19th Jan 2005 07:00
Barratt Developments PLC19 January 2005 Under embargo 7am 19 January 2005 BARRATT DEVELOPMENTS PLC TRADING UPDATE Barratt Developments PLC, Britain's largest housebuilder, is today providing thefollowing Trading Update for the six months to 31st December 2004, ahead of itsInterim Results, which will be announced on 23rd March 2005. We expect to confirm another successful period for the Group with further growthin completions, margins and pre-tax profit. It is particularly pleasing toreport that the Group is also in a very strong financial position and finishedthe half year with net cash of circa. £150m. We exercised caution in the land market throughout 2004 and tightened ouracquisition criteria again, in December 2004. Nevertheless, we maintained a highquality land bank which now stands at circa. 59,000 plots (2003: 56,345 plots),including 8,000 plots (2003: 9,700 plots) agreed subject to contract. Thisequates to 4 years supply. UK completions increased to 6,866 homes, up 2%, at an average selling price ofaround £165,000, an increase of approximately 2%. Over 80% of the homes builtwere on brownfield land, once again demonstrating our position as Britain'sleading urban regenerator. Private completions were 8% lower at 5,610 homes, atan increased selling price of circa. £179,000, up 6%. However, social housingcompletions more than doubled to 1,256 homes, at an average selling price of£105,800, up 18%. For the full year, we expect social housing completions toincrease by approximately 50% over last year's level. We remain well positionedto continue our steady increase in sales outlets and, subject to planningapprovals, we expect these to increase to circa. 455 by summer 2005. Forward sales at 31 December 2004 increased to circa. £800m (2003: £757m), a newrecord which, together with legal completions to date, secures approximately 80%of our full year objective. After very high house price rises in recent years, the market continues itsadjustment to more modest price increases and a normal level of activity. Thisadjustment was overdue but welcome since it will provide a more stable andsustainable market for the future. We anticipated, and prepared for, these morecompetitive conditions. This, combined with our marketing skills, should enableus to continue to deliver good results. The fundamentals of the housing marketremain sound with historically low interest rates, good employment levels andrestricted supply due to planning delays. Furthermore, stable prices, or modestprice rises in the year ahead should increase buyer confidence, improveaffordability and gradually release any pent-up demand. This will benefithousebuyers and housebuilders alike. Our core strengths of wide geographic spread, affordable product range and urbanregeneration skills have together produced another record half year - for the13th consecutive year. Despite continuing delays within the planning system, wehave all planning permissions in place to achieve our requirement for this yearand over 80% of our requirement for 2005/2006. We are in good shape as we enterthe next six months with strong finances, a high quality land bank and recordforward sales. Enquiries:- Barratt Developments PLC Weber Shandwick Square MileDavid Pretty, Chief Executive/ Terry Garrett/Colin Dearlove, Finance Director Chris LynchTel: 0191 286 6811 Tel: 0207 067 0700 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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