Group chief executive Mark Clare said that Barratt was making the changes because lending restrictions favoured houses over flats. “This ensures that we are building the right mix of products for our customers,” he said.
A change in product mix helped Barratt narrow its net losses and improve its operating position. For the year ended 30 June 2011, the company made a 50% increase in operating profit before operating exceptional items to £135.0m (2010: £90.1m). Full year operating margin before operating exceptional items increased to 6.6% (2010: 4.4%).
After operating exceptional items of £7.7m (2010: £15.8m), operating profit was £127.3m (2010: £74.3m)
Before exceptional costs, the group returned to profit for the full year of £42.7m (2010: loss of £33.0m).
After exceptional costs of £54.2m (2010: £129.9m) the group made a loss before tax for the year of £11.5m, a significant improvement on 2010’s loss of £162.9m. Most of the exceptional costs this time related to refinancing.
Revenue for the year on continuing operations was £2,035.4m, which was just £200k ahead of 2010.
Mr Clare said: "We have made considerable progress in rebuilding profitability - by optimising selling prices, improving operational efficiency and securing new higher margin land. Whilst we expect progress to continue, further recovery in the housing market remains dependent on improving economic conditions and the ability of our customers to secure mortgage finance."
Chairman Bob Lawson said: “ The housing market in the UK has remained constrained. The key restriction on the new build industry remains the availability of adequate mortgage finance, particularly with higher loan to value products.
“With continuing low levels of new build activity, there remains a fundamental imbalance between annual housing demand and supply which will continue to widen unless the underlying causes are addressed. There is considerable demand for housing but the mortgage market is not supporting this and it will clearly take time for the market to function in a more normal way.”
Since re-entering the land market in mid-2009, Barratt has invested £981.3m in acquiring sites.