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Barratt Developments delivered continued volume growth

Barratt Developments PLC (LON:BDEV) has today announced its half year results for the six month period ended 31 December 2019.

£m unless otherwise stated1,2Half year ended 31 December 2019Half year ended 31 December 2018Change
Total completions (homes)38,3147,6229.1%
Revenue2,266.22,132.06.3%
Profit from operations421.7409.72.9%
Adjusted operating margin419.4%19.0%40 bps
Operating margin418.6%19.2%(60 bps)
Profit before tax423.0408.03.7%
Basic earnings per share (pence)33.832.73.4%
Interim dividend per share (pence)9.89.62.1%
ROCE (%)429.329.5(20 bps)
Net cash4433.8387.711.9%

Highlights 

·    Britain’s largest housebuilder leading the industry in both build quality and customer service. Only major housebuilder to be awarded HBF 5 Star rating by our customers for ten consecutive years

·    Highest half year home completions in 12 years with 8,314 total completions3, up 9.1%, reflecting growth and a smoother delivery profile. On track for 3-5% growth in wholly owned completions in FY20

·     Adjusted operating margin of 19.4% (2018: 19.0%), driven by continued good progress from our margin initiatives. Operating margin was 18.6% (2018: 19.2%) after adjusted items costs of £17.8m (2018: adjusted items credit of £3.7m)

·     Land creditors as at 31 December reduced to £830.8m (2018: £961.8m), achieving targeted level, and continued effective cash generation, closing the half year with net cash of £433.8m (2018: £387.7m)

·    First UK housebuilder to set a science-based target, challenging ourselves to reduce carbon emissions in our operations by around a third from FY18 to FY25 in line with our ambition to be the leading national sustainable housebuilder

Current trading

·      Net private reservations per active outlet per average week from 1 January to 2 February 2020 were 0.83 (2019: 0.74)

·      Strong total forward sales3 as at 2 February 2020 of 13,043 homes (3 February 2019: 13,194 homes) at a value of £3,027.1m (3 February 2019: £3,021.0m)

·      Outlook for the full year remains in line with the Board’s expectations

Capital Return Plan

·     Further extension to the Capital Return Plan with proposed special returns of £175m in November 2020 and November 2021 in addition to ordinary dividend cover at 2.5 times

1 Refer to Glossary for definition of key financial metrics

2 Unless otherwise stated, all numbers quoted exclude JVs

3 Including JVs in which the Group has an interest

4 In addition to the Group using a variety of statutory performance measures it also measures performance using alternative performance measures (APMs). Definitions of APMs and reconciliations to the equivalent statutory measures are detailed in the Glossary and Definitions. Net cash definition in Note 5.1

Note on forward looking statements

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.

This announcement contains inside information. The person responsible for arranging for the release of this announcement on behalf of Barratt Developments PLC is Claire Adams (Interim Head of Investor Relations).

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.

A listen only function will also be available

Dial in:08003 767922
International dial in: +44 (0) 2071 928000
Conference ID:1970264

Further copies of this announcement can be downloaded from the Barratt Developments 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.

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

“We have achieved a strong first half performance, delivering continued volume growth and making good progress against our medium term targets. We have made a good start to our second half and with substantial net cash, a well-capitalised balance sheet and strong forward sales, the outlook for the full year is in line with our expectations.

‘The customer continues to be at the heart of everything we do. In 2019 we were proud to become the only major housebuilder to be awarded a 5 Star rating by our customers in the HBF survey for ten consecutive years and look forward to extending that record. We will continue to lead the industry in quality and service as we deliver the high quality homes and developments the country needs, creating jobs and supporting economic growth across England, Scotland and Wales.”

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