Barratt to bring back dividends next month as it ups guidance

Housebuilder Barratt Developments hopes to bring back its dividend next month even as its post-lockdown sales boom slowed in recent months.

The business’s sales rate was 11.6% higher in the first half of its financial year, but dropped significantly between the first and second quarters.

In the first three months of the year, Barratt’s measure of net private reservations per week in each active outlet reached 0.87. That same figure fell to 0.77 across the first and second quarter combined.

“While demand for the homes built by Barratt Developments may have slowed from the pent-up flood seen last summer, it remains at a steady flow rather than a trickle,” said AJ Bell investment director Russ Mould.

Mr Mould said that Barratt has around £1 billion on its balance sheet, which will enable it to restart dividend payments, but also to invest in land at a time when prices are depressed.

Barratt also recognised this, and has bought 5,635 plots on 35 new sites since starting to buy land again in August.

“We are now seeing a greater range of land-buying opportunities come to market and have a good pipeline of offers accepted on additional sites,” it said.

Over the six months, Barratt completed 9,077 homes, up 9.2% compared with the same period in 2019, it said. Selling prices increased by 1.1% on average to £283,000.

The business said it expects to complete between 15,250 and 15,750 homes in the 2021 financial year. This is up from earlier estimates of 14,500 and 15,000 homes.

“Despite the ongoing challenges presented by the pandemic, we are confident that our operating performance and strong financial position provide us with the resilience and flexibility to respond to the operating environment in the 2021 financial year and beyond,” said chief executive David Thomas.