Barratt boosts building after strong demand
Barratt completed 17,243 homes in the year ending June 30th 2021, 36.8% ahead of last year and 3.4% below the 2019 level of 17,856.
Announcing its annual results on Thursday 2nd September, Barratt said revenue reached £4,811.7 million in the year, 40.7% ahead of last year and pre-tax profit was £812.2 million, up 65.1%. Gross margin reached 21%.
Commenting on the results David Thomas, ceo of Barratt, said: “We have made excellent progress this year thanks to the resilience, flexibility and hard work of our employees, subcontractors and suppliers, who have also continued to deliver the highest standards of quality and service. We have begun the new financial year in a strong position and, whilst there are still uncertainties ahead, our strong balance sheet, forward order book visibility and construction activity to date all stand us in good stead.”
Reinforcing the views he gave in this month’s Housebuilder SWOT analysis, Thomas added: “There is very strong demand for houses across the country and we play a crucial role in providing the high quality and sustainable homes this country needs. As we work towards our medium term target of growing completions to 20,000 homes a year, we are committed to doing so as the leading national sustainable housebuilder – building homes which have a positive environmental, social and economic impact today and into the future.”
Barratt reported that the land market remains attractive with a good supply of land opportunities, and, despite pandemic-related challenges, planning consents remain ahead of home building activity.
Barratt’s total forward sales, including JVs, as at August 22nd 2021 stood at 15,734 homes at a value of £3,939.9 million (2020: 15,660 homes, £3,706.5 million).
On mortgages, the firm confirmed it was exploring alternative ways to support customers and is currently trialling the Deposit Unlock Scheme, which offers a 95% mortgage, with a UK mainstream lender.
In the year Barratt incurred an additional £81.9 million of costs associated with legacy properties. “Of this,” the firm said, “£32.5 million related to legacy properties comprising costs relating to external wall systems and associated reviews.” Barratt has established an in-house building safety unit. For next year, the firm anticipates adjusted items of “at least £40 million for costs associated with EWS and cladding related remediation activities. These are costs that we may agree to incur beyond our contractual and legal obligations, and in response to evolving legislation.”