IN A TRADING UPDATE for 1 January 2023 – 23 April 2023, Barratt Developments PLC has declared that it is now “fully forward sold” for its financial year to 30 June 2023.

David Thomas, Chief Executive, said: “In February we reported early signs of recovery in our reservation rates following the exceptionally challenging trading conditions experienced at the end of 2022.

“Whilst the economic backdrop remains difficult, we are pleased that more positive sales rates have been maintained through this period and we are now fully forward sold for FY23. As a result, we expect to deliver full year adjusted profit before tax in line with current market expectations.”

Forward Sales Drop

The value of Barratts total forward sales was £2,956.5m (compared to those of 24 April in 2022 of £4,505.5m), a decline of 34.4%.

The company reports that the weekly average reservation rate per outlet is 0.65, compared to 2022 when it was 0.93. Likewise, total forward sales at 23 April 2023 were £2,956.5m, compared to last year’s £4,505.5m.

All this means that the company has slowed its rate of housebuilding to 303 equivalent homes per average week, down on the 359 being built at the same time last year.

The business reports its balance sheet shows year-end net cash is expected to be around £0.9bn. Meanwhile, the trading outlook for the full year remains on track to deliver between 16,500 and 17,000 homes.

The housebuilder expects total build cost inflation (including infrastructure, materials and labour) of around 9% to 10% for FY23. Whilst the outlook for total build cost inflation in FY24 remains uncertain, the firm says it currently anticipates a slowing to around 5% for FY24.

Barratts has seen a reduction of 1,125 plots to 3,636 so far this year on an unchanged number of 27 sites (with 1,415 fewer plots across 6 sites in the financial year).

Building Safety

Barratts signed the Government’s Self-Remediation Terms to put right the buildings with dangerous cladding and other fire risks that it built. It says that while the industry is in discussions with the Scottish Government about a Scottish Safer Buildings Accord and Single Building Assessments, the

At 23 April 2023 the Group had c. £600m of net cash and a credit facility of £700m. Year-end net cash is expected to be around £0.9bn.

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