UK builder expects pre-tax gain to rise 9% amid slowdown

BRITAIN'S biggest housebuilder Barratt Developments expects full-year pretax profit to have risen 9 per cent, boosted by a 5 per cent average rise in prices and a continuing creep higher in its number of homes sold.

Barratt is one of the largest residential property development companies in the UK, operating a network of over 30 divisions.

While there are signs of a slowdown at the top of the UK housing market, Barratt and other new-home builders have been propped up by low interest rates and government schemes designed to help younger people get on to the housing ladder.

The company said market conditions overall continued to be supportive, and it had seen a better-than-expected performance in a flagging central London market, where it sold 190 homes at an average price of just under £1.2 million (S$22 million).

Total completions rose 1.1 per cent to 17,579 for the year ended June 30, while the average selling price rose to £289,000 from £275,200 a year earlier.

In a push to boost profit margins, Barratt reviewed its housing ranges in 2016, changing designs to simplify construction and reduce build costs. The company said operating margins rose 50 basis points to about 17.7 per cent, helped by those initiatives.

It added that total forward sales had risen 1.5 per cent year-on-year to £2.18 billion as of June 30, and that it will provide 2019 guidance and a medium term outlook with its full-year results on Sept 5. REUTERS