Housing giant Barratt Developments plc has reported a 75% increase in profit before tax for the half-year ended December 31, 2014.
Supported by a improving housing market, the Government’s Help to Buy scheme and a strategic approach to land acquisition, the group, which was founded in the North East, grew the figure to £210.2m, compared to £120.4m in 2013.
Total completions, including joint ventures were likewise up 12.5%, from 6,195 to 6,971, while half-year revenues rose 24.6%, from £1.26bn to £1.58bn.
In a report accompanying the latest results, Barratt said the land market remained attractive, with a good supply of high quality new development opportunities.
There had also been a step up in the rate of site openings, with nearly 100 new sites opening in the half-year.
Meanwhile, build cost pressures had moderated as the supply of materials and labour increased.
The report said: “The well publicised materials shortages, in particular of bricks and blocks, has eased and has had only a limited effect on the group’s costs and supplies.
“A shortage of skilled labour, particularly bricklayers, continues to affect the industry, and has resulted in increased costs.
“In recent months, we believe the effect has moderated as more labour has returned to the industry and better production management has reduced our peaks of activity.”
Barratt, which is expected to have net cash of between £50m and £100m at June 30, has also enjoyed a strong start to the second half of the year, with total forward sales at February 22 up 17.5% to £2.28bn.
An interim dividend of 4.8p per share will be paid, compared to 3.2p in 2013.
Barratt’s medium-term Capital Return Plan also includes a special cash payment programme through which it anticipates a £100m payment in November, 2015, a £125m payment with the 2016 results and a £175m payment in 2017.
In total, the group is expected to return £962m through both dividends and cash payments to shareholders by November 2017, equating to 97p per share.
Group chief executive Mark Clare said: “Since 2009, we have committed to invest over £4bn in land for new housing and this is now paying off.
“Housing completions were up over 12% during our first half and are running at the highest level for six years, supporting over 12,000 suppliers and subcontractor companies.
“Over the next six months we plan to open a further 90 sites (including joint ventures) that will deliver another 13,500 new homes over their lifetime.
“Our investment programme and the improvements to the business have driven a significant step up in our financial performance in the past year including a 75% increase in profit before tax.
“Our disciplined approach to land investment, delivering high quality homes and driving efficiency across the business, means we are well on our way to hitting our FY17 targets of a gross margin of at least 20% and a return on capital employed of at least 25%.”