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Housebuilder Barratt slashes dividend by half to reflect lower earnings

Published 04/09/2024, 07:44
© Reuters Housebuilder Barratt slashes dividend by half to reflect lower earnings

© Reuters Housebuilder Barratt slashes dividend by half to reflect lower earnings

BTRW
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RDW
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Proactive Investors - Barratt Developments PLC (LON:BDEV) is paying less than half of last year’s dividend this year to reflect a squeeze on earnings amid a strained housebuilding environment.

Full-year shareholder returns for the year ending 30 June totalled 16.2p per share compared to 33.7p per share previously.

Basic earnings per share fell by 78% to 11.8p.

Total home completions in the year came to 14,004, which was at the upper end of guidance but still nearly a fifth lower than in the 2023 financial year.

Barratt expects lower demand to persist. In today’s full-year results, the group reiterated reduced housebuilding expectations of between 13,000 and 13,500 homes in the year ahead.

However, there is optimism of a return to strength in the years ahead as the Labour government pushed forward with plans to deliver 1.5 million new homes in the next five years.

Chief executive David Thomas stated: “Whilst demand continues to be sensitive to mortgage affordability, and reduced land buying activity during the past two years has had a near-term impact on the number of outlets we are operating from, we are well-positioned to meet the strong underlying demand for new homes of all tenures in the UK.

“We welcome the Government's proposed reforms of the planning system as one of the key levers to increase housebuilding, drive economic growth and tackle the chronic undersupply of high-quality, sustainable homes."

Speaking on Barratt’s recent acquisition of Redrow (LON:RDW), management stated: “We have created a leading British housebuilder focused on quality, service and sustainability which will deliver more homes across Great Britain than the two companies on a stand-alone basis, and we will also deliver significant cost synergies from the combination.”

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