Shares of Barratt Developments (LON: BDEV) today surged 8.6% higher despite the company announcing that it would not be paying the £175 million special dividends scheduled for November 2021.
Investors cheered the board’s prudent decision given the current challenging business environment created by the coronavirus pandemic lockdown measures and the ensuing decline in economic activity and output.
The residential property development company released its results for the financial year ended 30th June earlier today revealing a 45% drop in pretax profits to £491.8 million from £909.8 million, as the COVID-19 pandemic significantly reduced the number of completed projects.
Barratt’s revenues fell 28% to £3.4 billion, while its gross profit margin fell to 18.0% from 22.8% after factoring in £74.3 million in coronavirus costs.
The company reported that current trading conditions had improved as the number of completed homes in the eight weeks to August 23 was up 62% compared to the prior period at 1,439 homes due to “pent up demand”.
Barratt share price
Barratt shares surged 8.6% to trade at 547.2p having ended Tuesday’s session trading at 503.6p.