Shares in the UK’s largest housebuilder Barratt Developments (BDEV) are back above the levels they traded before the Brexit vote after reporting 2017 pre-tax profit will be at the top end of expectations.
It tops the FTSE 100 leaderboard off the back of the bullish trading statement, up 4% to 620.5p.
Shares in housebuilders all took a knock last June when the Brexit vote sparked fears of a slowdown in the UK property market.
Barratt now says it is on track to deliver 17,350 completions this year, the highest number in nine years.
BULLISH OUTLOOK
Barratt is very positive on the outlook, noting that increased competition in the mortgage market and the Help to Buy scheme are driving consumer demand.
It also reports upwards momentum in private average selling prices and record forward sales, up 12.7% year-on-year at £3.2bn.
The trading update reveals an improvement in the sales rate from 0.78 net private reservations per outlet per week to 0.8.
The company says it remains focused on delivery of a 20% gross margin for 2017 although it makes no direct comment on the impact of cost inflation.
CASHED UP
Net cash is expected to come in ahead of expectations, hitting £600m at the year-end stage which is 30 June. That is well ahead of the £350m-£400m expectation when half year results were reported in February.
The board is sticking with its plan to deliver cash returns of £1.4bn in the four-year period to November 2018 but the strength of its balance sheet may encourage it to be more generous.
