Housebuilder Barratt resumes dividend after record house sales

By Aby Jose Koilparambil

(Reuters) – Britain’s biggest housebuilder Barratt said on Thursday it continued to see strong demand after record house sales in the last six months of 2020, enabling it to reinstate its dividend as promised.

Britain’s housing market rebounded last year after initial coronavirus-related restrictions, as people took advantage of low interest rates and a stamp duty holiday. Barratt sold a record 9,077 new houses in the six months ended Dec. 31, up 9.2%.

Shares in the company, which surged more than 40% in the December quarter, were trading 3.1% higher at 649 pence at 0946 GMT.

The FTSE 100 firm reported a 2% rise in pretax profit to 430.2 million pounds ($585 million) for the six months to Dec. 31, which is the first half of its financial year, and declared an interim payout of 7.5 pence per share.

“There is strong underlying demand and there has been good mortgage availability. That has attracted customers, leading to good reservations and completion volumes,” Barratt Chief Executive Officer David Thomas told Reuters.

House prices fell in January for the first time in seven months after fresh restrictions were imposed to combat COVID-19 and the March 31 deadline for the stamp duty tax holiday threatened to sour buyer’s appetite.

The company said it had nevertheless made a solid start to the second half of its financial year, with over 95% of this year’s homes forward sold. 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 half-year results were driven by stronger-than-expected gross margins, Credit Suisse analysts said in a note.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Amy Caren Daniel and Elaine Hardcastle)