Trading Statement
Barratt Developments PLC
23 January 2006
BARRATT DEVELOPMENTS PLC
TRADING UPDATE
23 JANUARY 2006
Barratt Developments PLC is today issuing the following Trading Update for the 6
months to 31 December 2005, ahead of its Interim Results, which will be
announced on 29 March 2006 and will be prepared under International Financial
Reporting Standards ('IFRS') for the first time.
Despite testing market conditions we competed well in all our operational areas
and, once again, expect to announce further growth in legal completions and an
improvement in continuing pre-tax profit. We also increased our investment in
land and work in progress whilst maintaining a strong financial position, with
no borrowings at the half year.
We continued our consistent approach to land acquisition and strengthened our
land bank which has now increased to circa 63,000 plots (2004: 59,443),
including 7,000 plots (2004: 8,000 plots) agreed subject to contract. This
equates to 4.3 years' supply at current volumes (2004: 4 years).
Legal completions increased to 7,003 homes, up 2%, at an average selling price
of circa £165,000, similar to last year. Private completions were just 1% lower
at 5,569, at an increased selling price of circa £180,000, up 1%. Social housing
completions increased by 14% to 1,434 at a maintained average selling price of
circa £106,000.
As expected, competitive market conditions continued to require a wide range of
incentives and marketing support. However, overhead efficiencies and a
continuing strict control of building costs have ensured satisfactory operating
margins.
Overall, 2005 was challenging with the market adjusting from its earlier
overheated levels to more normal levels of activity. We anticipated and prepared
for these more competitive conditions with improved sales efficiencies and
steadily increasing sales outlets. We have 125 new sales outlets programmed for
launch throughout the country by next Summer.
There have been positive signs in the past 3 months that buyer confidence has
improved and recent sales rates have been encouraging. Forward sales at 31
December 2005 remained very healthy, at circa £700m (2004:£803m). Together with
completions to date this secures approximately 75% of our full year objective.
Whilst below last year's record levels, encouragingly these remain above our
historic norms. With the key Spring selling season still ahead of us, it is
clearly too early to be sure of market trends for the rest of the financial year
but, if recent improvements are sustained, we are currently on target to
increase volumes.
After 25 years with the Group, the last 14 of which as Group Finance Director,
Colin Dearlove has decided to retire at the end of this financial year. Mark
Pain, formerly Group Finance Director at Abbey National plc, has been appointed
to succeed him and will join the Group as an Executive Director on 1 March 2006
to ensure an orderly handover.
Our national geographic coverage and extensive product range, combined with our
urban regeneration and social housing expertise, have again contributed to
another improved performance. Together with our strong forward sales, quality
land bank and strong finances, these core strengths leave us well positioned for
the full year and the years ahead.
Enquiries:-
Barratt Developments PLC Weber Shandwick Square Mile
David Pretty, Chief Executive/ Terry Garrett/
Colin Dearlove, Finance Director Chris Lynch
Tel: 0191 286 6811 Tel: 0207 067 0700
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