Barratt Developments Plc, the U.K.’s biggest homebuilder by volume, said its average selling price rose by about 9 percent to 180,000 pounds ($286,000) since July as the company built a greater proportion of houses compared with apartments.
Total forward sales, or houses paid for but not yet built, were similar to last year at 870.9 million pounds, London-based Barratt said today in a statement. Net debt should increase to 400 million pounds to 450 million pounds by the end of June 2011, the company said. Barratt said in September that net debt was 366.9 million pounds.
“We’re being hit quite hard by macro factors,” Chief Executive Officer Mark Clare said on a conference call. “All we can do is focus on improving our profit margins. If we focus on share price, we’re losing the plot.” Barratt has slumped 40 percent in London trading this year, more than any other U.K. housebuilder.
The U.K. government’s plan to cut nearly 500,000 jobs to bring down its record deficit resulted in weaker sales in the period than usual, Clare said. A lack of mortgage availability remains the biggest headwind to the industry, he said.
Houses should make up 65 percent of the homes sold during this fiscal year, up from about 60 percent, the company said. The increase in prices and recent purchases of cheap land should drive up profit margins, Barratt said.
Barratt gained 1.5 percent to 75 pence as of 8:54 a.m. The stock changed hands at about 180 pence after a rights offer to raise about 700 million pounds was announced in September 2009.