Housebuilder Barratt’s sees strong demand for new homes, reinstates dividend By Reuters

(Reuters) – UK’s biggest housebuilder Barratt on Thursday reported a near 2% rise in first-half pretax profit and said there is strong demand for new homes, as buyers take advantage of a temporary reduction in purchase taxes.

Shares of the company rose 3.2% to 694.8 pence in early trading.

Britain’s housing market boomed in 2020 after coronavirus-led restrictions ended in June, boosted by stamp duty incentives and people looking for larger homes better suited for working from home during the pandemic.

“We have also made a solid start to the second half and are now over 95% forward sold for our financial year,” said Chief Executive Officer David Thomas.

“The housing market fundamentals remain attractive and our outlook for the full year remains in line with expectations.”

However, the latest lockdowns and an impending end to a tax holiday on March 31 raised concerns about demand fading.

The FTSE 100 firm, which signalled its intention to resume dividend payments last month, declared an interim payout of 7.5 pence per share.

Total forward sales came in at 14,289 homes as of Jan. 31, compared with 13,043 homes as of Feb. 3 last year.

The company said pretax profit rose to 430.2 million pounds ($584.68 million) for the six months ended Dec. 31 from 423 million pounds in the year-ago period.

The half-year results were driven by stronger-than-expected gross margins, Credit Suisse (SIX:CSGN) analysts said in a note.

($1 = 0.7358 pounds)