Barratt Developments (LON:BDEV) has updated investors on its recent performance this morning.
Highlights from the company statement:
The Group has delivered a good first half performance and has secured attractive land opportunities whilst maintaining discipline around our land acquisition financial hurdles. This performance is supported by ongoing healthy market conditions driving robust consumer demand. We continue to benefit from good mortgage availability and a supportive Government policy environment including Help to Buy (Equity Loan).
Our average net private reservations per week were 247 (2015: 246) for the period.
We launched 83 new developments in the period (including JVs) (2015: 63) and operated from an average of 374 outlets (including JVs) (2015: 386). We expect to see average outlet numbers remain broadly flat for the full year against the prior year.
Total completions (including JVs) were 7,180 (2015: 7,626) units.
Total average selling price ('ASP') on completions increased by 3.9% in the period to c.£264k (2015: £254.2k), with private ASP up by 5.3% to c.£296k (2015: £281.1k) benefiting from mix as well as some underlying house price inflation.
The Group anticipates around 7% growth in profit before tax in the first half, to around £315m (2015: £295.0m).
We are committed to investing in the future of housebuilding as the largest employer of apprentices in the industry, and continue to develop, trial and implement modern methods of construction which can help address industry-wide skills challenges and support future growth.
Barratt's ongoing commitment to quality design, build and excellence in market‐leading customer service has supported our strong performance. Our focus remains on maintaining good operational and financial performance, and delivering attractive shareholder returns.
The Group continues to focus on driving operational improvements throughout the business. Given good demand and our healthy forward order book we continue to expect to deliver on our full year volume guidance: modest volume growth for wholly owned completions and 700 JV completions.
We remain on track to achieve our target ROCE(4) of 25%, and remain focused on delivery of a 20% gross margin for FY17 notwithstanding that the high-end London market presents some headwinds in this regard.
We remain committed to our cash return policy and expect to deliver cash returns of c. £1bn(5) of dividends (based on consensus earnings) in the three year period to November 2017. We will comment on our plans beyond this period at our interim results on 22 February 2017.