Barratt and Travis Perkins offer mixed message on house market

Click to follow
The Independent Online

Two of the biggest bellwethers of the housing market yesterday provided mixed messages on the recovery of the UK property sector.

While the housebuilder Barratt Developments boasted an improved trading performance and an uplift in selling prices over the six months to 31 December, Travis Perkins, the owner of the DIY retail chain Wickes, reported a slump in annual sales at its eponymous builders' merchants, and warned that it was unable to predict when the group will return to growth.

Barratt Developments delivered an upbeat assessment of the six months to 31 December 2009, citing an improved trading performance, the value of its order book being up by 27 per cent, and a rise in the prices of houses sold.

Mark Clare, the group chief executive at Barratt Developments, said it was targeting completed sales of about 11,500 units over the full year, with average selling prices up by between 8 per cent and 10 per cent, although this was mainly driven by changes in its mix towards houses and away from flats.

However, its buoyant update came against the backdrop of stark warnings on the economy and housing market by Kate Barker, a member of the Monetary Policy Committee, on Monday, that the rally over the last 12 months cannot continue. On the same day, the British Bankers' Association had said that mortgage approvals fell to an eight-month low of 35,083 in January, hit by the end of the stamp duty holiday.

Certainly, Travis Perkins yesterday offered a subdued assessment of the market after posting an 11 per cent fall in group adjusted pre-tax profits to £180m, on revenues down 8 per cent to £2.93bn over the year to 31 December.

Geoff Cooper, Travis Perkins' chief executive, said: "Whilst our markets are no longer exhibiting the abrupt declines in volume that characterised the start of the recession, activity levels remain fragile."

On a brighter note, TP's retail division – which is dominated by Wickes, but also includes Tile Giant – delivered a jump in pre-tax profits from £10.2m to £57m, after a better-than-expected retail environment in 2009.