Covid-19 "significantly" impacts Barratt's completions

Property Reporter
9th July 2020
construction 7

Housebuilder, Barratt, has reported that coronavirus has significantly reduced Barratt’s its volumes this year, with completions crashing almost 30%.

The figures were revealed in an update on its year ending June 30 2020 ahead of publishing its results on September 2. According to the firm, it achieved 12,604 completion volumes against 17,856 the previous year.

At the same time, Barratt has seen “high customer interest levels” since reopening its sales centres. During the last six weeks, its net private reservations per active outlet per average week have been 0.63 compared to 2019’s 0.69.

Its sales rate for the full year was 0.60 net private reservations per active outlet per week (2019: 0.70).

Pricing was “resilient” throughout the year, with the private average selling price of homes slightly down at £311,000 against 2019’s £312,000.

During the period, the business operated from an average of 366 (2019: 379) active outlets.

Its “strong” forward order book stood at a value of £3,249.7 million as of June 30 2020 (June 30 2019: £2,604.1 million), equating to 14,326 homes against last year’s 11,419 homes.

Barratt also said it faced future costs of around £70 million to remediate several buildings, including its Citiscape scheme in Croydon, which, following the removal of ACM cladding (aluminium composite material) after the Grenfell tragedy, was revealed to have “significant” structural issues with its reinforced concrete frame (RCF). Seven of its other developments featuring RCF require remediation “to address smaller-scale problems”. Barratt added that most of the buildings it reviewed were built more than ten years ago.

David Thomas, Barratt’s, CEO, said: “Prior to the Covid-19 pandemic, the group was delivering a strong year of progress on both volume and margin. The pandemic has caused significant disruption, but our highly skilled and experienced team have shown incredible resilience, flexibility and commitment both through the peak of the crisis and in the careful reopening of our sites.

“Now, with our construction sites operational across the UK, we begin the new financial year with cautious optimism supported by our strong forward order book and our well-capitalised balance sheet."

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