nice starting point..

Trading Update.

Highlights


Total completions (Note 1) of 11,377 for the full year in-line with guidance, with 6,324 completions delivered in the second half


Average selling price up by c.11% for the full year to c. 174k and by c.18% in the second half on the prior year equivalent period, mainly due to changes in mix


Net private reservations up 4.2% for the full year at 0.50 per week per active site


Forward sales up by 27% to 591.7m as at 30 June 2010


Operating profit (Note 2) of at least 85m for the full year, ahead of expectations, resulting in a full year operating margin (Note 3) of at least 4%, and a second half operating margin of at least 5.5%


Net debt of c. 375m as at 30 June 2010, significantly lower than previous guidance

Final Results.

Highlights

Net private reservations up 4.2% for the full year at 0.50 per active site per week.

Total completions, including joint ventures, were 11,377 (2009: 13,277).

Average selling price (excluding joint ventures) up by 10.9% for the full year to 174,300 (2009: 157,200) and by 17.8% in the second half on the prior year equivalent period mainly due to changes in mix.

Profit from operations before operating exceptional items was 90.1m (2009: 34.2m) at a full year operating margin of 4.4% (2009: 1.5%), with the second half operating margin at 5.9% (2009: 1.8%).

Loss before tax and exceptional items of 33.0m (2009: 144.1m) with a profit before tax and exceptional items of 15.5m in the second half. Loss before tax for the year of 162.9m (2009: 678.9m).

Agreed terms on 527.2m of land purchases (equivalent to 13,359 plots) since re-entering the land market in mid-2009.

Net debt reduced by 910.0m since 30 June 2009 to 366.9m (2009: 1,276.9m).

Tangible net assets, excluding intangible assets, per share 208p (net assets per share 300p).

Forward sales at 30 June 2010 were up by 27% at 591.7m (2009: 464.3m) representing 3,889 plots (2009: 3,328 plots). At 5 September 2010 forward sales had increased to 847.1m (2009: 696.3m).

Over the 10 weeks since the financial year end net private reservations have averaged 0.48 per active site per week (2009: 0.51). Cancellation rates have remained low at an average of 11.0% (2009: 12.3%) for the year to date.

Looking at 90p.

Nobody loves the builders and thats for sure!

LOOKS LIKE A GOOD RECOVERY SITUATION TO ME -
NET TANGIBLE ASSETS PRESENTLY ABOUT 2 QUID A SHARE
SMALL CAPITALISATION, AND NOT EXCESSIVE DEBT NOW.
IF NOT FIRST TIME BUYERS, EXISTING HOME OWNERS ARE ALWAYS IN THE MARKET FOR A CHANGE OF HOUSE.

PROBABLY WORTH KEEPING AN EYE ON, ESPECIALLY IF THE ECONOMY DOES NOT WEAKEN FURTHER AND ALSO IN ANTICIPATION OF A POSSIBLE SPRING TIME IMPROVEMENT IN BUILDERS SHARE PRICES.
ALSO BROKERS TARGET PRICES MUCH HIGHER THAN CURRENT 90P

ANY COMMENTS - DO YOU AGREE OR DISAGREE ?

I'll only get back in when I see genuine interest in the builders again which I guess won't happen till we know for sure that a double dip won't happen. As confidence returns then the builders will rise along with the housing market.

Deutsche Bank says it's not all doom and gloom as the sector is currently pricing in a double-dip in house pricing, that's a 13 per cent decline year-on-year. Unlikely. But through 2013 it expects housebuilders to show a rapid increase in profitability driven by the contribution of new higher margin developments.

Deutsche favours those companies that bought new development land at rock bottom prices. Indeed, Deutsche's pre-tax profit estimates for the sector remain 10 per cent to 15 per cent ahead of consensus 2011-12 forecasts and it sees upside in market expectations and strong value in the sector.

Deutsche favours those companies that bought new development land at rock bottom prices. Its top picks are Barratt Developments, 2.45p easier at 90.8p, Bovis Homes, 8.7p off at 363.7p, and Taylor Wimpey 0.63p cheaper at 26.05p.

2013 is a long way (economically speaking) off. "Bought land at rock bottom prices" so prices can't go lower?

Lots of buys at end of day.

Todays budget talks of building more "social" housing. Perhaps Persimmon and Taylor Wimpey may be part of this essentially, but is not bad for the sector as a whole.

Now priced at 84.45 to buy. Will it drift any lower ?

Any ideas ?

I went short on Monday and see no reason to close.

Adde a few more just now for the SIPP. Everybody seems to have forgotten the huge housebuilding targets set by the last Gov. and the need hasn't gone away even if the money, temporarily, has.

More unemployment to come with a big cut in government jobs announced today. Certain areas are going to be badly hit, imo. More downside to come in the middle & lower housing sectors. Top end of the market (new build & existing) seems to be fairly resilient.

UK Housing Industry Slams Government's Spending Cuts

Today : Wednesday 20 October 2010
The housing industry slammed planned spending cuts to social housing outlined by U.K. Chancellor George Osborne in his Comprehensive Spending Review Wednesday because it will limit the number of new low-cost homes built and cost tenants more to live in them.

Chancellor Osborne said the coalition government will build 150,000 affordable new homes over the next four years despite cutting the housing budget to GBP4.4 billion over the period from GBP8.4 billion over the previous three year period.

Osborne, who set out to tackle the U.K.'s mounting debt burden, laid out plans to cut the taxpayer funding of social housing.

The U.K. coalition government said that while rent levels and terms in social housing will remain unchanged, new tenants will be offered intermediate rents at around 80% of the market rate, which should help pay for building the 150,000 homes over the next four years.

The National Housing Federation slammed the decision to cut the affordable house building budget and said that charging "new social housing tenants up to 80% of the market rate could trap thousands of social housing tenants in a lifetime of poverty, provide a strong disincentive to work and increase dependency on benefits."

The NHF, which represents 1,200 not-for-profit housing associations, calculated that average social housing rents, currently at around GBP85 per week for a three-bedroom home, could triple to GBP250 a week.

The cuts come at a time when some 4.5 million people in England are currently waiting for a social home and the number of homes being built has slumped to its lowest level since the Second World War with just 113,000 built in 2009/10.

All the U.K.'s listed house builders are involved in building low-cost homes for government programs, even if it makes up a small part of their overall portfolio.

Shares of the U.K.'s largest house builders were little changed following the chancellor's speech. At 1230 GMT Persimmon PLC (PSN.LN) shares were down 3 pence, or 0.7%, to 3.67 pence, Taylor Wimpey PLC (TW.LN) fell 1 pence, or 2.3%, to 25 pence and Barratt Developments PLC (BDEV.LN) fell 2 pence, or 2.4%, to 86 pence.

"The housing industry has been preparing itself for the worst for some time, so while the cuts outlined today are not welcome, nor are they a surprise," said head of residential research at property consultancy CB Richard Ellis, Jennet Siebrits.

She added that "there is now an opportunity for the private sector to step in and provide suitable housing where it is most needed. The private rented sector will have a critical role to play."

Still, the cuts will increase the pain felt by first time buyers, who have been hit by the lack of mortgage finance in the recession, as it will close another avenue to own a home. First-time buyers, who are key to a recovery in the housing market, still have to meet tight lending criteria and high house prices.

The U.K. government also said it will give more power to local communities, which could hurt house builders. "This could result in poor planning decisions and/or the hi-jacking of the planning process by local pressure groups," said CBRE's head of national planning, Ian Anderson.

TW in auction.

RNS Number : 7751U

Barratt Developments PLC

21 October 2010

NOTIFICATION OF DIRECTORATE CHANGE IN ACCORDANCE WITH LISTING RULES 9.6.14R and 9.6.11

Barratt Developments PLC (the "Company") announces that in light of his appointment as a Non-Executive Director and Chairman Designate of St. Modwen Properties PLC with effect from 1 November 2010, William Shannon has resigned as a non-executive director of the Company with immediate effect.

CREDIT SUISSE below 5%

Interim Management Statement.

Highlights



Underlying selling prices remained stable during the period

Total average selling price ("ASP") on completions increased by c. 9% to 180,000, with private ASP increasing by c. 12% to 194,000, driven by changes in mix

Total completion revenues increased by c. 9%

Net private reservations per active site per week were down in the period at 0.45 (2009: 0.55), reflecting weaker customer sentiment

Total forward sales were in line with the prior year at 870.9m

Success in signing large scale partnership agreements

closed my short today (for now).