13th Oct 2021 09:00
(Alliance News) - Barratt Developments PLC shares were on the march on Wednesday as it backed its outlook after seeing ongoing strength in demand for homes.
Shares in the blue chip housebuilder were 4.4% higher in London on Wednesday morning at 670.20 pence each - making it the best performer in the FTSE 100.
"The positive start to the new financial year has continued in recent weeks with private reservations remaining strong. This is particularly encouraging given the significant year on year reduction in Help to Buy reservations and the ending of the stamp duty holiday," Chief Executive David Thomas said.
For the financial year to date, covering July 1 to October 10, it has seen net private reservations per average week of 281, down slightly from 288 in the same period a year ago but up on 262 two years ago.
"Whilst the net private reservation rate was 2.3% below that reported in the prior year period, this was a particularly active period reflecting both pent-up demand following the initial national lockdown, and increased Help to Buy reservation activity," the housebuilder explained.
Despite global supply chain issues, Barratt said it has not experienced any significant disruption to its build programme. It continues to expect build cost inflation of between 4% and 5% for the full-year.
"Whilst there continues to be some macroeconomic uncertainty, the board believes that our strong financial position provides us with the platform and flexibility to react to any changes in financial 2022 and beyond," said Barratt.
In the period, the housebuilder delivered 3,699 home completions, down 8.3% on the year before but up on 3,252 homes delivered in the same period in 2019.
At October 10, Barratt's forward sales stood at 15,393 homes valued at GBP3.94 billion versus 15,135 homes at GBP3.65 billion the year before and 12,963 homes at GBP3.07 billion two years ago.
The average selling price for its forward sales is GBP344,300, up from GBP331,400 last year and GBP316,000 two years ago.
"Based on current market conditions and working closely with our suppliers and sub-contractors to minimise disruption to our build programme, we continue to expect to grow wholly owned completions to between 17,000 and 17,250 homes in financial 2022," Barratt said.
It continued: "The group is in a very good position. We have both a substantial net cash balance and strong forward sales, as well as an excellent land bank and a continued focus on delivering operational improvements across our business, alongside our ongoing commitment to deliver high quality, sustainable homes across the country."
By Paul McGowan; [email protected]
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