House builder Barratt has reported an expected 15% rise in its average selling price or the six months to 30 June 2010, compared to the equivalent period a year.
The price increase is projected to be 10% for the full financial year, largely due to “mix changes”, Barratt said in an interim management statement covering the year to date.
In other developments, Barratt reported:
- The Group is on track to deliver a profit before tax and exceptions for the second half, having made a £63.5m loss in the same period during 2009;
- Net private reservations for the reporting period up 4% on the prior year;
- Total forward sales up 32% on prior year at £1.1bn;
- Terms agreed on £447.8m of land acquistions equating to 12,286 plots since mid 2009;
- Completions for the full year expected to be 11,500 units, with houses representing around 60% of total volumes compared to 46% in the prior year;
- Net debt at 30 June 2010 anticipated to be around £500m, due to the deferral of land payments;
- Barratt expects to incur exceptional costs in the first half of £129.9m (2009 first half: £513.9m (restated)), chiefly due to restructuring of its financing arrangements and a charge relating to the sale of its Atlantic Quay 5 scheme in Glasgow.
Mark Clare, group chief executive said: "The increase in our selling prices coupled with effective cost control is leading to good margin growth and we expect to deliver a profit for the second half.
“Our forward sales now exceed £1bn, the highest level we have reported for two years, and we're continuing to secure highly desirable land that meets our hurdle rates and will further accelerate our margin recovery.
“Nevertheless while the market has seen a measure of recovery we remain cautious given continuing economic uncertainty and constrained lending."