(Updates with share price in the fifth paragraph.)
Sept. 14 (Bloomberg) -- Barratt Developments Plc, Britain’s largest homebuilder by volume, reported a narrower full-year loss as the average selling price of its homes rose and the company cut costs by refinancing debt.
The net loss for the 12 months through June shrank to 13.8 million pounds ($21.7 million) from 118.4 million pounds a year earlier, the London-based company said in a statement today. Analysts had predicted a loss of 22.2 million pounds, the average of three estimates compiled by Bloomberg. The selling price of Barratt’s homes rose 7.4 percent to 198,900 pounds.
“We have made considerable progress in rebuilding profitability,” Chief Executive Officer Mark Clare said in the statement. “Further recovery in the housing market remains dependent on improving economic conditions and the ability of our customers to secure mortgage finance.”
Barratt in May predicted a “substantial improvement” in second-half and full-year operating profit after lowering costs and buying discounted land to boost margins. A lack of supply has helped buoy prices even as mortgage approvals remain at less than half the level seen before the financial crisis.
Barratt was little changed at 75.5 pence as of 9:01 a.m. in London trading after rising as much as 2.4 percent, giving it a market value of about 729 million pounds.
Financing costs fell to 138.9 million pounds from 235.7 million pounds the previous year, Barratt said. Net debt decreased to 322.6 million pounds as of June 30 from 366.9 million pounds a year earlier.
Barratt reached a 1 billion-pound refinancing deal in May on loans that were due next year. The company had fully drawn down its credit facilities, giving it about 500 million pounds of cash. The agreement significantly reduced the need for liquidity, cutting financing costs, Group Finance Director David Thomas said on a conference call today.
Barratt, which hasn’t paid a dividend since 2008, won’t resume the payments until it has returned to profit, operating margins improve and prospects for the housing market are more certain, Clare said on the call.
--Editors: Ross Larsen, Jeff St.Onge.
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