Britain’s biggest housebuilder has said its finances are strong enough for it to repay millions of pounds claimed under the Government furlough scheme.
The business said some 85 per cent of its 6,700 workers had been placed on the Government job retention scheme at the height of the lockdown.
However, all of its building sites had now reopened and everyone – apart from those shielding – was back at work.
READ MORE: {}
The £4.76 billion turnover building giant said it had been grateful for the help to safeguard its workforce, and as its financial position had remained resilient, it wanted to give the money back - around £25 million in total.
Chief executive David Thomas added that he was “cautiously optimistic” for the year ahead, despite the company warning the prospects for the wider 海角视频 economy and the new homes market remained “uncertain”.
In a trading update the business, formed in Newcastle in 1958 and now based in Coalville, Leicestershire, said it saw a big drop in the number of homes completed as a consequence of the pandemic.
The total number built in the year to June 30 – either by its subsidiaries or in joint ventures – was just over 12,600, compared to more than 17,800 a year earlier.
However reservations were only down marginally and the company’s order book remained strong, with total forward sales of more than 14,300 homes (worth £3.25 billion) compared to around 11,400 this time last year (worth £2.6 billion).
Most Read
Shares in the business were up 8 per cent today on the news at around £5.30.
When the pandemic hit, the business said it took various actions, including:
• Suspending all land buying
• Stopping all recruitment
• Postponing non-essential spending
• Actively managing cash flows whilst ensuring suppliers and subcontractors were paid on time
• Cancelling an interim dividend, due on May 11
Don’t miss
• Furloughing employees on full pay
• A temporary, voluntary 20 per cent cut in base salaries and fees for executive directors, the executive and regional managing director team, the chairman and non-executive directors
David Thomas said: “Prior to the Covid-19 pandemic, the Group was delivering a strong year of progress on both volume and margin.
“The pandemic has caused significant disruption, but our highly skilled and experienced team have shown incredible resilience, flexibility and commitment both through the peak of the crisis and in the careful reopening of our sites.
“Now, with our construction sites operational across the 海角视频, we begin the new financial year with cautious optimism supported by our strong forward order book and our well capitalised balance sheet.”
In a trading update the business, which has around 350 active sites, said: “Since the removal of Government restrictions on housing market activity on May 13, 2020, there has been a welcome recovery in internet activity, site visitors and net reservations across both the industry and our business.
“However, the prospects for the wider 海角视频 economy and the medium term impact on the new homes market remains uncertain and will only become clearer over the coming months.
“Key to the health of the new homes market is mortgage availability.
“Whilst there is a reduced level of availability of higher loan to value mortgages, demand from first time buyers looking to use Help to Buy has been significant since the market reopened.
“To help ensure the 海角视频’s housing recovery is sustained, capacity in the industry is maintained and to ensure that customers who planned to use the current Help to Buy scheme still can, given the unprecedented backdrop, we believe it would be sensible for Government to extend the existing scheme beyond March 2021.”
It said average private selling price had remained good, down £1,000 at around £311,000.
Russ Mould, investment director at online stockbroker AJ Bell said any kind of positivity was welcome in the current economic climate, whether it was “cautious or otherwise”.
He said: “This optimism is not founded on thin air.
“The company has a growing order book, has seen high customer interest levels since the reopening of its sales centres, and it now has all its sites up and running.
“The Help to Buy scheme is helping to underpin already resilient demand from homebuyers and the reported prospect of stamp duty changes is potentially an indication that the state is willing to stand behind the sector’s recovery.
“There was some bad news to balance out the good in Barratt’s statement – inevitably completions were down in the 12 months to the end of June and the average asking price also fell.
“Dividends remain off the table, but it doesn’t appear as if the market was expecting anything different on that score.
“Barratt’s concession that mortgage availability is key to the health of the new homes market is a reminder that any reduced willingness on the part of lenders to hand out high loan-to-value mortgages could be damaging.
“This nagging concern could build as the full economic impact of the coronavirus crisis comes through.”