Barratt shares follow value down

Apr 26 2008 by Graeme King, The Journal

SHARES in housebuilder Barratt fell by 5.5% in late trading yesterday after continued talk of a possible rights issue.

The UK’s third-biggest house- builder, with its registered office in Newcastle, has suffered a dramatic fall in its share price in the past year – and yesterday saw the company’s value dip below the billion-pound mark.

When Barratt completed the purchase of rival Wilson Bowden in February last year, it was valued at about £4.5bn.

A spokesman for Barratt has consistently said the company will not comment on “market rumour and speculation” and no further announcements have been made.

However, a source close to Barratt has said the company’s position on its finances has not altered since it published interim results last February.

At that time, the company said it was operating “well within” its financial covenants and so did not require further resources.

One analyst speculated yesterday that Barratt was perhaps struggling to digest the £2.2bn acquisition of Wilson Bowden at a time when its income has been hit by the housing market slowing quite markedly. Shares in Barratt have plunged from about 1100p a year ago to just 278p at the close of trading yesterday. The stock fell from 294p to 278p yesterday.

Barratt Developments moved its head office away from Newcastle last year under the leadership of new chief executive Mark Clare.

The senior management team now work from offices in central London, rather than Newcastle Quayside.

The business’s North East operations are at City West Business Park, off Scotswood Road.