Barratt 42% ahead but discounts worry market
Thursday 23 March 1995
Deputy City Editor
The market was resolutely unimpressed by a strong set of interim figures from Barratt, the housebuilder, focusing instead on prospects for margins as the company continues to drive for volumes in the face of flat selling prices.
The shares, which have already fallen from a high of 288p at the beginning of last year, fell a further 14p to 171p.
Barratt surprised analysts by announcing sales growth since the beginning of 1995 of 16 per cent. That compared with a 12 per cent decline at Wilson Connolly, which announced figures earlier this week, and caused worries about the discounts Barratt is having to give to achieve the improvement.
Despite warning that the housing market slowed during the six months to last December, Barratt was able to report a 42 per cent increase in interim pre-tax profits to £16.1m. After a 32 per cent jump in earnings per share the half-time dividend was up a quarter to 2.5p.
Sir Lawrie Barratt, who came out of retirement four years ago after the company plunged more than £100m into the red, said the second half would continue to be difficult. He criticised the Government's unhelpful attitude to the housing market, which had been hit by rising interest rates, reductions in mortgage interest tax relief and cut-backs in housing income support.
To combat those pressures, and remain on track to complete 8,000 houses a year by June 1996, Barratt had introduced a two-year fixed rate mortgage deal and expanded its part exchange scheme.
Despite thinking the mark-down had been overdone, most analysts trimmed their forecasts for Barratt this year and next, with about £46m expected this time and between £55m and £60m in 1996. That means the shares, trading on a p/e of only 8, are rated substantially lower than the rest of the market.
- 2 Italian police 'reveal' what Jesus looked like as a young boy
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 University student in court for allegedly covering housemates' food in window cleaner and spit
- 5 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Italian police 'reveal' what Jesus looked like as a young boy
Who should I vote for? The Independent quiz matches best political party for undecided voters ahead of the general election
Mysterious 'X-Files' sounds heard miles above the Earth
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...