Barratt Developments remains on top of market in first half

Housebuilder Barratt Developments posted its interim results on Wednesday, reporting strong operational and financial performance driven by customer demand.

The FTSE 100 company remained the UK's largest housebuilder, with total completions for the six month period to 31 December standing at 7,324 plots, while it also saw good growth in profit before tax, up 6.8% to £342.7m with return on capital employed improving 1.3 percentage points to 28.3%.

During the period, the company approved the purchase of £641.2m of land, up from £328.2m in the same period a year earlier, which the board said reflected confidence in the market, excellent land opportunities and its commitment to disciplined volume growth.

It retained its focus on customer satisfaction and build quality, the board claimed, as it won the 2017 Large Builder NHBC Supreme National Award.

A new Cambridgeshire division was set to open, which would help to meet the high demand for new homes in the region.

Looking at current trading net private reservations were up 6.5% at 0.82 per active outlet per average week, with total forward sales ahead 2.0% to £3.078bn as at 18 February - a marginal increase from £3.018bn.

The board also noted its extended capital return plan, with an ongoing commitment to ordinary dividend cover at 2.5x, and an intention to pay special dividends of £175m in November this year and £175m in November 2019.

It confirmed a 17.8% improvement in the interim dividend per share to 8.6p, although net cash had slipped 15.7% to £165.9m.

“With good consumer demand, a healthy forward order book and a robust balance sheet, overall we have had a strong first half and we continue to deliver against our operational and financial objectives,” commented Barratt Developments chief executive David Thomas.

“As the UK's largest housebuilder, we enter our 60th year increasing our housing output, creating jobs and supporting economic growth across the country.

“Having built more than 450,000 homes since 1958, Barratt remains focused on quality, design and industry-leading customer service while delivering homes the country needs.”