Housebuilding giant Barratt to home in on site activity with latest update

Barratt Developments, one of the biggest housebuilders operating in Scotland, will provide insight into the strength of current demand in the market when it reports full-year figures this week.

Barratt will provide an update on current levels of buyer activity on its sites when it reports full-year figures.
Barratt will provide an update on current levels of buyer activity on its sites when it reports full-year figures.

The developer, which recently secured the green light for work on a development of new homes in Winchburgh in West Lothian, is expected to report underlying pre-tax profit of just under £899 million which is at the high end of market expectations.

Completion volumes are expected to show a strong recovery, coming in just 3.4 per cent lower than before the crisis.

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Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said that with the financial figures already flagged it is the outlook statement that investors will be focusing most on.

Key issues to look out for include cost inflation on sites which is thought to be running at a “rather unhelpful 3-4 per cent”.

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“We’d like to know if this trend is expected to continue, and what it might mean for margins,” said Lund-Yates.

Investors will also be looking for guidance on current levels of demand.

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“The stamp duty holiday and pandemic lifestyle changes lit a fire under the housing market. But demand is likely to dissipate as some of the headwinds of the last eighteen months ease,” she said.

Elsewhere in the sector, Berkeley Group will update on first-quarter trading next week ahead of its AGM. The housebuilder is focused on the south east of England and analysts will be keen to see whether overseas buyers, who have long been a big source of demand, are still viewing the UK as a safe haven in an uncertain world.

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