February 27, 2013 / 7:47 AM / 5 years ago

UPDATE 2-Housebuilder Barratt lifted by mortgage market thaw

* NewBuy scheme firing on all cylinders, says CEO

* Order book hits 1.1 bln stg for first 8 weeks of year

* H1 pretax profit more than doubles to 46.1 mln stg

* On track to pay first dividend in five years

By Clare Hutchison

LONDON, Feb 27 (Reuters) - British housebuilder Barratt Developments reported its best start to the year since 2007, saying that government schemes to boost mortgage access have energized the country’s sluggish housing market.

“The foundations of stronger mortgage lending are a lot firmer than they have been for some time,” Chief Executive Mark Clare said on Wednesday after announcing that Barratt’s order book had reached 1.1 billion pounds ($1.7 billion) in the first eight weeks of the year.

“We will, of course, remain cautious as to whether the slow thaw in the lending market is sustained.”

Britain’s housebuilders have countered housing market woes by buying land cheaply during the recession and focusing on selling more expensive family homes rather than flats, concentrating on the relatively buoyant market in the south of England.

Clare said that the government’s NewBuy scheme is “firing on all cylinders” and estimated that about 10 to 15 percent of Barratt sales in the second half would come through the initiative.

NewBuy allows lenders to provide 95 percent mortgages on new-build properties, with guarantees from the government and developers.

Britain’s largest housebuilder by market value reported a slight decline in first-half revenue, but higher margins helped it to more than double pretax profit. At 46.1 million pounds for the six months to Dec. 31, pretax profit beat the company’s own forecast of 45 million pounds.

Revenue over the half year was 951.1 million pounds.

Private sales increased by 5.3 percent and the average price for Barratt properties rose 2.4 percent to 185,500 pounds.

The company, which announced in September that it would pay its first dividend in five years in 2013, said that it is on track to deliver a final dividend in June.

Barratt said that debt fell to 331.7 million pounds from 542.2 million pounds as it pushed forward with its plan to be debt-free by 2015.

Its positive performance comes after rivals Persimmon and Bovis Homes posted strong full-year results on Monday and Redrow said on Tuesday that its first-half profit had increased by 50 percent.

Analysts said that Barratt, which boosted margins to 8.3 percent from 6.4 percent in its first half, still had some way to go match its competitors.

“Barratt still has the lowest margins in the sector, which could be forgivable if there was a high return on invested capital, but there is not,” Panmure Gordon analysts said in a note to clients.

Barratt shares, which have climbed by more than 65 percent in the past year, were down nearly 0.8 percent at 1120 GMT.

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