Commenting on the results David Thomas, Chief Executive of Barratt Developments PLC said:
“While COVID-19 has had a significant impact on our results, our priority has been to keep our people safe, mitigate the effect of the pandemic on our business and be able to emerge from the crisis in a resilient position. Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism. We are now renewing our focus on our medium term targets, on leading the industry in quality and service and on supporting jobs and economic growth by building the homes the country needs.”
- COVID-19 and the lockdown period significantly reduced completion volumes, increased costs and impacted profit:
- Total COVID-19-related costs of £74.3m, comprising £45.2m of safety costs, non-productive site costs and site-based employee costs and £29.1m related to an expected increase in site durations.
- After COVID-19 costs, adjusted profit from operations was £507.3m (2019: £904.3m) at an adjusted operating margin of 14.8% (2019: 19.0%).
- After adjusted items of £13.9m comprising CJRS grant income of £26.0m (which was repaid in FY21) and legacy properties costs of £39.9m, profit from operations was £493.4m (2019: £901.1m).
- Profit before tax of £491.8m (2019: £909.8m), impacted by the unprecedented disruption to sales and build in our fourth quarter.
- Resilient balance sheet with net cash at 30 June 2020 of £308.2m (2019: £765.7m) and land creditors of £791.9m (2019: £960.7m) equivalent to 25.4% (2019: 31.3%) of the owned land bank, equating to modest total gearing (including land creditors) of 12.3% (2019: 4.9%).
- Continued industry leadership in quality and customer service recognised through a sixteenth consecutive year achieving more NHBC Pride in the Job Awards than any other housebuilder and the eleventh consecutive year of receiving the HBF maximum 5 Star customer satisfaction rating.
- Our commitment to be the country’s leading national sustainable housebuilder demonstrated with new sector-leading carbon reduction targets.
- Net private reservations per active outlet per average week from 1 July through to 23 August have been ahead of the prior year at 0.94 (FY20: 0.68).
- Strong forward sales(4) as at 23 August 2020 with 15,660 homes (25 August 2019: 13,064 homes) and a value of £3,706.5m (25 August 2019: £3,037.5m).
- Health and safety continues to be our number one priority and our production levels continue to improve.
- When the Board believes the time is right, it will implement a dividend policy based on a dividend cover of 2.5 times.
Certain statements in this document may be forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Accordingly undue reliance should not be placed on forward looking statements. Nothing contained in this Annual Report or the Group’s website should be construed as a profit forecast or an invitation to deal in the securities of the Company.
There will be an analyst conference call and webcast at 8.30am today. An archived version of the webcast will also be available on our website during the afternoon of 2 September 2020.