Barratt Developments grew pre-tax profit by 10% to £705.1m in the year to 30th June 2023 (2022: £642.3m) on revenue up 1% at £5,321.4m (2022: £5,267.9m).
Adjusted gross profit was down, however, by 14% at £1,130.4m and the adjusted gross margin dipped from 24.8% in the 2022 financial year to 21.2% this time. This reflects the fall in customer demand, house price inflation running below build cost inflation and the operational gearing impact as the market slowed , directors said.
The number of homes completed in the year was down 4% at 17,206 (2022: 17,908), reflecting the market slowdown that started in September 2022.
Statutory pre-tax profit improved despite adjusted profits deteriorating because there were fewer exceptional items in the accounts this time.
Adjusted items recognised in the year to June 2023 totalled £179.2m (2022: £412.5m). Of this total charge, £117.7m (FY22: £377.7m) related to future commitments in relation to fire safety and external wall systems; £51.5m (FY22: £34.8m) relating to remedial works arising from a review of reinforced concrete frames announced in July 2020. A further £10.0m was expensed in the second half of the year in relation to two other developments, where investigations are ongoing.
Chief executive David Thomas said: "We have delivered a strong operational performance in a challenging operating environment. Customers continue to face cost of living and mortgage affordability challenges, and new developments are increasingly constrained by an ineffective planning system. Today's results reflect the hard work and dedication of our teams and the decisive actions we have taken as a business to respond to market conditions.
“Whilst we expect that the backdrop will continue to be difficult over the coming months, we are a resilient business with a strong balance sheet and an experienced management team. We remain committed to building the communities that our customers want to live in – delivering high-quality, sustainable homes at competitive prices to help address the country's housing crisis and drive long term, sustainable growth for our business."
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