Covid safety measures cost Barratt £45.2m
Barratt Developments spent a total of £45.2m on covid-19 safety measures, while the total bill for covid-19-related costs ran to £74.2m.
The figures emerged as the housebuilder revealed a 28.2% decline in revenue to £3.4bn for the year to 30 June 2020, with pre-tax profit down 45.9% to £491.8m, and the total number of home completions down 29.4% to 12,604, as compared to the year before.
Nonetheless, the company reported strong forward sales of 15,660 homes as at 23 August 2020, up from 13,064 homes on 25 August 2019. It also had net cash as at 30 June 2020 of £308.2m, although that was down from £765.7m in 2019.
Chief executive David Thomas said: “Prior to the lockdown, we were delivering strong progress against our medium-term targets including increasing completion volumes. As at 22 March 2020, we had delivered 10,364 total home completions including 484 joint venture completions, up 9.8% on the prior year equivalent period (2019: 9,437 homes). The lockdown halted construction activity and meant the closure of our sales centres until 21 May 2020 in England, 11 June 2020 in Scotland and 25 June 2020 in Wales. As a result, wholly owned completions declined by 29.7% to 12,034 homes in the year ended 30 June 2020 (2019: 17,111 homes).
“As well as causing the significant reduction in completion volumes with the associated impact on our profitability this year, covid-19 has resulted in significant additional costs. During the lockdown period and in preparation for site recommencement, we incurred £45.2m of safety costs, non-productive site costs and site-based employee costs and £29.1m related to the expected increase in site durations due to covid-19. After charging this £74.3m, we made an adjusted profit from operations of £507.3m (2019: £904.3m) at an adjusted operating margin of 14.8% (2019: 19.0%).
“We enter FY21 focused on rebuilding both our completion volumes and our financial performance towards our unchanged medium-term targets.”