Barratt profits up 11%; ready to outperform sector: Pretty |
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Published
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Thu, 29 Sep 2005 13:35
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LONDON: The country’s biggest housebuilder Barratt Development PLC, said it was optimistic of a slow but complete recovery of the housing market over the next year. However, it would still be a challenging year for the market, the group warned.
The group was sharing its outlook yesterday as it reported growth in annual pretax profits to £406.6m from £367.7m last year, a growth of almost 11 percent.
Turnover in the year to June declined slightly from £2.516bn to £2.512bn while group operating profits were up 10 percent to £411.3m.
The average Barratt house price rose 4 percent to £172,200 during the last year to June.
The builder has a large enough land bank, financial resources and a forward orders worth £900m which places it in a better position than most others in the property market currently. It has already secured 52 percent of the full year requirement.
CEO David Pretty said his organisation was looking to sell around the same number of homes this year as in last. But if the market improves sooner than anticipated then his organisation is well geared to respond immediately by moving volumes forward. The group thinks it wise to work on the basis that the market will continue to be challenging.
While elaborating on the outlook for the coming months, Pretty said the medium and long term fundamentals appeared sound, supported by the continuing shortage of new homes.
Pretty said his firm could outperform the sector yet again in terms of profit growth. One in 11 of Britain's new homes are now built by Barratt every year.
The Barratt chief also welcomed the cut in base lending rate and felt another cut would slowly bring the buyers back into the housing market and “would be good for the economy as a whole”.
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