Barratt set to build 20% of homes using MMC

Aaron Morby 7 months ago
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Britain’s biggest house builder is aiming to deliver one in five new homes using moderns methods of construction by the end of next year.

Thomas said margin improvements would deliver modest improvement in board's expectations for year ending June

Barratt has rolled out a series of new housing types that will see the firm start to switch to greater use of offsite production and standardised product use.

Its commitment to driving down build costs using modern methods of construction came as the volume house builder reported a 9% fall in forward sales of private homes in May compared to the same time last year.

The slowdown in private housing orders was compensated by a near 20% rise in the number of affordable homes which saw the overall forward sales position in May 3.9% up on last year in volume terms.

In a trading statement this morning, Barratt said build cost inflation was expected to run at  3-4% for the rest of the 2019 calendar year.

It added that its focus on managing its supply chain meant that around 90% of materials now sourced by its centralised procurement function were manufactured or assembled in the UK.

Chief executive David Thomas said that operational improvements made through its new product range, including its concentration on standardised product, would underpin Barratts ability to acquire land at a minimum 23% gross margin.

Thomas said: “Our new housetype ranges are suitable for modern methods of construction. We continue to develop, trial and implement MMC and aim to use it in the construction of 20% of our homes by 2020.

He added: “To improve our cost profile, we have made further refinements to our new housing ranges this financial year, without affecting our quality or design standards.

“We continue to roll these ranges out across the business, providing us with the flexibility to replan sites to suit market conditions and meet consumer demands should the need arise.

“We continue to expect to approve between 18,000-22,000 plots for purchase per annum over this year and for the next two financial years, which will support our volume growth aspirations.”

Ahead of the firms June year end, Thomas said: “Trading since the beginning of the year has been strong, the outlook for the year is modestly ahead of our previous expectations and we are encouraged by our continued progress in driving operating efficiencies through the business.

“Whilst we continue to monitor the market closely, we are confident of delivering a good financial and operational performance in FY19.”

He added that Barratt would remain focussed on driving margin improvement and delivering its medium term targets of volume growth of 3-5% over the medium term.

 

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