One of the biggest British developers has released its trading results for the year which ended on 30 June 2016.
Barratt Developments’ key metrics were up from last year, but the firm insisted it is “mindful” of the impact of the economic uncertainty on their business despite being in a strong position.
The company reported the number of total completions, including joint ventures (‘JVs’), increased by 5.3% to 17,319 (2015: 16,447). Profit before tax was expected to be up by c. 20% to c. £680m (2015: £565.5m), driven in part by increased completion volumes, growth in average selling price (ASP) and an increase in share of profits from JVs.
Year end net cash balance was significantly up at c. £590m (2015: £186.5m) above forecasts of £400m. Return on capital employed (‘ROCE’) increased by c. 3 percentage points to c. 27% (2015: 23.9%) which was done as the firm sought to defer payment for new land where possible.
Barratt Developments said in the statement that it was “too early” to draw any conclusions regarding the market conditions since the referendum. The company has also taken appropriate measures to reduce its risk, such as reassessing land approvals.