Higher New homes prices helps Barratt’s profits jump

In a further sign that new homes market conditions are improving, Barratt Development expects to report a group operating profit of about £61m for the six months to 31 December, up 40% from the first half of 2010.

The positive trading update comes following an 8% improvement in revenues to £950m due to a 3% annual increase in the average selling price to £181,000.

Barratt has enjoyed a positive six month period in which new homes sales increased, with an 8.1% improvement in its order book to £698.1m including a 29.8% surge in private forward new homes sales to £415.3m.
The increase in sales has allowed the group to reduce its debt to £550m by the end of the year, which is below its previous guidance.

"This has been yet another six months of good progress for our business despite the wider economic uncertainty," said Mark Clare, chief executive of Barratt Developments.

He added: "We have delivered a further substantial increase in profits, brought debt in below expected levels and are starting the second half with a much stronger forward order book."