Another day, another housebuilder delivers a positive trading statement… Today, it’s the turn of Barratt Developments (LSE: BDEV) to announce it’s benefited from the government’s Help To Buy scheme.
The rate of sales since the initiative was launched in April has shot up 34.7%, and is up 17.9% in the second half on the prior year. Total forward sales are up a very healthy 53.6% to £829.7m.
Operating margin is anticipated to rise to around 10.4% in the second half, and about 9.7% for the full year, which is up from 8.2% in the prior full year.
As a result of the encouraging news, full-year pre-tax profit is now expected to come in at around £192m, which is ahead of the top end of previous forecasts.
Chief executive Mark Clare commented:
“As more house buyers return to the market, supported by improved mortgage availability and the Help to Buy scheme, we are in a strong position to continue to grow the value of the business. We are increasing our investment in land whilst reducing debt and have delivered a performance ahead of expectations. Momentum is continuing to build and with forward sales up substantially, we are confident we can improve our performance still further in the year ahead.”
Following improvements across all operating metrics, there was little change in Barratt’s shares today, but the good news was already baked in to the price following the recent steady stream of good news coming from fellow housebuilders.
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> Sam does not own shares in Barratt Developments.
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