Barratt parts company with finance chief ‘by mutual agreement’

Neil Cooper

Neil Cooper

Barratt Developments chief financial officer Neil Cooper suddenly left the company yesterday in a move said to be “by mutual agreement”.

Neil Cooper, who had joined Barratt in November 2015 from bookmaker William Hill, leaves the housebuilder a week after it reported a 5.8 per cent drop in home completions.

He was previously group finance director of Bovis Homes from 2007 until 2010.

Chief executive officer David Thomas, who previously held the role of Barratt CFO for six years, will reassume temporary responsibility for the finance function.

Barratt’s board is launching a search for a new CFO and a further announcement will be made in due course.

Neil Cooper said: “I wish David and the team all the best for the future and would like to thank the Board for the opportunity to work with Barratt over the past year.”

Chairman John Allan added: “On behalf of the board, I would like to thank Neil for his contribution during his time with us and we wish him well for the future.”

Barratt buoyed by booming regions despite fall in completions

David Thomas

David Thomas

Housebuilder Barratt Developments said that market conditions remained healthy and demand strong, despite a 5.8 per cent drop in home completions.

In a trading update for the six months to 31st December 2016, Barratt said home completions rose to a nine-year high, though overall figures were offset by a 56 per cent drop in completions in London during the period.

Completions in London, including joint ventures, fell to 367 in the first half, down from 842 in the same period a year earlier, “primarily driven by the planned build programme between the first and second half impacting wholly owned site product availability”.

Total home completions for the period, including joint ventures, totalled 7,180, down from 7,626 in the first half of 2015.

Total average selling price on completions rose 3.9 per cent to £264,000, and on private home sales the average price rose 5.3 per cent to £296,000.

Barratt said average price increases were down to the sales mix “as well as some underlying house price inflation”.

Chief executive David Thomas said: “Consumer demand is strong benefiting from good mortgage availability and ongoing government support.”

Profit before tax for the half-year is expected to be up around 7 per cent to approximately £315 million, (2015: £295.0m) while total forward sales (including joint ventures) are up 16 per cent at £2,336.6m and wholly-owned forward sales are up 35 per cent to £2,167.5m.

Mr Thomas added: “This has been another good half year for the group. Consumer demand is strong benefiting from good mortgage availability and ongoing government support. Our healthy forward order book and this strong demand leaves us on track to deliver on our volume guidance for the full year.”

Barratt Developments sold 17,319 homes in the year to June 2016, making it the biggest house-builder by volume in Britain.

Barratt Scotland delivers £319m boost to UK economy

Douglas McLeod

Douglas McLeod

Housebuilder Barratt Developments has delivered a £319 million boost to the UK economy over the past year, according to a new report from the firm.

During the 12 months ending 30th June 2016, the group, which includes both Barratt Homes and David Wilson Homes, has built over 1,550 new homes in Scotland and supported around 5,900 jobs. As part of its housebuilding activity, Barratt has made £12.7m in local contributions to help build new local facilities and infrastructure in communities surrounding its new developments.

The achievements are highlighted in Barratt Scotland’s latest Social Economic Footprint report which measures the housebuilder’s social and economic contribution to Scotland over the past year. Included within the report are key measures relating to the company’s support for the housebuilding supply chain, local communities, environment, public services and employment.

Highlights include:

  • Supported 5,900 jobs though Barratt, David Wilson, its contractors and suppliers
  • Directly employed 59 new graduates, trainees and apprentices
  • Supported 1,010 subcontractor companies and 930 supplier companies
  • Generated £12.7m in local contributions including affordable housing sales
  • Created 525 school places
  • Planted or retained 26,300 trees or shrubs on its developments
  • Recycled 97 per cent of construction waste
  • Created 70.8ha of greenspace through public open space and private gardens
  • Generated £39.4m in tax to support public services.
  • Contributed £318.9m of Gross Value Added (GVA) to UK economic output.

Douglas McLeod, regional director for Scotland at Barratt Developments, said: “The past year has been extremely busy for Barratt Developments in Scotland, and our socio-economic footprint reflects that level of activity. By building over 1,550 new homes, we have helped more people onto the property ladder, supported employment and skills development and boosted Scotland’s supply chain networks.

“However, it’s not just about building homes, it’s also about building communities and behaving as good corporate citizens. Through our local contributions, we have been able to provide more funds for local services such as education and leisure facilities.

“As responsible stewards of our environment, we have also demonstrated a commitment to sustainable housebuilding practices including site recycling, tree planting and waste reduction measures.”

The report on Barratt’s Socio-Economic Footprint in 2016 was carried out by planning consultant Nathaniel Lichfield & Partners.

Trading continues well for Barratt Developments with ‘ongoing strong demand’

David Thomas

David Thomas

Housebuilder Barratt Developments said demand for new homes remained “strong” as sales rose 4.3 per cent since July.

Issuing a trading update today, the company said the demand was driven by a shortage of homes, good mortgage availability and supportive government policy in the shape of the Help to Buy scheme.

However the firm added that it was wary of the political uncertainty that could potentially be triggered once Britain formally begins the process of leaving the European Union.

Chief executive David Thomas said: “This has been another good trading period for the Group. Consumer demand is strong supported by good mortgage availability. “We are mindful of the potential for economic uncertainty created by the outcome of the EU Referendum. However, market fundamentals are robust, and we remain a housebuilder of choice.

“Barratt’s commitment to quality design, build and excellence in market-leading customer service has supported our strong sales performance. Our focus remains on maintaining good operational and financial performance, and delivering attractive shareholder returns.”

The housebuilder has launched 69 new developments since July, compared to 51 in the same period last year. The company now has 385 sites, slightly up on last year’s 380.

Barratt said the average rate of reservations per week was in line with last year, at 265.

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.”