17th Nov 2005 07:01
Barratt Developments PLC17 November 2005 Thursday 17 November 2005 Barratt Developments PLC AGM Statement Barratt Developments PLC will be holding its Annual General Meeting at 2.30pmtoday. At the meeting Charles Toner, Group Chairman, will make the followingstatement:- Once again, I am pleased to have the opportunity to comment on our results forthe year ended 30 June 2005 and to update you on current trading conditions andon our prospects for the current financial year. The Group faced challenging market conditions throughout the last financial yearbut, nevertheless, produced record results and our 13th consecutive year oforganic growth. We completed 14,351 homes throughout Britain, including our300,000th home since the company was founded in 1958. Over 11,700 (82%) of thesehomes were built on brownfield sites and for the third year this was more intotal and more on brownfield sites than any other housebuilder, firmlymaintaining our position as Britain's leading urban regenerator. We alsoreinforced our leading position in the provision of social housing. All of thisenabled us to increase UK housebuild turnover by 6% to £2.472 billion which,together with an improvement in UK housebuild margin, to 16%, helped raisepre-tax profit by 11% to £406.6m and also earnings per share by 11%. We alsostrengthened our financial position with cash in hand at the year-end of £276.9million compared to £189.7 million cash in hand last year. The latter, ofcourse, was aided by the £85m net proceeds from the sale of our small SouthernCalifornia operation. Return on Capital at 31% remains one of the highest in theindustry. Our wide geographic spread, diverse product range covering all market sectors,and affordable average selling price, helped generate healthy forward sales of£774m which provided another good start to the new financial year. We remainedprudent in the land market throughout the year but, nonetheless, our landacquisition and planning skills enabled us to acquire over 19,000 plots, 33%more than we used. This increased our total land bank, including plots agreedsubject to contract, to over 61,000 plots, equal to 4.25 years supply. Wesecured planning approvals for 16,400 new homes, 6% more than last year, andhave all the necessary planning approvals for this year's production. This willincrease outlets and help mitigate the effects of a more moderate market. We have unrivalled experience in brownfield development and social housingpartnerships. We remain, therefore, very well placed to contribute to, andbenefit from, the Government's ongoing emphasis on urban regeneration and theincreased priority for social housing. Recently, English Partnerships, thenational regeneration agency, appointed Barratt in consortium with others, todeliver one of England's largest new communities in Telford. Barratt'scontribution will exceed 1,100 new homes, with construction starting nextSummer. We have also just been selected, with our partner Artisan, as preferreddeveloper for in excess of 1,000 new homes under the East Central Rochdaleregeneration scheme. These follow our recent selection to build 2,000 homes atWest Hendon in partnership with the Metropolitan Housing Trust and the LondonBorough of Barnet. We are also pleased to confirm that in the past two weeks we have been selected to develop two key sites in the Government's Design for Manufacture competition. These will provide over 300 new homes in Leeds and Northampton, mostly using modern methods of construction. We have further developed our Corporate Responsibility Strategy across all areasof the business, improving our Insight Investments/WWF sustainability ratingdramatically from 31% to 69% and achieving the international EnvironmentalManagement standard in six divisions, with a further eight targeted in thisyear. The continued focus of senior management on Health and Safety has furtherimproved standards across the Group, enabling me to report that, for the thirdyear in a row, our Health and Safety performance was ahead of the NHBC nationalhousebuilder average. We will, however, continue to identify areas for furtherimprovement. Likewise, improving customer care and product quality is important to us andgood progress has been made. In August we launched our new Customer Chartersetting out the standards of quality and service we must provide to ourcustomers. We are also developing a Personal Code of Practice for staff,suppliers and sub-contractors to support the Charter. Our construction teams produced an excellent performance, winning 51 NHBCquality awards, a new record. The Group also won more Greenleaf environmentalawards than any other housebuilder for the fourth year running and, in theprestigious 'Building' awards, we were voted 'Major Housebuilder of the Year'.The Group also did well in the Daily Express 'British Housebuilder' awards, withKingsOak securing 'Best National Builder 2005'. This good all round performance and robust results reflect the continued successof our organic growth strategy and the fundamental strengths of our Company. I have two Group Board changes to announce. Firstly, I would like to take this opportunity to thank Peter Ashworth whoretires from the Board at the close of this meeting. Peter has been aNon-Executive Director since 1997 and my Board colleagues join me in thankinghim for his contribution to the Group during a period of enormous progress. Wewish him the very best for the future. I would also publicly welcome Bill Shannon who joined the Board as aNon-Executive Director in September. Bill had a long career with Whitbread PLC,serving as an Executive Director for ten years until 2004. He also currentlyserves as Non-Executive Director of Aegon UK PLC and Matalan and brings with hima wealth of experience in the business sector. New Structure for Growth Our organic growth strategy has been successful for thirteen consecutive years.However, to ensure that Barratt remains at the forefront of the sector the Boardis restructuring the executive team to deliver its strategy for future growth.With effect from January 2006, a streamlined executive structure will beintroduced with three of our Group Board executive directors, Steven Boyes,Clive Fenton and Geoff Hester, promoted to more strategic executive roles. Inthis capacity they will report to the Group Board as the respective heads of ourextended and redefined Barratt North and Barratt South operating areas and ofour expanding KingsOak operation. As a result, at regional executive level threeof our highest calibre divisional managing directors are to be promoted toRegional Chairmen. Harold Walker will continue to serve as Deputy Chief Executive until hisretirement on 30 June 2006. Paul Gieron will stand down from his Group Boardrole in January 2006 to become Regional Chairman of the Barratt West Region.This new structure will preserve the current emphasis on operational performancewhilst at the same time enabling the Executive Directors on the Group Board tofocus on the delivery of our longer-term business objectives. This new streamlined executive structure will drive the business forward and thepromotion of some of our most successful and youngest divisional managingdirectors will assist this process. It also provides vital career developmentopportunities for the next generation of executive management. Outlook The short term economic outlook remains unclear and it is too early to assessthe market for the rest of our financial year. We have made further salesprogress in this new financial year and forward sales now stand at £900m which,together with completions to date, secures over 60% of our full yearrequirement. We are operating on the assumption that the market will remainchallenging but are targeting to maintain volumes and are currently achievingsales levels sufficient for us to secure our objectives. However, should themarket improve, we have the land, planning and capacity to respond and increasevolume. The underlying fundamentals of the housing market remain sound, furthersupported by the serious delays within the planning system. In the medium andlonger term there will be many growth opportunities for us and our long termgrowth strategy remains unchanged. This strategy will, naturally, be adapted tomarket conditions but we are well placed to continue our progress with goodforward sales, a high quality land bank, full geographic coverage and a wideproduct range. Our financial position is strong and this, together with ourproven marketing skills, increasing outlets, our urban regeneration and socialhousing expertise, ensures we are well positioned for the future. Charles TonerChairman For further information please contact: Chris Lynch/ Terry GarrettWeber Shandwick Square Mile 020 7067 0700 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Barratt Developments