Barratt Developments built 14% fewer homes during the 12 months to 30 June 2010, although its average selling price increased 11%.
In a trading update ahead of its annual results, the house builder reported total completions for the second half of the year were 6,324 (2009: 6,372), giving total completions for the year of 11,377 (2009: 13,277).
Private completions for the year were 9,455 (2009: 11,133), social housing completions were 1,870 (2009: 2,069) and joint venture completions were 52 (2009: 75). Social housing accounted for 16.5% (2009: 15.7%) of completions (excluding joint ventures).
Barratt's average selling price was up 11% for the full year to £174,000 and by 18% in the second half on the prior year equivalent period, mainly due to changes in mix. Houses represent 60% of completions in the year versus 46% in the prior year.
Forward sales were up by 27% to £591.7m as at 30 June 2010
Barratt said it expects operating profit of at least £85m for the full year, resulting in a full year operating margin of at least 4%, and a second half operating margin of at least 5.5%
Net debt has been reduced by £230m to £375m as at 30 June 2010.
The house builder has incurred exceptional costs for the full year of £129.9m (2009: £534.8m), relating to refinancing arrangements, restructuring costs, and the impairment on its troubled Atlantic Quay 5 project.
Barratt re-entered the land market in mid 2009, and has since agreed terms on £527.2m of land purchases, comprising 96 sites and 13,359 plots of which 77% are houses.
The house builder's land bank totalled around 50,700 plots at the end of June 2010 (June 2009: 53,541).
Mark Clare, group chief executive said: "In the last six months we have driven a significant improvement in operating margin, delivered a profit for the group, and reduced debt levels by around £230m. This improved operating performance, combined with our success in agreeing terms on higher margin land means that the group is well positioned to secure further margin growth in what continues to be a challenging market.
“Against this backdrop, the Group remains focused on driving profitability by achieving full value for its products and maintaining a tight control on costs. We are targeting total completions in FY 2011 to be approximately 5% to 10% ahead of the FY 2010 level resulting from an increase in the number of sales outlets rather than higher sales rates.
“Our focus will remain on optimising price and not pursuing volumes. We expect to see further mix change with houses representing at least 65% of total volumes. The split of completions between the first and second half is likely to be at a similar level to FY 2010.”
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