Barratt raises £720m as losses pile up

23rd Sep 2009 07:11

Housebuilder Barratt confirmed plans to raise £720.5m through an underwritten placing and a deep discount rights issue as it posted big losses last year.The builder will place 72.9m shares at 240p, representing a 10.6% discount to the closing price of 268.5p yesterday. In addition, there will be a 1.3 for 1 rights issue. In total, 618.4m new shares will be issued. The rights issue will raise £545m and the placing £175m.The fund raising follows a grim set of results with a loss before tax and exceptional items of £144.1m (2008: £392.3m profit) and a loss before tax of £678.9m (2008: £137.3m profit) in the year to June. Net debt at the year-end was £1.28bn.Completions for the full year fell 29% to were 13,202 at an average selling price of £157,200 (2008: £183,100). Group revenue decreased by 35.7% to £2.29bn.The firm said the new cash will enable Barratt to amend its bank covenants, allow it to develop its existing sites and put it in a better position to take advantage of land purchasing opportunities as and when they arise.Barratt added that the second half of the 2009 financial year had seen a degree of stability return to the UK housing market with prices holding up after significant falls in the first half year. Reservation rates per outlet also improved.'This trend has continued since the start of the new financial year with reservation rates in the first eleven weeks both above budget and those in the same period the previous year. Overall reservation prices are running ahead of internal expectations,' it added.Forward sales at 30 June 2009 were £464.3m (2008: £697.6m) representing 3,328 plots (2008: 4,586 plots). As at 13 September 2009 forward sales had increased to £733.4m.