Housebuilder saw pre-tax profits jump 8% despite lower completions and revenue
Companies: Barratt Developments PLC
Housebuilder Barratt Development published a strong half-year update on Tuesday, reporting a solid pre-tax profit, up 8% at £321m, despite completions and revenue falling year-on-year.
Barratt says Return on Capital Expenditure (ROCE) increased 27% (from 25.5%) due to its "fast build and sell" model. The firm confirmed it is planning a special dividend and capital return programme, too, after net cash jumped 712% to £196.7m.
The firm says completions outside of London hit the highest level in nine years, with London completions in line with expectations. There is significant uplift expected on wholly owned sites in the second half.
Completion growth is expected to continue in the second half of the year, following on from record total forward sales in the first half, up 17% to £3bn.
Commenting on the results, BDEV's Chief Executive David Thomas said it was a "very strong" first half, with profits up 9% and completions outside of London at the highest level in nearly a decade.
"With a record forward order book, strong consumer demand and a positive lending backdrop, we remain confident in our outlook for the full year. Our confidence in the business going forward is reflected in the improved and extended Capital Return Plan."
Shares in Barratt Developments opened up 2% in early trading on Wednesday.