Barratt Developments reports increase in forward sales amid ‘strong market conditions’

David Thomas
David Thomas

Housebuilder Barratt Developments has attributed “strong market conditions” for putting it on track to deliver the expected improvement in performance for its full financial year.

The FTSE 100 company said forward sales were up almost 10 per cent in the first 19 weeks of the year to £2,844.0 million thanks to “good levels” of demand for new homes.

Around seven weeks from its year-end, the company reported a sales rate of 0.75 net private reservations per active outlet per week, up from 0.74 last year and 0.66 in the first half of the year.

David Thomas, chief executive, said: “I am pleased with the strong performance of the Group in the period, both in terms of delivery for FY16 and in looking further ahead.

“We have approved the investment of over £4.8bn in land for new housing in the last five years and we continue to be committed to helping increase the number of new homes built across Britain.

“We remain on track to deliver the expected improvement in performance for the full year as we maintain our focus on disciplined volume growth, improving our key financial metrics and delivering attractive cash returns.”

Barratt launched 51 new developments in the period and said the opportunities it was seeing to buy further land remained “excellent”, with between 21,000-23,000 plots in line for approval in the current financial year.

Targets for a minimum gross margin of 20 per cent and minimum return on capital employed (ROCE) of 25 per cent by the 2017 financial year were reiterated, along with future cash returns of £678 million over two years to November 2017.

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