HOUSEBUILDER Barratt Developments has said its profits will be above the top end of market expectations amid "strong demand" across the UK.
The company’s full-year update shows a bullish stance even as the housing market cools following the ending of full stamp duty relief on June 30 south of the Border.
A report from Halifax last week showed that house prices fell by 0.5 per cent in June - the first decline since January, indicating that the peak for buyer demand may have passed.
While housebuilders have been optimistic over the outlook, with rivals such as Persimmon and Visry recently reporting continuing strong demand, some analysts have been less so.
Barratt said it is sticking to its sales goals, having notched up 17,243 home completions in the year to June 30.
READ MORE: Barratt hails £1bn forward sales hike amid ‘booming’ UK market
Chief executive David Thomas said: “Whilst these are still uncertain times, we enter the new financial year in a strong position and remain focused on our medium-term targets, including delivering 20,000 homes a year.”
Its private homes selling price rose to about £325,000 in the year, up from £310,600 the previous year.
It said that during the year it “successfully made the transition to remote working and virtual sales” in Scotland.
Barratt said it sold out at several sites across Scotland including The Limes in Edinburgh, Dovecot Mill, East Lothian, and Victoria Grange, Monifieth, as well as launching new sites including Hopecroft, in Bucksburn and Whiteland Coast in Newtonhill, both Aberdeen, Cammo Meadows, Barnton and Caisteal Gardens, Winchburgh.
It also launched new phases at 12 sites including Ness Castle, Inverness, Osprey Heights, Aberdeen and Harwood Park, West Calder.
Throughout 2020/21, Barratt Developments in Scotland employed 19 new apprentices, graduates and trainees, retained 100% of existing workforce, repaid 100% of furlough support from the UK Government and helped 158 key workers purchase a new home through its NHS and Armed Forces deposit assistance schemes.
Barratt Developments also revealed a further hit for cladding safety works after the Grenfell Tower disaster, taking its total annual bill to more than £80 million.
The firm’s latest cladding bill marks a steep rise on its earlier provision of £4.1 million for the second half put by in May.
At the time, it said its costs so far totalled £163.1 million since 2017-18 for remedial cladding work on developments.
READ MORE: Housebuilder pledges new Scottish jobs as it 'supports economic recovery'
Firms across the sector have been working to address potentially unsafe cladding on buildings following the 2017 Grenfell fire, but many leaseholders have been left on the hook for huge sums of money to pay for the work themselves.
Barratt said: “We recognise that the complex issues surrounding fire safety guidance are causing distress for affected home-owners across the country.
“We will continue to dedicate significant focus to this area, as founding signatories to the Building Safety Charter and active members of the Government’s Early Adopters Group, which is committed to protecting life by putting safety first ahead of all other building priorities.”
It added that it is liaising with owners, management companies and expert engineers on assessments of buildings it constructed and the works needed to support leaseholders and residents.
However, despite the cladding provisions, the group said it is expecting annual underlying pre-tax profits to be “marginally” ahead of expectations for between £761m and £812m after an “excellent” past year.
Statutory pre-tax profits, after adjusted items of around £107m, are expected at the top end of market forecasts.
Barratt had already hiked its outlook in May after a strong start to 2021 thanks to the minor boom following pent-up demand in the property market.
Gemma Boothroyd, Freetrade analyst, said the firm has fewer “favourable tailwinds” as the stamp duty holiday fades.
Shares closed at 711p, up 2.04%, or 14.2p.
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