Barratt Developments Reports Plummeting Profits

Barratt Developments has reported a substantial 75% decline in statutory pre-tax profits, falling from £705.1 million to £170.5 million, amid a challenging housing market characterized by high interest rates and inflation. The company also experienced an 18.6% drop in home completions, totaling 14,004 for the year ending June 30, and anticipates further reductions to between 13,000 and 13,500 for the upcoming year. Additionally, Barratt has reduced its dividend by more than half, reflecting the strain on earnings, with basic earnings per share plummeting 78%. The builder attributed its financial challenges to lower home completions, decreased average selling prices, and increased costs. Despite these setbacks, Barratt's management remains optimistic, citing potential boosts from government planning reforms aimed at addressing housing supply issues. The company maintains a strong balance sheet with a net cash position of £868.5 million, although this is down from £1.07 billion last year.