A RISE of 20 per cent in Beazer's pre-tax profits failed to move the market as shares in the housebuilder, floated off by Hanson in March, closed 2.5p lower at 153.5p.

Placed at 165p, the shares have traded below their opening price for most of the period since first dealings, although Dennis Webb, chief executive, said they had merely tracked a weak market.

Completions rose 17 per cent to 2,210 during the six months to March at an average selling price of pounds 61,600. Mr Webb said the increase from pounds 57,400 in 1993 reflected a move away from social housing sales, which fell from 328 to 276.

He expected house prices to rise by 3-4 per cent this year. Reservations, which had been running 30 per cent higher at the time of the float, are now 17 per cent up on a year ago, although the slowdown reflects seasonal trading rather than an underlying deterioration in the market.

Higher volumes and prices contributed to a 26 per cent improvement in turnover to pounds 133m but, as forecast in March, operating margins slipped from 12.6 to 11.8 per cent following the ending of a pension contribution holiday and the introduction of costs associated with being a publicly quoted company.

The use of sites written down to produce a gross margin of 12.5 per cent had also reduced the return on sales. But the company expects a return to operating margins of more than 13.5 per cent next year.

With no tax payable under Hanson's ownership, earnings per share were hit by the introduction of a 26 per cent charge, falling from 5.2p to 4.6p.

Mr Webb confirmed that Beazer plans to increase its annual output to 7,000 houses by the end of the decade. The land bank, 16,552 plots at the half year, will be raised to 21,000 or three years' supply.

Beazer, one of the UK's top five builders, plans to use the pounds 50m of new money raised in its flotation to expand in four regions where it is under-represented - South Wales, the North-west, East Midlands and the South-east.

Following the change in Beazer's year end to June, the next figures will cover a nine-month period.

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