Revitalised Barratt aims to build 15,000 homes a year

Aaron Morby 10 years ago
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Britain’s biggest house builder has set its sights on building around 15,000 home a year after a 14% rise in completions in the last 12 months

The firm said that its recovery from the 2008 housing slump is now complete with up to half of next year’s completions expected to be built on higher margin new land.

This proved the main driver behind a 42% jump in operating profits to £191m in the year ending June on revenue ahead 14% at £2.3bn.

Operating margin increased to 9.5% in the second half, up from 6.6% in the prior full year.

Mark Clare, chief executive, said: “Going forward, it is likely that some pressure will continue to be felt as raw material prices rise due to underlying commodity price increases.

“However, we will seek to mitigate this by continuing to drive further efficiency savings and reductions in operating costs across the business.”

The firm warned that while housing needs continue to grow, the number of new homes being built would only see a sustainable increase with a step change in mortgage lending.

Despite these concerns Barratt is moving ahead with plans to deliver up to 15,000 new homes a year by 2015, which would see it active sites rise from around 387 to 450 in number.

Clare said Barratt expected to clear all its debts by 2015. Then Barratt’s shareholders would fund its land bank and long-term work in progress, while banks would only be responsible for annual working capital requirements.

The turn around in fortunes saw pre-tax profits jump 159% to £111m and debt almost halved to £167.7m.

Clare added that private forward sales were up 15.3% to £609.6m.

 

 

 

 

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