Got net-zero news, project updates, or product launches to share? Barratt Developments profits plunge as completions fall
Barratt Developments has recently released its annual report, revealing a significant 75% decrease in profits and a double-digit decline in home completions. The housebuilder described the past year as “challenging,” highlighting various factors that influenced these results.
With a total of 14,004 home completions in the year ending on 30 June 2024, including joint ventures, there was an 18.6% decrease compared to the previous year’s 17,206 completions. Barratt explained that this figure fell within their anticipated range for the year but pointed out a lower private order book entering FY24 and reduced average outlet numbers during the period.
The company also warned of a potential further decline, projecting between 13,000 and 13,500 homes for the upcoming financial year. This outlook was affected by lower home completions, average selling prices, increased build cost inflation, and fixed cost levels at construction sites.
Adjusted gross profit for Barratt stood at £689.0m, down from £1,130.4m in the previous year. This decline was attributed to the aforementioned factors impacting home completions and sales prices, resulting in a reduced profit before tax of £385.0m compared to £884.3m in FY23.
Douglas McLeod, the regional managing director of Barratt Developments Scotland, expressed gratitude towards the company’s teams, sub-contractors, and suppliers for their dedication in delivering quality homes despite the challenging circumstances. He also mentioned the recent acquisition of Redrow plc and the ongoing collaboration with the Competition and Markets Authority (CMA) for clearance.
McLeod highlighted the sensitivity of demand to mortgage affordability and the impact of reduced land buying activity on the company’s outlet operations. However, he emphasised Barratt’s readiness to meet the strong demand for new homes in Scotland and across the UK, welcoming the Government’s proposed planning system reforms as crucial for increasing housebuilding, driving economic growth, and addressing the shortage of high-quality, sustainable homes.
