Barratt Developments PLC (LSE:BDEV) said it was braced for a tough year as it added "mortgage availability challenges" to a growing list of challenges moving into the new financial year.
The builder provided the commentary alongside annual results which revealed the widely expected decline in adjusted profits, which fell 16% to £884.3 million for the 12 months ended 30 June 2023.
Barratt also saw a 3.9% decline in total home completions year on year, reflecting the broader market slowdown.
"Whilst we expect that the backdrop will continue to be difficult over the coming months, we are a resilient business with a strong balance sheet and an experienced management team," said chief executive David Thomas.
The company's balance sheet remains robust with net cash at £1.1 billion, even after dividend payments of £360 million and a £200 million share buyback. However, the return on capital employed (ROCE) declined to 22.2%, reflecting the dip in profitability.
For the financial year 2024, Barratt aims to drive revenue through targeted incentives and sales to the private rental and social housing sectors.
Commenting after the results, Peel Hunt said the market would likely want more granularity around the slow holiday period for the company.
"Summer is traditionally a quiet period, which this year has been made worse by the volatility in the mortgage market so a bounce is probably a fair shout," the broker said following the results statement.
The shares were off around 2% in early deals.