per cent from previous day price close and closed at GBX 720 on 8 January.
Also read: Housebuilders Barratt, Persimmon Report Strong Sales Aided by Stamp Duty Holiday
Barratt remains committed to delivering high quality homes across the country. The company has a healthy forward sales position with over 90 per cent inventory sold for the FY 2021. The company is currently focused on making operational improvements. UK’s biggest housebuilder has a well-capitalised balance sheet and continues to be in a strong position with substantial net cash.
The company’s order book swelled by 14 per cent year-on-year to 13,588 homes during the first half of FY2021. During the six-month period ended December, home completions were up by 9.2 per cent year-on-year to 9,077. Notably, the average sale price of a private house rose by 2.2 per cent to £319,000 during the first half of the FY2021. Moreover, the rising housing prices would help the company in booking higher profits.
Barratt has also stated that it is aware of the prevalent uncertainties in the UK market. The stamp duty holidays would be ending in March and the ‘Help to Buy’ scheme has now become more stringent. Moreover, the UK has a new trading arrangement with the EU post Brexit.
Also read: UK House Prices at Highest Since 2016
The company anticipates wholly owned completions to be in the range of 15,250-15,750 homes by the end of fiscal year 2021, based on current understanding of market and level of construction activity. With most of the businesses adhering to sustainable development policies, Barratt development aims to create a positive, social, and economic legacy for the times to come. Barratt through its joint venture arrangements aims to deliver around 650 home completions by 2021.
Barratt was the pioneer amongst the national house builders which aspires to reduce carbon emissions scientifically and attain a target of net zero emissions by 2040. Simultaneously, the company had stated that it would not compromise on quality and sustainability and emphasise on building high quality, low carbon, energy efficient homes that are easy on pocket to maintain and have a far lower impact on the environment.
The UK-based housebuilder is expected to resume dividend payments by next month, provided there is no significant change in the trading environment. The company board acknowledges its strengthened financial position, resilience, and flexibility to react to changes in the operating environment in 2021 and shall continue to monitor the market and wider economy.
