Interim Results
Barratt Developments PLC
27 March 2002
BARRATT DEVELOPMENTS PLC
INTERIM RESULTS TO 31ST DECEMBER 2001
CHAIRMAN'S STATEMENT
The Group has again produced excellent results, further extending
our unrivalled track record of increasing earnings per share by over
20% per annum. We again out-performed the market and significantly
increased market share with completions up 10% whilst industry
completions in the period remained static. We started 2002 with
record forward sales, up 26% to £490m, and we have maximised on the
buoyant housing market that has existed since then, further
increasing our forward sales to over £580m. We have great confidence
that we will deliver another highly-successful full financial year.
Group results for the half year ended 31st December 2001, with
comparisons against the six months ended 31st December 2000, are as
follows:-
* Pre-tax profit increased to a record £77.6m against £63.1m, an
increase of 23%.
* Basic earnings per share amounted to 23.8p against 19.4p, an
increase of 23%.
* The interim dividend is 4.49p, an increase of 8%.
* Operating profits amounted to £82.6m against £68.5m, an
increase of 21%.
* Group turnover rose to £753m, against £629m, an increase of 20%
and the average selling price rose to £132,200, an increase of 10%.
* In the UK we achieved 5,498 completions, an increase of 10%
against static industry completions.
* UK land stocks increased by 2,027 plots over and above usage to
37,127 plots.
* Borrowings were £10.8m (2% gearing) against £66.6m (12%
gearing), notwithstanding an increased investment in land and work
in progress of £113.4m.
* Despite this major investment in our future profit growth, our
return on capital of 31% maintains our position as an industry
leader.
These results demonstrate the benefits of our policy of controlled
organic growth. From our expanded network of 32 housing divisions we
have again produced consistent profit growth and improved all of our
key financial statistics.
The Group benefits enormously from our total geographical spread of
outlets and from selling to all market sectors at prices ranging
from £60,000 to £3.0m. All of our regional markets are buoyant and
the demand for home ownership continues to be strong, underpinned
by high employment levels, steady earnings growth and increasing
disposable income. Modest movement in interest rates between 4% and
7%, as has been the case over the last nine years, coupled with a
very competitive mortgage market, is helping to sustain the market.
Throughout the period all of our regions traded successfully and we
increased sales reservations by 12% year on year, further
increasing our advance sales at 31st December to record levels.
Our ability to secure future land stocks is evident in our results
and reflects our proven skills and perseverance in dealing with a
very difficult planning regime. Over the period we achieved
planning approvals covering 130 sites, amounting to over 8,000
plots and increased selling outlets by 10% to 375.
We have secured a substantial increase in our land stocks,
acquiring 7,525 plots, 37% more than we used, thereby increasing
our total land stocks to 37,127 plots, fully meeting the
requirements of our planned growth. The Group's extensive
experience and skills in developing brownfield and multi-use sites
assist us enormously in maximising fully on the Government's
emphasis on urban regeneration. With over 70% of our developments
on land that has had a former use, we comfortably exceed Government
targets and our diverse product range ensures that we meet both
planning and customer requirements.
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 31%.
Our USA operation continues to make good progress and produced
another excellent result for the period, increasing profits by 15%
to £2.3m from 140 completions. Last year we made a timely change to
our land acquisition product mix, moving to a lower average selling
price. This is now benefiting our sales performance, maintaining
healthy turnover levels from increased sales reservations, up 14%
to 179 at an average selling price of £239,000. The Southern
California housing market remains buoyant with strong demand in our
regional markets. We continue to secure development sites in
quality locations and fully anticipate a further profit improvement
in the full year in line with our expectations.
Looking ahead, we anticipate improvements in the general economy
and the housing market should remain strong through 2002. Modest
movement in interest rates around 5% will add to this stability. We
have a divisional structure in place with strong, highly skilled
management teams that will facilitate our planned growth. We
benefit from a full national geographical spread and sell to all
sectors of the market. We have record selling outlets and we have
further strengthened our forward sales which now stand at £580m, up
29% year on year. We have one of the highest sales rates per site
and stock turn in the industry, which will ensure we continue to
produce a full return on investment. We are extremely well
positioned to produce further excellent results.
Frank Eaton
Chairman
27th March 2002
The following are the unaudited results of the Group for the half year
ended 31st December 2001.
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1. GROUP PROFIT AND LOSS ACCOUNT
Half year ended Half Year ended Year ended
31st December 31st December 30th June
2001 2000 2001
£m £m £m
------------------------------------------------------------------------------
TURNOVER: Group and share of
joint venture 752.8 633.3 1,515.0
LESS: Share of joint venture
turnover - (4.5) (5.9)
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GROUP TURNOVER 752.8 628.8 1,509.1
______________________________________________________________________________
OPERATING PROFIT 82.6 68.5 186.2
SHARE OF OPERATING PROFITS OF
JOINT VENTURE - 0.9 0.9
PROFIT ON DISPOSAL OF INTEREST IN
JOINT VENTURE - - 3.7
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PROFIT BEFORE INTEREST AND
TAXATION 82.6 69.4 190.8
NET INTEREST PAYABLE (5.0) (6.3) (12.4)
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PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 77.6 63.1 178.4
TAXATION (22.9) (18.6) (51.7)
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PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 54.7 44.5 126.7
DIVIDENDS (10.4) (9.6) (30.2)
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RETAINED PROFIT 44.3 34.9 96.5
______________________________________________________________________________
EARNINGS PER SHARE - BASIC 23.8p 19.4p 55.1p
______________________________________________________________________________
EARNINGS PER SHARE - DILUTED 23.5p 19.3p 54.7p
______________________________________________________________________________
DIVIDEND PER SHARE 4.49p 4.16p 13.07p
______________________________________________________________________________
DIVIDEND COVER 5.3x 4.7x 4.2x
______________________________________________________________________________
All activities of the group are continuing.
The interim dividend of 4.49p per share (2000 4.16p per share) will
be paid on 24th May 2002 to shareholders on the register at the
close of business on 12th April 2002.
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2. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Half year ended Half Year ended Year ended
31st December 31st December 30th June
2001 2000 2001
£m £m £m
------------------------------------------------------------------------------
Profit on ordinary activities
after taxation 54.7 44.5 126.7
Currency translation differences
on foreign currency net
investments (0.8) 0.5 1.9
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Total gains and losses recognised
in period 53.9 45.0 128.6
______________________________________________________________________________
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3. GROUP BALANCE SHEET
Half year ended Half Year ended Year ended
31st December 31st December 30th June
2001 2000 2001
£m £m £m
------------------------------------------------------------------------------
FIXED ASSETS
Tangible assets 1.8 2.1 1.9
Investment in joint venture:
Share of gross assets - 9.5 -
Share of gross liabilities - (5.9) -
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- 3.6 -
Other investments : interest in
own shares 16.6 10.9 11.7
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18.4 16.6 13.6
______________________________________________________________________________
CURRENT ASSETS
Properties held for sale 5.7 4.5 4.9
Stocks 1,307.7 1,084.9 1,177.6
Debtors due within one year 26.3 20.7 28.3
Debtors due after more than one
year 0.7 1.1 0.7
Bank and cash 30.1 30.6 86.6
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1,370.5 1,141.8 1,298.1
CURRENT LIABILITIES
Creditors due within one year (627.8) (507.3) (596.4)
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NET CURRENT ASSETS 742.7 634.5 701.7
______________________________________________________________________________
TOTAL ASSETS LESS CURRENT
LIABILITIES 761.1 651.1 715.3
CREDITORS DUE AFTER MORE THAN
ONE YEAR (84.7) (85.8) (84.2)
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NET ASSETS 676.4 565.3 631.1
______________________________________________________________________________
CAPITAL AND RESERVES
Share capital 23.6 23.4 23.5
Share premium 181.5 178.3 179.8
Profit retained 471.3 363.6 427.8
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EQUITY SHAREHOLDERS' FUNDS 676.4 565.3 631.1
______________________________________________________________________________
NET ASSETS PER SHARE 287p 242p 269p
______________________________________________________________________________
GEARING 2% 12% -
______________________________________________________________________________
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4. GROUP CASH FLOW STATEMENT
Half year ended Half Year ended Year ended
31st December 31st December 30th June
2001 2000 2001
£m £m £m
------------------------------------------------------------------------------
Net cash (outflow)/inflow from
operating activities
Operating profit 82.6 68.5 186.2
Increase in stocks (132.9) (102.9) (190.4)
Increase in debtors (1.8) (2.1) (6.4)
Increase in creditors 40.3 15.3 143.4
Other non cash movements (0.5) - (0.5)
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(12.3) (21.2) 132.3
Returns on investments and
servicing of finance (5.5) (8.9) (10.0)
Taxation (19.1) (13.1) (48.2)
Capital expenditure and financial
investment (5.1) (0.4) (0.9)
Acquisitions and disposals 3.7 - 4.9
Equity dividends paid (20.4) (18.4) (28.0)
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Cash (outflow)/inflow before
financing (58.7) (62.0) 50.0
Financing 2.3 31.6 6.4
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(Decrease)/increase in cash (56.4) (30.4) 56.4
______________________________________________________________________________
Reconciliation of net cash flow to
movement in net debt
(Decrease)/increase in cash (56.4) (30.4) 56.4
Cash flow from increase in debt (0.4) (31.6) (3.6)
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Change in net (debt)/funds
resulting from cashflows (56.8) (62.0) 52.8
Exchange movements 1.1 0.7 (2.6)
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Movement in net (debt)/funds
in the period (55.7) (61.3) 50.2
Net funds/(debt) at 1st July 44.9 (5.3) (5.3)
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Net (debt)/funds at 31st
December/30th June (10.8) (66.6) 44.9
______________________________________________________________________________
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 2001 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 2001 as
updated for the introduction of FRS19 'Deferred Taxation'. The
introduction of the standard has had no significant impact on the
reported results. These policies are set out in the company's Annual
Report and Accounts.
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For further information:
Mr C.A. Dearlove OR Ms. Chris Lynch/Mr Terry Garrett
Group Finance Director Weber Shandwick Square Mile
Barratt Developments PLC Telephone: 020 7950 2800
Telephone: 0191 286 6811
* * * * * * * * * * * *
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.
This information is provided by RNS
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