Artisan’s trading update largely favourable

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by Lin Freestone

Artisan (UK), an AIM-listed housebuilder, commercial property developer and property investor with headquarters in Huntingdon, has issued a trading update covering the year to the end of June 2008.

The company expects to take writedowns on the carrying value of its land bank. This will lead to a result substantially below market expectations.

Although the trading performance for the year will only be slightly below expectations the trading for the group’s residential division, Rippon Homes, remains challenging. The sites from which homes are currently being sold are profitable and these are not expected to attract any write-down.

In common with other developers, Artisan does not expect residential market conditions to improve until relative normality returns to the residential mortgage market.

However, the commercial division, Artisan (UK) Developments, has performed well during the year despite the commercial market being affected by the lack of confidence in the general economic conditions made significant progress.

The company’s potential customers are more varied and there are still individual businesses willing and able to contemplate new commercial property.

The property investment division has made significant progress and in the second half of the financial year has delivered its largest investment property to date.

To preserve liquidity, Artisan’s management started taking steps in 2007 to structure the business to ensure a good cash headroom. New land buying has been largely deferred, build programmes slowed or suspended as needed and the overhead structure reduced to meet present market conditions. The cost base is being constantly kept under review and adjusted in response to sales progress.