AGM Statement

Barratt Developments PLC 28 November 2006 28 November 2006 Barratt Developments PLC AGM Statement Barratt Developments PLC will be holding its Annual General Meeting at 2.30pm today. At the meeting Charles Toner, Group Chairman, will make the following statement: - Once again, I am pleased to have the opportunity to comment on our results for the year ended 30th June 2006 and to update you on current trading conditions and on our prospects for the current financial year. While the market remained very competitive, I am pleased to be able to report that the Group enjoyed its 14th consecutive year of growth with increases in completions, improved margins, and higher underlying profits. We completed 14,601 homes throughout Britain, an increase of 1.8% over the previous year. 83% of these homes were built on brownfield sites, confirming our position as Britain's leading urban regenerator. As a result of our strict control of build costs and the implementation of a wide - ranging efficiency drive we were able to improve our housebuilding margin to 16.7%. Our underlying profits increased by 3.4% to £391.4m. Our balance sheet remained strong with a net cash in hand position at the end of June of £43.3m. Our return on capital employed continued to be one of the strongest in the industry at 27%. As a result of these encouraging results, our strong balance sheet, and our growth expectations, underpinned by a sound investment strategy, we are recommending a final dividend of 20.69 pence per share bringing the total dividend for the year to 31.03 pence, an increase of 15%. During the year we increased our product range, launching our new iPad design, targeted at bridging the affordability gap for first time buyers. We also unveiled an 'Eco - village' in Chorley, Lancashire, the first project of its kind in Britain. Our total land bank grew to over 66,500 plots; delivering our highest ever land bank of 4.5 years at current supply volumes. While this investment will enable us to grow volumes over the next few years, it must be recognised that this is against a backdrop of a planning system that continues to add delays to the production cycle, which in turn reduces the affordability of what we build. We are, however, encouraged by the Governments commitment to improve the system; it is long overdue. We have continued to improve our standards of customer care, having completed a comprehensive overhaul of our quality procedures, and are achieving continued improvement in our independently audited buyer surveys. In addition, we have made good progress in embedding our corporate responsibility strategy into our day-to-day operations. Notably we achieved ISO 14001 certifications for our environmental management system at an additional 9 divisions. Approaching half the company is now certified to ISO14001 and we expect to be fully certified by the end of 2007. Whilst we have made good progress in our management of health and safety during the year, with a 36% reduction in our accident rate, we are deeply saddened to report that a fatal accident occurred on our Battersea Park Road project in London. On 26th September a tower crane collapsed, resulting in the deaths of two people - the crane driver and a member of the public. The cause of this accident is, as yet, unknown but together with the crane contractor, Falcon Crane Hire, we are co-operating fully with the Police and Health & Safety Executive to assist them with their investigations. The Board of Barratt are deeply saddened by these events and our condolences and heartfelt sympathy go out to the families and friends of those who have lost loved ones in this tragic accident. Looking at the new financial year, the fundamentals of the housing market remain sound with good buyer confidence. Visitor levels to our 460 sites remain healthy and we continue to see good sales momentum. Nevertheless, the market remains competitive, and although house prices in certain areas within Central London are still growing strongly, this is not representative of the rest of the country. Whilst interest rates are currently low, compared to historical levels, recent rate increases may have a detrimental effect on buyer confidence as we move into 2007. Our forward sales position at the end of September stood at £1.14bn, 27% higher than at the same time last year and a new record. Together with completions up to the end of September we have secured approximately 56% of our full year requirement, although the full benefit of this will not be seen until the second half of the financial year. Our full year outcome remains in line with management expectations. There have been a number of Board changes during the year as part of our planned succession arrangements. The opportunity has been taken, by the Board, to broaden the range of skills and experience available to the Group to ensure its continued growth and development. Group Finance Director, Colin Dearlove and Deputy Chief Executive, Harold Walker both retired on 30th June after many exemplary years of service with the Group. Mark Pain joined the Group in March of this year and was appointed Group Finance director with effect from 1st July. Mark was formerly Group Finance director of Abbey National plc and also served as Chief Executive Of Abbey National Treasury services and as Group Sales Director. On 1st May, we appointed Rod MacEachrane, formerly commercial director of the NHBC as a Non - Executive Director and today we say goodbye to Alan Kilburn who retires on reaching normal retirement age after 8 years of outstanding service. On 2nd October, Mark Clare was appointed Group Chief Executive. Mark has joined us after a very successful career at Centrica, which culminated in his appointment in 2002 as Managing Director of British Gas' Residential Energy operation. He brings with him a wealth of corporate experience and we're delighted to have secured his services. I would like to thank David Pretty, who retires from the Group Board at the end of December. David has made an enormous contribution to the Group over the past 27 years, and especially over the last 4 years as Chief Executive. Under his leadership we have achieved a strengthened land bank and successive years of record volumes and profits. We wish him a long, happy and well-deserved retirement. After another year of real progress, the board has been delighted that the company continues to receive substantial external recognition of its achievements, culminating in the top award of House Builder of the Year, at the 'What House?' annual awards. Finally, I would like to thank all of the people throughout Barratt who contributed to our success last year. It has been a tremendous team effort. The company is in good health and is well placed for the future. In accordance with normal practice, Barratt developments Plc will be issuing a trading update on 12th January 2007. Enquiries: Weber Shandwick Square Mile Chris Lynch / Terry Garrett Tel: 0207 067 0700 This information is provided by RNS The company news service from the London Stock Exchange
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