Barratt posts its first profit in three years

 
Kasmira Jefford
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BARRATT Developments, the UK’s biggest housebuilder, hailed its first underlying profit in three years yesterday, helped by higher selling prices, and expects to make further progress despite a sluggish housing market.

The group reported a full-year profit before tax and exceptional items of £42.7m compared with a loss of £33m in 2010, beating market estimates.

“We have made considerable progress in rebuilding profitability – by optimising selling prices, improving operational efficiency and securing new higher margin land,” Mark Clare, chief executive, said.

The company was lifted by strong second-half trading in London, where average selling prices of private homes were higher, as well as a shift in focus to family homes as opposed to flats. Its private average selling price was up 7.4 per cent for the year to £198,900.

Barratt said that while low construction levels and a lack of mortgage finance was restricting activity in the housing market, growth would be maintained by a focus on higher prices and new land, which it said should make 35 per cent of sales this year, up from 12 per cent in 2011.

The company also carried out a significant refinancing with £1bn of committed facilities and reduced the net debt on its balance sheet to £322.6m, down from £366.9m in the previous year.

Shares rose by 1.12 per cent last night, closing at 77p.