Chairman's AGM Statement re Results
Barratt Developments PLC
18 November 1999
Statement made by Mr Frank Eaton
Chairman of Barratt Developments PLC
at the Annual General Meeting
held on Thursday 18th November 1999
I would like to take the opportunity today to comment on our
results for the financial year ending 30th June last and also to
update you on current trading conditions since 1st July and our
prospects for the current financial year.
During the year we again achieved excellent progress and our
results were particularly pleasing in view of the slow market
that existed throughout the first half year from July to
December 1998. During that period we were the only national
house-builder to significantly increase volume, up 8% year on
year, which clearly demonstrates the inherent strengths that
exist within the Group.
Following a series of interest rate reductions, the housing
market improved in our second half year and we maximised fully
on this, producing record profits for the financial year ending
30th June 1999 of £112m, up 20% and securing record forward
sales, up £102m to £343m. A highly successful year,
contributing to an increase in earnings per share of 22% per
annum on average over the past five years. Over the same period
we have also progressively improved our return on capital up to
26% - amongst the highest in our industry.
As we move forward through our new financial year I am pleased
to report that we continue to produce an excellent sales
performance. Sales reservations for the 20 weeks to date are up
10% year on year, further increasing our advance sales to over
£400 million. We also continue to improve our average selling
price and selling costs in line with our expectations, which,
coupled with our stringent controls of overheads and
construction costs, give us great confidence. We remain fully
on course to achieve our anticipated volume profit and margin
improvement.
Land availability and planning delays continue to be a serious
concern and are restricting the industry's ability to satisfy
housing needs. The system is equally inefficient whether for
brownfield or greenfield sites and is undoubtedly adding
unnecessary pressure to house prices and in many areas is
pricing property out of the reach of first-time buyers.
Against this difficult background, our success in progressively
increasing land holdings year on year has been one of our
strengths and in the year just ended we further increased our
land stocks to 29,200 plots, up 12%, consistent with our planned
growth objectives. This ongoing expansion of our land stocks,
focusing on prime locations and areas of proven demand, has been
achieved whilst maintaining our stringent land buying criteria
and will further assist our sales operations going forward,
providing quality locations in all the main population bases
throughout the UK.
Shareholders will be aware that our current share price does not
reflect the performance of the Group, nor the future performance
we anticipate, because of concerns over interest rates.
However, our track record over recent years clearly demonstrates
our ability to continue to grow the business and increase
profits during periods of rising interest rates and fluctuating
markets and we are confident we will do so again. Modest
movement in interest rates will ensure we have a stable economy
going forward and, notwithstanding the two recent increases, we
continue to experience a good UK housing market, further
increasing both sales and market share.
Our financial position is very strong and our investment in
securing adequate land stocks has been well placed, providing a
total geographic spread of quality locations across all market
sectors. We have a range of house styles that meets the
aspirations of today's home-buyers and we have the proven
marketing skills to continue our sales success with all our
regions achieving sales increases year on year.
Having regained our position as the highest profit producer in
our industry, shareholders can be assured we shall strive to
maintain this position.
I am confident that our management team has all the qualities
and experience needed to secure another highly successful year
and continue the sound progress we have made in recent years.
Frank Eaton
Chairman 18th November 1999
Latest directors dealings
- 2 hours ago ASOS
- 3 hours ago MJ Gleeson
- 3 hours ago Rolls-Royce Holdings
- 3 hours ago Crest Nicholson Holdings
- 4 hours ago Naked Wines