Jump in sale prices helps Bryant to 95% increase: Difference between house values in North and South disappears

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THE CITY welcomed almost-doubled profits from Bryant yesterday, pushing the housebuilder's shares 5p higher to 191p despite the poor showing of the rest of the market.

Pre-tax profits, 95 per cent higher at pounds 14.6m, beat expectations and were boosted by a jump in the average selling price of Bryant's houses from pounds 81,000 to pounds 94,000.

But Andrew MacKenzie, chief executive, warned that the increase reflected a move towards building bigger homes rather than an improvement in underlying house prices. He expected tax increases in April to contribute to a patchy recovery and left the dividend unchanged at 1.4p.

Upward pressure on land prices meant that Bryant's stated aim of maintaining a three-and-a-half-year land bank had forced it to buy land on a tighter margin in the South than elsewhere.

According to Mr MacKenzie, the price differential between the North and South had now completely disappeared, with comparable houses in Leeds and Surrey selling for the same price.

Despite the squeeze, the homes division's operating margin increased from 8.6 per cent to 10 per cent as profits rose from pounds 8.7m to pounds 13.5m. The southern region moved into the black after last year's losses and all the other regions, including new operations in the North and Scotland, were profitable.

During the first half, 1,480 completions were made, a 15 per cent increase, with reservations up by a similar proportion.

At halfway, borrowings were only 3 per cent of shareholders' funds, but Mr MacKenzie said higher land purchases would push gearing to 25 per cent by the year end.

In contracting, margins remained under pressure, although one-off contract settlements boosted profits by pounds 2m to pounds 3.1m. Property, where tenant demand remains weak, continues to be run down and there was a pounds 1.9m loss.

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