Barratt Developments issued an 6 month trading Statement today giving details of its half year trading to End of December 2010 including details of Plot sales and land purchases with them looking to open 110 new sites in the next six months (net gain after closure of finished sites of 60 sites). The agreement of terms on 57 sites equating to a total of 6,078 plots (£318.0m of land purchases) in the last 6 months.
The relevant sections of the Statement are given below but a full copy showing the previous 18 months of land deal totals can be obtained from the link to their site and report given at the bottom of this post.
Barratt Developments PLC
Barratt Developments PLC is today issuing a trading update for the Company and its subsidiary undertakings (“the Group”) for the six months to 31 December 2010 (“the period”) ahead of its interim results announcement.
“The Group has delivered a significant improvement in both average selling prices and operating margin even though sales volumes have been affected by difficult trading conditions. We are on course to make further progress in the second half as we open new higher margin sites and continue to be value and quality focused.”
During the period the Group operated from an average of 352 active sites, down from 368 for the equivalent period in the prior year and 353 in the second half of FY 2009/10. The Group opened 79 active sites and closed 52 active sites, resulting in a net increase in active sites to 366 as at 31 December 2010. In the second half we expect to open a further c. 110 sites, and taking into account site closures, the net increase in active sites as at 30 June 2011 is expected to be c. 60, taking active sites at 30 June 2011 to c. 400.
Net private reservations per active site per week were down in the period at 0.39 (H1 2009/10: 0.49), reflecting weaker customer sentiment. The cancellation rate for the first half was 20.1% (H1 2009/10: 17.8%).
Total completions (Note 1) for the period were 4,832 units (H1 2009/10: 5,053) with private completions of 3,669 (H1 2009/10: 4,381), social housing completions of 1,127 (H1 2009/10: 647) and joint venture completions of 36 (H1 2009/10: 25). Social housing accounted for 23.5% (H1 2009/10: 12.9%) of completions (excluding joint ventures). The social housing mix has increased due to the higher level of new site openings over the past twelve months and the phasing of social delivery upon existing sites…
Given the constraints on mortgage finance, particularly at higher loan to value ratios, shared equity products have remained an important part of our sales mix. In the period, total shared equity product represented 28% of completions (H1 2009/10: 27%). Of these completions, 537 (H1 2009/10: 754) used the Government HomeBuy Direct initiative and the remainder used our own schemes. We have also targeted and achieved an increase in part-exchange, with 13% (H1 2009/10: 10%) of our completions supported by this in the period. We continue to manage our part-exchange stock effectively.
Land and planning
During the first half we have continued to pursue land opportunities where they provided attractive returns.
In the six months to 31 December 2010 we have agreed terms on £318.0m of land purchases equating to a total of 57 sites and 6,078 plots, of which 81% are for houses (Note 4). For the full year 2010/11 we anticipate agreeing terms on around 8,000 plots (mid 2009 to June 2010: 13,359 plots).
The majority of the Group’s landbank already has outline or detailed planning consent. Specifically the Group has detailed planning consent for 100% of budgeted volumes for FY 2010/11. For FY 2011/12, 86% of budgeted volumes have detailed planning consent, with a further 7% having outline planning consent.
The Group’s owned land bank totalled around 50,800 plots as at 31 December 2010 (2009: 50,990). This equates to approximately 4.5 years supply based on FY 2009/10 completion volumes.
Stock and work in progress
Stock and work in progress have been tightly controlled throughout the period. Unreserved stock units as at 31 December 2010 totalled 837 (2009: 691), 2.3 units per active site (2009: 1.9 units).
A full copy of the statement from Barratts can be obtained from their website http://www.barrattdevelopments.co.uk/barratt/en/home or the following link Statement Report
Andrew Fella at Onyx Construction Consultants is pleased to have counted Barratt as one of his first Clients when he first went freelance many years ago helping them set up their new offices in the Eastern Region at Brentwood before they moved to new premises at Chelmsford a couple of years later having out grown the old offices. Its great to see some of the guys are still there and getting the job done.
If you are a house builder and need assistance with your commercial requirements or a subcontractor looking for an introduction to major house builders such as Barratts then contact Andrew Fella at Onyx Construction Consultants Ltd