Higher selling prices boost housebuilder's operating margin
Housebuilder Barratt has reported improved margins and a narrowing of its pre-tax loss for the six months ended 31 December 2009.
The group reported a pre-tax loss of £127.4m in the half-year compared to £425.8m in 2008.
After exceptional items that relate to its refinancing deal and recent rights issue, the loss was £178.4m compared to a post-exceptional loss of £594.5m in the same period in 2008. Last year, the company wrote down the value of its land bank and work in progress by £431.5m.
The operating margin before exceptional items was 2.4% (2008: 1.3%).
Net debt at 31 December 2009 more than halved from £1.4bn to £605m.
The company sold 5,053 homes compared to 6,905 in the same period in 2008. The average selling price rose 3.5% to £166,300.
Chief executive Mark Clare said: “With our ongoing focus on optimising selling prices we are expecting to see significant improvements in operating margin in the second half.
“Further recovery in the UK new housing market will depend on improvement in the general economic conditions and in the availability of higher loan to value mortgages.”