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* Sees completitions at pre-pandemic levels this FY
* Annual profit surges 65.1% on low base
* Declares final dividend of 21.9p/share
* Shares drop about 3% in morning trade
(Adds analyst, CEO comments)
By Aby Jose Koilparambil
Sept 2 (Reuters) - Barratt Developments expects home
completions to rise to pre-pandemic levels in its fiscal year to
June, Britain's largest housebuilder said on Thursday, also
flagging a 4-5% rise in construction costs in what is a vibrant
property market.
The cost warning, accompanied by investor disappointment
over the lack of special dividend, sent its shares 3% lower to
the bottom of the blue-chip index, despite a 65.1%
earnings surge for the year ended June 30 that was in line with
forecasts.
The UK market has been underpinned by a temporary tax break
for homebuyers set in place during the COVID-19 crisis, and
prices unexpectedly bounced back strongly in August after a fall
the month before when the break began to be phased out.
Barratt - which had guided to build cost inflation of 1-2%
in the previous year - said selling prices were rising faster
than costs, helping its gross margin grow to 21% from 18%,
though still below the 22.8% posted in the pre-pandemic year to
June 2019.
The company expects 230 million pounds ($317 million) of
administrative expenses in the current year, up 26 million
pounds.
Peel Hunt analysts said the build cost inflation was mostly
due to higher logistics costs.
Barratt reported forward sales of 3.94 billion pounds as at
Aug. 22 versus 3.71 billion pounds a year earlier.
It declared a final dividend of 21.9 pence per share, but
some analysts were expecting a special dividend announcement
after the company in February said it continued to target
full-year cover of 2.5 times.
"Our main focus is on buying land and growing our business.
That is what we wanted to tie our financial resources to," Chief
Executive Officer David Thomas told Reuters when asked about the
lack of a special payout.
Annual pre-tax profit was 812.2 million pounds, compared
with 491.8 million pounds in 2020 fiscal and 909.8 million
pounds in the prior year.
($1 = 0.7254 pounds)
($1 = 0.7253 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru, Editing by
Sherry Jacob-Phillips and John Stonestreet)
