Barratt sees stability but still cautious

9th Jul 2009 07:59

Housebuilder Barratt Developments said it remains cautious about the outlook and will continue to match work in progress to demand, whilst reducing debt and controlling costs. The group since the start of 2009, it has continued to see signs of stability in the new housing market albeit at lower volumes. "Nevertheless, confidence remains fragile and sustained recovery will depend on the wider outlook for the economy, particularly the availability of mortgage finance which remains highly constrained," it said.Barratt also said that it does not expect to make further material land write-downs as at 30 June 2009 and it is closing its final pension salary scheme.Completions for the second half were 6,297, giving a total for the year of 13,202 (2008: 18,588), in line with expectations. Total average selling prices decreased by 14% to around £157,000 (2008: £183,100).Forward sales for the Group totalled £464.3m (2008: £697.6m), equating to 3,328 plots (2008: 4,586). Of this, £286.4m (62%) was contracted.Visitor levels per site during the second half were down 4.3% on the equivalent period in the prior year, and up 11.9% on the first half. The cancellation rate for the second half was 19.9% compared to 37.4% in the equivalent period in the prior year. The full year cancellation rate was 24% (2008: 33.6%)."Although sales prices remain under pressure, mainly as a result of constrained mortgage availability and down valuations, since 1 January we have seen greater stability. We have therefore been able to deliver adequate sales volumes during the second half at planned selling prices," said the group."The combination of more stable selling prices and our relentless focus on costs has enabled us to hold operating margins in line with expectations. We are continuing to make good progress towards our 2009/10 cost saving targets," it added.Net debt reduced by approximately £370m to an expected level of c.£1.28bn at 30 June 2009.