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Barratt stems losses

14 Jul 11 Housebuilder Barratt Developments reports that it made a pre-tax loss of £15m for the year to 30 June 2011 - a big imporvement on the losses of £130m and £535m in the previous two years.

Before exceptional items and tax, the company made a £40m profit. However, it has taken £55m of exceptional costs relating to refinancing and the cancellation of interest rate swaps – as previously announced in May.

While its full results for the year will not be published until September, in a trading update Barratt said that in the second half of the year it had improved its operating margin to 7.7%, up from 5.9% in H2 2010, and seen its average selling prices rise 5%.

Total completions for the year were 11,171, slightly down on the 11,377 homes completed in the year to 30 June 2010.

Forward sales are virtually unchanged year on year. As at 30 June 2011, forward sales totalled £590.3m, compared to £591.7m a year before.

In fiscal 2010 Barratt made a pre-tax loss of £130m on £2bn revenues, following a loss of £535m in 2009.

Group chief executive Mark Clare said: "Whilst we have seen some recovery following the difficult Autumn selling season, trading conditions in some areas outside London and the South East remain challenging.  In London, we continue to benefit from a strong market position, with our developments selling well.  FirstBuy is a timely boost and is already proving popular, but market recovery cannot be sustained without improved lending conditions.  Our focus remains on improving margin rather than driving volumes."

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