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Barratt Developments Plc

Barratt Development deliver a strong operational and financial performance

Barratt Developments Plc (LON:BDEV) today announced its annual results for the year ended 30 June 2019.

£m unless otherwise stated1,2,3Year ended 30 June 2019Year ended 30 June 2018Change
Total completions (homes)417,85617,579        1.6%
Revenue4,763.14,874.8(2.3%)
Gross margin (%)22.820.7210 bps
Profit from operations901.1862.64.5%
Operating margin (%)18.917.7120 bps
Profit before tax909.8835.58.9%
Basic earnings per share (pence)73.266.510.1%
Total dividend per share (pence)46.443.85.9%
ROCE (%)29.729.610 bps
Net cash765.7791.3(3.2%)

Highlights

·     Strong operational and financial performance with continued good progress against medium term targets

·   Operating margin of 18.9% (2018: 17.7%), with a trading improvement of 80 bps, driven mainly by continued strong progress from our margin initiatives

·   Profit before tax of £909.8m (2018: £835.5m), driven by margin initiatives, a strong close to the year and additional contribution from joint ventures

·    Continue to lead the industry in quality and customer service, achieving more NHBC Pride in the Job Awards than any other housebuilder for the 15th consecutive year and receiving the maximum HBF 5 Star customer satisfaction rating for the tenth year in a row

·      Strong cash generation with net cash at 30 June 2019 of £765.7m (2018: £791.3m)

·    Final ordinary dividend per share of 19.5p (2018: 17.9p) together with 17.3p (2018: 17.3p) special dividend per share, resulting in a total dividend for the financial year of 46.4p (2018: 43.8p)

Current trading

·   Net private reservations per active outlet per average week from 1 July were 0.70 with the prior year benefiting from reservations on two bespoke design and build arrangements (FY19: 0.75, excluding the two bespoke design and build arrangements 0.70)

·    Strong total forward sales4 as at 1 September 2019 of 12,911 homes (2 September 2018: 12,648 homes) at a value of £2,998.6m (2 September 2018: £3,054.0m).

Commenting on the results David Thomas, Chief Executive of Barratt Developments PLC said:

“It has been another outstanding year delivering a strong operational and financial performance. The Group’s long term investment in quality and operational excellence continues to drive margin improvements, alongside our highest number of completions for 11 years. As the only major housebuilder to be awarded a 5 Star rating for customer satisfaction for ten years in a row, we continue to lead the industry in quality and customer service.

Whilst there is increased economic and political uncertainty, we begin the new financial year with a strong forward order book, balance sheet and cash position which we believe provides us with the resilience and flexibility to react to potential changes in the operating environment in FY20 and beyond. We maintain our focus on the delivery of operational improvements across our business, and our commitment to deliver the highest quality homes across the country.”

1. Refer to Glossary for definition of key financial metrics

2. Unless otherwise stated, all numbers quoted exclude JVs throughout this statement

3. In addition to the Group using a variety of statutory performance measures it also measures performance using alternative performance measures (APMs). Definitions of the APMs and reconciliations to the equivalent statutory measures are detailed in the Glossary and Definitions

4. Including JVs in which the Group has an interest 

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.

There will be an analyst and investor meeting at 8.30am today at Deutsche Bank, 1 Great Winchester Street, London, EC2N 2DB. The presentation will be broadcast live on the Barratt Developments corporate website, www.barrattdevelopments.co.uk, from 8:30am today. A playback facility will be available shortly after the presentation has finished.

Dial in: 0844 571 8892

International dial in: +44 (0) 207 192 8000

Access code: 1469366

Further copies of this announcement can be downloaded from the Barratt Developments PLC corporate website www.barrattdevelopments.co.uk or by request from the Company Secretary’s office at: Barratt Developments PLC, Barratt House, Cartwright Way, Forest Business Park, Bardon Hill, Coalville, Leicestershire, LE67 1UF.