Wednesday 22 February 2017 9:22 am

Barratt hikes dividend as profits edge higher

It's been a decent six months for housebuilder Barratt, which today announced it was hiking its divi after profits edged up in the final half of last year – despite a fall in revenues.

The figures

Although revenues fell 3.2 per cent to £1.82bn in the six months to the end of December, pre-tax profits rose 8.8 per cent to £321m, partly thanks to its operating margin, which rose 1.7 percentage points to 17.8 per cent.

Net cash leaped 712.8 per cent to £196.7m, although total completions fell 5.8 per cent to 7,180.

Barratt said it was raising its dividend by 21.7 per cent to 7.3p. Shares were up 2.2 per cent at 526p in early trading.

Why it's interesting

The post-EU referendum world has not been an easy one to navigate for housebuilders, some of whom have run into serious difficulties since the vote. Take, for example, Bovis, which in December admitted it had put off some completions into the new year – while in January its chief executive stepped down and one of its largest shareholders urged larger rival Berkeley Group to buy it.

But despite the odd rough patch in 2016 (not least a bribery scandal involving one of its senior executives) Barratt's path has run remarkably smooth.

In November it was forced to admit it was taking "pricing action" on high-end homes in the capital as falling house prices in ultra-prime areas began to tumble – and last month it admitted sales in London were struggling.

But today chief executive David Thomas said completions outside the capital were at their highest level in nine years, while volumes across the UK had increased 55 per cent in the past five financial years. So things are looking fairly encouraging.

What Barratt said

Thomas added:

With a record forward order book, strong consumer demand and a positive lending backdrop, we remain confident in our outlook for the full year. Our confidence in the business going forward is reflected in the improved and extended capital return plan.