Barratt reports ‘solid operating performance in uncertain market’

Douglas McLeod

BARRATT Developments has announced the firm’s half-year results highlight a ‘solid’ operating performance in an ‘uncertain’ market.

Revenue for the six-month period ending December 31, 2023 is down 33% to £1.9 billion compared with £2.8 billion for the same period in 2022. Housing completions have fallen by 28.5% from 8,626 homes to 6,171. Adjusted profit before tax fell by 69.9% to £157.1 million.

Barratt revealed it has maintained balance sheet strength with net cash of £753.4 million (31 December 2022: £969.1 million), after payment of the FY23 final dividend of £228 million. (FY22 final dividend: £259.8m).

Forward sales as at 28 January 2024 were 8,760 homes (29 January 2023: 10,854) at a value of £2,268.3 million, with 6,470 homes of these total forward sales either exchanged or contracted.

The housebuilder said that whilst full-year out-turn remains dependent on how the market evolves through the spring selling season, based on the ‘encouraging uplift’ in reservation activity since the start of January, Barratt now expects to deliver total home completions of between 13,500 to 14,000 in FY24 (including around 650 JV completions).

Douglas McLeod, MD at Barratt Developments Scotland, said, “Whilst our operating environment is still challenging, Barratt has remained focused on delivering high-quality, energy-efficient and well-designed homes across the country. We continue to lead the industry in customer service, build quality and sustainability.

“During the period, we have been rigorous in carefully controlling our build activity, managing our costs, being highly selective in land buying, and driving revenue. These clear priorities have helped maintain the strength of our balance sheet despite lower levels of profitability and ensure we remain resilient and responsive through the cycle.

“Despite the challenging macroeconomic backdrop, underlying demand for our homes is strong. Since the start of January, we have seen early signs of improvement in both reservation rates and buyer sentiment, helped by expectations of lower interest rates and the introduction of more competitive mortgage rates. I would like to thank everybody at Barratt Developments, our sub-contractors and our suppliers for their commitment and hard work as we continue to deliver for our customers, stakeholders and shareholders.”