Barratt Developments plc - BDEV

Stock Discussions
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This property development giant buys and develops land, to build residential property developments and sell them across Britain.

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Ok. Who knows anything about this company. Im thinking of buying some shares in it. Any infomation would help

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Welcome @Wraith I used to own a Barratt’s home. Their houses don’t have the the best reputation though. I’ve been following a Youtuber recently who has invested in Barratt.His shares seem to be doing ok and held up during the recent dip in the market I think.

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I work for them. What do you want to know?

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Oops!

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It’s okay, being on the ‘inside’ we’re all aware of the reputation. Honestly the quality of your house comes how to the site team (and the quality of the trades) and when you move in. Across the whole industry houses are push into the the end of financial year / half year.

I know that we’re not offering the incentives that’s you can find elsewhere, this would bode well for gross profit & Ave £/sqft.

There is a big squeeze on materials at the moment and this could lead to increased build costs.

Land purchases were all put on hold / cancelled at the beginning of COVID-19 - many of the deals have been resurrected but the delay in getting them on stream could make growth a little trick / having to pay more for the sites.

All told they’re a good buy I think, stamp duty hasn’t been a factor in new build for months as we see off plan.

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Hi. How u think your company will fair in the future. To put it plain

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Would u invest in them?

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Thks for the info. I want to buy some Real estate stocks. Just dont know which companies are the best for it atm

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You might want to consider a REIT - Real Estate Investment Trust.

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Barratt are set up well, I’ve worked across a fair few FTSE250 builders.

Headwinds in the industry (not sceptically Barratts)

  • the property ombudsman which is planned for later this year but might be delayed could force pre completion inspections and this could add to build times and ultimately affect the turnover.
  • Land prices if restrained isn’t shown they could over pay based on current prices that could recede slightly.
  • Material shortages for the next 6-12 months could increase prices and affect the bottom line.

In reality most builders operate in monopoly / duopoly status. Within a 5 miles radius of most sites you’re likely to have 1-2 developments from competing builders and normally there is enough to differentiate yourself from each other. Add to this Help to buy only available on new homes and a large section of the market who prefer new homes you end up often the only show in town.

As @Doubledig says if you’re looking for broad exposure to real estate a REIT might work but caution should be shown for any with an over sized exposure to retail / commercial office space. Another alternative is to invest in the ‘picks and shovels’ by looking into material suppliers.

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Thks much appreciated…

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If you have a FTSE 100 ETF in your portfolio you are already investing in Barratt’s!

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A note of caution here but this news is perhaps more interesting to dividend investors with its whisper of a special payment later in the year:

Rising costs catch up with builders

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The UK’s biggest housebuilder has seen a slump in pre-tax profit for the year to June after setting aside cash to repair legacy properties, despite revenue topping £5bn for the first time.

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HALF YEAR RESULTS FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2022

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Britain’s biggest housebuilder Barratt cuts dividend after ‘marked slowdown’ in sales

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Interesting news.

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Analysts are predicting profit for NEXT year of ÂŁ355m down from over ÂŁ1bn LAST year.

Reporting year end figures next week for year to June.