A slide in Britain's housing market led builder Barratt Developments Plc to cancel its final dividend on Wednesday after underlying annual profit fell 13 percent and it warned that the market remained difficult.
"There is little prospect for any material improvement in trading conditions until mortgage finance and customer confidence return," chief executive Mark Clare said.
Latest monthly data from HBOS, Britain's biggest mortgage lender, showed house prices fell for the seventh month running in August to stand 12.7 percent lower than a year earlier, a sign the property downturn has turned into a crash.
More than 25,000 pounds has been wiped off the value of the average British home in the past year as the economy came to a standstill and the global credit crunch bit.
Clare told reporters on Wednesday the group had successfully completed a 400 million pound ($706 million) refinancing, with a new covenants package also in place until 2011. However, he warned the total interest cost on the finance package had increased around 2 percentage points to 9.5 to 9.75 percent.
Rival housebuilder Redrow also announced a new finance package on Tuesday, which took its effective interest rate up 2 percentage points to around 8.5 percent.
Barratt shares were down 1.8 percent at 155.75 pence at 0910 GMT, following results that brokerage Panmure Gordon said did not contain many surprises.
Barratt made a pretax profit before exceptional items of 392.3 million pounds in the year to end-June. It announced landbank write-downs to the tune of 208.4 million pounds as the group's underlying selling price dipped 5 percent.
Panmure Gordon said it expected further write-downs in the coming 12 months and that these will be in the region of 450 to 550 million pounds.
NEW MEASURES
Barratt unveiled a new package of measures to stimulate flagging sales, including its own stamp duty holiday on purchases up to 500,000 pounds, effectively a price cut, and a price guarantee to protect buyers from short-term falls in prices.
Under its so-called Price Promise scheme, if a buyer sells a house at a loss within three years, Barratt will refund the difference, up to a maximum of 15 percent.
Clare said he hoped the combination of the government's plans to encourage first-time buyers and Barratt's own incentives would stimulate additional demand through the important autumn selling season.
Barratt said forward sales at end-June were 698 million pounds, compared with 1.4 billion a year ago. By the end of August, forward sales had increased to 783 million pounds.
Clare said Barratt, which in July announced plans to cut 1,200 jobs, is now looking to make cost savings of some 140 million pounds in the current year and wants suppliers to "bear some of the pain".
He said the group is receiving discounts of 5 percent on many of its materials, while subcontractors' costs are coming down by up to 10 percent.
