Barratt Developments is the largest housebuilder in the UK. It has expertise in acquiring land, obtaining planning consents and building high quality homes. The company operates in 6 regions via 27 operating divisions. It has three consumer brands, Barratt Homes, David Wilson and Barratt London, which offer a variety of properties across the UK. These range from apartments in the city of London to luxury detached houses in the countryside. Commercial business Wilson Bowden creates spaces from industrial and office buildings to retail and leisure.
Company in brief
- Market: Main
- Sector: Building & Construction
- Share price at time of reporting: 711p (14 July 2021)
- Market capitalisation: £7,240m
- Prospective P/E ratio: 10.2x
- Prospective dividend yield: 4.0%
Review
The business is now in a very strong position with substantial net cash, a solid balance sheet and a healthy forward sales position. It remains focused on medium term targets and delivering sustainable growth towards capacity of 20,000 homes over the next three to five years. A minimum 25% ROCE is targeted. The stated dividend policy is based on a full year dividend cover of 2.5 times and this means that the shares are suitable for income seekers as well as those looking for capital growth.
