# Barratt Developments Chairman and Non-Executive Directors agree to a voluntary 20% reduction in base salary and fees

- Link: https://www.directorstalkinterviews.com/barratt-developments-chairman-and-non-executive-directors-agree-to-a-voluntary-20-reduction-in-base-salary-and-fees/412813102
- Published: 2020-04-16T07:47:30+01:00
- Author: Amilia Stone

**[Barratt Developments PLC](https://www.directorstalkinterviews.com/ftse-company/barratt-developments/bdev.l)**(
LON:BDEV), Britain’s largest housebuilder, today provided the following update on
the evolving impact of COVID-19 and further mitigating actions taken by the business.
Barratt Developments PLC has a year end of 30 June.

**Our first priority continues to be the safety of our employees, sub-contractors
and customers**

As previously announced, in line with our commitment to health and safety we took
the decision to temporarily close all of our sales centres, construction sites and
offices due to the COVID-19 pandemic. All locations were closed safely and securely
by 27 March 2020. To help our customers, some home completions were delivered after
closure using an updated process in line with Public Health England guidance on 
social distancing to protect both our employees and customers.

**Trading update and financial guidance**

Between 23 March 2020 and 12 April 2020, the Group delivered 1,349 home completions(
including JVs). The Group has therefore completed 11,713 homes (2019: 10,954 homes)
in the period to 12 April 2020 (including JVs). Our total forward sales are 12,376
homes at a value of £2,891.9m (including JVs). Whilst our sales centres and construction
sites remain closed, we expect any further home completions and reservations to 
be very limited.

The Board announced on 25 March 2020 that it had suspended all forward guidance 
until such time that the overall impact of COVID-19 on the Group becomes clearer.
Given the ongoing uncertainty, particularly in the duration of the closure of our
sales centres and construction sites, we reiterate that all existing financial guidance
is suspended.

**Further mitigating actions**

As reported on 25 March 2020, the Board acted rapidly in response to COVID-19, taking
a number of immediate measures to manage the Group’s cost base and cash flows to
ensure resilience. These actions have included:

·    Suspending all land buying activity

·    Ceasing all recruitment activity

·    Postponing all non‐essential capital expenditure

·    Actively managing cash flows whilst ensuring that we are paying our suppliers
and sub‐contractors on time

·    Cancelling the interim dividend of 9.8 pence per share (c. £100m)^(1), which
was due to be paid on 11 May 2020

In addition to the actions previously announced, we are in the process of furloughing
around 85% of our employees. We will pay furloughed employees their normal pay while
they are furloughed until at least the end of May 2020.

To reflect the ongoing focus on preserving cash within the business, as agreed with
the Remuneration Committee, all Executive Directors, the wider Executive and Regional
Managing Director team, the Chairman and the Non-Executive Directors have agreed
to a voluntary 20% reduction in base salary and fees, effective from April 2020,
until such time as the Group is able to restart work on site. In addition, they 
have also agreed to waive any salary or fee increase for FY21.

More generally, we will continue to assess further cost‐saving opportunities available
to us as the situation develops, whilst balancing the long‐term requirements of 
our business.

**Funding and liquidity**

The Group continues to be financially strong, with a well-capitalised balance sheet
and a robust cash and liquidity position. As at 14 April 2020 the Group had c. £
450m of cash^(2). The Group has total committed facilities and private placement
notes of £900m, comprising a £700m undrawn revolving credit facility^(3) and fully
drawn £200m US private placement notes^(4). The Group continues to explore other
Government funding initiatives and will provide updates where appropriate.  

**Looking ahead**

Our experienced Board remains focused on taking the right actions and planning for
the future, so that when appropriate to do so, we can re-start our sales centres,
construction sites and offices safely and are well-placed to continue to deliver
the high quality homes the country needs.

**Notes**

Unless otherwise stated, all numbers quoted exclude Joint Ventures (JVs) throughout
this statement

1                  Based on 31 December 2019 share capital of 1,014,746,539 shares
for proposed payments

2                  Cash comprises cash and cash equivalents

3                  The revolving credit facility has an expiry date of November 
2024

4                  The US private placement notes have an expiry date of August 
2027

**Appendix**

|  | **Private**  |   | **Affordable ** |   | **Wholly Owned** |   | **JVs ** |   | **Total**  |   | 
| **Forward sales** | Homes | £m | Homes | £m | Homes | £m | Homes | £m | Homes | £m | 
| 02-Feb-20 | 4,984 | 1,593.70 | 7,127 | 1,118.70 | 12,111 | 2,712.40 | 932 | 314.7 | 13,043 | 3,027.10 | 
| 22-Mar-20 | 5,904 | 1,894.20 | 7,063 | 1,109.40 | 12,967 | 3,003.60 | 869 | 294.6 | 13,836 | 3,298.20 | 
| **12-Apr-20** | **4,786** | 1,552.80 | **6,773** | **1,068.50** | **11,559** | **2,621.30** | **817** | **270.6** | **12,376** | **2,891.90** |

**Financial reporting calendar**

Barratt Development’s next scheduled announcement of financial information is the
trading update on 8 July 2020.

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