Barratt Developments (BDEV)

[scrumpyjack]

Good results from Barratt today

https://www.londonstockexchange.com/new ... s/15320892

The dividend is increased by 49% to 11.2p with more to come as they promise to reduce cover from 2.5 to 1.75 over the next few years. They clearly feel their balance sheet is too conservative and promise to return capital in addition to shareholders (method not yet decided).

The other point of interest is that the phasing out of Help To Buy does not seem to been a problem at all.

"The interim dividend will be paid on Wednesday 18 May 2022 to all shareholders on the register on Friday 8 April 2022"

[idpickering]

Trading Statement.

Highlights;

· Net private reservations per active outlet per average week of 0.93 (2021: 0.83)(1)

· Fully forward sold for FY22 with total forward sales (including JVs) at 1 May 2022 of £4,383.3m (2 May 2021: £3,696.3m; 3 May 2020: £2,834.0m)

· Construction activity progressing well with 362 (2021: 321) equivalent homes (including JVs) built per average week in the period

· Balance sheet strength maintained with year-end net cash expected to be between £1.0bn and £1.1bn

· On track to deliver total home completions of between 18,000 and 18,250 homes including around 750 JV home completions, resulting in a trading outlook for the full year in line with the Board's previous expectations

https://www.investegate.co.uk/barratt-d ... 00033719K/

[idpickering]

Barratt Trading Statement.

Highlights

· Strong nationwide demand sustained throughout the year, resulting in net private reservations per active outlet(2) per week of 0.81 (FY21: 0.78)(3).

· Total home completions returned to pre-pandemic levels, with 17,908 homes completed in the year (FY21: 17,243 homes) including 746 from JVs (FY21: 726).

· Adjusted profit before tax is anticipated to be in the range of £1,050m and £1,060m, slightly ahead of current market consensus expectations(4) at £1,048m (FY21: £919.7m). This is stated before adjusted item costs of c. £412m (FY21: costs of £107.5m).

· Awarded 98 Pride in the Job Awards for outstanding site management in the June 2022 NHBC awards, more than any other housebuilder for the 18th consecutive year.

· Continued to demonstrate our leading design and innovation capabilities, with the launch of the zero carbon concept home, the "Zed House", as well as completions from Delamare Park, our first air source heat pump development of 82 homes.

· Introduced an accelerated 5% pay increase from 1 April 2022 and a further temporary salary supplement of £1,000 to all employees below senior management, phased over the coming six months to 31 December 2022.

· Balance sheet strength maintained with year-end net cash(5) of c. £1,125m (30 June 2021: £1,317.4m) after the £250m acquisition of Gladman Developments and land spend of c. £1,050m during the year.

· Well positioned for FY23 with total forward sales (including JVs) at 30 June 2022 of 13,579 homes (30 June 2021: 14,334 homes) at a value of £3,622.3m (30 June 2021: £3,473.5m).

https://www.investegate.co.uk/barratt-d ... 00074104S/

Ian.

[scrumpyjack]

The statement also says:
"The Board continues to review its capital allocation policy and will provide an update with our FY22 financial results on 7 September 2022."

The newspapers suggest this may mean a special dividend or capital return.

The £412m charge for remediation (aka Gove's blackmail) seems rather high but they say it covers 30 years of stuff so hopefully it really is a one off!

[idpickering]

CMA closes investigation into Barratt.

Barratt Developments PLC is pleased to note the announcement made by the UK Competition and Markets Authority that, after more than three years, it has now closed its investigation into Barratt in relation to the sale of leasehold homes. Barratt has worked constructively with the CMA throughout. Barratt is committed to putting its customers first and has been awarded a 5 Star rating by its customers for 13 successive years, more than any other major housebuilder.

https://www.investegate.co.uk/barratt-d ... 08131641W/

Ian.

[idpickering]

Trading Update.

Trading update

In the period our net private reservations2 per average week were 188 (FY22: 281) and net private reservations per active outlet per average week of 0.55 (FY22: 0.85; FY21: 0.87; FY20: 0.72). (Appendix 1).

The private reservation rate in the period reflects customer response to increased wider economic uncertainty, where growing cost of living concerns have been compounded by increased mortgage interest rates and reduced mortgage availability.

In addition we have limited availability of homes for early occupation given the strength of our forward order book and we have also seen the expected reduction in Help to Buy activity, which accounted for 12% of private reservations in the period (FY22: 21%; FY21: 51%; FY20: 45%).

In line with our expectations, we have launched 25 (FY22: 27) new developments (including JVs) in the period. We operated with an average of 351 (FY22: 338) active outlets (including 8 JVs (FY22: 8)) and we continue to expect to deliver average sales outlet growth of around 3% in FY23.

In the period we delivered 3,608 (FY22: 3,699) home completions (including JVs), in line with our budget plans.

The completion profile in FY23 is expected to remain broadly in line with the typical seasonal pattern with around 45% of our full year completions anticipated in the first half of FY23 and around 55% in the second half of the financial year.

Reflecting the slower reservation rate, our total forward sales (including JVs) as at 9 October 2022 totalled 13,314 homes (10 October 2021: 15,393 homes; 11 October 2020: 15,135 homes; 13 October 2019: 12,963 homes) at a value of £3,603.1m (10 October 2021: £3,936.6m; 11 October 2020: £3,647.6m; 13 October 2019: £3,070.2m). (Appendices 2 and 3).

We are now 64%3 forward sold with respect to private wholly owned home completions for FY23 (FY22: 72%4; FY21: 70%4), of which approximately 72% are either completed or exchanged (FY22: 67%).

The private average selling price ('ASP') in our wholly owned forward order book as at 9 October 2022 was £377.2k (10 October 2021: £344.3k; 11 October 2020: £331.4k; 13 October 2019: £316.0k).

Construction activity continues to grow with 367 (FY22: 335; FY21: 294; FY20: 364) equivalent homes (including JVs) constructed per average week in the period. We will be closely monitoring changing market conditions in the coming months to ensure our site build programmes align with home delivery scheduling to meet customer commitments within our order book, as well as ongoing market demand.

We continue to expect build cost inflation of between 9% and 10% for FY23.

https://www.investegate.co.uk/barratt-d ... 00045558C/

Ian.

[idpickering]

Barratt Developments PLC Trading Update.

Highlights

· Total home completions including joint ventures ('JVs') at 8,626 (HY22: 8,067).

· Sales rate of 0.44 (HY22: 0.79) net private reservations per active outlet per week1 during the period with a net reservation rate per average week of 0.30 (HY22: 0.69) for the period from 10 October 2022, our AGM trading update, through to 31 December 2022.

· Total forward order book (including JVs) as at 31 December 2022 was 10,511 homes (31 December 2021: 14,818) at a value of £2,544.4m (31 December 2021: £3,794.3m).

· Net land approvals have been negative with a net 290 plots cancelled (HY22: 8,869 approved).

· Strong balance sheet with net cash2 as at 31 December 2022 of c.£965m (30 June 2022: £1,138.6m; 31 December 2021: £1,131.7m), after dividend payment of £259.8m and share repurchases of c.£100m.

· Our sustainability performance recognised with the Group joining the CDP's Climate Change A List for Leadership, one of just 283 companies worldwide and the top-rated UK housebuilder.

· Assuming net reservation rates increase in line with normal Spring trading patterns to around 0.50 homes per active outlet per week, we will remain on track to deliver consensus total home completions of 17,4753. However, should the usual seasonal improvement not occur and trading remain at recent levels, the Group would expect to deliver total home completions for FY23 in the range of 16,0004 to16,5004.

https://www.investegate.co.uk/barratt-d ... 00073091M/

The above doesn't sound very good imho.

I hold Persimmon in the sector, not BDEV.

Ian.

[idpickering]

Changes to Board and Committee Composition.

https://www.investegate.co.uk/barratt-d ... 05013155M/

Ian.

[idpickering]

Half year results for the six month period ended 31 December 2022.

Strong operating performance, well positioned for an uncertain trading backdrop in 2023

Commenting on the interim results David Thomas, Chief Executive of Barratt Developments PLC said:

"We have delivered a strong operating performance for the six months to 31 December 2022. This was possible because of our significant forward order book at 30 June 2022 and the tremendous efforts of our employees, sub-contractors and supply chain partners.

However, the economic backdrop has clearly been challenging and consumer confidence weakened significantly during the half, which meant we saw lower reservation rates for future sales - particularly in the second quarter. Whilst we have seen some early signs of improvement in current trading during January, we will need to see continued momentum over the coming months before we can be confident that these challenging trading conditions are easing.

Our business remains fundamentally strong, both operationally and financially, with an experienced leadership team, a strong net cash position and a resilient and flexible business model. We are well-placed to navigate the challenges ahead and are focused on driving revenue whilst taking a decisive and disciplined approach to costs. As always, our priority is delivering excellent quality and service for our customers."

highlights;

Strong operational performance in the first half, delivering 6.9% growth in total home completions3 to 8,626 with adjusted profit before tax up 15.9% at £521.5m and reported profit before tax also advancing 15.9% to £501.5m.

Continuing focus on build quality, health and safety and customer service recognised as the Group was named 'Large Housebuilder of the Year' for the third time in four years.

Industry leadership on Sustainability recognised with the Group joining the CDP's Climate Change 'A' List for Leadership, one of just 283 companies worldwide and the top-rated UK housebuilder .

Strong balance sheet with net cash of £969.1m (HY22: £1,131.7m) after dividend payment of £259.8m and £100.5m of share repurchases.

Our full year out-turn remains dependent on how the market evolves through the Spring selling season, but assuming we continue to see the improved reservation activity we have experienced since the start of calendar 2023, we expect to deliver total home completions of between 16,500 to 17,000 in FY23 (including c. 750 JV completions).

Interim ordinary dividend of 10.2p (HY22: 11.2p) reflecting the planned reduction in dividend cover to 2.0 times for the full financial year (2.25 times cover in HY22).

Buyback programme to recommence following today's interim results announcement.

https://www.investegate.co.uk/barratt-d ... 00052290P/

Ian (No holding).

[granretire]

Ex-div 6/4/23
pay day 17/5/23

[idpickering]

Ex-div 6/4/23
pay day 17/5/23

Thanks for your input.

Ian.

[BullDog]

Dividend is cut 8.9% and the share price goes up!

[scrumpyjack]

Dividend is cut 8.9% and the share price goes up!

As ever the market has long (over, IMO) discounted the probability of builders having a bad time, for a while, and cutting their dividends so it is no surprise that when they announce their results and things are not as bad as expected, the shares go up.

I am very happy to continue to hold Barratt and Persimmon, and indeed increased my grandchildren's Persimmon holdings recently.

[idpickering]

Trading Update.

Highlights
·

Net private reservations per active outlet per average week of 0.65 (2022: 0.93)(2)

·

Fully forward sold for FY23 with total forward sales (including JVs) at 23 April 2023 of £2,956.5m (24 April 2022: £4,505.5m)

·

Construction activity has been adjusted to the slower trading backdrop with 303 equivalent homes (including JVs) built per average week in the period (2022: 359)

·

Balance sheet strength maintained with year-end net cash(3) expected to be around £0.9bn in line with previous guidance

·

Trading outlook for the full year remains in line with the Board's previous expectations with the Group on track to deliver total home completions of between 16,500 and 17,000 homes including around 750 JV home completions

https://www.investegate.co.uk/announcement/7509661

Ian.

[idpickering]

Signing of the Scottish Safer Buildings Accord.

In line with its belief that leaseholders should not have to pay for remediation, Barratt has signed the Scottish Safer Buildings Accord ("the Accord"), an industry commitment supporting the remediation and / or mitigation of external wall cladding systems on buildings of 11 metres and above, in Scotland

https://www.investegate.co.uk/announcement/7552806

Ian (No holding).

[idpickering]

Portfolio sale to Citra Living.

Barratt Developments PLC ("Barratt") today announces the agreed future sale of 604 (1) homes to Citra Living Properties (No. 1) Limited ("Citra"), a wholly owned subsidiary of Lloyds Banking Group plc ("Lloyds") for total cash consideration of £168.4m (1) (2).

Barratt will recognise revenue and profit on the legal completion of each home under this future sale agreement. Of the 604 homes included within this transaction, in excess of 500 are expected to be legally completed and transferred to Citra's ownership over the 12 months to 30 June 2024. The remaining homes will be completed and transferred in the financial year to 30 June 2025, reflecting the variations in both site development stages and build scheduling, across the sites included in this transaction.

David Thomas, Chief Executive of Barratt said:

"We are delighted to announce a significant step forward in our partnership with Citra, who share our commitment to delivering a wide range of high-quality, sustainable homes and communities across the UK.

Since forming our strategic partnership in 2021, we have agreed the sale of some 502 homes on individual sites to Citra. Our focus on quality and the environmental performance of our homes has enabled us to assemble an attractive portfolio of homes in desirable locations for private rental.

The single-family dwelling segment of the private rental sector continues to grow strongly and presents an opportunity for us to both diversify our revenues against the current challenging market backdrop and develop communities which encompass all forms of housing tenure."

https://www.investegate.co.uk/announcem ... ng/7604487

Ian (No holding).

[idpickering]

Barratt Developments Trading Update.

Highlights

· Net private reservations per active outlet(2) per week of 0.55 (FY22: 0.81)(3) including a contribution of 0.10 (FY22: 0.03) from increased reservations into the private rental sector and to registered providers of social housing.

· Total home completions of 17,206 (FY22: 17,908) including 828 from JVs (FY22: 746).

· Adjusted profit before tax is anticipated to be in line with current market expectations(4). This is stated before total adjusted items (including JVs) of c. £180m (FY22: £412.5m) relating to building safety.

· Balance sheet strength maintained with year-end net cash(5) of c. £1,070m (30 June 2022: £1,138.6m) after completing the £200m share buyback and land spend of c. £820m during the year.

· A solid order book for FY24 with total forward sales (including JVs) at 30 June 2023 of 8,995 homes (30 June 2022: 13,579) at a value of £2,223.4m (30 June 2022: £3,622.3m) with the order book normalising to more typical levels of next year's completions.

· Awarded 96 Pride in the Job Awards for outstanding site management in the June 2023 NHBC Awards, more than any other housebuilder for the 19th consecutive year.

· Continued to demonstrate our leading design and innovation capabilities, with the launch and testing of the 'eHome2' within the Energy House 2.0 at the University of Salford.

https://www.investegate.co.uk/announcem ... te/7629623

Ian (No holding.

[idpickering]

Annual Results Announcement.

Highlights

Strong operational performance delivering 17,2063 (FY22: 17,908) total home completions, a decline of 3.9% year on year reflecting the market slowdown experienced from September 2022.

Industry leadership in build quality, customer service and sustainability maintained through:

19th consecutive year of achieving more NHBC Pride in the Job Awards than any other housebuilder;

14th consecutive year of receiving the maximum HBF 5 Star customer satisfaction rating; and

Awarded membership of CDP's Climate Change A List for Leadership, one of fewer than 300 companies globally.

Adjusted gross profit of £1,130.4m (FY22: £1,308.1m) and adjusted gross margin at 21.2% (FY22: 24.8%), with reduced profitability reflecting the fall in customer demand, overall house price inflation running below build cost inflation and the operational gearing impact as the market has slowed down.

Adjusted profit before tax of £884.3m (FY22: £1,054.8m) in line with market expectations5.

Adjusted items relating to costs associated with legacy properties of £179.2m (FY22: £412.5m), which resulted in reported profit before tax of £705.1m (FY22: £642.3m).

Strong balance sheet with net cash at 30 June 2023 of £1,069.4m (30 June 2022: £1,138.6m), after dividend payments of £360m and completion of £200m share buyback.

ROCE declines to 22.2% (FY22: 30.0%) reflecting the decline in profitability in the year.

Final ordinary dividend per share of 23.5p (FY22: 25.7p) which, together with the interim dividend of 10.2p (FY22: 11.2p), results in total ordinary dividend for the financial year of 33.7p (FY22: 36.9p).

In line with our stated dividend policy, ordinary dividend cover will be 1.75 times for FY24. Given current market uncertainty, the Board has decided to retain surplus capital to maintain the resilience of the Group's balance sheet.

The focus for FY24 will be driving revenue through targeted use of incentives, sales to the private rental and social housing sectors, whilst continuing to manage build activity and controlling the cost base. This will be supported by a highly selective approach to land buying whilst continuing to lead the industry on sustainability.

https://www.investegate.co.uk/announcem ... t-/7737627

Ian (No holding).

[Dod101]

So the housing downturn is biting.

Dod

[idpickering]

So the housing downturn is biting.

Dod

Seems so Dod, thanks for your input.

I only hold Taylor Wimpey in the sector nowadays.

Ian.