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Barratt First-Half Earnings Jump on Improving U.K. Economy

Feb. 27 (Bloomberg) -- Barratt Developments Plc, the U.K.’s second-largest homebuilder by market value, said first-half profit almost tripled as Britain’s improving economy fueled demand for homes. The shares climbed the most since March 2013.

Net income for the six months ended Dec. 31 rose to 92.6 million pounds ($154 million), or 9.2 pence a share, from 32.8 million pounds, or 3.3 pence, a year earlier, the Leicestershire-based company said in a statement today. Full-year profits are likely to be at the top end of analysts’ expectations, Chief Executive Officer Mark Clare said by phone.

U.K. homebuilders are ramping up construction as a rise in mortgage lending, government assistance for buyers and an improving economy increases demand for homes. Prime Minister David Cameron’s efforts to stimulate the economy through the housing market are bearing fruit, with buyers seeking almost 1 billion pounds of mortgages under the government’s Help to Buy loan program.

“For four or five years, we’ve had a dearth of mortgage lending -- that’s clearly improved,” Clare said. “Banks are now competing to lend and of course we’ve got Help to Buy, which has really brought the rates down.”

Persimmon Plc, the U.K.’s largest homebuilder, said on Feb. 25 that full-year profit rose 54 percent from a year earlier. Taylor Wimpey Plc, the third-largest homebuilder by market value, yesterday said net income rose 19 percent in 2013 as home sales and prices climbed. Both beat analysts’ estimates.

Barratt’s revenue climbed to 1.26 billion pounds from 951.1 million pounds. The company will pay an interim dividend of 3.2 pence per share two years ahead of target, the company said. Dividend payments for the three years through 2016 will amount to about 365 million pounds, according to the statement.

Barratt was up 4.7 percent to 431.8 pence at 10:03 a.m., giving the homebuilder a market value of 4.25 billion pounds. The shares have gained 39 percent in the past six months.

To contact the reporter on this story: Patrick Gower in London at

To contact the editor responsible for this story: Andrew Blackman at

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