British housebuilder Barratt Developments Plc said it expects operating margin for the first half to be around 5 percent, significantly up from 2.4 percent in the year-ago period. The company said its average selling price rose by about 6 percent.
With a greater proportion of completions coming from recently acquired higher margin land in the second half, the group said it expects to continue to drive margin growth.
The Group has delivered a significant improvement in both average selling prices and operating margin even though sales volumes have been affected by difficult trading conditions, said chief executive Mark Clare.
Group revenue was about 875 million pounds ($1.37 billion), in-line with prior year, driven by lower completion volumes and the significant uplift in average selling price, it said.
ASP increased 6 percent to 176,000 pounds for the six months ended December 2010. Total completions for the period fell to 4,832 units from 5,053 units in the first half of last year, the company said.
As at December 31, 2010, forward sales for the Group were in-line with the prior year at 645.7 million pounds.
Mortgage lending remains at unusually low levels and we view this restricted availability of mortgage finance as continuing to be the key constraint on market growth in the near term, the company said.
While the Group said it will benefit from the opening of about 110 sites during the second half, Barratt expects any volume growth for the year to be limited.
Group net debt as at December 2010 was about 540 million pounds, down from 605.3 million pounds, and the group continues to expect net debt to be between 400 million pounds and 450 million pounds as at June 30, 2011.
Shares of the company, a member of FTSE-250, closed Tuesday's trading at 94.90 pence on the London Stock Exchange.