Barratt cuts losses but reservations slip

8th Sep 2010 07:45

Housebuilder Barratt cut its losses sharply last year and made a net profit in the second half as the housing market rebounded, though reservations have turned down recently.Losses before tax and exceptional items were £33.0m (2009: £144.1m) with a profit before tax and exceptional items of £15.5m in the second half. The loss before tax for the year to June was £162.9m (2009: £678.9m).Sales fell to £2.04bn from £2.29bn, with operating profits up to £90.1m (2009: £34.2m). Pre-tax losses included a £114m charge for refinancing and hedging costs.Net private reservations were up 4.2% for the full year at 0.50 per active site per week with total completions, including joint ventures, at 11,377, down from 13,277. Average selling prices rose by 10.9% for the full year to £174,300 (2009: £157,200) and by 17.8% in the second half on the prior year equivalent period mainly due to changes in mix.Barratt added that forward sales at 30 June 2010 were up by 27% at £591.7m (2009: £464.3m) representing 3,889 plots (2009: 3,328 plots). At 5 September 2010 forward sales had increased to £847.1m (2009: £696.3m) though over the 10 weeks since the financial year end net private reservations dropped to an average of 0.48 per active site per week (2009: 0.51). "We are targeting total completions for this financial year at 5-10% higher than 2010, driven by increasing our numbers of 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," chief executive Mark Clare said.