Barratt boosted by 18% price rise

14th Jul 2010 08:04

Barratt Developments' underlying profits this year will beat expectations after the housebuilder pushed though price rises of 18% and kept costs under control.Operating profit will now be at least £85m for the full year to June as margins for the year rose to 4% and hit 5.5% in the second half.Completions totalled 11,377, with 6,324 completions in the second half. Average selling prices rose by 11% for the full year to £174,000 and by 18% in the second half. This was mainly due to changes in product mix Barratt said, with the proportion of houses up to 60% from 46%.Going forward, reservations are up 4.2% for the full year at 0.50 per week per active site with forward sales up by 27% to £591.7m at end June.Conditions in the housing market will remain difficult overall due to continued constraints on the availability of mortgage finance and overall economic concerns, the firm said. Even so, it expects completions to rise again. "We are targeting total completions in FY 2011 to be approximately 5% to 10% ahead of the FY 2010 level resulting from an increase in the number of sales outlets rather than higher sales rates," chief executive Mark Clare said."Our focus will remain on optimising price and not pursuing volumes. We expect to see further mix change with houses representing at least 65% of total volumes. The split of completions between the first and second half is likely to be at a similar level to FY 2010m" he added. Net debt at the end of June was £375m, significantly lower than previous guidance, Barratt added.