Barratt Developments expects to meet market forecasts |
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Tue, 24 Jan 2006 10:15
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LONDON: Housebuilder Barratt Developments Plc. expects its annual profit for the period ending June 2006 to be exceeding analysts' forecast, as the company said it has seen improved buyer sentiments in the past three months.
Britain's second largest builder of residential complexes, Barratt Developments, in a trading update ahead of the quarterly results due end-March, said buyer confidence has improved and recent sales deals have been encouraging.
Chief executive David Pretty said he expects pre-tax profits for the six months ended December 2005 to be on course and slightly above the market's estimate of 370 million pounds, as the company had imposed strict controls on building costs and other overheads. The estimates, however, fall short of its year ago profit of 406.6 million pounds.
The housebuilder said in the statement, "With the key spring season still ahead of us, it is clearly too early to be sure of market trends ... but if recent improvements are sustained, we are currently on target to increase volumes."
It added that forward sales at the end of December 2005 remained healthy -- around 700 million pounds, against 803 million pounds a year ago. However, together with completions todate, this secures almost 75 per cent of its full year projections.
The company has increased its land bank to about 63,000 by end-2005, compared with 59,443 a year earlier. Its completed sales went up 2 per cent to 7,003 between July and December. The average sale price stood at 165,000 pounds.
The company said its operating margins were satisfactory, in view of the strict cost controls although market conditions required several incentives and marketing support.
The update echoes the latest trends in the country's housing market, which has shown signs of stabilising, after remaining in limbo for more than a year.
The company also announced that its finance director Colin Dearlove is retiring at the end of the fiscal, after spending nearly 25 years with the company. The company has appointed Mark Pain, formerly group finance director at Abbey National Plc., to succeed him.
The company is expected to announce half-year results on 29 March.
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