Barratt Developments has posted solid annual results but warned of a challenging year ahead, with a significant fall in new home completions.
Total completions were down by 3.9% for the year, at 17,206, and revenue was up 1% to £5.32bn.
Adjusted pretax profit was down 16.2% to £884m. On a statutory basis, profit before tax was up 9.8% to £705m.
Chief executive David Thomas said: “We have delivered a strong operational performance in a challenging operating environment. Customers continue to face cost of living and mortgage affordability challenges, and new developments are increasingly constrained by an ineffective planning system.”
Barratt’s forward sales position as at 27 August was 49%, against 62% for the same period last year.
Private forward sales amounted to £1.53bn, down 37% on last year’s £2.42bn, with 4,440 homes sold versus 6,467. Total forward sales were down 36% to 9,608, worth £2.44bn, from 14,058 worth £3.8bn.
Average reservations per outlet were 0.42, down from last year’s 0.6.
Thomas added: “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.”
Barratt expects the total number of homes built in 2024 to fall by a quarter, with Barratt targeting home completions of between 13,250 and 14,250 for 2024.
Newly appointed chair Caroline Silver said: “We recognise that there are significant macro-economic headwinds… but our operating disciplines, forward order book and strong financial position provide us with resilience and flexibility to adjust to changes in the operating environment in the year ahead, and as the market evolves thereafter.”
Barratt said its focus for 2024 would be to drive revenue through the targeted use of incentives, along with sales to the private rental and social housing sectors.
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