Barratt secures record profits as higher house prices boost performance
Barratt Developments has chalked up record profits after Britain's healthy housing market helped it sell more homes at a higher price.
The housebuilder saw half-year pre-tax profits climb 7% to £342.7 million as total completions edged up 2% to 7,324.
Revenues also rose at a double-digit rate, lifting 10% to £1.9 billion for the six months ending in December.
The bright performance was underpinned by the "positive market backdrop" and "good customer demand", with its average selling price growing 7% to £281,000.
Government efforts to shunt more first-time buyers onto the property ladder has proved a boon for housebuilders, as schemes like Help to Buy ramp up the demand for new build homes.
Chief executive David Thomas said: "The group has delivered a strong operational and financial performance in the first half, including an increase in completion volumes and a record first half profit before tax.
"There is high demand for new housing across the country, supported by attractive market fundamentals."
Net private reservations, a key industry measure, rose 7% to 0.68 per active outlet per week, while total forward sales were 2% higher at £3.1 billion.
Barratt, which built 3,342 affordable homes in 2017, said the persistent shortage of skilled workers had continued to bump up costs, albeit at a slower rate.
George Salmon, equity analyst at Hargreaves Lansdown, said: "While the continuation of Barratt's generous capital return plans will likely grab the attention, the real positive for investors here is the indication that the important spring selling season has got off to a strong start.
He said: "With reservations rates, average prices and completions all ticking up, it's easy to see where Barratt gets the confidence to nigh-on double its investment in new land, while simultaneously earmarking another £175m for shareholder returns.
"Taken in the context of shakier UK housing data recently, these moves from the UK's biggest builder are reassuring."
Shares in Britain's biggest housebuilder were down more than 1% in afternoon trading on the London Stock Exchange, despite hiking its interim dividend by nearly a fifth to 8.6p per share.