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Barratt Developments PLC on Wednesday said it is still seeing strong demand, though private reservations are down from a year earlier, as the UK housebuilding sector fights rising interest rates and falling consumer confidence.
‘The outlook for the year is less certain with the availability and pricing of mortgages critical to the long-term health of the UK housing market,’ Barratt said.
The Leicestershire-based firm said it is on track to deliver an adjusted pretax profit in line with market consensus for the financial year ending June 30, 2023, however.
The adjusted pretax profit consensus cited by Bloomberg stands at £972.5 million, which would represent a 7.8% decline from £1.05 billion in financial 2022.
Total forward sales as of October 9 stood at 13,314 homes, down 14% from 15,393 a year earlier. Barratt blamed this on a ‘slower reservation rate’ due to wider economic uncertainty.
In the period from July 1 to October 9, net private reservations per average week were 188, down 33% from 281 a year ago.
Regarding its £200 million share buyback programme announced in September, Barratt said it has purchased 10.6 million shares for cancellation at a cost of £39.9 million so far, about 20%.
Barratt shares were 7.3% lower at 317.90 pence each in London on Wednesday morning.
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