Barratt Developments to pay dividend in 2013
Barratt Developments to pay dividend next year.
British housebuilder Barratt Developments plans to pay a dividend in 2013 for the first time in five years, it said on Wednesday, after a drive to build on cheaper land and government moves to support the housing market boosted its annual profit.
Britain's biggest housebuilder by volume, which last paid a dividend in February 2008, said the country's housing market remained stable, despite an economic recession.
While the number of house purchases has been hit by a reduction in risky lending by banks, prices have been supported by a shortage of new homes and government schemes, such as its NewBuy project to provide financial help for first-time buyers.
Last week, the government also unveiled reforms to ease planning laws and boost construction.
"There are plenty more opportunities to buy land throughout Britain that meets our criteria," Barratt's finance director David Thomas told reporters, adding the company had made a good start to its new financial year.
"We're also encouraged by measures announced by the British government."
Barratt said its pretax profit leapt 159 per cent to £110.7 million in the year through June on a 14 per cent rise in revenue to £2.32 billion.
Analysts had on average expected a pretax profit of £108.7 million, according to Thomson Reuters I/B/E/S.
The surge in profits was helped by the firm's move towards building on cheaper land, a focus on containing costs and an increase in volumes, with 12,637 completions compared with 11,078 in the year-earlier period.
Profit margins improved to 8.2 per cent from 6.6 per cent a year earlier.
The firm expects more than half of its 2012/13 completions to be delivered from recently-acquired, higher-margin land.
"Trading for the 2013 financial year has started soundly and the group should see further improvement in net margins as the percentage of new land increases," said Panmure analyst Rachel Applegate, who kept a 'buy' recommendation on the stock.
Shares in Barratt, which have rallied strongly this year, were down 5.8 per cent at 160.2 pence by 0920 GMT.
"The shares are up about 85 per cent since the start of the year - and have performed very well over the last couple of months too - so I think there's a bit of profit taking going on," said Panmure's Applegate.
Thomas said Barratt would pay a "a conservative" full-year dividend after its results next year.
The company, which aims to be debt free by the end of its 2015 fiscal year, said net debt halved during the year to £167.7 million.
"Is augmented reality the next big thing or a marketing gimmick? Is it fundamental to the future or a fashion faux pas?"
- Fukushima Daiichi Unit 3 5th Floor Highly Radioactive Debris [03:09 pm 17/05/13]
- Cluster formation on cooja simulator [01:59 pm 17/05/13]
- DSLAM Power Consumption [01:58 pm 17/05/13]
- English is not my first language. [01:23 am 17/05/13]
- Transport 2020 [09:35 pm 16/05/13]
Tune into our latest podcast