10th Sep 2014 06:58
LONDON (Alliance News) - Barratt Developments PLC Wednesday said it plans to return around GBP950 million to shareholders over the next three years, as it more than doubled its final dividend following a strong year underpinned by recovery in the UK housing market.
The company said it will pay a final dividend of 7.1 pence for the year that ended June 30, compared with 2.5 pence the year before, making a total dividend of 10.3. The company paid a total dividend of 2.5 pence a year earlier.
Under a special cash payment programme, Barratt hopes to make a special cash payment alongside its full-year 2015 results of GBP100 million, followed by a special cash payment of GBP125 million alongside its full-year 2016 results and a special cash payment of GBP175 million with its full-year 2017 results.
As a whole, the capital return plan is expected to return around GBP950 million of cash through ordinary and special cash payments to the company's shareholders in the next three years, Barratt said.
The capital return plan came as the housebuilder posted pretax of GBP390.6 million for the year to June 30, up from GBP192.0 million a year earlier, as revenue rose 21% to GBP3.16 billion from GBP2.60 billion.
Barratt, which will drop out of the FTSE 100 on September 22, said it ramped up housing completions in response to consumer demand.
In total, completions for the year, including joint ventures, rose 8.6% to 14,828 from 13,663 a year earlier. Private completions were up by 8.7% to 11,936 compared with 10,978 a year earlier, while affordable completions dipped slightly to 2,255 from 2,268.
Overall, Barratt said this represented its highest level of completions in six year.
However, like its peers Berkeley Group Holdings PLC and Redrow PLC, Barratt warned that the UK housing market is reverting to a more normal levels from the high point witnessed in 2013. It said market conditions have returned to a more seasonal levels of activity, meaning fewer people are buying in the summer, with more in the spring and autumn.
Nonetheless, during the year Barratt approved GBP1.20 billion worth of land investment amounting to 21,478 units on 156 sites. In the previous year, the company approved GBP1.05 billion worth of land amounting to 18,536 units on 145 sites.
At the period-end the group had 4.7 years of land supply, slightly exceeding the group target of 4.5 years.
"This reflects our success at both acquiring operational land in the market and converting land from our strategic land," the company said.
"We are continuing to see the benefits of the operational changes we have made in terms of efficiency and the focus we have placed on improving the design and quality of the homes we build," Chief Executive Mark Clare said in a statement.
"These disciplines coupled with the strength of the market and the quality of the land we are acquiring will support a further significant increase in performance in the full year 2015 and progress towards the new return on capital employed target we have set of at least 25% by the full year 2017," Clare added.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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