The share price of Barratt Developments (LSE: BDEV) — one of the largest residential property development companies in the UK — is currently down over 4%, despite the company releasing an Annual Report this morning that showed “significantly improved results”.
Pre-tax profit (before exceptional items) increased by almost 74% ,to £192.3m, and operating profit (also before operating exceptional items) for the full year up by 32.2%, to £252.7m, on group revenues that had risen 12.2% for the full year, to £2,606.2m. Completions (including joint ventures) were up over 6%, at 13,663 units, with an increase of 8% in the average selling price, which was up to £194,800.
The company also reported that it had significantly reduced its net debt, from £167.7m in 2012, to £25.9m, as of 30 June 2013.
Barratt’s board is proposing to pay a final dividend of 2.5p per share (no dividend was paid in 2012) and also announced that the company will be adopting a new “progressive dividend policy”, with a target of three times dividend cover for FY16 (this year’s dividend will be covered no less than six times).
Commenting on the results, Group Chief Executive Mark Clare said:
“These are significantly improved results and we have had a very strong start to the new financial year. We are seeing the housing market recovery starting to spread beyond London and the south east with a 29.4% increase in our average net private reservation rate across the Group. Our £2.6 billion commitment to land investment since 2009 puts us in a good position to capitalise on these market trends. We have already increased our completion volumes by over 20% in the past two years and expect to deliver around 45,000 new homes over the next three years.“
At the time of writing Barratt’s share price is 318.5p. That’s up 57% so far in 2013, and 93% on this time last year.
If you’re looking for a high-quality share with great potential, you’ll definitely want to know which company The Fool’s expert analysts have picked to feature in “The Motley Fool’s Top Growth Share” report.
It’s completely free of charge, and there’s no further obligation, so get your copy delivered to your inbox now!
> Jon doesn’t own shares in Barratt Developments.
