Barratt Developments Plc Results

[Ash4781]

http://www.barrattdevelopments.co.uk/media...nt.aspx?id=1556

Annual Results Announcement Results for the year ended 30 June 2009

Mark Clare, Group Chief Executive of Barratt Developments, commented:

“This has been an intensely difficult year for the Group following the sharp decline in the UK housing market. In the first half, as prices fell, we drove sales and reduced stock and debt levels. In the second half we have been able to maintain price levels and increase our reservation rates, with these encouraging trends continuing through the summer into the autumn.â€

“The Board has therefore decided it is now an appropriate time to substantially strengthen the Company’s balance sheet and reduce its debt levels via a Placing and a Rights Issue. This will also enable the Group to develop a number of its existing sites and to take advantage of land purchasing opportunities as they arise.â€

Highlights:

Net private reservations per site per week were up 10.5% compared with the 2008 financial year, 6.0% down for the first half and 28.6% up in the second half.

Completions for the full year were 13,202 (2008: 18,588), a decrease of 29.0%, at an average selling price of £157,200 (2008: £183,100). Group revenue decreased by 35.7% to £2,285.2m (2008: £3,554.7m).

Operating profit before exceptional items was £34.2m (2008: £550.2m) at a margin of 1.5% (2008: 15.5%).

Operating exceptional items totalled £519.5m (2008: £255.0m) including £499.5m (2008: £208.4m) impairment of inventories of which £494.9m (2008: £nil) was recognised at the half year. Exceptional items charged after operating profit totalled £15.3m (2008: £nil).

The Group made a loss before tax and exceptional items of £144.1m (2008: £392.3m profit) and a loss before tax of £678.9m (2008: £137.3m profit).

Adjusted basic loss per share before exceptional items was 23.8 pence (2008: 79.6 pence earnings). Basic loss per share was 135.8 pence (2008: 25.0 pence earnings).

Net debt has reduced by £373.7m since 30 June 2008 (£145.9m since 31 December 2008) to £1,276.9m (2008: £1,650.6m).

The Group continues to comply with the financial covenants in its existing financing arrangements.

As previously announced no dividend will be payable for the year ended 30 June 2009 (2008: 12.23 pence per share).

At 30 June 2009 net asset value per share was 672 pence (2008: 827 pence) and net tangible asset value per share was 415 pence (2008: 570 pence).

Forward sales at 30 June 2009 were £464.3m (2008: £697.6m) representing 3,328 plots (2008: 4,586 plots). At 13 September 2009 forward sales had increased to £733.4m.

Over the eleven weeks since the financial year end the Group has delivered 2,152 net private reservations (2008: 1,857). This represents an average of 0.46 net private reservations per site per week, up 53.3% on the equivalent period in the last financial year.

The Board has today announced a fully underwritten Placing and Rights Issue to raise gross proceeds of approximately £720m, together with amended financing arrangements which will come into effect upon successful completion of the Placing and the Rights Issue.

Waiting for the income statements.

32.4mn operating profit before expectionals, margin collapse, and debt reduced to 1.277bn

Not surprised at the 0.72bn under-written rights issue.

Edited September 23, 2009 by Ash4781

[Ash4781]

you do wonder how they're managing to carry on.I guess everyone's dreading some repo style mark to market.

http://www.barrattdevelopments.co.uk/ir/re...report_2009.pdf

page 57 in pdf consolidated income statement.

page 60 on notes re going concern

yeah looking at the income statement operating profit before exceptionals was 34.2mn against net finance costs before exceptionals of (£195.3mn). No wonder they need to do a rights issue seem to be like a few companies getting crushed by debt.

Comapanies paying down debt.... Deflation ?

[Sybil13]

BDEV

262.10 -13.60 (-4.93%)

Wonder if they read the moneyweek article UK Property Housing Market Hasn't Bottomed Yet ?

Banks aren't in a position to lend

But won't banks loosen the reins on credit? The trouble is, that assumes the banks are in a position to do so. And they're not. James Ferguson, chief strategist at Pali International and MoneyWeek regular, keeps pointing out to readers of his Model Investor newsletter that the banks still haven't written down anything like the scale of dodgy debts they wrote off in even the early 1990s recession, which was far less severe than today's.

It's a theme that Anthony Hilton also picked up on in last night's Evening Standard. "Our banks are bust, or would be if the state was not prepared to stand behind them," he says. And there are plenty of ropey loans waiting to be uncovered. There's commercial property for one: today, £250bn of bank money is tied up in commercial property loans compared to £50bn in 1990. "What will happen when those loans fall due and have to be repaid or refinanced, given that property valuations are down by some 40%?"

Then there are private equity deals going bad. And the fall-out from the mania for infrastructure deals at the peak of the boom. Even more importantly, says Hilton, there's the bog-standard fall-out that you'd normally see as a result of recession – personal and corporate bankruptcies, and rising unemployment.

There's every reason for banks to tighten the reins on lending

So there's no reason for bank lending to slacken off, and in fact, every reason for it to tighten up. In a property market which is still overvalued compared to average earnings, that can't be a recipe for rising house prices. And as unemployment picks up, there will be more forced sales.

That's not great for homeowners. And just as importantly, a low sales environment can't be good for homebuilders. At the end of the day, homebuilders need to build and sell houses – the price at which they sell is less important, as long as it's still enough to turn a profit.

So we wouldn't be keen to invest in house builders here, particularly when there are many perfectly decent, cheap defensive stocks, all paying nice dividend yields (unlike the house builders), available instead.

[ElPapasito]

QUOTE

Annual Results Announcement Results for the year ended 30 June 2009

Highlights:

Completions for the full year were 13,202 (2008: 18,588), a decrease of 29.0%, at an average selling price of £157,200 (2008: £183,100). Group revenue decreased by 35.7% to £2,285.2m (2008: £3,554.7m).

Annual HPI nominal at Barratts -14%. I would have thought it would have been more comparing Year to Jun08 with Year to Jun09. By fighting the price slide they have shrunk unit sales by a massive 29%. Doh!

And now they want to raise money to buy land at the bottom! My oh my these guys are in a class of their own.

[ralphmalph]

BDEV

262.10 -13.60 (-4.93%)

Wonder if they read the moneyweek article UK Property Housing Market Hasn't Bottomed Yet ?

They do not need to read moneyweek. Moneyweek asks BDEV as BDEV are at the coalface they will know reservations numbers, actual sales and average selling price a long time before moneyweek.