Housing sales boost bottom line at Barratt
HOUSEBUILDER Barratt Developments saw its losses narrow in the second half of the year as the housing market showed further signs of finding its feet.
Pre-tax losses came in at £178.4m compared to a loss of £594.5m a year earlier. However, it took a £129.9m hit from finance costs following its £720m placing and rights issue. The FTSE 250 group said demand levels from buyers and property prices picked up in second half trading after a tumultuous 18 months in the sector.
The UK’s largest housebuilder completed 5,053 homes during the period, down on the 6,905 for latter six months of 2008.
Houses made up a larger proportion of sales, accounting for 60.2 per cent of overall completions compared to 46.5 per cent in the previous year.
The gradual recovery in house prices lifted the average selling price by 3.5 per cent to £166,300, largely driven by the change in the mix of the properties on offer.
However, Barratt warned the housing market pick-up is being restrained by a lack of mortgage availability.
“During the period, the recovery of the UK new housing market continued in terms of customer demand and pricing, albeit mortgage availability remained restricted, particularly in the higher loan to value segment,” chief executive Mark Clare said.
The group says its focus is now on boosting its selling prices and concentrating on building houses rather than flats.
Clare added: “The value of our forward order book is now up 27 per cent year on year and with our ongoing focus on optimising selling prices we are expecting to see significant improvements in operating margin in the second half.”
Net debt was reduced to £605.3m from £1,422.8m after last year’s fundraising, the sale of a commercial property and cash management.