Barratt Developments has made its first annual profit since 2008, having finally shrugged off refinancing and restructuring charges that cost the house builder £54m last year. Cash flow improved strongly, and net debt has been almost halved to £168m.
Operating profits before exceptional items rose by 41.6 per cent to £191m in the 12-month period, underpinned by a 15 per cent rise in completions to 12,637 units and private average selling prices up by 1.5 per cent at £201,800. Combined with greater use of cheaper land, this helped to boost operating margins from 6.6 per cent to 8.2 per cent, with margins of 9.5 per cent achieved in the second half. Moreover, private forward sales are currently up 15.3 per cent at £610m.
Management has used the improved cash flow to pay down borrowings and buy more land. A total of 12,085 new plots were acquired for £578m although some of these were purchased on deferred terms, so the actual cash outlay so far is £397m.
Analysts at Northland UK Research are forecasting current year adjusted pre-tax profits of £145m and EPS of 11.3p (2012: £111m and 8p).
| BARRATT DEVELOPMENTS (BDEV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 159p | MARKET VALUE: | £1.55bn | |
| TOUCH: | 159-160p | 12-MONTH HIGH: | 175p | LOW: 70p |
| DIVIDEND YIELD: | nil | PE RATIO: | 23 | |
| NET ASSET VALUE: | 304p* | NET DEBT: | 6% | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 3.55 | 137 | 25.0 | 36.5 |
| 2009 | 2.29 | -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 |
| % change | +14 | - | - | - |
*Includes intangible assets of £892m, or 91p a share | ||||
