LONDON: Britain's largest house builder, Barratt Developments has announced that its profits for the year will not take a hit despite a sales trough of more than £100 million to date.
In a statement, the group said, "Notwithstanding the more challenging market throughout the financial year, we have achieved further growth in volume, margins and pre-tax profit and expect to announce results in line with market expectations."
But the group did warn that if sales did not pick up in the autumn and winter seasons, there would be little or no growth at all. "Traditionally, we would expect to see uplifts in sales activity in the autumn and next spring, but if these do not materialize we would expect little or no growth in completions," the statement added.
Barratt also continued to demand that the Bank of England should resort to the interest rate cut in the near future. "Clearly some housebuyers are standing on the sidelines waiting to see which way interest rates go ... I think sentiment has been slightly more fragile in the last three months and I think that's where interest rate cuts would help," said Barratt Chief Executive David Pretty. He also felt that the demand for the inevitable rate cuts was building up and that the BoE should act on those demands.
For the first time in 12 years, the consistent growth that had been shown by the house builder was in danger of being eclipsed due to the prevailing gloomy market conditions. The company said that its profits at the end of the year would be in line of expectations and would scale the £380 million mark.
The company also said that at the beginning of this month, its advance orders were estimated to be £774 million as compared to the £880 million at the same time last year. This is a 10 percent dip during the period.
Posted
on : Sat, 16 Jul 2005 12:05 GMT | Mortgages News
By : Rob Davis
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