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Barratt to hit 16,000 homes target in 2016

Barratt Developments is on track to deliver 16,000 homes in 2016, the company has said in a trading update.

The major housebuilder said it expected to “make good progress” in 2015 towards achieving its full-year target of 16,000 legal completions in 2016.

The update for the year ended 30 June 2014 was ahead of its annual results on 10 September 2014.

Legal completions for the full year were up 8.6 per cent with 14,838 units delivered, compared with 13,663 in 2013, which the housebuilder said had been at its highest level in six years.

Private completions were up by 8.7 per cent to 11,936 in 2014, compared with 10,978 in 2013; affordable completions were 2,255 for the full year, compared with 2,268 the year before; and joint venture completions stood at 647 in 2014, compared with 417 in 2013.

The group’s total average selling price jumped 13 per cent to £220,000, from £194,800 the year before, driven by sales of “larger homes in attractive locations”.

Pre-tax profit for the full year is expected to be ahead of the top end of analysts’ forecasts at around £390m, compared with £192m the year before.

The housebuilder expects to finish the year with a net cash balance of around £70m, compared with a net debt of £25.9m in 2013.

Forward sales as at 30 June 2014 stood at £1.2bn, compared with £829.7m in 2013, equating to 6,280 plots and up 44.7 per cent against 4,898 plots in 2013.

JV forward sales dipped to £101.7m with 150 plots, from £121.9m and 221 plots the year before.

Private forward sales were up by 65.6 per cent for the period to £870.1m with 3,315 plots, compared with £525.5m and 2,162 plots in 2013.

The group said it expects to exceed its 18 per cent target of return on capital employed for the full year, compared to 11.5 per cent in 2013 – two years ahead of schedule.

The housebuilder said it continued to secure “excellent” land opportunities across all regions, which met its minimum hurdle rates of 20 per cent gross margin and 25 per cent for return on capital employed.

For the year, the group will have approved a total of £1.2bn worth of land, equating to 21,478 plots, compared with 18,536 plots in 2013.

Barratt added that it will also achieve its target of maintaining a 4.5-year land supply, including 3.3 years of owned land and around 1.2 years of conditionally contracted land.

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