MARKET REPORT: Barratt builds on strong foundations

MARKET REPORT: Barratt builds on strong foundation as new home demand remains high despite stamp duty holiday end


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Housebuilder Barratt was one of the top tier players after he shook off the stamp duty holiday break and turned into Help to Buy to drive strong new home sales.

The FTSE 100 company said it had seen “sustained strong customer demand” throughout the summer, with buyers reserving about 281 homes each week between July and October.

The company’s order book grew from £3.6bn a year ago to £3.9bn, while the average selling price of a home rose to £344,300 from £331,400.

Construction boom: Home builder Barratt said it had seen 'sustained strength in customer demand' over the summer months

Construction boom: Home builder Barratt said it had seen ‘sustained strength in customer demand’ over the summer months

Barratt also said it had built 3,699 homes, down from 4,032 in the same period last year, which had benefited from a surge in activity following the easing of Britain’s first lockdown.

As a result, the company reiterated its plans to complete at least 17,000 homes by June next year.

“The positive start to the new financial year has continued in recent weeks, with private reservations remaining strong.

Stock Watch – Instant Fishing

Fishing tackle retailer Angling Direct dipped higher after raising full-year profit forecasts after a strong first half.

For the six months to August, the group posted profits of £3.7 million, more than double the £1.4 million in the same period a year ago, while revenues grew 19.5% to £38. .4 million.

Angling Direct said it now expects its revenues for the year to the end of January 2022 to be ‘no less than £5million… well exceeding current market expectations’.

Shares were up 10.9 percent, or 7p, to 71p.

This is encouraging given the significant annual decline in Help to Buy reservations and the end of the Stamp Duty Holiday.

“We have not experienced any significant disruption to our building program due to the challenging supply chain environment,” said Barratt chief David Thomas.

The rating sent the stock up 6.3 percent, or 40p to 682.2p. Analysts at Peel Hunt were also impressed and upgraded the company from ‘buy’ to ‘add’.

The news lifted other construction companies, with Vistry Group rising 4.7 percent, or 53p, to 1178p, while Persimmon climbed 3.6 percent, or 92p, to 2,657p, Berkeley added 1.7 percent, or 72p to 4278p, Taylor Wimpey jumped 3.9 percent cents, or 5.9p, to 155.3p and Redrow rose 2.4 percent, or 16p to 670.8p.

The FTSE 100 barely moved and rose just 0.16 percent, or 11.59 points, to 7141.82, while the FTSE 250 rose 0.74 percent, or 166.37 points, to 22635.27.

Investors seemed unsure in which direction to go after data from UK GDP showed the economy picked up in August but was below pre-pandemic levels.

Supply chain issues and the fuel crisis left many wondering if the momentum could be maintained.

British Gas owner Centrica saw its shares cool, falling 4.5 percent, or 2.8p to 58.3p after it postponed a capital market event due to ‘unprecedented’ volatility in energy markets.

Company chief Chris O’Shea said the company was instead focusing on taking care of its customers in what he said was an “unprecedented commodity pricing environment.”

The food delivery app, Just Eat, signaled that hungry UK households have placed 1 billion orders on the platform since its inception in 2001, including 266 million orders in the third quarter of this year.

While order numbers were 25 percent higher than last year, growth was slower than in previous quarters, pushing stocks down 1.7 percent, or 92p, to 5414p.

Cybersecurity firm Darktrace rose 7.7 percent, or 64.5p to 904.5p after lifting its full-year revenue guidance.

The company said it had delivered a strong performance in the three months to October, with revenue growing nearly 51 percent year-over-year and expects FY2022 revenue to grow 37 to 39 percent, up from previous estimates.

Asset manager Man Group was another strong mid-cap gainer after assets under management grew to a record £102 billion in the three months to October, from £99 billion at the end of June.

The company highlighted a “very strong” inflow of funds and a solid performance from its investments, adding that positive momentum is expected to continue into the next quarter.

The stock rose 7.6 percent. or 15.4p to 218.2p.

Meanwhile, publican Marston’s fell 0.1 percent, or 0.05p, to 72.8p after sales rebounded following the easing of lockdown restrictions in April.

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