Barratt Developments confident as net reservations fall

Housebuilder Barratt Developments reported a decrease in net private reservations in an update on Wednesday, measured per active outlet per average week, to 0.65 compared to 0.93 for the same period last year.

The FTSE 100 company said total forward sales, including joint ventures, stood at £2,956.5m as at 23 April, compared to £4,505.5m at the same time in 2022.

Barratt confirmed that it was fully forward sold for the 2023 financial year.

Construction activity had been adjusted amid the slower trading backdrop, resulting in 303 equivalent homes, including joint ventures, built per average week for the period from 1 January to 23 April, compared to 359 in the prior year equivalent period.

Despite the challenging market conditions, Barratt Developments said it had maintained its balance sheet strength, with year-end net cash expected to be around £0.9bn, in line with previous guidance.

The board said the firm was on track to deliver total home completions of between 16,500 and 17,000 homes, including around 750 joint venture home completions, in line with its previous expectations for the full year.

Overall, Barratt said its trading outlook for the full year remained in line with the board's prior expectations.

“In February we reported early signs of recovery in our reservation rates following the exceptionally challenging trading conditions experienced at the end of 2022,” said chief executive officer David Thomas.

“Whilst the economic backdrop remains difficult, we are pleased that more positive sales rates have been maintained through this period and we are now fully forward sold for the 2023 financial year.

“As a result, we expect to deliver full year adjusted profit before tax in line with current market expectations.”

Thomas said Barratt remained “committed” to “leading our industry” in quality, customer service and sustainability.

“We are proud to be the only major housebuilder awarded five stars by our customers for the 14th successive year in the Home Builders Federation awards, and we remain focused on delivering the high quality and sustainable homes the country needs, creating jobs and supporting the economy.”

At 1022 BST, shares in Barratt Developments were down 0.83% at 501p.

Reporting by Josh White for Sharecast.com.