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Barratt profits soar as home completions continue to rise

Barratt Developments has posted a 74.6 per cent leap in its profit before tax for the six months ended 31 December 2014.

The housebuilder’s profit before tax was £210.2m for the period, compared with £120.4m for the same period the year before.

Operating margin increased to 14.2 per cent, from 11 per cent for H1 2013.

Revenue jumped 24.6 per cent to £1.6bn, compared with £1.3bn for the same period the year before.

The housebuilder’s completion volumes increased by 12.5 per cent, including work delivered in joint ventures.

Barratt Developments chief executive Mark Clare (pictured) said: “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 per cent 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 per cent and a return on capital employed of at least 25 per cent.”

The housebuilder said build cost inflation had begun to slow to around 4 to 3 per cent, which it said it expected would continue for FY 2015.

The group said “improving efficiency” remains a priority and we it continued to focus on mitigating future material or labour cost increases.

“Over the next three years, we expect these to increase further the efficiency of our operations, in part through a greater use of technology, reduce operating cost and deliver quality and service improvements to our customers.”

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