Barratt share price: Surge in annual profit prompts dividend hike

By: Jane Tindall
Jane Tindall
I've worked within the banking & financial regulation industry for over 10 years. Now, I report on these sectors… read more.
on Sep 9, 2015
Updated: Oct 21, 2019

Barratt Developments’ (LON:BDEV) shareholders are set for a cash windfall, the British housebuilder said in an annual results announcement this morning. The company said that its pretax profit, revenue and house sales had all surged in the year to the end of June.

Barratt’s pre-tax profit came in 44.8 percent higher at £565.5 million, on revenues of £3.75 billion — 19.1 percent up year-on-year. The group’s total completions rose 11 percent to 16,447 — the highest for seven years — as demand continued to rise and Barratt managed to overcome labour shortages in the home construction market. Meanwhile, the average private selling price for a property rose 8.7 percent to £262,500.

Barratt’s chairman, John Allan, said: “The market for new homes remains strong across Britain, with demand continuing to exceed supply. The mortgage market has continued to improve both in terms of availability and rates, as well as Government support for the new-build market.” CEO David Thomas further noted that the year had “started very well” and Barratt was “making progress” towards its targets to reach a minimum 20 percent gross margin and 25 percent return on capital employed by 2017.
Reflecting its robust annual performance, Barratt has decided to pay a 10p per share special dividend. In addition to a total ordinary dividend payout of 15.1p — up from 10.3p a year earlier — the total payout to shareholders will be 25.1p per share, which is more than double the 10.3p it paid the year before. The hike takes the housebuilder’s total capital return for the year to £250 million, up from £102 million.
Investors have hailed Barratt’s update, sending the shares almost four percent up in early trading today. By 10:30 BST, the stock had pared some of the gains, standing 0.86 percent higher at 642.50p.
As of 10:54 BST, Wednesday, 09 September, Barratt Developments Plc share price is 642.00p.
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