Barratt losses cut to £118m as trading improves

Aaron Morby 14 years ago
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The cost of financing Barratt’s heavy debts saw the house builder post a net loss of £118m in the year to June, down from £468m last year.

Barratt said wider economic fears and the lack of mortgage finance meant the market for new housing was still challenging.

Despite these concerns, the house builder achieved strong improvements in trading with profit from operations up to £90.1m from £34.2m in 2009.

Its debt pile has shrunk to £367m from £1.3bn last year, helped by a £700m rights issue and better trading.

Mark Clare, group chief executive said: “During the year we have seen a very significant improvement in the performance of the business.

“Operating margin in the second half increased to 5.9%, returning us to profitability and gearing falling to 18%.

He said: “While the outlook for the UK housing market is still challenging, our priority remains optimising prices rather than volume and securing high quality land that will continue to drive our margin recovery.”

He said the house builder expect to raise completions by 5-10% in the coming year, driven by more outlets rather than higher sales rates.

“Our focus continues to be on optimising selling prices rather than pursuing volumes.

“We expect to see a further shift in product mix, with houses likely to represent at least 65% of total volumes, resulting in a modest increase in average selling price,” he added.

Average selling price rose by 10.9% to £174,300. In the second half, Barratt saw prices jump 17.8% to £180,700 due mainly to changes in housing mix away from apartments.

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