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Barratt Developments saw completions fall by nearly 4% (3.9%) in 2023 to 17,206 (from 17,908 in 2022). Reported full-year profit before tax at the FTSE 100 housebuilder rose by 9.8% to £705 million (from £642.3 million last year), while revenues remained broadly flat at £5.3 billion.
However, on an adjusted basis profits fell by 16.2% to £883.4 million (£1.1 billion), while operating margins shrank 380 basis points to 16.2% from 20% last year. The shares fell 2% on the day of results before recovering some ground in later trading.
Housebuilder hit by rising interest rates
“We have delivered a strong operational performance in a challenging operating environment. Customers continue to face cost of living and mortgage affordability challenges, and new developments are increasingly constrained by an ineffective planning system,” chief executive David Thomas told shareholders.
Meanwhile, Thomas said that he expects market conditions to “continue to be difficult over the coming months” but that Barratt is a “resilient business with a strong balance sheet.”
Indeed, the housebuilder has been busy conserving cash by dropping its share buyback scheme, and trimming its dividend payment by 8.7% to 33.7p. It had £1 billion of cash on its balance sheet at the end of the financial year.
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