One of Britain’s largest home builders, Barratt Developments, said it has the cash to deal with Brexit fallout in the housing sector.
The sector’s economic outlook depends on how Britain leaves the EU, Barratt said, but insisted its net cash balance and the homes it is set to sell this year means it has the “resilience and flexibility to react” to changes next year and beyond.
The developer finished more than 3,250 homes in the last 15 weeks and is due to sell nearly 13,000 for more than £3 billion over the financial year.
However the average value of the homes it is set to deliver is around £236,800, down from £243,900 last year.
Barratt chief executive David Thomas said the company has started its financial year well, showing “a good sales rate and a healthy forward order book”.
“We maintain our focus on the delivery of operational improvements across our business, and our commitment to deliver the highest quality homes across the country,” he added.
Charlie Campbell, a Liberum analyst, said that Barratt’s performance was “very creditable”, but he still prefers shares in rival Persimmon.
“We see no value in this stock,” he said, adding: “The board has persuaded the market that it is going to overcome the market pressures and deliver both volume and margin growth, but we do not see that this is likely.”
It comes as home builders across the sector have faced pressure on margins, with many players saying they have peaked. Meanwhile, house prices are barely rising and the increase in costs is not being offset.
Barratt is trading at a big premium to many of its rivals, including Bellway, which yesterday said its margin had fallen 21% from 22.1% in the most recent financial year.
Shares in Barratt, which were at a two-year high on Tuesday, fell by almost 2.7% to 664.8p on Wednesday morning.