House builder Ben Bailey yesterday posted an 18 per cent fall in pre-tax profits for the six months to June 30, blaming the recent slowdown in the UK housing market.
The company said pretax profits dropped to £ 6 . 17 million from £7.54 million while operating profits fell 8.7 per cent to £7.67 million from £8.4 million, despite a 22 per cent increase in turnover to £45 million.
Looking ahead, chairman Richard Bailey said: "The present subdued market conditions will continue to affect margins and any improvement will be dependent upon a return of customer confidence, possibly driven by a reduction in interest rates."
Mr Bailey said the optimistic view held in the early months of the year failed to be fulfilled after the general election.
" Various economic statements and a slowdown in the second hand housing market brought about uncertainty in prospective buyers," he said.
As a result the company was forced to deploy more sales incentives to maintain volumes and increases in the cost of some building materials and labour have also pressured margins.
" The company has, however, maintained its planned sales, cash flow and investment in land for future development," said Mr Bailey, adding that an increase in its number of developments will help to mitigate any slowdown in the rate of sales per site and will result in volume growth in the current year.