Interim results show good performance and no signs of a stumble amid Brexit uncertainty.
Barratt Developments shrugs off uncertainty to provide reassurance to investors
- Barratt Developments weathers Brexit uncertainty to report strong performance in first half of the year.
- Operational efficiencies continue to strengthen margins.
- We continue to recommend the to recommend the shares as ‘hold’ for investors willing to accept a medium to high level of risk.
Barratt Developments provided some reassurance for investors today with interim results displaying a good performance in the first half of the year and no signs of any slowdown due to Brexit uncertainty. Completions rose 4.1% to 7,622 units and pre-tax profit was up 19%, spearheaded through improved operational efficiencies and a disciplined business model.
Looking ahead the company reported forward sales up 7.3% and said it was confident of delivering good full-year figures. That confidence was further underlined by news Barratt will pay special dividends in November this year and next.
All of this amounts to good news for investors and adds to the sense demand for housing is holding up, supported by a positive lending environment and despite the well-known economic uncertainties. The shares have recovered strongly over the past month and rose a further 2% in early trading in response to the results. We continue with our ‘Hold’ recommendation on the stock, but the risk attached to it is medium to high.
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