Barratt keeps construction cost inflation at 3.5%

Grant Prior 7 years ago
Share

Barratt Developments managed to keep construction cost inflation down to 3.5% last year as the house building giant posted surging profits.

Pre-tax profit for the year to June 30 2015 jumped 44.8% to £565.5m representing an operating margin of 15.3% on turnover up 19.1% to £3,759m.

The sparkling results allowed Barratt to return £250m in dividends to shareholders.

That represents £15,200 for every one of the 16,447 homes Barratt completed during the year.

Construction cost inflation was pegged at 3.5% during the year and the company expects that level to remain in 2016.

Barratt said: “We have a robust and carefully managed supply chain with 85% of our build materials sourced through our centralised procurement function.

“We have effectively sourced the raw materials required to underpin our controlled volume growth and over 90% of our material costs are now fixed until the end of FY16.”

Labour costs remain the largest driver of increases and Barratt is looking to increase its use of of-site construction methods.

The firm is also boosting the use of timber frame and expects to build 1,300 homes using the method next year.

Barratt saw a slight increase in site accidents last year.

The company said: “Increased activity levels across the industry in terms of site openings and production volumes combined with shortages of skilled staff has increased the risk of accidents on sites.”

Barratt chief executive David Thomas said: “The strong operational and financial performance in FY15 reinforces the progress we have made over the past few years.

“Alongside our industry leading management team, I will continue to execute on our current strategy and focus on driving further efficiencies across the business.

“The new financial year has started very well; we have a strong forward sales position and are making very good progress towards our FY17 targets of at least a 20% gross margin and at least a 25% return on capital employed.”

 

Latest news

BAM UK delivers steady first half growth

First half UK profit up 16% to around £40m from revenue at £1bn
54 mins ago

Faults found on giant HS2 green tunnel segments

"Quality issues" found on precast segments at HS2 site pioneering off-site construction
24 hours ago

Balfour Beatty UK construction returns to profit

Group profits double to £82m in first six months after construction arm bounces back
23 hours ago

Bidding starts for £4.5bn Southern Construction Framework

5th generation deal includes new £1m-£5m lot for south west
24 hours ago

Persimmon expands output at off-site factories

Housing giant hits 31% profit margin with another £750m returned to shareholders
23 hours ago

Modular specialist Algeco lands £31m MoD double

Construction to start this year on two new sets of army barracks
23 hours ago

Hill gets go-ahead for North London estate rebuild

750 homes to be built at Douglas Bader Park estate in Colindale
2 days ago

Bid race for £210m Huddersfield town centre revamp

Kirklees Council's Cultural Heart scheme will be split into two major projects
2 days ago

£100m Darlington Station revamp enabling works start

Willmott Dixon set to deliver major station upgrade project
2 days ago

Demolition worker gets huge payout after losing leg

Compensation settlement will fund latest prosthetic limb technology for site victim
2 days ago

Plant hirer Vp abandons sale plan

Chairman Jeremy Pilkington says the plant hirer failed to find a suitable new owner.
2 days ago

Turner & Townsend on board for Sheffield Supertram upgrade

Consultant to help deliver programme over next seven years after £570m funding deal
2 days ago

Green light for new £33m Ipswich logistics park

Construction to start this October on latest Trebor Developments site
2 days ago

Piling starts on pioneering double composite HS2 viaduct

Wendover Dean Viaduct ‘double composite’ structure will halve carbon emissions
2 days ago

ISG pauses work on £300m gigaplant

Construction work rescheduled to reduce costs at giant car battery plant
3 days ago

Tory leadership battle delays bidding for HS2 phase 2a

Prequalification for £5.2bn-£7.2bn route to Crewe put back to September
3 days ago

Greswolde Construction goes under

Solihull contractor ceases trading with 24 jobs lost
5 days ago

Hanson on track for UK’s first net zero cement works

20 carbon capture projects shortlisted for £1bn funding
3 days ago

Plan in for Nottingham 967-room student scheme

Vita submits plan for second major purpose built student sh
3 days ago

Galliford Try gets go-ahead for next A47 dualling job

Early 2023 start for £200m section of A47 between North Tuddenham and Easton in Norfolk
3 days ago

Designs revealed for £1bn London Blackfriars tower blocks

Fosters design landmark green office skyscraper and two blocks of flats for Southwark site
6 days ago

Everton stadium job still on budget despite inflation

Club and Laing O'Rourke confident they can still build new ground for £500m
6 days ago

Construction output falls 1.4% halting 7-month growth spurt

Fresh output and orders figures confirm summer construction slowdown
6 days ago

McLaren gets green light for £85m build-to-rent scheme

Construction set to start this autumn on major city centre development
6 days ago

BAM limbers up for £25m Bedworth leisure centre

Pioneering Warwickshire health and fitness hub to start this autumn
6 days ago

Keepmoat to start four-year build in Wigan

Major regeneration scheme to start across four sites
6 days ago

Solihull contractor Greswolde heading for administration

New investors took over business 12 months ago
7 days ago

Duo win £500m canal and river main works deal

Kier and Bentley bag Canal & Rivers Trust's largest ever water engineering works deal
1 week ago

Construction Manager of the Year finalists revealed

70 of the industry's brightest talents: Full list
7 days ago

Willmott Dixon fills new strategic change director role

Vistry Group change director joins private builder to support future growth
7 days ago

Contractor services