Beazer boosts interim profits

Beazer Homes, floated on the Stock Market in the spring, has announced a 20% increase in profits for the six months to the end of March.

Turnover in the interim period was up 26% to œ133 million, and pretax profits were œ2.6 million higher than the year before at œ15.6 million.

Operating margins declined from 12.6% to 11.8%, and were much lower than Beazer's second-half performance last year of 14.3%. The fall, anticipated in the float prospectus, was due to the greater use of provisioned land, which is tending to produce margins of around 7%.

The unexpected boost in Beazer's figures was its cash position. As anticipated, the float brought in œ50 million of new money. But there was also an unexpected œ24.5 million net cash from the Hanson trading period. Comments broker NatWest Securities: 'It appears that Hanson has funded the group's cash flow - or rather out flow - up to February 1994. Financially the group is stronger than we had assumed and it should remain in net cash until 1995/96.'

Beazer denied it had experienced any downturn in the housing market. 'We haven't gone over this cliff in May that some people are talking about. At the end of March our reservations were up 17% on a year ago, and in May they were plus 18%,' said David Smith, finance director.

Beazer says house prices are continuing to rise, mainly due to changes in the housing mix. 'Inflation is currently running out at about 1% to 2%. We expect house price inflation by December to be 3% to 4%'.

Sales during the interim period were 2,210, a rise of 17% on 1993.