Shares in Barratt Developments fell almost 7% today as it said it would resume paying a dividend next year, not this one.
Chief executive Mark Clare said the builder needed to continue investing in new land and reducing the debt on its balance sheet before it could start paying a sizeable dividend to shareholders.
“We will declare a final dividend for the year to June 2013 which will be paid around the end of the year,” he said. “But we have set a target of 2015 to reduce our debt significantly which is when we should be able to start ramping up the dividend.”
The company last paid a dividend in 2008, before the financial crisis hit.
Barratt’s profits soared 159% to £111 million in the year to June, with completed sales up from 11,078 to 12,637 and average prices on private home sales up 1.5% to £201,800.
Clare said the growing proportion of sales on land bought cheaply after 2008 meant the group would show further “good progress” in the current year.
In London, sales at the group’s two major developments near the Olympic Park ran at between five and seven times the national average during the Games.
New developments include 460 flats above a new Sainsburys at Fulham Wharf which will command an average sales price of more than £1 million. Even higher prices are likely for the Horseferry Court development in Pimlico which is likely to attract MPs and senior civil servants among the buyers.
Barratt shares fell 11.1p to 158.5p.
