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Barratt Developments starts new financial year in 'strong position' with forward sales ahead

Barratt said it expects to deliver a “good financial and operating performance” in the 2019 financial year
Barratt
Barratt says it is focused on delivering its medium-term targets

Housebuilder Barratt Developments PLC (LON:BDEV) said it has started the new financial year in a strong position as government schemes and low borrowing costs continue to support demand.    

In a trading statement ahead of its annual general meeting on Wednesday, the company said forward sales, including joint ventures, came to 12,903 units at a value of £3.14bn on October 14, compared to 12,277 units at a value of £2.8bn a year ago.

The group completed 53 new developments, including joint ventures, in the first 15 weeks of the financial year, down from 62 last year. It had 365 active outlets, including joint ventures, compared to 371 a year ago.

READ: Barratt Developments delivers record profits as housing completions hit decade high

Barratt continues to expect outlet numbers for the 2019 financial year to rise.

Net private reservations per active outlet per average week stood at 0.72, down from 0.74 last year.

"The group has started the new financial year in a strong position, with a good sales rate, healthy forward order book and customer demand supported by an attractive lending environment,” said chief executive David Thomas.

“We are focused on delivering our medium-term targets set out at our full year results, whilst maintaining our commitment to leading the industry in the design and quality of our homes and in customer service, which we believe is fundamental to our ongoing success."

The company plans to increase housing volumes by 3-5% per year to help address the UK’s housing shortage.

Barratt expects a “good financial and operating performance” in 2019. 

“However, scratch the surface of Barratt’s announcement and there are one or two worrying signs," said Russ Mould, investment director at AJ Bell, who pointed out the decline in reservations. 

Shares were little changed at 512p.

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