Barratt said today that it remains cautious about the housebuilding market despite the “measure of recovery over the past six months”.
In a trading update ahead of its half year results Barratt said its forward sales at 31 December 2009 are up by 43 per cent to £651.2 million compared with £455.8 million for the same period a year earlier.
During the six month period Barratt opened 52 new active sites and were operating from 364 active sites overall compared with 428 the year before.
The firm built 5,028 homes over the first six months of the year compared to 6,905 the year prior.
But bosses expect to build 7,000 over the next six months giving a full year total of 12,000.
Chief executive Mark Clare said: “Over the last six months we have successfully refinanced the business, reduced debt and invested in land which will deliver higher returns.
“With margins growing and a 43 per cent increase in total forward sales, the market has improved but is still subject to the major uncertainties of both mortgage finance and the general economic outlook.”
The group’s net debt fell to £610 million from £1.42 billion a year ago following the completion of a £720.5 million rights issue in November.
Barratt said it will incur an exceptional cost of £130 million in the half results due to costs related to its refinancing and a charge from the sale of Atlantic Quay 5 in Glasgow, a legacy asset from the Wilson Bowden portfolio.
Barratt has total banking facilities of £1.6 billion which it said positions the firm well for market recovery and to take advantage of attractive land purchasing opportunities.
Since re-entering the land market in mid 2009, Barratt has agreed terms on £315 million of land purchases.
The group’s owned land bank totalled 51,600 plots for homes as at the end of December 2009 which equates to approximately 4.3 years supply based on this year’s expected completion volumes.
The trading update added: “Whilst the market has seen a measure of recovery over the past six months, we remain cautious, with growth likely to be constrained by economic uncertainty and a lack of mortgage finance, particularly in the high loan to value sector.”