Land value cuts put Barratt Developments on alert

Updated: 01:54 EST, 10 September 2008

The omens are not good for Barratt Developments after rival builder Redrow took the knife to the value of its land and other assets, writing down their worth by £259.4m.
<p>The cuts at Barratt, which reports full-year results later today, have been mild in comparison. However, Rachel Waring, analyst at Panmure Gordon, predicts £450m-550m of provisions this year following the sharp decline in the housing market and a hit in the same order in 2009-10.

The Lockhouse, owned by Barratt, overlooking Regent's Canal in Camden Town

'Conditions in the housing market remain weak, with reservations, average selling prices, margins and the forward order book trending downwards,' she said reiterating her sell recommendation.

She says the shares are worth 96p. They closed at 1561/2p (down 91/4p).

Redrow passed on the final dividend as it revealed a near halving of annual profits to £65.5m.

The company has renegotiated a &pound;450m debt facility, prompting the stock to rise 151/4p to 205p.