UK’s Barratt reports record annual profit and will repurchase shares worth $229 million.
After posting a record annual profit and announcing that it was on track to exceed its volume output target for fiscal 2023, UK’s largest housebuilder, Barratt Developments Plc, announced on Wednesday that it will repurchase shares worth 200 million pounds ($229.50 million).
The timing of Barratt’s statement is appropriate because HSBC has recently issued a warning about an impending decline in the UK housing market due to skyrocketing inflation and rising interest rates.
The average weekly number of homes reserved at each of the company’s sales sites decreased significantly over the summer compared to a year earlier.
The number of homes sold by the group is up from a year ago and prices are still rising. Additionally, it is lower than it was during the same time before the pandemic.
CEO David Thomas stated in a telephone interview that the present trading environment has become more difficult since July 1. “We acknowledge the low level of consumer confidence.”
The FTSE 100 company reported that construction activity was on course to deliver the anticipated increase in output, with an average of 366 comparable homes being completed each week so far in the 2023 fiscal year, up from 336 homes a year earlier.
The share repurchase scheme will soon begin, according to Barratt, with a first tranche of 50 million pounds to be finished by the end of the year and the entire program finished no later than June 30, 2023.
After adjustments, pre-tax earnings increased by almost 15% to 1.05 billion pounds for the fiscal year that ended on June 30 from 919.7 million pounds in the prior year. Additionally, it met market expectations.
High-end homebuilder Berkeley said it was on track to meet its annual profit projection on Tuesday, citing ongoing strong demand as a buffer against cost challenges.
