Housebuilder downgrades debt prediction as reservations soar
Barratt Developments has reported its strongest spring for sales since the onset of the credit crunch, with average weekly private reservations up 25.3% on 2011.
In an interim management statement for the first 18 weeks of 2012, the housebuilder said the underlying prices of its properties continued to be stable, underpinned by demand in London and the south east.
Barratt said its net debt was expected to be around £75m below previous guidance by June 30 this year - at some £275m. The June figure for 2011 was £322.6m.
Group chief executive Mark Clare said the first weeks of 2012 had been particularly encouraging. “We have had our strongest spring selling season for five years,” he said.
“Our overall pricing levels have been maintained and average weekly net private reservations in the period are up 25% compared to last year. As a result we’re ahead on achieving our objectives of improving profitability and reducing net debt.”
According to the statement, Barratt’s private average selling price on completions during the period were up by around 5% on 2011 figures to circa £202,000.
The company said its sites were delivering an average of 248 weekly private reservations, and that it was now forecasting an additional 600 completions compared to previous expectations.
Barratt also said that it had this week spent £10m consolidating its ownership of a 720 unit site in Hattersley, after its joint venture partner went into liquidation in March. It said some 50 reservations on the site had been taken to date.
Commenting on the government’s NewBuy mortgage indemnity scheme, Barratt said that about 1,600 prospective takers were registering with the company for the programme each week, but that only 70 reservations via the scheme had been made.
Barratt said it expected the rate to increase as it started to start to prioritise the scheme as a sales tool and all major lenders enter the market.
On the government’s National Planning Policy Framework, Barratt said that while it was encouraged by the requirement for local authorities to demonstrate a five-year land supply and the presumption in favour of sustainable development, it believed future planning successes would “remain a function of our level of engagement locally”.