Barratt Developments predicted a gentle recovery for the ailing house market over the next nine months as it posted an 11 per cent rise in annual pretax profit on Wednesday.
Chief executive David Pretty said Britain's biggest housebuilder had seen a solid start, having already sold or agreed to sell 52 per cent of its target, just three months into its financial year.
Like other housebuilders, Barratt is having a tough time tempting buyers who have been scared off over the past 12 months by weak consumer confidence and repeated warnings that the market had overheated.
"We are working on the basis that it's going to be challenging," Mr Pretty said.
"My personal view is that the market will continue its gentle recovery towards a normal market over the next year. I don't think we are going to see any spectacular growth; I think it's going to be stable, steady, competitive."
Barratt said pretax profit rose to £406.6 million in the year ending June 30 versus £367.7 million last year.
Excluding a £15.9 million profit from the sale of ground rents, Barratt made £390.7 million, at the top end of analyst forecasts.
Group turnover was flat at £2.5 billion. Barratt raised its total dividend by 25 per cent to
26.98p. It has housing schemes across the region.
Mr Pretty said sales in September were up ten per cent from July and August, but down slightly on a year ago when the firm launched a major sales drive before the expected housing slowdown.
He noted: "It is too early to assess the market for the rest of the year but we are working on the basis that it will remain challenging.
"Nevertheless, we are targeting to maintain volumes this year but, should the market improve, we have the ability to immediately respond and move volumes forward. All in all, we are well placed for the future."
Chairman Charles Toner added: "We have the land bank, financial resources and capacity to ensure our long term growth strategy remains unchanged."
He said the medium and long term fundamentals remained sound, bolstered by a continuing serious shortage of new homes due to the very slow planning system.
Since the year-end, Barratt has secured uncompleted sales worth £900 million, which together with completions was the second-highest rate of forward sales in the firm's history.
Having already secured so much of its target for the year, Mr Pretty said Barratt would not sacrifice pricing merely to achieve greater sales. He predicted prices would rise by 1-4 per cent over the year.
The company sold 1,500 more homes than its nearest competitor Persimmon in the last half.
