Developers in the UK are now able to bring better profits from the land they have invested in, according to the latest report published by Barratt Developments, which also examined the levels of return that other developers are currently bringing in through new home building. Barratt also said that in the last year it has enjoyed its highest level of completions seen at any time in the past five years.
In the six months to the end of 2013, Barratt said that completion levels were up by some 19 per cent, with 6,195 homes being built between April and December last year alone. And with the property market having seen prices increase by 9.4 per cent across the UK as a whole in 2013 according to Knight Frank, this figure represents a real opportunity for developers to harness the power of an ever improving property market to improve their bottom line.
It is in fact a reality that many developers have already been seeing as well, according to the report, which stated that a number of developers had seen profits throughout 2013 much higher than a year earlier. Barratt enjoyed a doubling in its profits to see them hit a level of £120.4 million. "Our disciplined approach means that we have been able to increase the number of new homes we are building while driving up profitability, return on capital and dividends," said Mark Clare, group chief executive at Barratt.
This was reflected in a number of other companies, with Kier Group having seen its profits rise from £22.7 million in the six months to December 2012 to £44.4 million for the same period last year. Like Barratt, Redrow PLC also enjoyed profits that were more than double what it had welcomed a year before. This figure went from £23 million in six months to December 2012 to £47.5 million last year.
- Tuesday 11 March 2014