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Barratt issues growth warning

House builder Barratt Developments today warned that a 13-year run of growth could end if an expected sales upturn in the autumn fails to materialise.
Barratt produced growth in volume, margins and pre-tax profits in spite of a more challenging housing market in the year-ending June 30, 2005.

But short term economic uncertainty is causing buyer hesitancy and if an uplift in sales does not materialise in the Autumn and the Spring, Barratt expects little or no growth.

Barratt exercised caution during the year in the land market, increasing its land bank by over 4,500 plots to around 61,000 representing over four years supply.

Total completions rose 2 per cent to 14,351 from 14,021 in 2004 at an average selling price of £170,000 up 2 per cent.

Private completions were down 1 per cent to 12,591 with an increased selling price of £180,000, up 4 per cent.

Social housing completions increased by 35 per cent to 1,760 at an average selling price of £100,000, up 12 per cent.

Forward sales were down slightly at the beginning of July to £774 million against £880 million last year, an all-time record for the company.

Barratt is confident that the medium and longer term fundamentals of the housing market remain sound because of a serious shortage of new homes in the UK.

In the short term the economic outlook remains uncertain which is causing buyer hesitancy and higher sales costs than earlier in the year.

Barratt is chasing another record year after pre-tax profits rose 20 per cent to £171.1 million during the six months to December 31, beating analysts' expectations.

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