Barratt Developments (BDEV) delivered a robust performance in the year to June, and after adding back exceptional finance costs, operating profits rose by a third to £253m. The housebuilder has also started paying dividends again.
Completions rose from 12,857 to 13,663 units in the period, and average selling prices were up nearly 8 per cent at £194,800. In turn, this helped to push operating margins up from 8.2 per cent to 9.7 per cent, hitting 10.4 per cent in the second half. Around half of all completions were built on higher-margin land, a ratio that Barratt expects to rise to 67 per cent in the current year, which augurs well for margins. Sales also benefited from an 11 per cent increase in the average weekly net private reservations per site. And, with the benefit of strong cash generation, Barratt has slashed borrowings while adding 18,536 plots to its land bank at a cost of £677m.
Given the strong tailwind driving the housing market recovery, trading in the new financial year has started strongly. Average net private reservations are up 29.4 per cent on a year earlier, and total forward sales are up 59 per cent to £1.23bn, or the equivalent of 6,676 plots.
Peel Hunt forecasts current year adjusted pre-tax profits of £322m and EPS of 25.7p, up from £192m and 14.6p in 2013.
| BARRATT DEVELOPMENTS (BDEV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 326p | MARKET VALUE: | £3.19bn | |
| TOUCH: | 325-326p | 12-MONTH HIGH: | 360p | LOW: 156p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 42 | |
| NET ASSET VALUE: | 314p* | NET DEBT: | 1% | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 2.28 | -679 | -135.8 | nil |
| 2010 | 2.04 | -163 | -14.5 | nil |
| 2011 | 2.04 | -12 | -1.4 | nil |
| 2012 | 2.32 | 100 | 7.0 | nil |
| 2013 | 2.61 | 105 | 7.7 | 2.50 |
| % change | +12 | +5 | +10 | - |
Ex-div: 23 Oct Payment: 20 Nov *Includes intangible assets of £892m, or 91p a share | ||||
