Barratt's Queensland Terrace development in Highbury, north London
UK Homebuilder Barratt Developments said its full-year profit rose significantly on better home prices in line with the recovery in the housing market that is spreading beyond London and the south east.
The company said that profit before tax and exceptional items rose by 73.3% to £192.3m ($302m, €228m) for the full year ended 30 June. After exceptional items amounting to £87.5m, pre-tax profit was £104.8m.
Group operating profit before operating exceptional items increased by 32.2% to £252.7m, and operating margin, calculated as profit from operations before operating exceptional costs divided by group revenue, increased to 9.7% from 8.2%.
Group revenues rose by 12.2% to £2.6bn as average selling prices increased to £194,800 from £180,500.
Barratt built 13,663 housing units for the full year, compared to 12,857 units a year before.
Spreading Recovery in UK Housing Market
"These are significantly improved results and we have had a very strong start to the new financial year. We are seeing the housing market recovery starting to spread beyond London and the south east with a 29.4% increase in our average net private reservation rate across the Group," CEO Mark Clare said in a statement.
The housing market in the UK has been recovering in the recent period, led by the 'safe haven' London area. According to several market reports, government schemes such as Funding for Lending and Help to Buy are increasing activity in the housing sector, resulting in high demand and increased prices.
"We have seen an increase in the availability of higher loan to value mortgages and increasingly competitive mortgage rates, largely resulting from the Bank of England's Funding for Lending Scheme," the company said.
On Tuesday, the Royal Institution of Chartered Surveyors said UK house prices rose at their fastest pace in close to seven years during August as demand is buoyed by the government schemes aimed at bolstering mortgage activity.
Earlier, mortgage lender Halifax, Nationwide Building Society and property tracking website Hometrack all reported house price increases for August.
Barratt said it had a "very strong start" to the new financial year with a 29.4% increase in average net private reservations per week per active site for the first ten weeks compared with the same period last year.
Private forward sales increased by 44.4% to £880.4m as at 8 September, the company said.
The company also said it expects to deliver about 45,000 new homes over the next three years.
It expects to maintain an appropriate capital structure, having reduced its debt to £25.9m from £167.7m.
Barratt proposed a final dividend of 2.5 pence per share.
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