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The UK’s largest house builder grew its profit to £355m in the six-month period ending 31 December 2017.
In results announced yesterday, Barratt Developments revealed it had increased its profit level by 9.6% from £324m in the same period in the previous year.
It spent a lot more on land in the period than the previous year, spending £641m on land, compared with £328m in the six months to December 2016.
Barratt said this was because exceptional opportunities had arisen and it expected the total land cash spend for the financial year 2018 to be £1.1bn.
It built slightly more homes in the period; the total figure rose from 7,180 to 7,324. This increase was mostly driven by private completions, with affordable numbers increasing only marginally from 1,221 to 1,229.
Forward sales for affordable housing, however, were up 11% on 18 February compared with 19 February last year. That figure had risen from £770m to £857m, well above the builder’s average increase in forward sales of 2%.
David Thomas, chief executive of Barratt, said: “We continue to expect to grow volumes modestly while ensuring we maintain our industry-leading standards of quality and service.
“We are delivering margin improvements through land acquisition and operational efficiencies but recognise that the continued headwinds in the high-end central London market may dilute some of these percentage margin improvements as we trade out of these schemes over the next couple of years.”
In his presentation to investors, Steven Boyes, chief operating officer at Barratt, said the company had not approved a site in Zones 1 or 2 since 2014, and that it has only 395 plots in its land bank in those areas.
The high-end central London market has struggled in the past 18 months and developer Capco just announced another drop in value on its landmark Earls Court regeneration scheme.