Barratt Developments Plc - Half-year Report

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Barratt Developments Plc

Half year results for the six month period ended 31 December 2019

Strong first half performance, continued good progress against medium term targets

£m unless otherwise stated1,2

Half year ended 31 December 2019

Half year ended 31 December 2018

Change

Total completions (homes)3

8,314

7,622

9.1%

Revenue

2,266.2

2,132.0

6.3%

Profit from operations

421.7

409.7

2.9%

Adjusted operating margin4

19.4%

19.0%

40 bps

Operating margin4

18.6%

19.2%

(60 bps)

Profit before tax

423.0

408.0

3.7%

Basic earnings per share (pence)

33.8

32.7

3.4%

Interim dividend per share (pence)

9.8

9.6

2.1%

ROCE (%)4

29.3

29.5

(20 bps)

Net cash4

433.8

387.7

11.9%


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

Commenting on the results David Thomas, Chief Executive of Barratt Developments PLC, 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."