Barratt reports rise in revenue
Sep 11 2008 by Graeme King, The Journal
BARRATT Developments released its full-year results for the financial year ending June 30, 2008. The results were broadly in line with analysts’ expectations and, consequently, the share price remained largely flat throughout the day.
Total completions for the year increased by 8.3% to 18,588 and as a result, group revenue stood 16.7% higher at £3,554.7m than the £3,046.1m achieved in the previous period. The overall average selling price of a Barratt home rose by 6% to £183,100, aided by changes to product and geographical mix.
However, on an underlying basis, the group reported a 5% decrease in price due to both increasing pressures on house prices, particularly in the fourth quarter, and sales incentives that were utilised by the group in the period. Nonetheless, the efficiency of the group was improved by the integration of Wilson Bowden, which was acquired by Barratt at the beginning of last year and contributed to synergy savings of £33m. The company confirmed that it had strengthened its financial structure, reiterating the restructuring of its banking covenants, and recently signed a £400m facility, as mentioned in a trading statement in July. Despite this, the group remained cautious on the near-term outlook of the housing market, due to the acute shortage of mortgages and lack of consumer confidence and confirmed that the final dividend for the year would be cut.
Elsewhere in The Journal 40, GlaxoSmithKline signed a $1.5bn deal with Anglo-German biotech group Cellzome, to develop new anti-inflammatory drugs.
Anna McKechnie anna.mckechnie@brewin.co.uk
