Interim Results

Barratt Developments PLC 28 March 2001 BARRATT DEVELOPMENTS PLC INTERIM RESULTS TO 31ST DECEMBER 2000 CHAIRMAN'S STATEMENT We have again achieved excellent results, significantly increasing market share and delivering record profits. This performance is consistent with our track record of increasing earnings per share by over 20% per annum and has been achieved notwithstanding a tightening of the UK housing market throughout 2000. Our forward sales are also at record levels and we are confident we will deliver another highly successful financial year. Group results for the half year ended 31st December 2000, with comparisons against the six months ended 31st December 1999, are as follows:- Record pre-tax profit amounted to £63.1m against £50.5m, an increase of 25%. Basic earnings per share amounted to 19.4p against 15.1p, an increase of 28.5%. The interim dividend declared is 4.16p, an increase of 8%. Operating profits amounted to £69.4m against £53.4m, an increase of 30%. Group turnover rose to £629m against £516m, an increase of 22% and the average selling price rose to £120,000, an increase of 7%. In the UK we achieved 4,990 completions, an increase of 7% against an industry decrease of 3% - the only major housebuilder to significantly increase market share. UK land stocks increased by 1,600 plots over and above usage to 33,300 plots. Borrowings were £66.6m (12% gearing) against £38.0m (8% gearing), notwithstanding an increased investment in UK land and work in progress of £136.6m. Return on capital of 30%, maintaining our position as an industry leader. A further period of considerable progress, improving all of our key financial statistics. We established another four new housing divisions and further increased total selling outlets to 340. Sales completions were up 7% against an industry decrease of 3%, thereby further increasing our market share and setting us apart from our competitors, being the only major housebuilder to significantly increase volume year on year. Our strategy of ongoing organic growth, which commenced eight years ago, is extremely successful. We have consistently increased our volumes and more than doubled the size of our business, generating strong profit growth and a tenfold increase in earnings per share. The overall UK housing market has stabilised from the overly buoyant levels that existed in 1999 but is still sufficiently robust for us to achieve our objectives. We commenced the second half year in a very strong position, with record forward sales of £390m, up 21%. This, coupled with further strengthening of our margin, sets us firmly on course to maintain our unrivalled record of consistent profit growth over the last eight years. All of our regional market places continue to be good, with the south, where we have majored our emphasis on growth, remaining the strongest. The Group benefits enormously from our total geographic spread of outlets and from selling to all market sectors at prices ranging from £50,000 to £2.9m. We have a proven track record of adapting to varying market conditions, offering purchasers assistance to suit local market needs. During the period demand for our part-exchange service reduced a little, with 21% of our customers taking advantage of this fast and efficient re-sale service and in the period we completed 941 part-exchange re-sales. Demand for home ownership continues to be strong, underpinned by high employment levels, steady earnings growth and increasing disposable income, and affordability is forecast to remain positive. The recent cut in base rate to 5.75% should also help to sustain a strong economy and maintain a robust housing market going forward. Our long experience and skills in developing brownfield and multi-use sites positions us well to deal with the current planning regime and its emphasis on urban redevelopment. Over 70% of our developments are on land that has had a former use - comfortably exceeding Government targets - and our diverse product range ensures that we can meet both planning and customer requirements. While planning delays remain a concern, our unrivalled skills in land buying continue to stand the Group in good stead and we continue to make excellent progress in securing our land requirements in quality locations of proven demand. A total of 6,590 plots were acquired, 32% more than we used, thereby increasing our total land stocks to 33,300, fully meeting requirements for our planned growth. Our investment in land and work in progress is stringently controlled, which helps us to produce one of the highest returns on capital in the industry at 30%. Our USA operation produced another excellent result for the period, increasing profits by 67% to £2.0m. Legal completions increased 20% to 148 and the average selling price increased from £286K to £319K. We operate within a good Californian economy with high levels of employment and strong demand in our regional markets. We continue to secure development sites in quality locations and fully anticipate a further substantial profit improvement in the full year. Looking ahead, the UK housing market is sound and sufficiently strong for us to achieve our objectives. Sales reservations in the six months to 31st December increased 6% year on year and sales since January have continued at this level, again setting us apart from our competitors. We have a highly skilled and experienced management team, which coupled with excellent current forward sales of £450m and a quality land bank, means we are extremely well placed to continue our sound progress. We are confident we will achieve another highly successful financial year. Frank Eaton Chairman 28th March 2001 The following are the unaudited results of the Group for the half year ended 31st December 2000 1 GROUP PROFIT & LOSS ACCOUNT Half year ended Half year ended Year ended 31st December 31st December 30th June 2000 1999 2000 £m £m £m TURNOVER: Group and share of joint venture 633.3 519.3 1,259.5 LESS: Share of joint venture turnover (4.5) (3.6) (9.5) --------------------------------------------------- GROUP TURNOVER 628.8 515.7 1,250.0 ___________________________________________________ OPERATING PROFIT 68.5 52.6 150.8 SHARE OF OPERATING PROFITS OF JOINT VENTURE 0.9 0.8 1.2 --------------------------------------------------- PROFIT BEFORE INTEREST AND TAXATION 69.4 53.4 152.0 NET INTEREST PAYABLE (6.3) (2.9) (8.1) --------------------------------------------------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 63.1 50.5 143.9 TAXATION (18.6) (15.4) (43.7) --------------------------------------------------- PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 44.5 35.1 100.2 DIVIDENDS (9.6) (8.9) (27.3) --------------------------------------------------- RETAINED PROFIT 34.9 26.2 72.9 ___________________________________________________ pence pence pence EARNINGS PER SHARE - BASIC 19.4 15.1 43.3 ___________________________________________________ EARNINGS PER SHARE - DILUTED 19.3 14.9 43.1 ___________________________________________________ DIVIDEND PER SHARE 4.16 3.85 11.88 ___________________________________________________ DIVIDEND COVER 4.7x 3.9x 3.6x ___________________________________________________ The interim dividend of 4.16p per share (1999 3.85p per share) will be paid on 25th May 2001 to shareholders on the register at the close of business on 6th April 2001 2 GROUP BALANCE SHEET Half year ended Half year ended Year ended 31st December 31st December 30th June 2000 1999 2000 £m £m £m FIXED ASSETS Tangible assets 2.1 2.5 2.2 Investment in joint venture: Share of gross assets 9.5 8.6 9.6 Share of gross liabilities (5.9) (5.9) (6.6) __________________________________________________ 3.6 2.7 3.0 Other investments: interest in own shares 10.9 8.0 10.7 -------------------------------------------------- 16.6 13.2 15.9 __________________________________________________ CURRENT ASSETS Properties held for sale 4.5 3.9 4.2 Stocks 1,084.9 946.9 981.0 Debtors due within one year 20.7 12.0 17.7 Debtors due after more than one year 1.1 1.0 2.6 Bank and cash 30.6 6.0 46.9 -------------------------------------------------- 1,141.8 969.8 1,052.4 -------------------------------------------------- CURRENT LIABILITIES Creditors due within one year (507.3) (438.3) (476.3) -------------------------------------------------- NET CURRENT ASSETS 634.5 531.5 576.1 __________________________________________________ TOTAL ASSETS LESS CURRENT LIABILITIES 651.1 544.7 592.0 CREDITORS DUE AFTER MORE THAN ONE YEAR (85.8) (65.2) (63.3) -------------------------------------------------- NET ASSETS 565.3 479.5 528.7 __________________________________________________ CAPITAL AND RESERVES Share capital 23.4 23.4 23.4 Share premium 178.3 177.0 177.1 Profit retained 363.6 279.1 328.2 -------------------------------------------------- EQUITY SHAREHOLDERS'FUNDS 565.3 479.5 528.7 __________________________________________________ NET ASSETS PER SHARE (p) 242 205 226 __________________________________________________ GEARING 12% 8% 1% __________________________________________________ 3 GROUP CASH FLOW STATEMENT Half year ended Half year ended Year ended 31st December 31st December 30th June 2000 1999 2000 £m £m £m Net cash (outflow)/inflow from operating activities Operating profit 68.5 52.6 150.8 Increase in stocks (102.9) (130.2) (159.4) (Increase)/decrease in debtors (2.1) 8.0 3.0 Increase in creditors 15.3 28.4 57.7 Other non cash movements - - (0.6) ---------------------------------------------------- (21.2) (41.2) 51.5 Returns on investments and servicing of finance (8.9) (2.9) (6.7) Taxation (13.1) - (42.9) Capital expenditure and financial investment (0.4) (9.4) (11.5) Equity dividends paid (18.4) (16.8) (25.8) ----------------------------------------------------- Cash outflow before financing (62.0) (70.3) (35.4) Financing 31.6 13.1 9.7 ----------------------------------------------------- Decrease in cash (30.4) (57.2) (25.7) _____________________________________________________ Reconciliation of net cash flow to movement in net debt Decrease in cash (30.4) (57.2) (25.7) Cash flow from increase in debt (31.6) (13.1) (9.7) ------------------------------------------------------ Change in net debt resulting from cash flows (62.0) (70.3) (35.4) Exchange movements 0.7 0.6 (1.6) ----------------------------------------------------- Movement in net debt in the period (61.3) (69.7) (37.0) Net (debt)/funds at 1st July (5.3) 31.7 31.7 ------------------------------------------------------ Net debt at 31st December/30th June (66.6) (38.0) (5.3) The financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 1985. The figures for the year to 30th June 2000 are an extract from the full accounts for that year which have been filed with the Registrar of Companies and on which the auditors gave an unqualified opinion. The interim financial information has been prepared on the basis of accounting policies adopted for the year ended 30th June 2000. These policies are set out in the Company's Annual Report and Accounts. _________________________________________________________ For further information: Mr C.A. Dearlove OR Ms Chris Lynch/Mr Terry Garrett Group Finance Director Square Mile Communications Limited Barratt Developments PLC Telephone: 0191 286 6811 Telephone: 0207 601 1000 ****************************** Further copies of the announcement can be obtained from the Company's Registered Office: Barratt Developments PLC, Wingrove House, Ponteland Road, Newcastle upon Tyne, NE5 3DP.

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