UK residential property development company Barratt Developments plc released its full year financial results on Wednesday, which reveal continued growth in demand for new homes in Britain.
The company reported profit before tax of GBP565.5m for the full year ended 30 June 2015; an increase of 44.8% compared to GBP390.6m for the full year ended 30 June 2014. Basic earnings per share were GBP0.455 for the full year, up by 45.8% over basic earnings per share of GBP0.312 reported in 2014.
Barratt Developments revenue for FY15 increased by 19% to GBP3,759.5m, compared to GBP3,157.0m in the previous year.
Average private selling prices for Barratt homes, increased by 8.7% to GBP262,500 in the company’s FY15, in comparison to GBP241,600 in the previous fiscal year. This increase was reportedly driven by further changes in mix and house price inflation.
In addition, Barratt said it continued to secure good land opportunities and approved 16,956 plots for purchase, as well as maintaining a controlled land supply of 4.5 years.
David Thomas, Chief Executive of Barratt Developments PLC commented:
“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.”
Richard Hunter, head of equities at Hargreaves Lansdown, was quoted by the BBC as saying: “Housebuilders find themselves in an extremely sweet spot at present and Barratt is no exception. A combination of low interest rates, a general lack of new housing supply, rising house prices and increased mortgage availability all play into its hands.”