Barratt homes surge in demand for new homes
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Britan’s biggest homes builder Barratt’s looks forward and targets 15000 new homes target this year.
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 across its sites in the UK and that Barratt’s had also re-entered the land market looking to pick up bargains.
Commenting on the results David Thomas, Chief Executive of Barratt Developments PLC said:
“While COVID-19 has had a significant impact on our results, our priority has been to keep our people safe, mitigate the effect of the pandemic on our business and be able to emerge from the crisis in a resilient position. Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism. We are now renewing our focus on our medium term targets, on leading the industry in quality and service and on supporting jobs and economic growth by building the homes the country needs.”
He carried on to say that 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 for homes fell to 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 competed further saying that: “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.”