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Barratt to open new sites after successful refinancing

Barratt Developments has said it is in a strong position to open new sites after completing a successful refinancing of the company.

In a trading update for 1 July 2009 to 8 November Barratt said it has significantly strengthen its financial position after a £720.5 million rights issue was completed on 4 November.

Bosses anticipate that net debt as at 31 December 2009 will now be around £700 million compared with £1.42 billion a year earlier.

During the first 19 weeks of the year Barratt opened 39 active sites and expect site numbers to be broadly stable during the year.

The business continues to focus on managing stock levels to operate at the optimal level in the current environment.

Barratt Developments chief executive Mark Clare said: “With the successful refinancing of the business now completed, we have substantially reduced debt levels and are in a strong position to buy land as opportunities emerge and to open new sites.

“Our net private reservation rates per site are running 34 per cent ahead of last year. While trading conditions in the housing market have improved, activity levels will remain constrained until the availability of mortgage finance increases particularly at higher loan to value levels.”

Assuming there is no significant change in mortgage availability Barratt expects to build 12,000 homes in 2010 with around 16 per cent of the total comprising social units.

The trading statement said: “Consistent with the re-planning and build programme, a shift in product mix towards a higher proportion of houses is expected.

“We continue to anticipate that this change in mix will improve average selling prices by around 8-10 per cent for the financial year.”

The forward order book at 8 November 2009 stands at £846.6 million compared with £817.7 million a year ago.

As at 8 November Barratt is operating from 362 active sites compared with 449 in 2008.