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 Â£490m, and we have maximised on the buoyant housing market that has existed since then, further increasing our forward sales to over Â£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 Â£77.6m against Â£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 Â£82.6m against Â£68.5m, an increase of 21%. * Group turnover rose to Â£753m, against Â£629m, an increase of 20% and the average selling price rose to Â£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 Â£10.8m (2% gearing) against Â£66.6m (12% gearing), notwithstanding an increased investment in land and work in progress of Â£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 Â£60,000 to Â£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 Â£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 Â£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 Â£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. ------------------------------------------------------------------------------ 1. GROUP PROFIT AND LOSS ACCOUNT Half year ended Half Year ended Year ended 31st December 31st December 30th June 2001 2000 2001 Â£m Â£m Â£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) ------------------------------------------------------------------------------ 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 ------------------------------------------------------------------------------ PROFIT BEFORE INTEREST AND TAXATION 82.6 69.4 190.8 NET INTEREST PAYABLE (5.0) (6.3) (12.4) ------------------------------------------------------------------------------ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 77.6 63.1 178.4 TAXATION (22.9) (18.6) (51.7) ------------------------------------------------------------------------------ PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 54.7 44.5 126.7 DIVIDENDS (10.4) (9.6) (30.2) ------------------------------------------------------------------------------ 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. ------------------------------------------------------------------------------ 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 Â£m Â£m Â£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 ------------------------------------------------------------------------------ Total gains and losses recognised in period 53.9 45.0 128.6 ______________________________________________________________________________ ------------------------------------------------------------------------------ 3. GROUP BALANCE SHEET Half year ended Half Year ended Year ended 31st December 31st December 30th June 2001 2000 2001 Â£m Â£m Â£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) - ------------------------------------------------------------------------------ - 3.6 - Other investments : interest in own shares 16.6 10.9 11.7 ------------------------------------------------------------------------------ 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 ------------------------------------------------------------------------------ 1,370.5 1,141.8 1,298.1 CURRENT LIABILITIES Creditors due within one year (627.8) (507.3) (596.4) ------------------------------------------------------------------------------ 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) ------------------------------------------------------------------------------ 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 ------------------------------------------------------------------------------ EQUITY SHAREHOLDERS' FUNDS 676.4 565.3 631.1 ______________________________________________________________________________ NET ASSETS PER SHARE 287p 242p 269p ______________________________________________________________________________ GEARING 2% 12% - ______________________________________________________________________________ ------------------------------------------------------------------------------ 4. GROUP CASH FLOW STATEMENT Half year ended Half Year ended Year ended 31st December 31st December 30th June 2001 2000 2001 Â£m Â£m Â£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) ------------------------------------------------------------------------------ (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) ------------------------------------------------------------------------------ Cash (outflow)/inflow before financing (58.7) (62.0) 50.0 Financing 2.3 31.6 6.4 ------------------------------------------------------------------------------ (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) ------------------------------------------------------------------------------ Change in net (debt)/funds resulting from cashflows (56.8) (62.0) 52.8 Exchange movements 1.1 0.7 (2.6) ------------------------------------------------------------------------------ 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) ------------------------------------------------------------------------------ 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. ------------------------------------------------------------------------------ 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 The company news service from the London Stock Exchange

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