Barratt Developments (LSE: BDEV) headed the FTSE 100‘s biggest winners Wednesday morning, on the back of an AGM day trading update. Shares in the housebuilder gained 4% in early trading, on a day when the index opened in subdued fashion.
The current financial year kicked off in July, and the company described its performance so far as strong and sustained.
Supply chain problems? Not for Barratt. Chief executive David Thomas said: “We continue to work closely with our suppliers and sub-contractors and have not experienced any significant disruption to our build programme as a result of the challenging supply chain environment.”
He pointed out that the encouraging start to the year comes despite the ending of the stamp duty holiday and a reduction in Help to Buy reservations.
Barratt says it is on track to achieve between 17,000 and 17,250 wholly-owned home completions in the current year. And we should see around 750 completions from joint ventures.
Barratt sales growing
Total forward sales at 10 October were only slightly ahead of the equivalent point a year ago, up just 1.7%. That is against the stamp duty holiday, though. And we’re looking at an 18.7% rise in forward sales compared to 2019.
But it’s not all sweetness and light. In a period of renewed inflation, cost pressures are going to hit the building industry. For the full year, Barratt says it expects build costs to rise between 4% and 5%.
The Barratt share price might be winning on the day. But that’s after a few months of weakness following the stock’s 2021 peak in April. Still, the shares are up 21% over the past 12 months, slightly ahead of the Footsie’s 18%.