Housing boom boost for Barratt

HOUSEBUILDER Barratt Development matched its reputation for suburban respectability with a solid set of half-year results that delivered strong evidence of an extremely robust housing market.

Barratt, which operates in all sectors of the new-homes market with prices ranging from £60,000 to £3m, started the year with forward sales up a record 26% to £490m, Since then sales have risen to £580m.

In the first six months of the year Barratt sold 10% more homes and the average price rose to £132,000, also up 10%.

Chairman Frank Eaton said all Barratt's regional markets are buoyant and demand for home ownership continues to be strong. High employment and low interest-rates are underpinning the market. He predicted improvements in the general economy and a strong housing market throughout 2002 with Barratt soaring ahead. 'We have one of the highest sales rates per site and stock turn in the industry which will ensure we continue to produce a full return on investment,' he said. 'We are extremely well positioned to produce further excellent results.'

Investors will be relieved that the group's US operations have come through the tumultuous autumn with no obvious scars. US profits grew by 15% to £2.3m from 140 completions. The move slightly down market to an average selling price of £239,000 has boosted demand with sales reservations up 14% at 179.

Back in Britain Barratt, unlike some of its rivals, has stuck to its policy of organic growth. In the half-year it won planning permission for 130 sites with a total of 8,000 plots. Overall, Barratt increased its landbank by 37% and now 70% of its sites are on land formerly developed.

Pre-tax profits beat City analysts' expectations, coming in at £77.6m for the six months to 31 December compared with £63.1m, up 23%, on sales of £752.8m, up 20%.

Basic earnings per share rose 23% to 23.8p and the interim dividend is lifted 8% to 4.49p. Barratt's shares jumped 19 3/4p to 462 3/4p.