Newspaper article The Journal (Newcastle, England)

Rise in Completed Homes Boosts Profits at Barratt; HOUSING

Newspaper article The Journal (Newcastle, England)

Rise in Completed Homes Boosts Profits at Barratt; HOUSING

Article excerpt

Byline: COREENA FORD coreena.ford@ncjmedia.co.uk

BARRATT Developments has delivered more cheer from the housebuilding sector as it posted a 40% leap in half-year profits after ramping up efforts to complete more homes.

The Newcastle-founded firm said pre-tax profits rose to PS295m in the six months to the end of December, up from PS210.2m a year earlier.

Directors said moves to increase its output had seen a 9.4% lift in the number of homes completed, taking half-year revenues to PS1.875bn.

The firm said the group had delivered a strong performance, with year-on-year improvements across key financial metrics, and that the market remained strong, buoyed by the extension of the Help to Buy initiative.

Gross margin improved by 1.2 percentage points to 18.6% and operating margin improved by 1.9 percentage points to 16.1%. Return on capital employed for the 12 months to December 31, 2015 was up by 3.9 percentage points to 25.5%, showing in part the results of our actions to improve returns.

Performance was driven, it said, by "targeted land-buying and effective planning, outstanding design, and construction excellence and efficiency, backed by sales and marketing and industry-leading customer experience".

With housing demand remaining strong, directors said the firm has continued to invest to increase housing production, with more than PS4.4bn approved for the purchase of 82,800 plots of land over the last five years. Annual output has increased by more than 53% over the last five years, the market note said.

In the stock market announcement, chief executive David Thomas said: "There remains a long-term housing shortage of all tenures that can only be addressed through additional supply; we are committed to playing a leading role in addressing this issue without compromising our operational or financial strength. …

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