Barratt Developments 2023 trading update

Full financial results for the year to 30 June 2023 show improved revenue and healthy profits, ahead of a solid forward sales position in FY2024. 

Further details of its operational performance is outlined below.

Highlights 

• Revenue: £5.32 billion (FY2022: £5.26 billion) 
• Adjusted gross profit: £1.13 billion (FY2022: £1.3 billion) 
• Gross profit: £974.9 million (FY2022: £899.9 million) 
• Adjusted profit before tax: £884.3 million (FY2022: £1 billion) 
• Profit before tax: £705.1 million (FY2022: £642.3 million) 
• Gross margin: 18.3% (FY2022: 17.1%) 
• Adjusted gross margin: 21.2% (FY2022: 24.8%) 
• Operating margin: 13.3% (FY2022: 12.3%) 
• Adjusted operating margin: 16.2% (FY2022: 20%) 

Return on capital employed (ROCE) was 22.2%, compared to 30% in the previous year. 

The total ordinary dividend for the financial year was 33.7 pence (FY2022: 36.9 pence). 

Net cash was reported at £1 billion, compared to £1.138 billion in 2022, after dividend payments of £360 million and a £200 million share buyback. 

Basic earnings per share were 53.2 pence (FY2022: 50 pence). 

The company also delivered 17,206 home completions, a decline of 3.9% year on year due to a market slowdown from September 2022. 

Adjusted gross profit and adjusted gross margin results reflected a fall in demand, and house price inflation running below build cost inflation. 

It had to make provisions for £179 million to counter the cost of remediation works on legacy properties.  

Outlook 

The company aims to drive revenue through targeted use of incentives, and sales to the private rental and social housing sectors, while continuing to manage build activity and controlling its cost base.  

“We have delivered a strong operational performance in a challenging operating environment,” said David Thomas, chief executive of Barratt Developments. “Customers continue to face cost of living and mortgage affordability challenges, and new developments are increasingly constrained by an ineffective planning system. Today’s results reflect the hard work and dedication of our teams and the decisive actions we have taken as a business to respond to market conditions.”  

Adding: “Whilst we expect that the backdrop will continue to be difficult over the coming months, we are a resilient business with a strong balance sheet and an experienced management team. We remain committed to building the communities that our customers want to live in – delivering high-quality, sustainable homes at competitive prices to help address the country’s housing crisis and drive long term, sustainable growth for our business.” 

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