Barratt sees losses cut and sales up

Housebuilder Barratt Developments yesterday revealed a sharp narrowing of losses and said there had been a significant pick-up in trading in 2011.

The group's focus on selling more family houses rather than flats ensured the average selling price rose by 5.7 per cent to 175,800 in the second half of 2010 as it bucked the trend in a declining housing market.

The price rise and ongoing efficiency savings helped Barratt's profit margin jump from 0.6 per cent to 5 per cent and lifted its operating surplus to 43.5 million from 5.2m a year earlier. Bottom-line losses were 4.6m, compared with 178.4m the previous year when the company incurred one-off charges due to restructuring costs and amended financing arrangements.

Barratt, which is the UK's biggest housebuilder by volume, said it had made "a good start to 2011 with a significant pick-up in trading since the depressed autumn selling period", which was hit by the uncertainty around the UK government's comprehensive spending review.

The number of reservations per site a week increased to 0.57 over the past six weeks, up from 0.39 in the final half of 2010, although some of the increase may be due to a bounce back from the disruption caused by the snow in December.