UK's Barratt flags up to 7% drop in 2025 homebuilding targets amid tough market
Shares down 3%; stock top pct loser on FTSE 100 index
Barratt sees FY25 homebuild target of 13,000-13,500 units
Co expects reduction in average outlets in FY25
Updates share move in paragraph 2, adds analyst comment in paragraph 8, adds chart on home completions
By Aby Jose Koilparambil
July 10 (Reuters) -Britain's Barratt Developments BDEV.L expects its homebuilding targets for fiscal 2025 to drop by up to 7% as elevated mortgage rates and broader economic concerns hold back a housing market recovery.
Shares in the FTSE 100 .FTSE housebuilder were down 3% at 475.80 pence at 0756 GMT, the top percentage loser on the blue-chip index.
The housing sector is betting on a dynamic shift in homebuilding policy under the new Labour government, mainly to tackle planning-related issues, as a delay in interest rate cuts has tempered hopes for a fast-paced recovery.
Barratt, one of the biggest homebuilders in the UK in terms of output and revenue, said it expects to build 13,000-13,500 homes in the year through June 2025, including 600 units from joint ventures. The group said it built 14,004 homes in the year ended June 30, at the upper end of its forecast range.
Britain's new finance minister Rachel Reeves on Monday pledged to tackle a chronic shortage of new homes, saying the government would restore mandatory housebuilding targets for local authorities, fund the hiring of more planning officers and accelerate development of large green energy projects.
Barratt said it expects to see a reduction in average outlets, or sites doing sales, in the current year, but was confident that the numbers would grow into 2026 fiscal year.
Forward sales - a key industry metric which gauges housing demand in the near term - stood at 7,239 homes, including joint ventures, as of June 30, down from 8,995 units a year earlier.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said in a note that further easing of mortgage rates would be necessary for activity to pick up significantly in the housing sector.
Barratt alsoforecast profit slightly above its expectations for the 2024 fiscal year.
Analysts on average expect adjusted profit before tax for the year ended June 30 at 357 million pounds ($456.8 million), according to LSEG data. That is an about 60% slump from 884.3 million pounds reported for the prior year.
Barratt's FTSE 100 .FTSE peers Taylor Wimpey TW.L and Persimmon PSN.L have warned of subdued market conditions this year, while Vistry on Tuesday forecast a 7% rise in half-year profit, thanks to strong demand for its affordable homes.
In February, Barratt agreed to buy smaller rival Redrow RDW.L in an all-stock deal valuing it at about 2.52 billion pounds.
($1 = 0.7815 pounds)
Barratt's delivery woes https://reut.rs/4cQJKKz
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich and Bernadette Baum
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.