Barratt Completes Most Homes in Seven Years as Profit Jumps

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Residential Construction On A Barratt Developments Plc Site

Chris Ratcliffe/Bloomberg

Barratt Developments Plc, the U.K.’s third-largest homebuilder by market value, reported a 41 percent increase in full-year profit as property values gained and demand remained strong.

Profit from operations jumped to 576.8 million pounds ($887 million) in the 12 months through June from 409.8 million pounds a year earlier, the London-based company said in a statement on Wednesday. Revenue climbed 19 percent to 3.76 billion pounds.

Barratt completed the most homes in seven years, according to the statement, as the company took advantage of rising house prices across the U.K. Total completions rose 11 percent to 16,447 during the period.

“The market is strong,” Chief Executive Officer David Thomas said by phone.
“We’re continuing to invest, buying new land, opening sites and employing more people.”

Barratt climbed as much as 3.6 percent in London trading and was up 1.3 percent at 645 pence at 8:24 a.m. The shares have gained 76 percent in the past 12 months, the second-biggest increase among stocks in the Bloomberg EMEA Home Builders Index after Taylor Wimpey Plc.

Barratt is on track to meet its 2017 fiscal targets of 20 percent gross margin and a 25 percent return on capital employed, according to Thomas, who became CEO in July. In the first 10 weeks of the new fiscal year, home reservations rose 15 percent from the same period in 2014, he said.

(Adds CEO comment in fourth paragraph.)
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