Barratt Developments PLC on Wednesday raised guidance for home completions for its full financial year, after a strong first half.

Total home completions for the Leicestershire, England-based property developer were down 11% to 8,067 in the six months that ended December 31 from 9,077 a year before.

Barratt said the lower comparison reflected an unusually large amount of completions in the prior year, owing to the Covid lockdowns disrupting timelines. It said it has now returned to more normal seasonal phasing of completions.

Barratt now expects to complete between 18,000 to 18,250 homes, including joint venture completions, in the full year, provided there is no further pandemic-related disruption. This is 250 homes higher than previous guidance and up from 17,243 in financial 2021. It also would be higher than pre-Covid levels. Completions in financial 2019 were 17,856 in financial 2019 before dropping to 12,604 in the Covid-hit financial 2020.

More work in progress was carried forward in to the second half of the current year than at the last two period-ends, Barratt said.

Revenue was down 9.9% to £2.25 billion in the first half from £2.49 billion in the comparative period of financial 2021. However pretax profit remained fairly flat, edging up 0.6% to £432.6 million from £430.2 million the previous year. Operating margin increased by 230 basis points to 19% from 17%.

Barratt declared an interim dividend of 11.2 pence per share, up from 7.5p the previous year. The dividend cover was 2.25 times adjusted earnings per share, down from 2.5 times in the previous year. Dividend cover will continue to be gradually reduced to 2.0 times in financial 2023, and 1.75 times in financial 2024, the company said.

In its second half so far, trading has been ‘very strong’ with a 6.2% growth in net private reservations per week. Total forward sales from the end of January were 15,736 homes, up 10% from the previous year, at a value of £4.11 billion, up 17% year-on-year from £3.43 billion.

Barratt’s share price was up 1.2% to 634.60 pence each in London on Wednesday morning.

Looking ahead, Chief Executive David Thomas commented: ‘Macroeconomic uncertainties remain, most notably around rising inflation and interest rates in the wider UK economy. As a business we also face higher taxation, the ongoing challenges around build cost inflation and the future withdrawal of Help to Buy, which will begin to impact reservations in Autumn 2022, as the scheme draws to a close in March 2023.

‘The board believes, however that the overall strength of the housing market, our operational performance since the onset of the pandemic and our strong financial position provide us with the platform and flexibility to react to any challenges and opportunities in the remainder of FY22 and beyond.’

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