Barratt restores build rates as sales surge

Aaron Morby 3 years ago
Share

Britain’s biggest house builder Barratt has got its production rates back on track and is now targetting 15,000 home completions for the year ahead.

Barratt chief says pent-up demand has triggered a surge in sales.
Barratt chief says pent-up demand has triggered a surge in sales.

Chief Executive David Thomas said the firm has enjoyed a surged in demand for homes since the lockdown ended and had ramped up production rates.

He said Barratt had also re-entered the land market looking to pick up bargains.

Thomas said: “We are pleased that since the start of the new financial year we have seen our production increase, constructing the equivalent of 347 homes in the week ending 23 August and we are on track to deliver our planned output.

“Based on current market conditions, construction activity levels and assuming no further lockdowns, we expect to grow wholly owned completions to between 14,500 and 15,000 homes in FY21, and in addition around 650 completions from our joint ventures, whilst ensuring we maintain our industry leading standards of quality and service.”

He added Barratt was focused on rebuilding completion volumes to its medium term target and capacity of 20,000 homes.

Announcing latest results for the year to June, Thomas said extra costs from Covid-19 hit £74m.

This comprised pf £45m of safety costs, non-productive site costs and site-based employee costs and £29m related to an expected increase in site durations.

The house builder said pre-tax profit had plunged to £492m (2019: £909.8m), impacted by the unprecedented disruption to sales and building in the final quarter. 

Barratt also booked legacy properties costs of £39.9m relating to recladding work and decided in July to repay £26m in furlough grants from the Government.

Completions fell 29% to 12,604 homes as a result of the lockdown, with group revenue down a similar amount to £3.42bn.

But Thomas said demand had rebounded strongly this summer stimulated by a combination of pent-up demand, the Stamp Duty holiday and an understanding that Help to Buy will only be available to first-time buyers and regional home price caps will exist from April 2021.

He said: “The sales performance across all regions in the new financial year to date has been encouraging, with net private reservations per average week of 314 (FY20: 250), resulting in net private reservations per active outlet per average week of 0.94 (FY20: 0.68).”

Barratt also enjoyed a substantial increase in home completion volumes in the last eight weeks, up over 60% at 1,439 homes compared to the same period last year.

Total forward sales stand at 15,660 homes compared to 13,064 homes a year ago.

Thomas said: “While there continues to be economic and political uncertainty, the group is in a strong position.

“We have a substantial net cash balance, a well-capitalised balance sheet, a healthy forward sales position, a continued focus on delivery of operational improvements across our business and an ongoing commitment to deliver high quality homes across the country. 

“We have therefore now re-entered the land market selectively, maintaining our disciplined approach, where we see attractive opportunities.”

Latest news

Lonsdale went down owing £65m to supply chain

More than 600 firms owed money as reduced credit rating sinks M&E giant
2 days ago

Wates only bidder for £80m Cardiff estate rebuild

Council contacted 20 framework firms but received only one bid for 295-home Channel View estate rebuild
1 day ago

£21m legal battle over flawed concrete at Salford flats job

Developer in compensation battle with Arcadis after new concrete core demolished
1 day ago

Abu Dhabi developer Aldar Properties buys London Square

UAE giant swoops on resi specialist in vote of confidence for London market
1 day ago

Hunt for delivery partner to revive New Hospital Programme

Programme delivery partner to get £600m fee to get plans back on track
2 days ago

Green light for new £780m Essex garden village

3,700 homes and four new schools to be built at Dunton Hills
2 days ago

Laing O’Rourke makes a £288m loss

Rampant inflation on fixed-price jobs and problem contracts blow hole in accounts
2 days ago

Keltbray, OCU and Clancy clinch £1bn electricity network upgrade

Scottish and Southern Electricity Networks awards biggest ever deals for central southern England
3 days ago

G&T enlisted for commercial review of HS2 main civils contracts

Phase 1 Main Works Civils Contracts to come under cost scrutiny
2 days ago

TClarke order books doubles to top £1bn for first time

M&E specialist on track to exceed £500m turnover this year
2 days ago

Wates signs Government safety remediation pact

Private builder belatedly signs fire safety developer remediation contract
2 days ago

Liverpool all-electric industrial park approved

McLaren and Caddick in chase for Sefton 800,000 sq ft Atlantic Park scheme
3 days ago

Former Buckingham Group MD to join John F Hunt

Simon Hyams is new Managing Director for Contracting
3 days ago

Three in race for retendered £150m A9 dualling job

Bidders take another look after client takes on more risk
3 days ago

Clancy tops £300m revenue in fifth year of growth

Civils contractor delivers £13.5m pre-tax from water and energy sector work
3 days ago

Tower crane collapses on Edinburgh resi site

Jib falls onto apartment block under construction: Video
4 days ago

Salboy drops office space from Viadux Phase Two

Developer to focus on Manchester residential towers of 76 and 23 storeys
4 days ago

Warwick Uni plan for science and engineering campus

370,000 sq ft science and engineering precinct submitted for planning
3 days ago

Morgan Sindall chalks up Greater Manchester schools treble

Bury, Stockport and Wythenshawe school jobs will create 1,600 pupil places
3 days ago

Plans in for £65m Blackpool multiversity campus

Council leads plan for Talbot Gateway learning campus
3 days ago

Laing O’Rourke wins first phase of £700m Oxford R&D district

Landmark Red Hall and two labs to be built in phase 1a of Oxford North scheme
5 days ago

Ardmore wins retrofit deal on £200m Chancery Lane office

Building will be transformed to provide 105,637 sq ft of office space
5 days ago

Construction’s “Leading Lights” recognised

More than 50 winners in latest Considerate Constructors Scheme awards
4 days ago

Balfour Beatty clinches £20m Norfolk coastal defence jobs

Firm will install rock armour at Cromer and Mundesley
4 days ago

Architects join construction union Unite

Section of Architectural Workers forms official branch
5 days ago

Boot to build £20m lightweight aviation composites factory

Work starts on Sheffield University's COMPASS R&D facility
4 days ago

GMI secures £27m Leeds City College job

Site clearance underway for new Mabgate campus
5 days ago

Balfour signs deal with Koreans for UK power transmission jobs

Contractor strengthens large-scale onshore power transmission capability
5 days ago

36 storey south London build to rent flats tower approved

Construction to start next year on £220m Croydon scheme
5 days ago

Hunt for firms for £400m volumetric offsite deal

Procurement for Housing aims to expand its pool of firms on major offsite framework
5 days ago

Contractor services