Barratt profit rebound beats expectations

Aaron Morby 12 years ago
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Britain’s largest volume house builder has bounced back into the black with a pre-tax profit of £26m in the first half of the year.

Barratt said it has seen a strong start to 2012 with sales up 22% in the first seven weeks of the year.

But the builder is still maintaining a cautious policy towards openning new sites with 400 on the go at present.

Barratt said current operating capacity could see this rise to 460, but only if market demand supported it.

House building completions for the first half edged up just 6% to 5,117 with private completions of 4,028 (2010: 3,669) and social housing completions of 1,089 (2010: 1,127). Average selling prices were up 3.1%.

As a result revenue in the first half grew by just 9% to £953m, but operating profits jumped 40% to £61m.

Mark Clare, group chief executive of Barratt Developments said: “Over the last six months we have continued to improve the performance of the business, despite the wider economic uncertainty.

“We have delivered a further substantial increase in profits and recently acquired high margin land is now driving further recovery.

“We have again brought debt and land creditors in below expected levels.

“We have seen a strong start to 2012 and over the first seven weeks private reservations are running 21.8% ahead of this time last year.”

He added that soaring land values in the London would help to drive profits for year end.

Net debt is forecast to reduce to around £350m as at 30 June 2012 from £542m.

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