Barratt Developments’ London boss arrested on suspicion of contracts misconduct

Alastair Baird

Alastair Baird

The regional managing director for London at Barratt Developments was arrested following an ongoing probe into contract awards.

The housebuilder said this morning it has suspended Alastair Baird pending the outcome of an inquiry by the Metropolitan Police.

One other former Barratt London employee was also arrested, the firm added.

The arrests follow a referral in April 2016 by Barratt to the Metropolitan Police of initial findings of an internal investigation. The investigation commenced in August2015 following an internal audit and relates to possible misconduct in the process for awarding and managing certain material & sub-contract supply contracts in the London region.

The investigation also led to civil legal action which commenced in October 2015 against an employee who was dismissed in February 2016.

Following the initial findings of the internal investigation, Barratt appointed an accounting firm to conduct an external review of the controls relating to the tendering and procurement processes in the London business, the results of which were reported to the Audit Committee.

Following this review, Barratt said it has adopted additional controls. Barratt’s London procurement processes differ from wider Group processes reflecting the non-standard and one-off nature of London construction projects.

Chief executive David Thomas said: “We have acted decisively, launching our own thorough and comprehensive investigation and referring the matter to the Metropolitan Police.”

He added: “We will continue to co-operate fully with the Metropolitan Police and to conduct our own investigation into these matters.

“We will take whatever action is required to ensure our values and standards are upheld.”

Gary Ennis, regional managing director for Southern Region, will take interim responsibility for the London and Southern Regions, supported by the London Board and other senior management of the Group

Barratt said it did not expect a material financial hit to arise from the misconduct inquiry.

Barratt Developments shrugs off Brexit worries with 21 per cent profits jump

David Thomas

David Thomas

Barratt Developments has said it remains so far unscathed by the Brexit vote with the housebuilder reporting a 20.7 per cent rise in pre tax profits and its highest completion volumes for eight years.

A 5.3 per cent increase in completions to 17,319 homes in the year ended 30 June saw profits at the company leap to a record £682.3 million during the period, up from £565.5m a year earlier.

The increase in home completions was even higher in Scotland with 1,600 new homes built north of the Border, up 15 per cent on the 1,390 in 2015.

The company also significantly strengthened its balance sheet, with Barratt’s cash pile rising 217.43 per cent to £592m in 2016.

Chief executive David Thomas said: “Whilst the outcome of the EU referendum has increased levels of economic and political uncertainty, the group is in a strong position, with a substantial year end net cash balance, healthy forward sales position and an experienced management team.

“The board will continue to monitor the market and economy and take appropriate action where necessary. The wider market for new homes remains healthy across Britain, with a long term undersupply of new homes, strong government support to the sector and a liquid mortgage market.

“Consequently, we remain confident in the strong fundamentals of the housing sector and our business.”

“We’re very pleased with where we are in Scotland,” he added. “Following the EU referendum, it’s been people’s main concern in the market, but the customer is behaving normally and the banks are behaving normally, so our take on that is that we should adopt a business-as-usual stance and get on with buying land, building houses and selling houses.”

After eight years’ service to the Board, Mark Rolfe will step down from his position as a non-executive director of the company with effect from the conclusion of the forthcoming AGM to be held in November. Mark will also stand down as the senior independent director and chairman of the audit committee on the same date.

Richard Akers, who has been a non-executive director of the group since 2012 and is also chairman of the remuneration committee, will replace Mark Rolfe as the senior independent director.

Brexit could force Barratt to slow down housebuilding plans

David Thomas

David Thomas

The UK’s biggest housebuilder Barratt Developments is forecasting a 20 per cent increase in full-year profits but warned that it could slow its pace of construction following the Brexit vote.

Despite increasing new property completions by 5 per cent last year, the builder said there was greater uncertainty facing the economy after the UK voted to leave the EU.

Barratt said it is “reassessing land approvals” to reduce the risks from any fallout but the full impact of the vote would require a more long-term assessment.

“Following the EU referendum, we are mindful of the greater uncertainty now facing the UK economy. Consequently, the immediate outlook for our industry is less clear and it is too early to draw any conclusions regarding market conditions from the short trading period since the referendum,” it said.

“We had contingency plans in place and we have taken appropriate measures to reduce our risk, such as reassessing land approvals, as we continue to monitor the market.”

Barratt chief executive David Thomas said: “We have delivered another strong performance for the year.

“The disciplined growth in completion volumes reflects the strength of our sector leading build and sales teams.

“Following the EU referendum, it is too early to say what the impact of the uncertainty facing the UK economy will be.

“The sector continues to receive focused government support, mortgage availability is good and there remains an undersupply of new homes.

“With a strong balance sheet and forward order book, and industry leading quality and customer service, we remain confident in the positive fundamentals of both the housing sector and our business.”

Since the vote, Barratt’s share price has fallen more than 25 per cent – alongside falls among other housebuilders – as economists warn of a slowdown that could end up hitting the housing market.

However, it said its annual pre-tax profit would increase to £680m from £565.5m last year, and that its average selling price had risen by 10.6 per cent to £260,000.

Plans lodged for more homes at Edinburgh’s Bonnington district

Artist’s impression of South Fort Street by EMA Architects

Artist’s impression of South Fort Street by EMA Architects

A detailed planning application has been submitted to build 122 homes at South Fort Street in Edinburgh.

Designed by EMA Architects, the project for Barratt Homes and the Blake Group will see the redevelopment of the site within the Bonnington area which is recognised for major change in the coming years.

The design seeks to provide frontage to the existing streets and a new civic space to the centre of the site.

A new pedestrian / cycle route through the site will allow connections to the existing Nation Cycle Network to the north and fulfil the aspirations of the City of Edinburgh Council’s Bonnington Design Brief.

EMA submitted a separate application for a development of 80 apartments at the West Bowling Green Street end of the Bonnington district back in February, while Miller Homes plans to deliver a development of 214 homes arranged over five blocks on a site presently occupied by warehousing at Bonnington Village.

Barratt Developments reports increase in forward sales amid ‘strong market conditions’

David Thomas

David Thomas

Housebuilder Barratt Developments has attributed “strong market conditions” for putting it on track to deliver the expected improvement in performance for its full financial year.

The FTSE 100 company said forward sales were up almost 10 per cent in the first 19 weeks of the year to £2,844.0 million thanks to “good levels” of demand for new homes.

Around seven weeks from its year-end, the company reported a sales rate of 0.75 net private reservations per active outlet per week, up from 0.74 last year and 0.66 in the first half of the year.

David Thomas, chief executive, said: “I am pleased with the strong performance of the Group in the period, both in terms of delivery for FY16 and in looking further ahead.

“We have approved the investment of over £4.8bn in land for new housing in the last five years and we continue to be committed to helping increase the number of new homes built across Britain.

“We remain on track to deliver the expected improvement in performance for the full year as we maintain our focus on disciplined volume growth, improving our key financial metrics and delivering attractive cash returns.”

Barratt launched 51 new developments in the period and said the opportunities it was seeing to buy further land remained “excellent”, with between 21,000-23,000 plots in line for approval in the current financial year.

Targets for a minimum gross margin of 20 per cent and minimum return on capital employed (ROCE) of 25 per cent by the 2017 financial year were reiterated, along with future cash returns of £678 million over two years to November 2017.

Barratt appoints first female West Scotland director in 20 years

Barratt HomesBarratt Homes West Scotland has appointed the first female director to its board in more than 20 years.

Estelle Sykes has been appointed sales director for West Scotland, bringing with her over 22 years’ property experience from when she began her career at the same company.

Now responsible for 48 full and part-time staff, Ms Sykes, originally from Polmont, said she intends to “outperform competitors in every aspect of the home buying journey”.

Ms Sykes said: “This is it for me. It’s what I have always wanted to do.

“My career in property started with Barratt Homes West Scotland over two decades ago as a sales administrator and when I left the company briefly 12 years ago, I told my then boss that I would be back one day as a sales director and here I am.”

Barratt Developments appeals for more sub-contractors in East Lothian

Barratt HomesBarratt Developments plc is seeking more sub-contractors in East Lothian and the surrounding area to help it meet its ambitious plans for growth.

With household names Barratt and David Wilson Homes, the housebuilder says as the economy continues to pick up and demand for new homes increases, it’s vital that it has the skilled labour in place.

Alison Condie, managing director, Barratt Homes East Scotland, said: “We have ambitious growth plans and are looking to supplement our sub-contractor base in East Lothian. We would like to hear from sole traders right the way through to larger companies who can provide trade services for the domestic building sector.

“They could have worked with us before or are new to the organisation. Equally, they could currently be working in the commercial sector and are looking to move over to house building. The trades we’re looking for include groundworkers, electricians, plumbers, painter and decorators, joiners, roofers, scaffolders, plasterers/dry liners and bricklayers.”

Barratt Homes is also keen to help ambitious trades people who are looking to start their own businesses.

Alison added: “Providing people with business opportunities and the environment in which to thrive, through regular work and mentoring, is one of the huge benefits we offer. Our philosophy is straightforward. We recognise sub-contractors are vital to our business and with Barratt Developments we are looking for genuine partnerships where all parties move forward together.”

To register their interest, sub-contractors are asked to contact

Barratt issues skills shortage warning despite strong first half performance

David Thomas

David Thomas

Barratt has reported a 40 per cent surge in pre-tax profits as its increased home completions by over nine per cent.

Figures for the housebuilder over the last six months revealed it has completed 7,626 homes so far this year, a 9.4 per cent increase from the half year ending December 2014.

However, the firm has said it expects construction costs to rise between three and four per cent this year as skills shortages continue to bite.

Barratt said that while labour shortages have eased over the past year, the issue remains the single biggest cause of build cost inflation.

David Thomas, chief executive of Barratt Developments PLC, said: “Whilst we have seen an increase in the supply of skilled subcontractors over the past year, there remains an industry shortage in the UK, with increases in labour costs remaining the largest driver of overall build cost inflation.”

He added: “We are well placed with the necessary labour to meet our operational and quality requirements. We are also seeking to increase efficiency through the use of timber frame on around six per cent of our plots during FY16 and through the use of alternative off-site manufacturing options, including closed panel roof solutions.”

Revenue for Barratt was up 19 per cent to £1,875.5m and pre-tax profit was up 40 per cent to £295.0m. The operating margin improved from 14.2 per cent last time to 16.1 per cent.

Mr Thomas said: “In line with our strategy, we have stepped up the number of completions in the first half and we did this in a disciplined way, both financially and operationally, without compromising on the quality of the homes we’re building.

“We will continue to grow in a way that delivers for the needs of homebuyers and shareholders alike.”

Barratt Developments unveils plans for over 1,400 new Scottish homes

Doug McLeod

Doug McLeod

Housebuilder Barratt Developments has announced plans to open 14 new sites creating 1420 new homes across Scotland.

The new sites will underpin over 300 extra local jobs, reflecting both a continued recovery in Scotland’s economy and the health of the new build housing market. The homebuilder predominately employs local sub-contractors and tradesmen – so local businesses and people will benefit directly from the jobs.

In 2015, Barratt Developments opened new sites across Scotland underpinning employment opportunities for 4,500 people. In total, the division built around 1,390 homes, 48 per cent of which were constructed on previously developed (brownfield) land.

New developments planned for 2016 includes new sites in Glasgow, Edinburgh & Aberdeen, where homes are being released for sale this month.

The expansion plans follow a strong year for the Group in Scotland despite the withdrawal of Help to Buy. During the course of the year, it sold out on a number of successful developments whilst also launching a number of new developments including the Botanics – the flagship David Wilson Homes development on Queen Margaret Drive in the west end of Glasgow.

The Castlewell development in Ellon

The Castlewell development in Ellon

Yesterday the Barratt Group said it remains confident in its outlook for the full year after it managed to lift completions by 9.4 per cent.

Douglas McLeod, regional director for Barratt Developments in Scotland, said: “We have seen demand for new homes across Scotland remain high and our new sites will provide more choice for buyers looking to purchase in some of Scotland’s most sought after residential locations. It’s also good news for the Scottish economy not just in terms of supporting local construction jobs, but also through the generation of local revenue from new residents spending in local shops and on local services. We know the positive social and economic impacts that our developments can make and we’ll be working closely with all the communities in which we’re building, to make sure we maximise those impacts as we progress.”

The new Barratt sites in Scotland include developments in Edinburgh, Haddington, Glasgow, Linwood, Strathven, Aberdeen and Newmachar.

Barratt increases completions by 9 per cent in first half

David Thomas

David Thomas

Britain’s biggest house builder Barratt remains confident in its outlook for the full year after it managed to lift completions by 9.4 per cent to 7,626 homes in the first half.

The firm said the rise kept it on course to lift overall new homes output to 16,750 units by its year-end in June.

During the first half ended December 31, Barratt managed to increase the private average selling prices by 11.0 per cent to circa £281,000 benefiting from both mix and underlying selling price inflation.

Operating from an average of 386 active sites during the first half in line with last year, Barratt saw a dip in new site openings but launched 63 new developments in the first half compared to 96 last year.

David Thomas, chief executive, said: “We have seen an excellent first half performance, increasing our completions by 9 per cent whilst maintaining our industry leading quality.

“We continue to invest for the future, approving the purchase of £559m of land and investing in training and recruitment programmes to help address the need for additional skilled labour.

He added: “Overall, market conditions are good and we remain confident in our outlook for the full year as we continue to execute our strategies: aimed at ensuring disciplined growth, improving key financial metrics through a focus on efficiency and the continued delivery of attractive cash returns.”

He said that Barratt continued to benefit from a good level of consumer demand across all regions, with mortgage availability and affordability remaining attractive as competition amongst lenders continues.

Fellow housebuilders Persimmon and Taylor Wimpey have recently reported strong growth, boosted by increased house sales at higher prices.