Galliford Try became the latest construction company to benefit from the buoyant housing market, with revenues in its housebuilding division up 20 per cent in the past six months.
The company, which built the roof over the Centre Court at Wimbledon, said pre-tax profit for the six months to December 31 rose to £38.1m from £32.3m on revenues also up 18 per cent at £803.5m.
Its housebuilding division, Linden Homes, posted a 20 per cent rise in revenues and an operating margin of 13.5 per cent. Housebuilding accounts for about 85 per cent of profits, with the remainder in construction, where margins fell from 1.8 per cent to 1.4 per cent.
Housebuilders have benefited from a raft of government schemes to boost mortgage lending, including the controversial Help to Buy programme, which is due to end in 2016.
The increase in housebuilding has boosted construction output, which rose for the third consecutive quarter in the three months to December but remains 11 per cent below where it was six years ago.
Jeff Davis, analyst at HSBC, said: “Management has been very encouraged by trading since the start of the calendar year. Housing market conditions have markedly improved, with better mortgage availability and affordability, and improved confidence.”
The trading update came as fresh figures on Tuesday showed London house prices jumped 12.3 per cent last year, raising fears of a house price bubble in the British capital.
Property prices in the rest of the country rose broadly in line with inflation, with the average house price rising by 5.5 per cent in the year to December 2013, topping £250,000 for the first time, according to the data from the Office for National Statistics.
Galliford Try said it had secured a £400m five-year unsecured bank facility which would support a new growth strategy to 2018. It said it aims to more than double 2013 pre-tax profits and earnings per share by 2018, with a greater increase in the dividend.
The company, whose financial year runs from July to June, posted a full-year 2013 pre-tax profit of £74.1m in September.
Galliford said it was confident of meeting its own expectations for the full year and raised its midyear dividend by 25 per cent to 15p per share, which will be paid on April 9.
The shares rose 4.1 per cent to close at £12.15 in London on Wednesday.
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