Barratt Developments sees H1 pre-tax profit up 7%

12th Jan 2017 07:18

(ShareCast News) - Housebuilder Barratt Developments said pre-tax profit for the six months to the end of December is expected to be up 7% on the same period a year ago, with overall market conditions healthy amid strong demand for new homes.The company said completions outside London are at their highest level in nine years, offset by lower completions in London, mostly reflecting its planned build programme.Barratt said the sales rate nudged up to 0.68 net private reservations per active outlet per week from 0.66 the previous year.Pre-tax profit for the first half is expected to come in at around £315m, up from £295m in the same period a year ago and the group said its net cash position at half year end was strong, at around £195m, compared to £24.2m the year before.Total forward sales were up 15.8% against a strong prior year comparative at £2.34bn, with wholly-owned forward sales up 35.2% to £2.17bn.The total average selling price on completions was 3.9% higher at about £264,000, with the private average selling price up 5.3% to around £296,000, benefiting from mix and some underlying house price inflation.Barratt said it is on track to achieve its target return on capital employed of 25% and remains focused on delivery of a 20% gross margin for full-year 2017 although the high-end London market presents some headwinds in this regard.Chief executive David Thomas said: "This has been another good half year for the group. Consumer demand is strong benefiting from good mortgage availability and ongoing government support. Our healthy forward order book and this strong demand leaves us on track to deliver on our volume guidance for the full year."Barratt's continued commitment to quality design, build and excellence in market-leading customer service is reflected in our strong performance and ensures we remain a housebuilder of choice. Our focus remains on maintaining good operational and financial performance, and delivering attractive shareholder returns. The fundamentals of the market are robust."