Barratt turnover drops

In its interim report housebuilder Barratt said that turnover fell 33 per cent in the six months to 31 December 2009 after a 27 per cent drop in the number of homes built in that period compared to a year earlier.

The key Highlights were:

• Total completions (including 25 joint venture completions) for the half year were 5,053 (2008: 6,905). Group revenue was £872.4m (2008: £1,261.8m).
• The average selling price (excluding joint ventures which are equity accounted) increased by 3.5% to £166,300 (2008: £160,700) largely driven by changes in mix.
• The operating margin before exceptional items was 2.4% (2008: 1.3%). Operating profit before exceptional items was £21.0m (2008: £16.0m ¹). Operating profit was £5.2m (2008: £497.9m loss ¹).
• Exceptional items of £129.9m (2008: £513.9m ¹) primarily related to the Group’s amended financing arrangements, which came into effect following the Placing and the Rights Issue (2008: impairment of inventories and restructuring costs).
• The Group made a loss before tax and exceptional items of £48.5m (2008: £80.6m ¹), and a loss before tax after exceptional items of £178.4m (2008: £594.5m ¹).
• Net debt was £605.3m at 31 December 2009 (2008: £1,422.8m), a reduction of £671.6m since 30 June 2009 due to the net proceeds of the Placing and the Rights Issue, the sale of a commercial property and ongoing strong cash management.
• Forward sales at 31 December 2009 were £651.2m (2008: £455.8m) representing 3,995 plots (2008: 3,529 plots). At 21 February 2010 forward sales had increased to £847.4m, which, taken with completions to date, means that the Group has secured around 77% of its full year requirement.
• Since mid-2009 the Group has agreed terms on £358m of land, comprising 74 sites and 9,038 plots, which will deliver attractive margins based on current selling prices.
• For the last 6 weeks the Group has delivered 0.55 private sales per active site per week up 12.2% on the first half of the financial year.

Mark Clare, Group Chief Executive of Barratt Developments commented:“During the last six months, we have improved our trading performance, successfully refinanced the business and invested in new land. The value of our forward order book is now up 27% year on year and with our ongoing focus on optimising selling prices we are expecting to see significant improvements in operating margin in the second half.”