Another day, another stellar performance by a housebuilder: Barratt said revenues rose by a fifth last year, thanks to rocketing house prices.
Revenues rose 19 per cent to £1.87bn in the six months to the end of December, up from £1.58bn the year before. That pushed pre-tax profits up 40.3 per cent to £295m.
Completions rose 9.4 per cent to 7,626, while average selling price increased 10.9 per cent to £254,200 - up from £229,200 last year.
Basic earnings per share rose 40.6 per cent to 23.9p - causing the company to hike interim dividends to 6p per share.
Shares rose 1.5 per cent to 570.5p in early trading.
Why it's interesting
House prices are up and the government is desperate to persuade housebuilders to increase supply: if ever there were a good time to be in the business, it's now.
And while external indices suggested house price growth had "moderated" to 4.5 per cent in the six months to the end of December, Barratt doesn't have as much exposure as some of its rivals (eg. Berkeley Group) to the most volatile markets, including central London's most exclusive areas, where house prices have actually dropped.
Meanwhile, the government is introducing schemes to boost supply as fast as it can think of them. Last year we had the help to buy isa, the starter homes scheme and the garden cities initiative.
The only spanner in the works may be new rules on stamp duty for buy-to-let homes, due to be introduced in April. But for the moment, Barratt looks strong.
What Barratt said
Chief executive David Thomas said:
In the past five years we have increased our annual output by more than 53 per cent, built more than 71,7001 homes and approved the investment of over £4.4bn in new land for housing. The market remains strong as a result of improved mortgage availability and government support for first time buyers and we will continue to grow in a way that delivers for the needs of homebuyers and shareholders alike.
With revenues rising by a fifth, the company looks strong.