UK’s largest housebuilder Barratt starts year in ‘strong position’ despite drop in reservations
Housebuilder Barratt Developments looked to paint a positive picture in its trading update this morning, as it announced a rise in forward sales and remained confident of the year ahead.
Total forward sales in the 15 weeks to mid-October were up 12.4 per cent on the prior year at a value of £3.1bn.
However, reservations per active outlet per average week – which is viewed as an important performance benchmark – slipped, as did new developments.
Shares were down more slightly more than one per cent in morning trading.
AJ investment director Russ Mould said: "Scratch the surface of Barratt’s announcement and there are one or two worrying signs. In the first 15 weeks of its current financial year, reservations per active outlet per average week, a key metric for the industry, slipped to 0.72 from 0.74 a year ago and the number of new developments is down from 62 to 53."
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The news comes as Barratt holds its annual general meeting (AGM), which comes after an influential shareholder advisory group PIRC recommended last night that investors vote against the re-election of chairman John Allan.
Barratt, which is a FTSE 100 member and the UK’s largest housebuilder, has been bolstered by low interest rates and the government's Help-to-Buy scheme in recent years.
Boss David Thomas said the group had started the new financial year in a “strong position” on the back of a robust healthy forward order book and “customer demand supported by an attractive lending environment.”