Britain’s construction industry received a double dose of cheer yesterday as housebuilder Barratt said profits more than doubled and Robertson Group unveiled record orders.
Barratt also announced that investors were in line for a £400 million windfall as it noted that housing market conditions were becoming “more normal”.
Privately-owned Robertson, which was last month named preferred bidder for The Macallan’s £100m distillery and visitor centre on Speyside, said its order book has now swelled to almost £1.7 billion, boosted by a strong performance at its facilities management business.
Chairman Bill Robertson said: “That’s mainly across health and education, where we provide cleaning, maintenance and repairs and food in many cases. We look after 63 schools and 11 hospitals, spread across the UK from Aberdeenshire to Hull and Newcastle.”
Robertson told The Scotsman that the firm has a strong presence in the affordable housing market and has won a deal to build 600 homes in Edinburgh as part of the regeneration of the Pennywell area.
He added: “We now have a self-contained division just for affordable homes and they’ve got a healthy order book.”
The group employs almost 1,300 people and expects to add a further 65 this year, although Robertson said it can be a “challenge” to find suitably skilled workers, echoing a recent warning from the Chartered Institute of Purchasing & Supply. The organisation said the sector is struggling to find enough skilled trades people to keep pace with new work, and this could continue to put pressure on costs until the next wave of apprentices enter the jobs market. “If the private sector opens up and we get more volumes coming through, that could have its own difficulties in terms of the quality and number of people we can get,” Robertson said.
“However, it is becoming a more credible sector and there are lots of career opportunities for youngsters leaving school.”
Robertson is due to unveil its full annual results before the end of this month.
A 12.9 per cent rise in Barratt’s average selling prices to £241,600 helped pre-tax profits at the firm surge to £390.6m for the 12 months to the end of June, up from £192m a year earlier and in line with City estimates.
Chief executive Mark Clare said conditions in the property market, which has been boosted by the UK government’s Help to Buy scheme, were returning to “more normal” trends as the initial stimulus from the initiative begins to fade.
Barratt will make a special cash payment to investors of £100m in November next year, rising to £125m and then £175m over the following two years.
Shore Capital analyst Robin Hardy said: “This must be seen as a positive step and pushes the income level up to a level similar to the existing higher yielders of Persimmon, Berkeley and Taylor Wimpey.”
The builder proposed a final dividend of 7.1p a share to be paid on 20 November, taking the total for the year to 10.3p – more than four times the previous year’s payout of 2.5p.