Slide 1: HY24 Results Presentation
Wigmore Park New Waltham HY24 Results Presentation Half year ended 31 December 2023 7 February 2024
Slide 2: David Thomas, Chief Executive Officer
Fradley Manor Lichfield David Thomas Chief Executive Officer Barratt Developments PLC Half Year 2024 Results 2
Slide 3: Overview - HY24 performance
Overview - HY24 performance • On-track for FY24 despite continuing HY24 HY23 Change uncertainties Total home completions (inc JVs) 6,171 8,626 28.5% • Reduced volumes, softer pricing and Adjusted PBT £157.1m £521.5m 69.9% ongoing, but moderating, build cost inflation impacted adjusted PBT ROCE 12.8%
Slide 4: Overview – Current trading
Overview – Current trading 2HY24 2HY23 • Private reservation rate of 0.60, including to date to date Change 0.04 relating to multi-unit sales Net private reservation rate (1) 0.60 0.49 22.4% • Continuing benefit from multi-unit sales - of which PRS and RPs 0.04 0.01 n/m anticipated through 2024 Aver
Slide 5: Plan to deliver through FY24 remains on track
Plan to deliver through FY24 remains on track • Focused on: – Driving revenue – Controlling costs – Maintaining land investment discipline – Leading the industry on customer service, build quality and sustainability • We now expect to deliver between 13,500 and 14,000 total completions(1) in FY24 Er
Slide 6: Steven Boyes, Chief Operating Officer
Morton Meadows Bristol Steven Boyes Chief Operating Officer Barratt Developments PLC Half Year 2024 Results 6
Slide 7: Sales performance
Sales performance HY24 HY23 Change Average net private reservations per active outlet per week • Sales rate improved as mortgage rates eased lower from Wholly owned 0.48 0.44 9.1% August 2023, limited seasonal impact - Of which PRS and RPs 0.06 0.05 20.0% • Outlet numbers flattening, reflecting: JV
Slide 8: Private reservation analysis
Private reservation analysis • Continued growth in multi-channel reservations 13% 11% PRS & RPs • Part-exchange proving an important sales tool 10% Part-exchange 17% • Resilient first time buyer reservations, despite 14% Cash buyers & investors mortgage qualification and affordability challenges 8%
Slide 9: Completions and pricing performance
Completions and pricing performance HY24 HY23 Change Home completions (units) • Completion volumes reflect: Private 4,008 6,269 36.1% – Change in market conditions seen in FY23 PRS 481 22 n/m – Reduced affordable due to fewer new sites given RPs 291 258 12.8% land buying position Affordable 1,201 1,
Slide 10: Construction output, customer service and build quality
Construction output, customer service and build quality • Construction output aligned with FY24 planned home completions HY24 HY23 Performance metrics • HBF 5 star rating for 14 consecutive years and on track for Average construction output per week 5 star in 2024 (equivalent homes) 251 333 • Slight
Slide 11: Build cost inflation
Build cost inflation Materials • Centralised procurement team continues to manage around 95% of materials • Current materials purchases showing limited year on year inflation • Price reductions seen in some key areas e.g. timber, bricks, plastics and steel • Unchanged pricing agreements from a wide
Slide 12: Land bank
Land bank 31 Dec 31 Dec 2023 2022 • Highly selective approach continued given continuing Land bank plots uncertainty on the outlook With detailed planning consent 43,308 47,641 • 1,619 plots acquired in HY24 (HY23: 4,641) reflecting With outline planning consent and other (1) 11,246 16,431 approach
Slide 13: Mike Scott, Chief Financial Officer
Hawk Rise Ledbury Mike Scott Chief Financial Officer Barratt Developments PLC Half Year 2024 Results 13
Slide 14: Summarised performance
Summarised performance £m (unless otherwise stated) HY24 HY23 Change Revenue 1,850.8 2,783.9 33.5% Adjusted gross profit 295.9 647.9 54.3% Adjusted gross margin % 16.0 23.3 730 bps Gross profit 238.5 630.3 62.2% Gross margin % 12.9 22.6 970 bps Adjusted operating profit 155.2 511.8 69.7% Adjusted op
Slide 15: Adjusted operating margin bridge
Adjusted operating margin bridge (660 bps) 18.4% (540 bps) Volume impact 70 bps (20 bps) 70 bps 80 bps Admin Mix/other expenses 8.4% Completed Net inflation London mix development decrease(1) provision HY23 HY24 (1) Reflects the prior year impact of a previously impaired site at Hounslow, the majori
Slide 16: Administrative expenses and adjusted items
Administrative expenses and adjusted items £m HY24 HY23 • Administrative expenses increase limited to 2.9% in Sundry income (9.3) (7.6) HY24 Employee performance pay 29.6 27.4 Other administrative costs 120.6 117.1 • Guidance for FY24 unchanged at c. £290m to £300m, Administrative expenses per incom
Slide 17: Adjusted items – legacy property costs in HY24
Adjusted items – legacy property costs in HY24 • £61.4m net increase in external wall systems provision: £m External wall systems and Reinforced concrete Legacy properties associated review frames Total – Increase in contingency amounts based on latest At 1 July 2023 535.9 76.4 612.3 information in
Slide 18: Cash flow
Cash flow 257.6 (239.3) £m 5.3 23.6 Utilised in Cash Other Net land cost of sales land spend movements Net cash, interest Other non-cash and tax and working capital Legacy provision Profit from utilisation operations WIP / PX / Net land JV Operating promotion investment cash outflow Other agreements
Slide 19: Balance sheet
Balance sheet £m 31 Dec 2023 30 Jun 2023 Change 31 Dec 2022 Goodwill and intangible assets 1,042.6 1,047.8 (5.2) 1,053.0 Investment in jointly controlled entities 144.3 129.8 14.5 188.0 Gross land bank 2,979.1 3,139.9 (160.8) 3,253.7 Land creditors (367.2) (506.7) 139.5 (622.3) Net land bank 2,611.9
Slide 20: Our land bank and gross margin
Our land bank and gross margin • Gross margin within the current land bank impacted 31 December 2023 owned land bank plots by gross margin(1) by: No. of owned land bank plots Share of owned land bank plots – Pricing movements, given deterioration in trading 20,000 40.0% conditions 35% 18,000 35.0% –
Slide 21: Strength from clear operating framework
Strength from clear operating framework • A strong balance sheet remains important in a As at 31 December 2023 (and 30 June 2023) challenging market 3.9 years owned and 0.6 years controlled Land bank (1) (2023: 3.6 years owned and 0.7 years controlled) • Clear and consistent operating framework Redu
Slide 22: Guidance for FY24
Guidance for FY24 c.13,500 – 14,000 total home completions, including c. 650 JV completions (previously c.13,250 – 14,250 total home completions, including c. 650 JV completions) Completions PRS contribution expected to be c. 750 homes Affordable mix expected to be broadly in line with FY23 Average
Slide 23: David Thomas, Chief Executive Officer
Bertelin Fields Stafford David Thomas Chief Executive Officer Barratt Developments PLC Half Year 2024 Results 23
Slide 24: Market fundamentals
Market fundamentals 5.39% average 2 year fixed rate at 85% LTV (1) Structural under-supply Vast majority want to Ineffective planning Mortgage rates easing of homes remains and own - but mortgage system; land values have and competition for looks set to deteriorate affordability remains a not yet fu
Slide 25: Planning and the UK land market
Planning and the UK land market • Latest 12 month detailed planning consents Savills UK Greenfield Development Land Index(1) (LHS) (100 = 2007 peak) England moving annual planning consents(2) and net new build home additions (RHS) ('000s) were 27.6% down from peak in 2Q 2021 120 360 • Planning clari
Slide 26: Mortgage affordability and mortgage lending
Mortgage affordability and mortgage lending Halifax Mortgage Affordability Index (1) Average 2-year fixed rate mortgage pricing Mortgage costs as a proportion of earnings 75% and 90% LTVs January 2020 - December 2023(2) 60% 7.0% 67 bps Standard 75% LTV mortgage product (3) 6.28% 55% Standard 90% LTV
Slide 27: A business model for the long term
A business model for the long term Barratt Developments PLC Half Year 2024 Results 27
Slide 28: Conclusion
Conclusion • Resilient operational performance in HY24 • Industry leading customer service, build quality and sustainability positions maintained • The backdrop remains uncertain but we are well positioned through our: – Financial strength – Land bank – Experienced management team • We remain focuse
Slide 29: Q & A
Suffolk DEVELOPMENTS PLC
Slide 30: Appendices
Grange View Hugglescote Appendices Barratt Developments PLC Half Year 2024 Results 30
Slide 31: Appendices - Index
Appendices - Index PAGE 32 Definitions 33 Forward order book at 31 December 34 Forward sales roll at 31 December 35 Forward order book – current trading 36 Forward sales roll – current trading 37 Site based construction activity 38 Private completions - volume and ASP 39 Home completions analysis -
Slide 32: Definitions
Definitions Active outlet is a site with at least one home for sale ASP is average selling price Average net cash (debt) is calculated on average daily closing position in period Contribution is surplus of revenue for a unit over the direct costs (land and build) attributed to that unit, expressed a
Slide 33: Forward order book
HY24 Forward order book 15.0 31 December 2023 31 December 2022 Change £m Homes £m Homes £m Homes Private 1,256.7 3,606 1,337.7 3,576 6.1% 0.8% Affordable 675.6 4,153 1,000.2 6,259 32.5% 33.6% Wholly owned 1,932.3 7,759 2,337.9 9,835 17.3% 21.1% JV 160.0 453 206.5 676 22.5% 33.0% Total 2,092.3 8,212
Slide 34: Forward sales roll
HY24 Forward sales roll HY24 HY23 Change Private Total(1) Private Total(1) Private Total(1) 30 June 3,884 8,995 6,108 13,579 36.4% 33.8% Reservations 4,502 5,388 4,017 5,558 12.1% 3.1% Completions (4,780) (6,171) (6,549) (8,626) 27.0% 28.5% 31 December 3,606 8,212 3,576 10,511 0.8% 21.9% (1) Includi
Slide 35: Current trading
Current trading Forward order book 15.0 28 January 2024 29 January 2023 Change £m Homes £m Homes £m Homes Private 1,422.2 4,105 1,462.4 3,961 2.7% 3.6% Affordable 676.7 4,178 993.3 6,213 31.9% 32.8% Wholly owned 2,098.9 8,283 2,455.7 10,174 14.5% 18.6% JV 169.4 477 209.3 680 19.1% 29.9% Total 2,268.
Slide 36: Current trading
Current trading Forward sales roll 2HY24 to date 2HY23 to date Change Private Total(1) Private Total(1) Private Total(1) 31 December 3,606 8,212 3,576 10,511 0.8% 21.9% Reservations 796 887 753 779 5.7% 13.9% Completions (297) (339) (368) (436) 19.3% 22.2% 28 Jan 2024 / 29 Jan 2023 4,105 8,760 3,961
Slide 37: Site based construction activity
Site based construction activity Average weekly output Average weekly build equivalent unit production (homes) 400 396 384 372 350 365 365 364 363 361 352 350 350 343 341 337 333 331 331 324 322 300 317 312 311 306 302 299 298 298 296 250 263 251 240 200 150 100 50 0 Q1 Q2 H1 Q3 Q4 H2 FY Q1 Q2 H1 Q3
Slide 38: Private completions
Private completions Volume and ASP Scotland Homes: 650 (HY23: 762) ASP: £320.4k (HY23: £315.2k) Northern Homes: 1,191 (HY23: 1,265) ASP: £281.8k (HY23: £295.2k) Central Homes: 867 (HY23: 1,210) East ASP: £358.3k (HY23: £353.5k) Homes: 910 (HY23: 1,127) ASP: £394.8k (HY23: £424.2k) West London & Sout
Slide 39: Home completions analysis
Home completions analysis Product type 2% 2% 30% 34% 5 & 6 bedroom homes 4 bedroom homes 3 bedroom homes 35% 1 & 2 bedroom homes 39% Apartments (non-London) Apartments (London) 14% 12% 7% 2% 11% 12% HY24 HY23 Barratt Developments PLC Half Year 2024 Results 39
Slide 40: Full income statement
Full income statement £m (unless otherwise stated) HY24 HY23 Change Revenue 1,850.8 2,783.9 33.5% Cost of Sales (1,612.3) (2,153.6) 25.1% Gross profit 238.5 630.3 62.2% Gross margin % 12.9 22.6 970 bps Analysed as: Adjusted gross profit 295.9 647.9 54.3% Adjusted gross margin % 16.0 23.3 730 bps Cos
Slide 41: Calendarised income statement
Calendarised income statement 12 months 12 months £m (unless otherwise stated) to Dec 23 to Dec 22 Change Revenue 4,388.3 5,804.7 24.4% Cost of Sales (3,805.2) (4,821.0) 21.1% Gross profit 583.1 983.7 40.7% Gross margin % 13.3 16.9 360 bps Adjusted gross margin % 17.7 24.0 630 bps Administrative exp
Slide 42: Group cost structure
Group cost structure Contribution and adjusted gross margin record 40% 35% 34% 34% 34% 33% 33% 32% 32% 32% 32% 32% 30% 32% 32% 32% 31% 30% 29% 25% 25.0% 24.8% 24.7% 23.8% 23.3% 23.2% 23.1% 23.0% 22.8% 22.5% 22.4% 20% 21.2% 19.0% 18.5% 15% 16.0% 10% 9.5% 5% 0% HY19 2HY19 FY19 HY20 2HY20 FY20 HY21 2HY
Slide 43: Driving operating margin
Driving operating margin New product range roll-out New product ranges (%) 81% 83% 65% 64% 58% Proportion of regional completions using new product ranges (%) (1) 83% 88% 94% 96% 76% % of active outlets with new product range (1)(2) HY20 HY21 HY22 HY23 HY24 (1) Including JVs (2) As at 31 December Ba
Slide 44: Administrative expenses analysis
Administrative expenses analysis £m HY24 FY23 2HY23 HY23 FY22 2HY22 HY22 Sundry income (9.3) (16.7) (9.1) (7.6) (21.2) (12.5) (8.7) Employee performance pay 29.6 44.7 17.3 27.4 78.4 43.3 35.1 Other administrative costs 120.6 242.8 125.7 117.1 199.2 111.1 88.1 Administrative expenses per income state
Slide 45: Net interest charge analysis
Net interest charge analysis £m HY24 HY23 Interest on deposits, term debt and overdrafts (23.0) (7.9) Interest on private placement notes 2.8 2.8 Utilisation/non-utilisation fees on RCF 1.8 1.8 Other interest (0.6) (0.2) Total cash interest (19.0) (3.5) Land creditors/deferred payables 5.9 7.0 Inter
Slide 46: Balance sheet
Balance sheet Land bank 31 Dec 2023 31 Dec 2022 Land bank plots With detailed planning consent 43,308 47,641 With outline planning consent 10,086 15,773 With resolution to grant and other 1,160 658 Owned 54,554 64,072 Controlled 9,060 13,322 Total land bank plots 63,614 77,394 JV plots – owned 2,448
Slide 47: Land bank evolution
Land bank evolution Reconciling plots and balance sheet land investment HY24 HY23 HY22 Plots £m £k Plots £m £k Plots £m £k Land bank movements Start of period total land bank 3,139.9 3,339.9 2,946.3 Start of period strategic and WBD land (96.0) (67.7) (48.7) Start of period owned current land bank 5
Slide 48: Land creditors payment profile by calendar year
Land creditors payment profile by calendar year £m Dec 2023 2024 2025 2026 & beyond Barratt Developments PLC Half Year 2024 Results 48
Slide 49: Planning and the UK land market
Planning and the UK land market Savills UK Greenfield Development Land Index(1) (LHS) England moving annual planning consents(2) and (100 = 2007 peak) net new build home additions (RHS) ('000s) Jun 21 120 360 Sep 07 339.5 100.0 Sep 23 100 91.6 Dec 23 300 Jun 09 90.9 53.3 80 Sep 23 240 Jun 09 219.1 2
Slide 50: 2023 Socio-economic footprint
2023 Socio-economic footprint Barratt Developments PLC 2023 Socio-economic footprint The infographic provides an illustration of the social and economic contribution made by the Barratt Group to people, places and nature for the financial year 2023 The assessment was carried out by independent expert
Slide 51: External benchmarks
External benchmarks 5 Star award for 14 years 30 Seal of Excellence awards in Only major national 2023 housebuilder to achieve this More than double any of our competitors for the second year in a row Gold award for 2023 Supreme runner up award Highest scoring national A Barratt site manager has bee
Slide 52: Disclaimer
Disclaimer This document has been prepared by Barratt Developments PLC (the “Company”) solely for use at a presentation in connection with the Company‘s Interim Results Announcement in respect of the half year ended 31 December 2023. For the purposes of this notice, the presentation (the “Presentati
Slide 53: www.barrattdevelopments.co.uk/investors
Environmental properties of this document This brochure is printed on paper manufactured from 100% Recycled post consumer waste without the use of optical brightening agents (OBA) www.barrattdevelopments.co.uk/investors