Barratt delivers highest volumes in nine years
Barratt Developments is seeking to further improve the efficiency of its operations after delivering its highest volumes in nine years.
The housebuilder said it is increasingly looking to timber frames, large format block and light gauge steel frames to speed build times and reduce labour dependency.
The announcement came as the company increased its profit before tax by 12% to £765.1 million (2016: £682.3m) on turnover up 10% to £4.65 billion (2016: £4.23bn).
The number of homes completed during the year to June 30 rose by 0.4% while total completions crept up to 17,395 from 17,319.
Barratt also confirmed plans for a series of special dividends to shareholders which will see them receive a £1.4bn windfall over the next two years.
Chief executive David Thomas said: “Improving the efficiency of our operations and controlling costs continues to be a high priority for the Group, as it will further enhance our margin.
“In 2016, the Group undertook a fundamental review of its Barratt and David Wilson housing ranges.
“The outcome was a reduction in the number of houses in the range which will increase standardisation, simplify construction and reduce build costs whilst maintaining our high standards of design and build quality.
“There are currently 132 sites with c. 19,000 plots where we will be using the new ranges, of which 51 sites are already under construction.
“We have a robust and carefully managed supply chain with 90% of the housebuild materials sourced by our centralised procurement function manufactured or assembled in the UK. The cost of c. 75% of our centrally procured materials is now fixed until the end of FY18.
“On labour, whilst we continue to see some pressure on skilled labour supply with shortages remaining location and trade specific, the rate of cost increase has eased.
“We are also seeking to increase construction efficiency and reduce demand on labour through implementing the new house-type ranges which are easier to build and through the use of alternative build options such as timber frames, large format block and light gauge steel frames.
“We continue to expect that overall build cost inflation for FY18 will be c. 3-4%.”