High completion rate boosts Barratt Developments

The UK’s biggest housebuilder Barratt Developments – which recently bought Borders-based Oregon Timber Frame – has announced forward sales of £2.6 billion, up from £2.1 billion, with the best rate of completion since 2011.

In its trading update for the year ended 30 June 2019, it said it has built 17,856 homes including joint ventures, up 2.6%, while operating margin is 18.9%, up from 17.5 in 2018. Profit before tax expected to be ahead of market expectations at around £910 million, up from £835.5 million. The company has been awarded the HBF’s maximum 5 Star customer satisfaction rating for the tenth year in a row.


David Thomas, chief executive said: “It has been another very good year for the group both operationally and financially. We have delivered our highest number of completions for 11 years, made further improvements to our margin and as the only major housebuilder to be awarded a 5 Star rating for customer satisfaction for ten years in a row, we continue to lead the industry in quality and customer service.

‘We begin the new financial year with a strong forward order book and cash position, continued focus on the delivery of operational improvements across our business, and an ongoing commitment to deliver the highest quality homes across the country.”

The report said the group has traded well across the country and is making good progress against its medium term targets.

“Our operational improvements, including new product ranges, underpin our land acquisition at a minimum of 23% gross margin. We have delivered incremental underlying operating margin improvements of around 70 bps this year driven mainly by our margin initiatives. In addition, we have delivered a strong performance from our joint ventures at around £35 million. Reflecting our strong performance, profit before tax for the year is expected to be around £910m, ahead of market expectations and a record for the Group.”


During the year, Barratt opened 163 (2018: 142) new outlets (including JVs) and operated from an average of 379 active outlets (including JVs). The total average selling price for the year was c. £274,000 (2018: £288.900), with private ASP at c. £312,000 (2018: £328.8k), reflecting changes in mix, partly offset by some underlying house price inflation.

“As Britain’s largest housebuilder we remain committed to playing our part in addressing the housing shortage. We continue to increase volumes whilst maintaining our industry-leading quality. In line with expectations, we saw 2.6% growth in our wholly owned completions to 17,111 homes (2018: 16,680 homes) and delivered 745 home completions through our joint ventures (2018: 899 homes) making our total completions including JVs 17,856 homes (2018: 17,579 homes) for the year.”

“Our new housetype ranges are suitable for modern methods of construction which we aim to use in 20% of our homes by 2020. In addition, we recently acquired Oregon Timber Frame Limited, one of our key suppliers of timber frames, to complement our existing business operations,” said the upadte.


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