Barratt Developments - Prices climbing, but sales rates flat

Galtero Lara
Enero 13, 2018

The builder also said its total completions had risen 2 percent to 7,324 homes in the period and it expects this year to beat the 17,395 homes it built in the twelve months to the end of June 2017.

Housebuilder Barratt Developments PLC (LON:BDEV) completed 144 more homes in the first half as low interest rates, good mortgage availability and government schemes supported demand.

The average selling price of its houses had increased 6.5 percent to 281,000 pounds ($379,100) in the second half of past year, the latest builder to benefit from rising prices which have driven bumper profits across the sector. It operated from an average of 376 outlets, including joint ventures, up from 374 in 2016. This included private forward sales at a value of £1,457.8 million, up 0.4% which equated to 4,209 plots compared to 2016's 4,037.

While the firm is on track to secure "modest growth" in wholly-owned completions for 2018, shares were down 3% on the London Stock Exchange following a broker downgrade from Peel Hunt.

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The company purchased £641.2 mln worth op operational land over the six month period, with over 13, k260 plots and 51 sites being approved.

Forward sales were up 2% at £2.38bn, net cash is down from £196.7m to £165m but the company says it still plans to pay a special dividend of £175m in November 2018.

A lack of guidance on margin performance in today's trading update helps sink shares in the UK's largest housebuilder Barratt Developments (BDEV). Liberum Capital lifted their target price on shares of Barratt Developments from GBX 537 ($7.28) to GBX 575 ($7.80) and gave the stock a "sell" rating in a research note on Wednesday, January 3rd.

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