12th Jan 2007 07:00
Barratt Developments PLC12 January 2007 BARRATT DEVELOPMENTS PLC TRADING UPDATE 12th January 2007 Barratt Developments PLC is today issuing a trading update for the 6 months to31st December 2006, ahead of the Interim Results, which will be announced on28th February 2007. We are pleased to report a strong trading performance in the first half,supported by further growth in legal completions with both an improved mix andincreased average selling prices. Total completions increased by 2.9% to 7,206 (2005: 7,003) at an average sellingprice of £165,000, (2005: £162,900*). Private completions were 4.0% higher at5,791 (2005: 5,569), at an increased average selling price of £184,200, up 1.2%.Social housing completions decreased by 1.3% to 1,415, at an average sellingprice of £86,600, down 2% (2005: £88,400*) as a result of mix changes. Whilst the competitiveness of the market and changes to our product mixconstrained average selling price growth, our continued focus on drivingimproved overhead efficiencies through increased scale, and strict control ofbuild costs, should enable us to deliver a robust operating margin in the firsthalf, with pre-tax profits in line with management expectations. We have continued to pursue an investment led organic growth strategy, which isreflected in increasing completion rates, a strengthened land bank (up 11.9%)and a record forward sales position (up 47%). Our land bank has increased to c.70,500 plots (December 2005: 63,000), including8,000 plots (December 2005: 7,000 plots) agreed subject to contract. Thisequates to 4.8 years' supply at 2005/6 volumes (December 2005: 4.3 years). Asalready indicated to the market, the continued investment in land and work inprogress has resulted in the business running higher average gearing levels. Atthe half year borrowings were £224 million and average gearing was 17% in theperiod. Against the backdrop of a competitive but stable market, with good buyerconfidence, we have delivered a strong sales performance in the first half. As aresult of improved sales rates, total reservations are now 25% better than ayear ago with forward sales at 31st December 2006 of c. £1,030m (2005: £700m).Taking account of completions to date and those forward sales expected tocomplete in the second half, we have now secured over 70% of the year's expectedvolumes. With the key spring selling period still ahead of us, it is clearly too early tobe certain of market trends for the rest of the year. However, the fundamentalsof the housing market remain sound and we expect it to continue to performsatisfactorily over the coming 6 months. The strength of our forward sales, ournational geographic spread and product range, combined with our urbanregeneration and social housing expertise, leaves us well placed for the future. * The average selling price for social housing completions for the 6 months to31st December 2005 has been adjusted to exclude the revenue received in theperiod in respect of stage payments for the land element of units which were notphysically completed, to be consistent with the treatment in the 6 months to31st December 2006. This had a negligible profit impact in the 6 months to 31December 2005 and no profit impact for the year ended 30th June 2006. Enquiries:- Barratt Developments PLC Weber Shandwick Square MileMark Clare, Chief Executive/ Chris Lynch/Mark Pain, Finance Director Terry GarrettTel: 0207 067 0700 Tel: 0207 067 0700 Note to editors: Barratt Developments PLC is Britain's best-known house builder and has builtmore homes in the last decade than any other. We have a network of 6 regions and 33 divisions operating throughout Britain. Wedirectly employ over 4,400 people including 550 apprentices and 50 graduatetrainees. Our developments span the length and breadth of Britain developing on over 450sites, helping to meet housing demand in towns, cities and rural areas. Barrattis at the forefront of urban regeneration with over 80% of our developmentsutilising brownfield land. We are also one of Britain's leading suppliers ofsocial housing. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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