Barratt resumes dividends as half-year sales surge

Housebuilder Barratt Developments has resumed dividend payouts to investors after notching up higher half-year profits amid a booming property market.

The company posted a 1.7% rise in interim pre-tax profits to £430.2 million as revenues surged 10% to £2.5 billion.

But profits growth was held back by a £77 million charge for furlough income repayments and remedial cladding work on some developments in the wake of the Grenfell tragedy.

Barratt completed a record 9,077 homes over the six months to December 31, a jump of 9.2% from the last six months of 2019 and the highest ever for its half-year.

Barratt shares rose 3% as it cheered investors with confirmation that it will restart dividends with a 7.5p interim payout.

It expects up to 15,750 homes to be completed over the full year and another 650 through joint ventures.

The housing market was sent into a frenzy in 2020 thanks to a stamp duty holiday, pent-up demand from the first lockdown and changing demands due to the pandemic.

Barratt has since seen demand ease back, with average net private reservations per active outlet a week at 0.77 in January, down from 0.83% a year earlier.

But it gave a bullish outlook and said demand remains robust.

“We have also made a solid start to the second half and are now over 95% forward-sold for our financial year,” said chief executive David Thomas.

“Whilst we are mindful of the continued economic uncertainties, the housing market fundamentals remain attractive.”

The company saw average selling prices for private homes rise to £319,000 in the half-year, up from £312,000 a year earlier.

Analysts at Peel Hunt said Barratt’s 10% jump in interim revenues shows a “healthy bounce”.