UK housebuilder Barratt at a loss

Barratt Developments, one of the UK's largest housebuilders, reported pre-tax losses for the half year to 31 December 2008 of -£ 592 million (€ 667 million), down on the £ 194 million (€ 219 million) pre-tax profit for the same period in 2007.

Results were based on 6905 completions in the sixth month period, down -23% on the 9056 completions in the same period a year ago.

Revenues for the six month period dropped from £ 1,6 billion (€ 1,8 billion) in 2007 to £ 1,2 billion (€ 1,4 billion) in 2008.

The majority of Barratt's losses were incurred through a £ 495 million (€ 557 million) impairment charge on its land assets, brought about through falling property prices and a reduction in demand for homes in the UK.

Barratt Developments laid-off 1900 workers in the third quarter of 2008 to reduce costs and match demand.

Despite the 2008 losses, Barratt Developments' share price rose +14% on news that the company had managed to operate within its banking covenants and therefore wouldn't need to raise additional cash through any rights issue.

"This remains an intensely difficult market with little forward visibility," said Mark Clare, Group chief executive. "During the last six months we have driven sales, removed costs and cut our debt levels.

"We've reduced our prices and we're now seeing some signs of increased activity levels in terms of visitor numbers and sales. However, there will be no recovery in the housing market until the availability of mortgage finance improves," said Mr Clare.