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Barratt developments record £512.4m loss

Wednesday, 25 February 2009 1:01 PM

UK house builder Barratts has recorded a pre-tax loss of £512.4 million, compared to £194.6 million profit in 2007.

In the six months to December 31st the company suffered decreased revenue by 23.7 per cent, with average sale prices falling by 9.7 per cent from £178,000 to £160,700.

The basic loss per Barratt share was 123.0 pence, compared with 38.8 pence earnings for 2007.

Mark Clare, group chief executive of Barratt Developments said: "This remains an intensely difficult market with little forward visibility.

"During the last six months we have driven sales, removed costs and cut our debt levels. We've reduced our prices and we're now seeing some signs of increased activity levels in terms of visitor numbers and sales.

"However, there will be no recovery in the housing market until the availability of mortgage finance improves. So, we are continuing to offer customers every possible assistance to move house, ranging from shared equity products to part exchange on their current home."

The Group's half year net debt was £1,422.8 million, a reduction of £315.7 million since December 31st 2007, and down £227.8 million since June 30th 2008.

The number of Barratt Development employees fell by 29 per cent during the period, down some 38 per cent since the acquisition of Wilson Bowden, two years ago.

Brian Berry, director of external affairs at the Federation of Master Builders (FMB) said: "News today that Barratt has posted a loss is yet more evidence of the problems the construction industry is facing in its worst recession since 1980.

"What is needed is for the government to act now to kick start the building industry by committing to public spending on social housing as well as hospitals, schools and prisons.

"Developing a strategy for the UK's existing homes would also open up an estimated £3.5billion market which would be a tremendous boost to the building industry. The FMB as part of the 'Get Britain Building' coalition is calling on the government to adopt its 10-point manifesto which would provide the stimulus the industry so desperately needs to keep the building industry going and to stop further job losses."

Sarah Garrod

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