* Says net debt cut by 230 million sterling to 1.42 bln
* FY operating margins to be hit by discounting
* Finance Director Mark Pain to leave group
* Sees no visibility in UK housing market
* Shares down 2 percent at 1000GMT (Adds management, analyst comment, share price, detail)
By Lorraine Turner
LONDON, Jan 15 (Reuters) - British housebuilder Barratt Developments Plc. said on Thursday it has trimmed 14 percent off its debt pile, but that heavy price discounting will hit full-year margins.
Barratt, one of the more heavily indebted UK housebuilders, said that the outlook for the housing sector remains bleak as mortgage lending is constricted and buyer appetite is low.
"There is very little visibility until mortgage financing returns," Chief Executive Mark Clare said on a conference call.
In a separate announcement, the group said that its longstanding finance director, Mark Pain, will leave the company at the end of June, adding further uncertainty to the group's outlook.
All eyes are focused on cost reductions and debt positions of housebuilders, with Barratt shaving 230 million pounds ($334.8 million) off its net debt position to 1.42 billion pounds in the six months to the end of 2008.
The housebuilder reported a pick-up in sales during the Autumn selling period, with total completions in the first half falling by 23.8 percent to 6,905.
Total average selling prices fell by 9.6 percent to 160,900 pounds in the first half, as Barratt announced a new shared government-backed equity scheme on Thursday to entice buyers back to the market which will enable homeowners to move into a home for 70 percent of its value.
Price discounting, however, will push full-year operating margins lower, with Barratt expecting analysts to forecast operating margins in a range of 1 to 3 percent.
Shares in Barratt, which have lost 92 percent of their value in the last 18 months, slipped 2.14 percent to 80 pence at 1000GMT.
COST CUTS
Barratt said that cash generation remains a key priority over the next six months, as market conditions remain "challenging". Land writedowns are also foreseen.
The management said that debt reduction was achieved through a cut back in land spend, a boost to revenue from higher volumes, lowering work in progress and a 30 million pound tax rebate as well as cash realisation from the sale of its Wilson Bowden Developments portfolio.
Barratt said in December it would realise around 155 million pounds from the sale of the assets, which it acquired in April 2007.
Rival Persimmon announced last week it was cutting back its debt by over 300 million pounds after a tax windfall, to 600 million pounds.
Barratt added that it has repaid in advance a 200 million pound loan facility, due in April. This comes after the housebuilder completed a 400 million pound refinancing package in 2008, with new covenants in place until 2011.
Forward sales at the end of 2008 stood at 456 million pounds compared to 1.26 billion pounds at the end of 2007.
Analysts said that Barratt's cash generation was positive, but achieved at the cost of heavy discounting.
"We believe it (the trading statement) sounds more positive than it is -- in truth they have been discounting aggressively to achieve sales," said analysts at Merrill Lynch.
($1=.6869 Pound)