Barratt Developments said it is on track to significantly boost profit for both the half and full year 2013 as its London business goes from strength to strength.
"Against a stable market backdrop, these improvements will be founded on the increased delivery of newer higher margin land in combination with the continued focus on driving efficiencies throughout the business," it said in a company statement.
"At the same time we will continue to identify and approve the purchase of new land that meets or exceeds our hurdle rates for profitability and return on capital," it added.
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In its first quarter update to November 11th 2012 the house builder said net private reservations per site per week rose to 0.54 from 0.53 before.
Private forward sales rose 21.1% to £768.5m. Barratt said it expects half of full year completions to come from newer higher margin land.
Over the quarter market conditions remained stable and with no adverse impact from the Olympics. It said the London business in particular is continuing to trade strongly.
"Overall underlying prices have remained stable during the period, with greater strength in London and the South East. Further changes in product mix are expected to deliver growth in private average selling price in the first half and full year 2013," the group explained.
Barratt said, assuming a continuing stable market, it expects to restart dividend payments, by proposing a final dividend for the financial year to June 30th 2013, payable in the final quarter of 2013.
Debt reduction remains a key objective, the group said, with target for zero net debt as at June 30th 2015. Net debt guidance for December 31st 2012 reduced to around £400m.
CJ
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