25th Feb 2015 07:38
LONDON (Alliance News) - Housebuilder Barratt Developments PLC Wednesday joined peers Persimmon PLC and Bovis Homes PLC in reporting a big leap in earnings driven by higher home sales at higher average prices, and in saying 2015 had got off to a strong start.
FTSE 100-listed Barratt said pretax profit rose to GBP210.2 million in the six months to end-December, the first half of its financial year, from GBP120.4 million a year earlier, as revenue rose to GBP1.58 billion, from GBP1.26 billion.
Like its peers, the company reported higher operating margins and return on capital employed, and hiked its returns to shareholders. It raised its interim dividend by half to 4.8 pence, from 3.2p, and said it plans to return 97.0p a share to shareholders over the three years to November 2017. The interim dividend marks the second payment under that plan.
"Housing completions were up over 12% during our first half and are running at the highest level for six years, supporting over 12,000 suppliers and subcontractor companies. Over the next six months we plan to open a further 90 sites (including JVs) that will deliver another 13,500 new homes over their lifetime," Barratt Chief Executive Mark Clare said in a statement.
Total completions in the half rose to 6,971 homes, from 6,195 a year earlier, while its total average selling price rose 8.5% to GBP229,200.
Barratt said its second half has also got off to a strong start, with forward sales including joint ventures at GBP2.28 billion on February 22, up 17.5% from GBP1.94 billion at the same stage in 2014.
It said net private reservations per week over the last eight weeks stood at 279, down slightly from 285 a year earlier.
"First time buyers have continued to return to the market and the number of first time buyer completions has reached a seven year high. The market has been supported by improved mortgage lending conditions leading to an expansion of mortgage products and more competitive rates for borrowers," the housebuilder said.
Like its peers, Barratt continued to invest in land. At the end of December, it had 68,947 plots, up from 62,644 a year earlier.
"The land market remains attractive across all regions and our strategy is to acquire high quality land in strong market locations, and to bring that land through to planning and into production. We continue to target a regionally balanced portfolio with a c. 4.5 year owned and conditionally contracted land bank," it said.
By Steve McGrath; [email protected]; @stevemcgrath1
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