Barratt Developments has confirmed that it is ‘exploring all options’ including the possible sale of its commercial arm, Wilson Bowden Developments.
In a statement to the stock exchange today it said that it had received a number of offers for the business, as tipped by Property Week on 11.04.08, but noted the commercial development market remains ‘challenging’.
The company said: ‘We continue to focus Wilson Bowden Developments on realising cash from its portfolio and are exploring all opportunities to maximise value. We are making progress in selling existing stock units, and have also received a number of expressions of interest in the remainder of the business, although these are at a very early stage.’
Fewer new starts
Barratt also said that the deterioration in the housebuilding market meant that it would only be starting on new sites on a ‘highly selective basis where we have clear visibility of demand and where work-in-progress can be tightly controlled.’
However, it did say that it had made a ‘relatively encouraging start to the year’ but warned that conditions had worsened since the end of March.
Total housebuilding revenues for the 19 week period to 11 May 2008 were down 7.6% to £825m compared to £893m for the same period in 2007.
'Pricing pressure across all regions'
Completions were down 5.5%, and net private reservations were also down 34% on the same period for 2007. It also said that cancellation rates have increased in the last six weeks, with greater pricing pressure across all regions, and that its forward order book is down to £1.56bn, from £2.1bn last year.
Group chief executive Mark Clare said: 'Despite the deterioration in current trading conditions, we expect to deliver a satisfactory outcome for the current financial year. Against the difficult market backdrop, we continue to prioritise margin management and cash generation by focusing on efficient and effective selling, reducing costs, and tightly controlling land spend and work-in-progress.’
It is thought that Jones Lang LaSalle Corporate Finance has been appointed to sell Wilson Bowden.