Barratt Developments FY Pre-tax Profit Up 12%; Hikes Dividend

Lloyd Doyle
September 6, 2017

Over the last 30 and 90 trading days the company share price has increased 11.5 points and increased 23 points respectively.

Barratt Developments Plc (LON:BDEV)'s stock had its "hold" rating restated by investment analysts at Peel Hunt in a research report issued to clients and investors on Wednesday. The firm's 50-day moving average is GBX 609.54 and its 200-day moving average is GBX 579.12.

David Thomas, chief executive, noted that market conditions remain positive, "with attractive mortgage financing and the support of Help to Buy driving strong consumer demand". At the time, this indicated a possible upside of 0.16%. Liberum Capital have set their target price at 537 GBX on its stock. Finally, Barclays PLC boosted their price target on Barratt Developments Plc from GBX 629 ($8.12) to GBX 712 ($9.20) and gave the stock an "overweight" rating in a research report on Thursday, July 13th. Barratt Developments Plc now has an average rating of "Hold" and an average target price of GBX 644.62 ($8.33). The Company is principally engaged in acquiring and developing land, planning, designing and constructing residential property developments and selling the homes, which it builds throughout Britain.

Relatively low housing transactions and the government's planned withdrawal of Help to Buy in 2021 will weigh on housebuilders' minds, but for now the company said it was experiencing "robust" demand. Its housebuilding segment operates through approximately six regions and approximately 30 operating divisions delivering over 17,319 homes.

In total, Barratt said it is returning GBP347.2 million to shareholders this November, when the dividends will be paid, and said a further GBP430.7 million will be returned in November 2018 - split GBP255.7 million in dividends and another GBP175.0 million special dividend.

Looking at Barratt's smaller Commercial business, which contributed just GBP61.1 million to overall revenue in the year, the division achieved a gross margin of 7.9% and delivered profit from operations of GBP1.4 million. It purchases land in targeted locations and designs homes for its customers using standard house designs. Its Barratt London brand portfolio offers apartments and penthouses in Westminster to riverside communities in Fulham.

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