Page last updated at 09:31 GMT, Wednesday, 24 February 2010

Barratt reports smaller loss as housing market recovers

Barratt homes under construction
Barratt says it will invest in new sites and not pay an interim dividend

Housebuilder Barratt Developments has reported reduced losses for the second half of last year and issued an upbeat forecast for the next six months.

The company made a pre-tax loss of £178.4m, £129.9m of which related to finance costs, compared with a loss of £594.5m a year earlier.

The builder said it had 27% more orders on its books than this time last year.

"We are expecting to see significant improvements in operating margins in the second half," it added.

Total home completions for the six months to the end of 2009 were 5,053, compared with 6,905 in the same period in 2008.

Revenue came in at £872.4m, compared with £1.26bn a year earlier.

'Critical list'

"During the period, the recovery of the UK new housing market continued in terms of customer demand and pricing, albeit mortgage availability remained restricted, particularly in the higher loan to value segment," said Mark Clare, Barratt's chief executive.

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He added that the company would continue to invest in new sites and so would not be paying an interim dividend.

Keith Bowman, at Hargreaves Lansdown Stockbrokers, said: "Barratt has been removed from the critical list.

"Forward sales are rebounding, losses have begun to narrow, whilst the company - like rivals - has begun buying what it hopes will prove to be bargain priced land plots".

The upbeat message from Barratt was in contrast to that from builders' merchant Travis Perkins, which reported an 11% drop in profits in 2009 and warned of continued "fragile" trading activity.

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