Slide 1: FY24 Results Presentation
Kings Gate Abingdon FY24 Results Presentation Year ended 30 June 2024 4 September 2024
Slide 2: David Thomas, Chief Executive Officer
Whittle Gardens Gloucester David Thomas Chief Executive Officer Barratt Developments PLC Full Year 2024 Results 2
Slide 3: Overview - FY24 performance
Overview - FY24 performance • Solid operational performance FY24 FY23 Change • Adjusted PBT reflected lower completions, Total home completions (inc JVs) 14,004 17,206 18.6% softer pricing and moderating build cost inflation Adjusted PBT £385.0m £884.3m 56.5% • ROCE impacted by decline in profitabil
Slide 4: Overview – Current trading
Overview – Current trading • Private reservation rate has reflected more FY25 FY24 stable trading conditions and the summer to date to date Change seasonal softening Net private reservation rate (1) 0.58 0.42 38.1% • Sales outlets reflect lower land buying in - of which PRS and Other MUS 0.03 0.02 n
Slide 5: Barratt Developments in FY25
Barratt Developments in FY25 • In the year ahead, on a stand-alone basis, our priorities will remain centred on: – Driving revenue – Controlling build activity and costs – Optimising our land buying – Leading the industry around customer service, build quality, social responsibility and sustainabili
Slide 6: Steven Boyes, Chief Operating Officer
Ersham Park Hailsham Steven Boyes Chief Operating Officer Barratt Developments PLC Full Year 2024 Results 6
Slide 7: Sales performance
Sales performance FY24 FY23 Change • Sales rate improved, as mortgage rates began to ease Average net private reservations per active outlet per week lower, from August 2023 Wholly owned 0.58 0.55 5.5% • Sales activity remains highly sensitive to mortgage - Of which PRS and Other MUS 0.08 0.10 20.0%
Slide 8: Private reservation analysis
Private reservation analysis • Our strategic partnership with Citra Living continued during 14% FY24 17% PRS & Other Multi-Unit sales • We are growing and diversifying our portfolio of 16% 11% Part-exchange PRS partners 7% 11% Cash buyers & investors • Significant increase in part-exchange use, but
Slide 9: Completions and pricing performance
Completions and pricing performance FY24 FY23 Change Home completions (units) • Home completion volumes reflected: Private 8,851 11,676 24.2% – Lower opening forward order book PRS 1,048 258 306.2% – Muted demand in 1Q but improved reservation Other MUS 767 522 46.9% activity from 2Q onwards Afforda
Slide 10: Construction output, customer service and build quality
Construction output, customer service and build quality FY24 FY23 • Average construction output aligned with sales outlet reduction Performance metrics and lower completions Average construction output per week (equivalent homes) 257 322 • HBF 5 star rating for 15 consecutive years HBF survey (star
Slide 11: Build cost inflation
Build cost inflation Materials • Centralised procurement team manage around 95% of materials • Inflationary pressures continued to ease • Price reductions achieved in some commodities as input costs reduced e.g. bricks, blocks and steel Total build costs • Supply agreements in place at year end for
Slide 12: Land bank
Land bank 30 June 30 June 2024 2023 • Significant acceleration in land approvals for future Land bank plots purchase during the second half With detailed planning consent 40,030 48,270 • Our land bank remains strong at 4.9 years With outline planning consent and other (1) 17,602 10,978 of supply Own
Slide 13: Conclusion
Conclusion • Solid operational performance in FY24 • Mortgage rates and qualification have been, and will remain, key to reservation rate activity • Build cost inflation has eased and is expected to be broadly flat in FY25 • Back in the land market but we will remain selective and disciplined • Focu
Slide 14: Mike Scott, Chief Financial Officer
Sycamore Grove Walkergate Mike Scott Chief Financial Officer Barratt Developments PLC Full Year 2024 Results 14
Slide 15: Summarised performance
Summarised performance £m (unless otherwise stated) FY24 FY23 Change Revenue 4,168.2 5,321.4 21.7% Adjusted gross profit 689.0 1,130.4 39.0% Adjusted gross margin % 16.5 21.2 470 bps Gross profit 509.5 974.9 47.7% Gross margin % 12.2 18.3 610 bps Adjusted operating profit 376.6 862.9 56.4% Adjusted
Slide 16: Adjusted operating margin bridge
Adjusted operating margin bridge (300 bps) 16.2% (430 bps ) Volume impact 30 bps (100 bps) 60 bps 20 bps Completed Mix / other Net inflation London mix development Admin decrease(1) provision expenses 9.0% FY23 FY24 (1) Reflects the prior year impact of a previously impaired site at Hounslow Barratt
Slide 17: Administrative expenses
Administrative expenses • Adjusted administrative expense increase included: – Normalisation of employee performance pay £m FY24 FY23 Sundry income (14.8) (16.7) – Average annual salary increase of c. 5% Employee performance pay 73.5 44.7 – Increased IT and Digital capability investment Other admini
Slide 18: Adjusted items – legacy property charges in FY24
Adjusted items – legacy property charges in FY24 • Portfolio under review at year end was 262 buildings, 16 £m External wall systems and Reinforced concrete lower than at 30 June 2023 Legacy properties associated review frames Total At 1 July 2023 535.9 76.4 612.3 • 137 buildings within the portfoli
Slide 19: Cash flow
Cash flow 537.4 (674.3) £m (125.4) Utilised in 11.5 cost of sales Cash Other Net land land spend movements Legacy WIP / PX / provision promotion utilisation agreements Net cash Other non-cash Net land interest and working capital JV and tax investment Other investing and financing Profit from Operat
Slide 20: Our land bank and gross margin
Our land bank and gross margin • Current land bank gross margin is impacted by: 30 June 2024 owned land bank plots by gross margin(1) – House price movements, which eased in 2HY24 No. of owned land bank plots Share of owned land bank plots – Build cost inflation, which fell away through FY24 18,000
Slide 21: Guidance for FY25
Guidance for FY25 (1) Completions c. 13,000 – 13,500 total home completions, including c. 600 JV completions Affordable mix expected to be in the high teens Average sales outlet movement (inc JV) c. 9% decline Build cost inflation Broadly flat c. £310m, excluding integration costs Adjusted administr
Slide 22: Conclusion
Conclusion • Challenging year with lower volumes and inflationary pressures • Margin pressures easing but will take time to rebuild • Good progress on building safety • Strong balance sheet gives us continued flexibility • Focused on delivering completion growth in FY26 with: – Better asset turn; an
Slide 23: David Thomas, Chief Executive Officer
Great Dunmow Grange Essex David Thomas Chief Executive Officer Barratt Developments PLC Full Year 2024 Results 23
Slide 24: Market fundamentals
Market fundamentals 5.2% average 2 year fixed rate at 85% LTV (1) Structural under-supply of Vast majority want to Solving an ineffective Deposit qualification is homes remains but is now own - but mortgage planning system remains the challenge, but the an absolute Government affordability remains a
Slide 25: Planning and the UK land market
Planning and the UK land market • Latest 12 month detailed planning consents at Savills UK Greenfield England moving annual planning consents(2) Development Land Index(1) (LHS) and net new build home additions (RHS) 236,644 down 29.5% from the 2Q 2021 peak (100 = 2007 peak) ('000s) • Detailed planni
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 - July 2024 (2) 60% 8.0% Standard 75% LTV mortgage product (3) 55% Halifax 7.0% Standard 90% LTV mo
Slide 27: Barratt Redrow
Barratt Redrow A uniquely compelling opportunity to 1 2 3 4 5 Build on Barratt and Create a strong brand Realise significant Maintain a robust Deliver significant Redrow’s excellent portfolio of three high cost synergies balance sheet better benefits for the reputations for build quality diversified
Slide 28: Barratt Redrow: Driving completions, land bank efficiency and asset turn
Barratt Redrow Driving completions, land bank efficiency and asset turn Illustrative benefits of multi-branded sites on delivery – Grey Towers Village (Nunthorpe, Middlesbrough) David Wilson site from FY16 to FY20; during COVID, site was dual-branded to include Barratt Homes (incl. a Barratt sales o
Slide 29: Barratt Redrow: Realisation of significant cost synergies
Barratt Redrow Realisation of significant cost synergies 90 • Significant cost savings through: Procurement-related savings – Procurement-related savings 34 (primarily direct materials) and 38% other efficiencies in build cost – Optimisation of the divisional office structure overheads – Consolidati
Slide 30: Barratt Redrow: Transaction timeline
Barratt Redrow Transaction timeline Steps completed in 2024 Milestone ahead Completion (Scheme effective) & CMA Standard timetable for Approved by both Submissions of considers CMA to accept Announcement sets of CMA Phase undertakings in undertakings in lieu undertakings and issue of acquisition sha
Slide 31: Conclusion
Conclusion • Solid operational performance in FY24 • Industry leading customer service, build quality and sustainability positions maintained • Solid start to FY25 with an improved reservation rate supported by current mortgage rates • We are focused on: – Driving revenue – Controlling build activit
Slide 32: Q&A
Kings Gate Abingdon Q&A
Slide 33: Appendices
Grey Towers Village Nunthorpe Appendices Barratt Developments PLC Full Year 2024 Results 33
Slide 34: Appendices - Index
Appendices - Index PAGE 35 Definitions 36 Current trading - forward order book 37 Current trading - forward sales roll 38 Private monthly reservations vs available mortgage rates 39 Site based construction activity 40 Private completions - volume and ASP 41 Home completions analysis - product type 4
Slide 35: 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 CMA is Competition and Markets Authority Contribution is surplus of revenue for a unit over the direct costs (land and bu
Slide 36: Current trading
Current trading Forward order book 15.0 25 August 2024 27 August 2023 Change £m Homes £m Homes £m Homes Private 1,467.0 4,159 1,527.6 4,440 4.0% 6.3% Affordable 579.6 3,519 752.0 4,691 22.9% 25.0% Wholly owned 2,046.6 7,678 2,279.6 9,131 10.2% 15.9% JV 151.1 399 157.7 477 4.2% 16.4% Total 2,197.7 8,
Slide 37: Current trading
Current trading Forward sales roll 25 August 2024 27 August 2023 Change Private Total(1) Private Total(1) Private Total(1) 30 June 2024 / 2023 3,386 7,239 3,884 8,995 12.8% 19.5% Reservations 1,436 1,606 1,303 1,440 10.2% 11.5% Completions (663) (768) (747) (827) 11.2% 7.1% 25 Aug 2024 / 27 Aug 2023
Slide 38: Private monthly reservation rates
Private monthly reservation rates Sensitivity to available mortgage rates Barratt Developments monthly private reservation rate vs Mortgage rate available at 85% LTV (5 lender average) Barratt private reservations rate 2-year fixed rate ex PRS & other MUS 85% LTV - 5-lender average in month 1.00 7.0
Slide 39: Site based construction activity
Site based construction activity Average weekly output Average weekly build equivalent unit production (homes) 400 396 384 372 350 365 365 364 363 361 352 350 350 343 341 337 333 331 331 324 322 300 317 312 311 306 302 299 298 298 296 278 250 263 263 257 251 249 240 200 150 100 50 0 Q1 Q2 H1 Q3 Q4 H
Slide 40: Private completions
Private completions Volume and ASP Scotland Homes: 1,439 (FY23: 1,590) ASP: £310.4k (FY23: £309.9k) Northern Homes: 2,446 (FY23: 2,511) ASP: £288.8k (FY23: £299.9k) Central Homes: 1,990 (FY23: 2,273) East ASP: £347.5k (FY23: £354.2k) Homes: 2,083 (FY23: 2,279) ASP: £390.4k (FY23: £425.3k) West Londo
Slide 41: Home completions analysis
Home completions analysis Product type 3% 2% 2% 15% 30% 5 & 6 bedroom homes 34% 4 bedroom homes 23% 3 bedroom homes 1 & 2 bedroom homes 5% 35% Apartments (non-London) 38% Apartments (London) 46% 15% 13% 10% 11% 8% 8% 2% FY09 FY23 FY24 Barratt Developments PLC Full Year 2024 Results 41
Slide 42: Full income statement
Full income statement £m (unless otherwise stated) FY24 FY23 Change Revenue 4,168.2 5,321.4 21.7% Cost of Sales (3,658.7) (4,346.5) 15.8% Gross profit 509.5 974.9 47.7% Gross margin % 12.2 18.3 610 bps Analysed as: Adjusted gross profit 689.0 1,130.4 39.0% Adjusted gross margin % 16.5 21.2 470 bps C
Slide 43: Balance sheet
Balance sheet £m 30 June 2024 30 June 2023 Change Goodwill and intangible assets 1,037.4 1,047.8 (10.4) Investment in jointly controlled entities 158.5 129.8 28.7 Gross land bank 3,233.6 3,139.9 93.7 Land creditors (472.8) (506.7) 33.9 Net land bank 2,760.8 2,633.2 127.6 Land creditor % 14.6% 16.1%
Slide 44: Operating framework
Operating framework Operating framework As at 30 June 2024 c. 3.5 years owned and c. 1.0 year controlled 4.3 years owned and 0.6 years controlled Land bank (1) (2023: 3.6 years owned and 0.7 years controlled) Maintain at 15 – 25% of the land bank over medium term Reduced to 14.6% Land creditors (202
Slide 45: Group cost structure
Group cost structure Contribution and adjusted gross margin record 34% 34% 34% 33% 33% 32% 32% 32% 32% 32% 31% 30% 29% 29% 29% 25.0% 24.8% 24.7% 23.8% 23.3% 23.2% 23.0% 22.5% 21.2% 19.0% 18.5% 16.9% 16.5% 16.0% 9.5% HY20 2HY20 FY20 HY21 2HY21 FY21 HY22 2HY22 FY22 HY23 2HY23 FY23 HY24 2HY24 FY24 Cont
Slide 46: Administrative expenses analysis
Administrative expenses analysis £m FY24 2HY24 HY24 FY23 2HY23 HY23 FY22 2HY22 HY22 Sundry income (14.8) (5.5) (9.3) (16.7) (9.1) (7.6) (21.2) (12.5) (8.7) Employee performance pay 73.5 43.9 29.6 44.7 17.3 27.4 78.4 43.3 35.1 Other administrative costs 255.8 135.2 120.6 242.8 125.7 117.1 199.2 111.1
Slide 47: Net interest charge analysis
Net interest charge analysis £m FY24 FY23 Interest on deposits, term debt and overdrafts (44.7) (21.7) Interest on private placement notes 5.6 5.5 Utilisation/non-utilisation fees on RCF 3.6 3.5 Other interest (1.6) (0.7) Total cash interest (37.1) (13.4) Land creditors / deferred payables 10.7 13.9
Slide 48: Land bank analysis
Land bank analysis 30 June 2024 30 June 2023 Land bank plots With detailed planning consent 40,030 48,270 With outline planning consent 15,239 9,658 With resolution to grant and other 2,363 1,320 Owned 57,632 59,248 Controlled 8,607 11,142 Total land bank plots 66,239 70,390 JV plots - owned 2,913 2
Slide 49: Land bank evolution
Land bank evolution Reconciling plots and balance sheet land investment FY24 FY23 FY22 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 50: Land creditors payment profile by financial year
Land creditors payment profile by financial year £m June 2024 FY25 FY26 FY27 & beyond Barratt Developments PLC Full Year 2024 Results 50
Slide 51: 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 Sep 07 Sep 22 360 335.8 100.00 99.6 Jun 23 320 100 94.0 Jun 24 Jun 09 Jun 23 280 91.1 53.3 80 2
Slide 52: External benchmarks
External benchmarks 5 Star award for 15 years 89 awards in 2024 Only major national More than any other housebuilder to achieve this housebuilder for 20 consecutive years Gold award for 2023 RI score of 0.13 in FY24 Highest scoring national For 5 years Barratt has ranked first housebuilder in report
Slide 53: Investment case summarised
Investment case summarised Shorter Industry- owned leading Multi- A portfolio of land bank customer housing brands channel service sales and distinct house types strength Nationally Industry- diversified leading build quality Making sustainable Leading in living a reality, Strong balance sustainabil
Slide 54: 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 Results Announcement in respect of the full year ended 30 June 2024. For the purposes of this notice, the presentation (the “Presentation”) shall m
Slide 55: 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