September 2, 2020 @ 14:50 by Steven Hugill
A Tyneside-founded housebuilder says it is cautiously optimistic of a post-COVID-19 resurgence after seeing the pandemic wipe more than £1.3 billion from revenues.
Barratt Developments says it is approaching its new financial year with renewed confidence following a rise in sales.
Like many, the business, founded in the 1950s when accountant Sir Lawrie Barratt built his own four-bedroom home in Newcastle, it suffered during the coronavirus crisis, with total COVID-19-related costs hitting £74.3 million and revenues and profits nosediving.
However, officials today (Wednesday, September 2) revealed a brighter outlook while unveiling results for the year to June 30, saying “very strong” demand, coupled with its “robust financial position” mean the business is in good shape to meet its targets.
According to the company’s update, COVID-19 had a significant impact on its fortunes, with annual sales down nearly 30 per cent on the previous year to 12,604.
Furthermore, revenue slumped more than £1.3 billion to £3.4 billion, with pre-tax profit 46 per cent worse off at £491.8 million.
However, bosses say the picture at the builder – which runs a divisional office out of Gateshead – has begun to change, with forward sales ahead of last year.
They say 15,660 homes, worth £3.7 billion, were allocated in its books as of August 23, compared to 13,064 properties, totalling £3 billion, at the same time a year earlier.
Commenting on its financial results and present position, David Thomas, Barratt Developments’ chief executive, said: “While COVID-19 has had a significant impact on our results, our priority has been to keep our people safe, mitigate the effect of the pandemic on our business and be able to emerge from the crisis in a resilient position.
“Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism.
“We are now renewing our focus on our medium-term targets, on leading the industry in quality and service and on supporting jobs and economic growth by building the homes the country needs.”
The builder’s Barratt Homes division has developments across the North East, which include estates in Newcastle, Hebburn, Consett, Washington and Spennymoor.
Its David Wilson Homes venture has further properties in Houghton-le-Spring, Sunderland, Wynyard and Nunthorpe, near Middlesbrough.