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Barratt dismisses Brexit fears as trading update reveals 20% profit rise

Barratt Developments has said it retains a “positive outlook” for the housing market after posting a 20 per cent increase in pre-tax profit.

In a trading update, the housebuilder said profit before tax for the year to 30 June 2016 would increase by 20 per cent to hit £680m, up from £565.5m a year earlier.

Total completions are also expected to be 5.3 per cent higher, reaching 17,319 compared with 16,447 in its previous results.

Chief executive David Thomas said the firm “remains confident in the positive fundamentals of both the housing sector and our business”.

He added that it was “too early to say” what the impact of uncertainty from last month’s EU referendum would be on the business.

Barratt Developments’ share price slumped by 23.8 per cent in the immediate aftermath of the Leave vote, dropping to 354.4p per share by 28 June, down from 557.5p on 23 June, the day of the referendum. However, it has since recovered to 393.7p, as of today.

The group added that, although the immediate outlook was “less clear”, it had taken measures to mitigate the risk to its business.

“We had contingency plans in place and we have taken appropriate measures to reduce our risk, such as reassessing land approvals, as we continue to monitor the market,” it said.

The group reported a net cash balance of £590m, up from £186.5m a year earlier, while it also approved £1.09bn of operational land for purchase, up from £957m.

It also reported a 15.2 per cent increase in private forward sales, which grew to £1.02bn, up from £882.4m a year earlier.

In May, the developer was named master developer for Enfield Council’s £3.5bn Meridian Water regeneration alongside joint venture partner Segro.

The development, which is one of London’s largest regeneration schemes, will provide 10,000 homes as well as supporting infrastructure, a railway station and retail space.

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