Drop is in line with seasonal trend, says housebuilder
Housebuilder Barratt has said a drop in reservations since the end of June is in line with seasonal trends.
At its 2010 results presentation on Wednesday, the company said net private reservations in the 10 weeks since its year-end averaged 0.48 per active site per week, down on last year’s figure of 5.1%.
The dip followed weekend reports that reservation levels had fallen to their lowest levels on record during August.
A company statement said: “This [0.48] is slightly down on the prior year when sales for the traditionally quieter period were stronger than normal but it is in line with the rate required to achieve our projected volumes for the current financial year.”
In the 12 months to 30 June 2010, net private reservations were up 4.2% at a figure of 0.5 per active site per week.
However total completions were down from 13,277 to 11,377, in line with the company’s policy of accepting “lower sales volumes to preserve value”.
As a result, Barratt’s operating profit before exceptional items was £90.1m, up from £34.2m in 2009, producing an operating margin of 4.4% (2009: 1.5%).
The company statement added: “During the year conditions in the housing market in Britain steadily improved. Nevertheless, by historic standards the market remained difficult and activity levels continued to be extremely low in terms of the number of house buyers and sellers.”
As part of the housebuilder’s efforts to put the company on an even financial keel, net debt was slashed from £1.3bn to £367m.