Wed 14 May 2008
Barratt bitten by the credit crunch
Unable to escape the pitfalls of the existing credit crunch, Barratt has posted a rather bleak interim management statement.Despite a rather positive start to the year, company revenue, completions and private reservations have all declined significantly since March, largely due to the lack of available finance and a fall in consumer confidence.
Average private reservations stood at 276 per week over the 19-week period from 1 January 2008, down 33%, compared to the corresponding period last year.
During the same period, total housebuilding revenues dropped by 7.6%, from £893m to £825m this year. Completions were down 5%.
Barratt has also managed to buy itself some time, by securing an extension with its bankers for the the remaining £600 million debt owed over the acquisition of Wilson Bowden Developments into a new two-year facility with a one-year extension option.
Mark Clare (pictured), group chief executive, said: “Despite the deterioration in current trading conditions, we expect to deliver a satisfactory outcome for the current financial year. Against the difficult market backdrop, we continue to prioritise margin management and cash generation by focusing on efficient and effective selling, reducing costs, and tightly controlling land spend and work-in-progress.”
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