July 11 (Bloomberg) -- Barratt Developments Plc, the largest U.K. homebuilder by volume, said full-year revenue rose about 14 percent as the company sold more homes at higher prices.
Sales in the 12 months through June increased to about 2.32 billion pounds ($3.6 billion), the London-based company said today in a statement. Completions rose 14 percent to 12,637 homes and the average selling price climbed 1 percent to about 180,000 pounds.
“Given a stable market, we would expect our strong progress to continue,” Finance Director David Thomas said on a conference call. Uncertainty surrounding the economy and the housing market is continuing, “primarily as a result of constraints around mortgage availability,” he said.
British homebuilders have increased revenue amid restrained mortgage lending and little change in home values after focusing on wider margins. The company’s full-year operating margin rose to around 8.2 percent from 6.6 percent, according to the statement. That’s likely to increase to more than 10 percent next year, Thomas said.
Barratt has risen 43 percent this year compared with 21 percent gain in the Bloomberg EMEA Home Builders Index. The shares were down 3 percent, or 4.1 pence, to 133 pence as of the 4:30 p.m. close in London trading, giving the company a market value of 1.3 billion pounds.
“Higher-margin land will continue to be brought into production and our focus on sales prices, cost and debt reduction will continue,” Thomas said on the call.
Net debt was about 170 million pounds as of June 30 compared with 322.6 million pounds a year earlier, the company said in the statement. Total forward sales decreased 6 percent to 555.4 million pounds, while the cancellation rate declined to 18.5 percent from 20.6 percent.
Growth in the number completions is likely to decelerate while mortgage lending in Britain remains limited, according to Thomas. U.K. mortgage approvals fell in May as the housing market slowed amid concern over the economic outlook, the Bank of England said July 3.
“There is good underlying demand in terms of the housing market,” Thomas said. “That demand has to be enabled by further availability in terms of mortgages.”
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