4th Sep 2019 08:41
(Alliance News) - Barratt Developments PLC on Wednesday said its annual profit climbed due to successful "margin initiatives".
Shares in Barratt were down 1.9% at 610.40 pence in London in early morning trade.
The residential property developer posted a GBP909.8 million pretax profit for the financial year ended June 30, up 8.9% from GBP835.5 million the year before. This was only just shy of its GBP910 million pretax profit forecast made in July.
This was attributed to "margin initiatives, a strong close to the year and additional contribution from joint ventures".
Revenue fell 2.3% to GBP4.76 billion from GBP4.87 billion year-on-year. This was below company-compiled consensus of 16 analysts, which forecast revenue of GBP4.83 billion.
However, Barratt's share of post-tax profit from joint ventures doubled to GBP39.2 million from GBP18.6 million.
Moreover, gross margin grew to 22.8% from 20.7%. The operating margin was 18.9%, up from 17.7%. This operating margin was in line with Barratt's July forecast.
Barratt will pay a total dividend per share for the year of 46.4 pence, up 5.9% from 43.8p the year before. This was even higher than consensus expectations of a 45.3p per share financial 2019 dividend.
Chief Executive David Thomas said: "It has been another outstanding year delivering a strong operational and financial performance. The group's long term investment in quality and operational excellence continues to drive margin improvements, alongside our highest number of completions for 11 years. As the only major housebuilder to be awarded a 5 Star rating for customer satisfaction for ten years in a row, we continue to lead the industry in quality and customer service.
"Whilst there is increased economic and political uncertainty, we begin the new financial year with a strong forward order book, balance sheet and cash position which we believe provides us with the resilience and flexibility to react to potential changes in the operating environment in FY20 and beyond. We maintain our focus on the delivery of operational improvements across our business, and our commitment to deliver the highest quality homes across the country."
The company said it has "strong total forward sales", standing at 12,911 homes on Sunday last week, up from 12,648 homes a year prior. This represents a value of GBP3.00 billion, down slightly from GBP3.05 billion a year before.
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