TIDMBDEV
RNS Number : 5909H
Barratt Developments PLC
25 March 2020
25 March 2020
Barratt Developments PLC
COVID-19 Update
Barratt Developments PLC (the 'Group'), Britain's largest
housebuilder, is today issuing an update on the impact of COVID-19.
Barratt Developments PLC has a year end of 30 June.
Our first priority is employee, sub-contractors and customer
safety
During this difficult period, our priority is to provide a safe
environment for all our employees, sub-contractors and customers.
Throughout, the Board and Executive team have taken steps to ensure
that the guidance of Public Health England is strictly adhered to
across all of our operations. As this guidance evolved, we took the
decision to close all of our sales centres , construction sites and
offices as quickly and safely as possible . We have transitioned
the business to enable home working and are offering support to
employees through this period of uncertainty.
COVID-19 impact and mitigating actions
The Board continues to closely monitor Government guidance in
respect of COVID-19. Whilst it is too early to make a reliable
forecast about the duration or impact of the pandemic, and with our
sites now closing, the Board expects it to have a significant
impact on both construction output and reservations.
The Board has acted rapidly, taking measures to manage the
Group's cost base and cash-flows to ensure resilience. These
actions have included:
-- Suspending all land buying activity
-- Ceasing all recruitment activity
-- Postponing all non-essential capital expenditure
-- Actively managing cash flows whilst ensuring that we are
paying our suppliers and sub-contractors on time
We will continue to assess further cost-saving opportunities
available to us as the situation develops, whilst balancing the
long-term requirements of the business.
Dividend
Given the uncertainties caused by the impact of COVID-19, the
Board believes it is appropriate to cancel the interim dividend of
9.8 pence per share (c.GBP100m)(1) , which was due to be paid on 11
May 2020. The Board recognises the importance of dividends as a
part of overall shareholder returns and will consider dividends at
the time of announcing the full year results in September taking
into account the position on COVID-19.
Strong Balance Sheet
The Group continues to have a very strong balance sheet and at
20 March 2020 we had c. GBP380m of cash(2) . The Group has total
committed facilities and private placement notes of GBP900m,
comprising a GBP700m undrawn revolving credit facility(3) and fully
drawn GBP200m US private placement notes(4) .
Trading update
The Group started the calendar year well with good customer
demand for our high quality new homes across the country and, until
the past week, our trading performance was in line with
expectations. The Group delivered 10,364 home completions (2019:
9,437 home completions) (including JVs) in the period to 22 March
2020, of which 2,050 homes (2019: 1,815 homes) (including JVs) were
completed in the period since 1 January 2020. Our total forward
sales remain strong at 13,836 homes and at a value of GBP3,298.2m
(including JVs). However, as COVID-19 has gathered pace in the UK
and since the introduction of increased social distancing
guidelines, there has been a reduction in reservations and site
visitors and an increase in cancellations.
Looking ahead
Given the ongoing uncertainty, we are unable to quantify the
impact of COVID-19 on our financial and trading performance at this
stage. Accordingly the Group is suspending all existing financial
guidance.
The business is facing this challenge from a position of
strength, with a robust balance sheet, a highly skilled workforce
and an experienced Board. Our customers and employees will remain
at the heart of every decision we make. The Board is focused on
taking the right actions so that we will emerge from this pandemic
well-placed to continue to deliver the high quality housing the
country needs.
Notes
Unless otherwise stated, all numbers quoted exclude Joint
Ventures (JVs) throughout this statement
1 Based upon 31 December 2019 share capital of 1,014,746,539
shares for proposed payments
2 Cash comprises cash and cash equivalents
3 The revolving credit facility has an expiry date of November 2024
4 The US private placement notes have an expiry date of August 2027
Further information
For further information please contact:
Barratt Developments PLC
Jessica White, Chief Financial Officer 01530 278 259
Analyst / investor enquiries
Claire Adams, Head of Investor Relations 01530 278 270
Media enquiries
Tim Collins, Head of Corporate Communications 020 7299 4874
Brunswick
Jonathan Glass/ Rosie Oddy 020 7404 5959
This trading update contains certain forward-looking statements
about the future outlook for the Group. Although the Directors
believe that these statements are based upon reasonable
assumptions, any such statements should be treated with caution as
future outlook may be influenced by factors that could cause actual
outcomes and results to be materially different.
This announcement contains inside information. The person
responsible for arranging for the release of this announcement on
behalf of Barratt Developments PLC is Claire Adams (Head of
Investor Relations).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
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