Good morning, ladies and gentlemen, and welcome to Barclays Interim Results Presentation for the 6 months ended 31st October 2020. I am Rob Perrins, Chief Executive of The Briarpley Group. Following my introductory remarks, I will hand over to Richard Stern, our Finance Director, to run through the financial results for the period. I will then provide an update on the operating environment, partly performance and our strategy. In introducing today's results, there are 4 features that I'd like to highlight upfront.
First, I'd like to register my thanks and admiration to our people and those working across all our sites. These are extraordinary times, and their resolve and expertise in continuing to serve our customers and meet our commitments to all stakeholders over this period warrants special recognition. This is made more remarkable by the increasing complexity of today's operating and regulatory environment. 2nd is Barclays' resilient operating performance during the period, which Richard will take you through, underpinned by Barclays' uniquely long term operating model. 3rd is our continued investment in the business.
We now have 28 large complex regeneration sites and have 10% more people on our sites than prior to the start of the pandemic. Lastly, we have developed a new 10 year vision for the business to ensure Bartlettry continues to deliver a positive and lasting contribution to society, the economy and the natural world. This includes science based targets for addressing climate change alongside other key priorities such as increasing the use of digital technology and advanced manufacturing and building upon our well established focus on our people, our customers, nature and the community. I will now hand over to Richard to run through the results.
Thank you very much, Rob, and good morning, everyone. I will take you through the results today, beginning with the summary, then touching on the drivers of revenue and profitability before looking in more detail at the income statement, cash flow and balance sheet, finishing with our land holdings. So beginning then with a summary of performance for the period. We've delivered £230,800,000 of pretax profit, down 16.6% from 276,700,000 for the same period last year. This result is slightly ahead of the updated guidance we gave with the AGM Trade Exchange in September, which was that we were on target to deliver profits for the full year of around €500,000,000 but that this would be more evenly distributed between the first and second half than the onethree to twothree split indicated in June at the time of the year end results.
This principally reflects the performance of our production teams and supply chain over the period. Earnings per share is down 15.2% to 149.6p. This is slightly less than the decrease in pretax profits due to share buybacks in the period. The operating margin is 25.4%, which compares to 24.5% for the whole of last year and 27.5% for the first half last time. Pretax return on equity is 14.9%, in line with the 15% long term baseline target, which we anticipate being slightly above for the full year based upon current guidance and consensus.
Moving on to look at the financial position of the company. Shareholders' funds or net assets are 3,100,000,000 with net asset per share up 0.4 percent to £24 0.82, enhanced by share buybacks in the period. Shares in issue have reduced from 125,500,000 at the start of the year to €125,100,000 due to the net effect of €900,000 of share buybacks and €500,000 of shares issued to meet share based payments. Net cash is £954,000,000 £185,000,000 down from the £1,140,000,000 at the start of the year. This reflects a mix of factors, but predominantly represents our investment in additional work in progress and land over the period, and I will go through this in more detail later.
In terms of future visibility, we have cash due on forward sales covering the next 3 years of €1,940,000,000 This is slightly ahead of last year end when the figure was €1,860,000,000 and this reflects robust trading in the period, which, of course, begun during the first COVID-nineteen lockdown. This represents a very strong order book. Approximately 35% of these board sales relate to the remainder of the current financial year, 45% to 2021, 'twenty 2 and 20% thereafter. The estimated future gross margin in our land bank has increased to 6,650,000,000 and I will look at this in more detail later too. This slide highlights the key components of revenue and profitability.
We have delivered 1104 Homes at an average selling price of £799,000 in the period. This compares to 1389 Homes at an average selling price of £644,000 for the same period last year. Residential volumes are therefore down 21% but offset by an increase in average selling price or ASP of 24%. As always, the ASP reflects the mix of properties delivered in the period. The higher ASP this time is as anticipated and is driven by the reprofiling of sites earlier in the year, leading to relatively more London homes being delivered compared to out of London as we initially focused our production on the onset of COVID-nineteen on delivering our forward sales commitments, which are more heavily weighted to London.
Volumes for 2021 are anticipated to be similar to last year with a slightly higher average selling price due to the mix impact I just mentioned. The long term trajectory will see our average selling price reduce towards the land bank level and volumes increase with delivery focused around our long term regeneration sites along with increasing contribution from joint ventures. Over the 3 years, immediately following the current year, so FY 'twenty two, 'twenty three and 'twenty four, I anticipate volumes will average around £3,500 per annum with pricing averaging around £550,000 with the precise timing of delivery between periods, an important variable as we will always prioritize quality over annual profit targets. In addition to the group numbers, 145 sales have come through the joint ventures in the period at an average selling price of £782,000 This compares to 212 sales at an average price of £805,000 in the comparative period last year. The majority of homes sold this time were in St.
William with 78 completions of Prince of Wales Drive in Bassi. Profits from joint ventures are expected to be around 50% higher in the second half of the year. Looking further ahead, JV profits are expected to increase approximately twofold in each of the next 2 years before stabilizing thereafter. Turning now to the income statement. Revenue has decreased by 3.8 percent to €895,900,000 due principally to the anticipated reduction in residential volumes, offset by the increased average selling price as Jess described.
Within the overall reduction, the comparative period included £18,000,000 of revenue from commercial property sales. This time, we're seeing just £1,000,000 of commercial property sales. Gross profit has decreased by 14% to €289,200,000 This reduction is higher than the decrease in revenue and reflects a fall in the gross margin percentage from the very high 36.1% in the first half last time to fetch 2.3% this time. This is due to the mix of properties sold in the period. As a consequence, operating margin was falling to from 27.5% to 25.4%, offset by a reduction in overheads, which has been driven by a mix of factors, including operational efficiencies and reduced share based payment charges.
I anticipate the operating profit for the full year will be around 25%, reducing to around 22% next year. We have net finance costs for the period of 3,800,000 compared to net income of 900,000 in the comparative period. This represents the forward returns on our cash deposits. With reduced completions in both St. Edward and St.
William, the contribution from joint ventures this period has decreased from 19,400,000 to 6,600,000. The effective tax rate is 18.7% with no unusual items. This slide sets out the cash flows for the period, which resulted in a reduction in net cash of 185,000,000 from €1,140,000,000 at the year end to €954,000,000 €231,000,000 has been generated from pretax profits with a net outflow of €178,000,000 from working capital. There are 3 important movements in working capital, all of which are dealt with on the next three slides. To summarize, these are a €329,000,000 outflow from increased inventory due to investment in new land as well as continued investment in our existing regeneration sites.
This has been offset partially by a £54,000,000 increase in customer deposits as new reservations exceeded the revenue taken to the income statement and a £98,000,000 decrease in other working capital, largely represented by an increase in land creditors. During the period, we paid £47,100,000 of tax, acquired £37,100,000 of shares and paid dividends of £134,300,000 Looking forward to the remainder of the year, we anticipate investing up to a further £150,000,000 in the balance sheet. This will come through investing in work in progress on our existing sites, bringing conditional land holdings onto the balance sheet and investing in new land. I do not propose to dwell on this balance sheet slide as I will run through the 2 big numbers, inventories and creditors, in the next two slides. And so this slide analyzes the GBP 329,000,000 increase in inventories in more detail.
The overall land cost in the balance sheet has increased by €183,000,000 meaning the new land acquired exceeded the cost of that used in production in the period. The costs incurred relate to 3 particular areas: 1st and most significantly, the cost of new sites acquired unconditionally secondly, the cost of sites previously acquired conditionally that have become unconditional in the period moving on to the balance sheet and finally, planning related costs in the period such as community infrastructure levy and Section 106 costs. Build work in progress has increased by £213,000,000 in the period as newbuild investment has exceeded the build cost expense. This investment was anticipated as we develop out our new regeneration sites. Completed stock of 73,300,000 includes 89 residential properties spread across 23 developments.
The figure is down significantly from the year end position of 139,500,000. Moving on to creditors. These have increased by £144,000,000 in the period. The two main reasons for this are a £53,600,000 increase in customer deposits as new reservations exceeded the revenue taken to the income statement in the period, reflecting good sales in the 6 months. The second reason is a £66,000,000 increase in land creditors.
The majority of this increase is long term and rises on the new sites acquired in the period. £100,000,000 of our land creditors are due in the next 12 months. This slide sets out the group's banking facilities. These remain at £750,000,000 consisting of a drawn term loan of £300,000,000 and a £450,000,000 revolving credit facility. Through these facilities, the group has certainty of financing out until November 2023.
In September, we repaid the £200,000,000 drawn in March under the revolving credit facility such that the entire £450,000,000 is now available for drawing. At the half year, Barclays was ungeared with net cash of £954,000,000 and total available liquidity of £1,700,000,000 taking into account its bank facilities. In addition to the group's facilities, our St. William joint venture has bank facilities of €360,000,000 available for a 3 year term to March 2023 with 2 1 year extension options. At the half year, £130,000,000 was drawn under this facility.
Finally, this slide summarizes our land holdings at the 31st October. Estimated future gross margin has increased to 6,650,000,000 compared to 6,420,000,000 at the year end with plot numbers increased to 60,327 from 58,413 in the period. After accounting for the plots taken to sales in the period, we've added a further 1900 plots to the land bank through the addition of 4 sites in the period as well as new planning and optimization of existing planning consents. After accounting for €328,000,000 of gross profit taken to sales, £562,000,000 of gross profit has been added, the majority of which relates to the new sites added in the period. Thank you very much.
And I will now hand back to Rob.
Thank you, Richard. In my speech today, I will cover 4 key focus areas: how Barclays responded to COVID-nineteen and the future operating environment then touching on Barclays' resilient operating performance during this period, underpinned by a uniquely long term operating model and financial strength and then the continued investment in our business and the future growth in housing delivery, followed by Barclays purpose and our vision commitments. And I will then conclude with our guidance for the next 5 years. Turning to COVID-nineteen and Barclays response. Our first priority throughout this period is to ensure the health and safety and well-being of our employees, supply chain customers.
Our health and safety professionals have supported our construction teams and subcontractors ensuring that disruption has been minimized whilst adhering to public guidance and amended site operating procedures. Similarly, we have adapted ourselves and marketing practices. We currently operate by appointment only and have enhanced our deployment of digital technology to ensure we continue to reach our customers. We have adapted our offices, undertaking necessary risk assessments to provide a safe working environment to those who need to be in the office. We now have 11,000 people working on our sites, which is over 10% more than the prior to the pandemic as we work towards increasing housing delivery by over 50% during the current business plan period.
In terms of the future operating environment, Barclays' holistic approach to placemaking, which prioritizes connectivity, nature and community, enables us to create unique and sustainable neighborhoods from large neglected brownfield locations. These sites meet the needs of our customers who, like us, take a long term view, valuing these attributes highly in their search for a new home. We have seen this across our portfolio in the last 6 months, with both homeowners and investors prepared to look through the pandemic, and this focus on the quality of life and place will continue to differentiate Barclays developments as we look beyond the immediate impacts of COVID-nineteen. Looking now at the regulatory environment, there have been some important changes, which will also play a significant part in the future for Bali and the wider delivery of the new homes. The first of these is in relation to the government white paper, Planning for the Future.
Barclays welcomes government ambition to improve, simplify and speed up the planning system in its pursuit of delivering 300,000 homes per annum. Like all new legislation, its implementation will need careful consideration to ensure there's not a hiatus as local authorities and other stakeholders transition between regimes. We do, however, have deep concerns on the proposal for new consolidated infrastructure levy. The proposal is appropriate for small sites, but it runs the very real risk of impeding the delivery of large regeneration projects, which have unique challenges that require locally negotiated solutions with empowered local stakeholders and councils at the table. Barclays' position is that the infrastructure levy should therefore be removed for sites over 300 homes and replaced with a locally negotiated Section 106 agreement, which takes account of the very significant additional costs of site specific remediation, infrastructure and other associated works that these strategic sites deliver.
The second regulatory change relates to the issue of the draft Building Safety Bill 2020. Firstly, we fully support government's determination to ensure buildings are safe for the people that live in them. We will ensure that our own procedures will be compliant with the new legislation ahead of its anticipated implementation and we are well advanced in this regard. Barclay took a leading role in the establishment of the original EWS I process to demonstrate the safety of buildings over 18 meters. We continue to engage with MHCLG and other stakeholders to find a comprehensive solution, which should be based upon science and risk assessment to unlock all safe buildings for mortgage valuation purposes.
This is required to ensure the housing market operates efficiently, effectively and fairly for all. Lastly, Barclays continues to work with its supply chain to mitigate to the extent possible any temporary disruption to the imported materials following finalization of the terms of the UK's trading relationship with the European Union this month. We're also mindful of the importance of the UK remaining an open and welcoming place for business. Now moving to operating model and the resilient performance. Richard has set out the financial performance of the group, along with a very strong balance sheet position.
I would like to highlight the following though. We are firmly on track to deliver our long term target of 15% pretax return on equity and shareholder returns of £280,000,000 per annum. Our long term model and financial strength has enabled us to continue investing in this very challenging period. We have added 4 new sites to our land holdings. We have moved 5 sites into production, which includes 4 long term regeneration developments.
This production momentum is evident in the additional £210,000,000 that has garnered to build and work in progress in the last 6 months, which Richard set out earlier. This means that over the last 18 months, we have increased our investment in each of land and build work in progress by €400,000,000 each, therefore €800,000,000 in total. We now have 28 significant development opportunities in London and the Southeast, which I would like to look at in more detail on the next slide. Barclays is the only developer undertaking major brownfield regeneration at scale in London and the Southeast. Large scale brownfield regeneration takes longer and is more complex and capital intensive than traditional house building sites.
It involves uncertain timing given the multitude of competing stakeholder requirements and complexities. However, these sites, when delivered with the right approach, can return greater value to all stakeholders over the long term. As the slide sets out, Barclays now has 22 of these 28 sites in production as at the 31st October 2020. This means we have good visibility on the business plan with these sites underpinning our anticipated 50% increase in housing delivery by 2024, 2025 from 20 eighteen-nineteen levels at the start of the 6 year guidance period. I would now like to look at the sales performance in the market.
For Barclays, sales for the 6 month period have been around 50% lower than the annualized run rate for the 'nineteen, 'twenty financial year. This period began in lockdown and so this is a resilient performance and is at levels which support our business plan. We've seen our cash flow and forward sales increase to above £1,900,000,000 which provides excellent assurance and visibility as we start the second half of this financial year. The split of customers remains broadly fifty-fifty between owner occupiers and investors, with overseas customers accounting for the majority of investors. Pricing is stable at or above business plan levels.
The temporary stamp duty reduction has eased a financial barrier that has presented many households from moving to homes that meet their needs. It has markedly improved household mobility and underpins our view that transaction taxes stifle activity levels. We fundamentally believe that stamp duties remain at 0 below £500,000 and the current rates halved above this level. Importantly, this has also clearly demonstrated that there's a strong underlying demand for housing if the right conditions for growth are in place. At the same time, supply in parking markets remains considerably below requirements.
The latest quarterly data shows that new starts in London for the 12 months of June 2020 are around 12,000, well below the needs of London. Looking forward, the fundamentals remain strong with undersupply and low interest rates, and this remains a good time to buy in London and the Southeast for those who have a deposit, particularly when compared to the cost of renting. Now looking at land and planning. Barclays continues to see opportunities to acquire new sites, but as always, has been selective. In many cases, particularly where institutional funds are selling, prices are yet to adjust to today's operating environment.
We are therefore being patient and we anticipate these valuations will adjust. We brought 4 new sites of the landholders in the period comprising around 2,800 new homes. In London, this includes a site at Burrow Triangle in Suffolk, which was acquired unconditionally and which we will begin formal community engagement in early 2021. We've also brought a site in Sutton, unconditionally, for which we will obtain vacant possession in 2 years' time. And a further unconditional site, which is adjacent to our West End Gate development in Paddington.
And we have acquired one site outside London conditionally, a site in Wallingford in Oxfordshire, which we've held an auction over for 10 years. We secured planning consents on 2 long term regeneration sites in the period. This includes Old Kent Road in Southwark for 13 50 homes and a Silk Park in Barnet for 1300 homes and the refurbishing of a Sainsbury store. And we have also obtained over 20 revisions and amendments on other sites as we always look to improve our planning in Sens. While we have a notable successes in boroughs, we want to see new housing, in the main planning is taking even longer, is expensive and increasingly bureaucratic.
In terms of build costs, these have been stable during the period. This reflects government's clear message that the construction industry, including house building, should remain open during the pandemic. Materials are generally on extended lead in times when compared to those available at the start of 2020, although this has eased. Consequently, we anticipate that build costs will be stable as we move into 2021, particularly in London with a backdrop of falling supply. As I have said earlier, the risk of material shipments in the New Year following conclusion of the trade agreement with the European Union cannot be discounted, neither can this be fully mitigated.
We currently have around 11,000 people working across our 66 sites in production, including some 200 apprenticeships, with a total of 32,000 UK direct and indirect jobs supported across the economy by Barclays. This is more than 10% higher than the levels prior to the pandemic. Turning to our modular factory. We have made good progress in the development of our precision manufacturing facility in Edgefield during this period. We aim to begin production of the first prototypes in 2021 and our focus is achieving a consistent and reliable level of build quality whilst enhancing environmental performance, safety and productivity.
This slide shows the status of our 93 development sites, of which 44 are in London and 49 are in the Southeast and in Birmingham. We've completed 9 sites in the period and acquired 4 new sites. This leads to a reduction in number of sites from 98 at the start of the financial year to 93 now. The sites in production decreased by net 4 to 66, with 5 started and the 9 sites mentioned above completed. Of the 16 owned sites not yet in construction, 10 have at least a resolution to grant planning pushing, significantly reducing the balance sheet risk in our land holdings.
Of the 11 conditionally contracted sites, 3 now have at least a resolution to grant planning. This slide and the next one are the map setting out the locations of all of our sites. I will not dwell on this, so to note that 4 new sites added in the period are marked with asterisks. These are the 44 sites in London. These are the 49 sites outside London.
Turning briefly to our joint ventures. Senebrities is our joint venture with M and G, and it currently comprises 5,250 homes in our land holdings across 6 developments. No new sites were added in the period. Five developments are in production, whilst the site in Brentford is contracted, subject to planning. St.
William is our joint venture for National Grid, comprising some 10,860 homes across 16 developments. While no new sites were added to the JV in the period, we are currently working with National Grid on a further 4 sites. Popular Riverside was moved into production during the period, which means St. William is now developing 4 of the group's 28 large regeneration schemes, all of which are in production. These comprise Prince of Wales Drive in Basssey, Clarendon in Hornsey, Kingsgrove Park in Fulham and Popular Riverside.
Consistent with previous guidance, we anticipate Savoyam to be materially earnings enhancing by 'twenty three, 'twenty four. Parkview's purpose is to build homes, strengthen communities, improve people's life, use our commercial sets to make valuable and enduring contribution to society, the economy and the natural world. Our vision is Barclays' strategy for the business through which we articulate how Barclays generates value and has a positive impact in line with our purpose. Having initially been launched in 2011, we reviewed our progress and achievements over the last 10 years and involved our vision for the next 10 year period. This will be launched in early 2021, structured around 10 key long term priorities for the business.
Partly aims is to continue taking a sector leading role in tackling climate change alongside new targets for the increasing use of digital technology and advanced manufacturing through our factory as well as continuing to build upon Barclays well established focus areas of our people, our customers, nature and community. Specifically, in terms of climate change, we developed a science based target, which commits Barclay to reducing emissions from our sites, sales suites and offices by 50% by 2,030 and reducing the carbon intensity of the homes rebuilt by 40% by 2,030, covering both the energy used by a resident together with the embodied carbon within the services and materials used to construct our homes. These commitments build upon our progress in this area over the last three years and are in addition to, Barclays being carbon neutral within our direct activities as we have been since 2017. This slide looks at our guidance, which is essentially unchanged. Looking to the full year ending 30th April 2021, we are firmly on track to deliver similar profits to 20 nineteentwenty 20 of around £500,000,000 Looking further forward, we continue to target a cumulative pretax return on equity of 15% for the 6 year period ending 30 April 2025.
This broadly equates to £500,000,000 pretax profit per annum. In saying this, it is also right to recognize the nature and complexity of the prevailing macro risks. In periods of extreme volatility, it is more difficult to forecast profits in any single accounting period, and Barclays will always prioritize its financial strength ahead of its annual profits. We're looking to set to add to our land holdings and are targeting the estimated future gross profit in the land holdings to grow to £7,500,000,000 by 2025. Turning to shareholder returns.
We remain committed to our £280,000,000 annual shareholder return program, which we are able to make through either dividends or share buybacks. This now equates to £2.25 per share following the acquisition of 15,500,000 shares for £551,000,000 at an average price of £35.62 since January 2017. Of the next return, £140,600,000 which is committed to be paid by 31st March 2021, £37,000,000 has already been returned through share buybacks of 900,000 shares at an average price of £41.59 per share. We also remain committed to delivering value to shareholders from the previously identified surplus capital of £455,000,000 We have deferred the return of this by up to 2 years, which is until April 2023 and provided the flexibility for this to be utilized either through enhanced cash returns to shareholders or investment in incremental land interest should opportunities arise to enhance shareholder value over the cycle. In the 1st 6 months of the financial year, we have made incremental land investments of around £50,000,000 and we do see ongoing potential for further incremental land investments.
Thank you very much for your time today. And this concludes the presentation of Barclays interim results for the 6 months ended 31st October 2020.