Barratt Developments 2H Profitability To Be Above Expectations

14th Jul 2010 07:23

LONDON (Dow Jones)--Barratt Developments PLC (BDEV.LN) said Wednesday second half profitability will be above expectations and it is well positioned to secure further margin growth. MAIN FACTS: -Operating profit of at least GBP85 million for the full year, ahead of expectations, resulting in a full year operating margin of at least 4%, and a second half operating margin of at least 5.5%. -Total completions for the second half were 6,324 (2009: 6,372), giving total completions for the year ended June 30 of 11,377 (2009: 13,277). -Private completions for the year were 9,455 (2009: 11,133), social housing completions were 1,870 (2009: 2,069) and joint venture completions were 52 (2009: 75). Social housing accounted for 16.5% (2009: 15.7%) of completions, excluding joint ventures. -In the second half, average selling price increased by around 18% on the prior year equivalent period to GBP181,000 (2009: GBP153.4k); Average selling price up by 11% for the full year to GBP174,000. -Net private reservations up 4.2% for the full year at 0.50 per week per active site; In the second half the net private reservations per active site per week were 0.52 (2009: 0.52); The cancellation rate was 18.0% for the full year (2009: 24.0%) and 18.2% in the second half (2009: 19.9%). -Forward sales up by 27% to GBP591.7 million as at June. 30 -Net debt of GBP375 million as at June 30, significantly lower than previous guidance. -Expects cash expenditure on land to increase in 2011 reflecting the payment of deferred terms agreed on land purchases since re-entering the land market in mid 2009; As a result, the company expects a small increase in the full year debt levels for 2011 with debt at the half year-end expected to be considerably higher, in-line with normal operational trends. -During the second half, the group continued to agree terms on high quality land, which is expected to drive both volume and margin growth in 2010/11 and beyond. -In the second half, 54 sites were opened and 79 were completed; The average number of active sites for the year was 360 (2009: 436); During the year, company has opened 106 sites and completed 143 sites. -Company sold 1,735 HomeBuy Direct units during the financial year. -For 2011, the company expects the total interest charge to be GBP105 million consisting of cash interest of around GBP75 million on net debt including term debt and around GBP30 million of non-cash finance charge. -Outlook for the new housing market in the U.K. is likely to remain challenging as a result of continued constraints on the availability of mortgage finance and overall economic concerns. -Targeting total completions in 2011 to be 5% to 10% ahead of the 2010 level. -Shares on Tuesday closed at 103.5 pence, valuing the company at GBP1.01 billion. -By Tapan Panchal, Dow Jones Newswires. Tel +44(0)207-842 9448, [email protected] (END) Dow Jones Newswires July 14, 2010 02:23 ET (06:23 GMT)