Barratt Developments Plc, the U.K.’s largest homebuilder by volume, reported its second full-year profit since 2008 as the company widened margins by building on cheaper land.
Net income climbed to 75 million pounds ($118 million) in the 12 months ended June 30 from 67.4 million pounds a year earlier, the London-based company said in a statement today. Revenue increased 12 percent to 2.61 billion pounds and the operating margin widened to 9.7 percent from 8.2 percent.
“We have had a very strong start to the new financial year,” Chief Executive Officer Mark Clare said in the statement. “We are seeing the housing market recovery starting to spread beyond London and the Southeast.”
British homebuilders have increased revenue as the U.K. government and the Bank of England’s credit-easing initiatives boosted mortgage availability. A U.K. house-price gauge rose to the highest in almost seven years in August as the economic recovery gathered pace.
Barratt rose 0.5 penny to 332.8 pence at 8:30 a.m. The shares have gained 60 percent this year, while the Bloomberg U.K. Homebuilders Index has added more than 45 percent.
Barratt will pay a final dividend of 2.5 pence a share for the period, the first time it’s paid one in five years. Adjusted earnings per share of 14.6 pence beat the median estimate of 14.5 pence of 10 analysts surveyed by Bloomberg.