Higher selling prices boost housebuilder's operating margin

Housebuilder Barratt has reported improved margins and a narrowing of its pre-tax loss for the six months ended 31 December 2009.

The group reported a pre-tax loss of 拢127.4m in the half-year compared to 拢425.8m in 2008.

After exceptional items that relate to its refinancing deal and recent rights issue, the loss was 拢178.4m compared to a post-exceptional loss of 拢594.5m in the same period in 2008. Last year, the company wrote down the value of its land bank and work in progress by 拢431.5m.

The operating margin before exceptional items was 2.4% (2008: 1.3%).

Net debt at 31 December 2009 more than halved from 拢1.4bn to 拢605m.

The company sold 5,053 homes compared to 6,905 in the same period in 2008. The average selling price rose 3.5% to 拢166,300.

Chief executive Mark Clare said: 鈥淲ith our ongoing focus on optimising selling prices we are expecting to see significant improvements in operating margin in the second half.

鈥淔urther recovery in the UK new housing market will depend on improvement in the general economic conditions and in the availability of higher loan to value mortgages.鈥�

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