Financial Highlights

Results for the financial year ended 30 June 2008

Highlights:

• Completions for the full year were 18,588 (2007: 17,168), an increase of 8.3%. As a result, Group revenue rose by 16.7% to £3,554.7m (2007: £3,046.1m). On a like-for-like(1) basis, completions were down 13.8%.
• The average selling price increased by 6.0% to £183,100 (2007: £172,800), reflecting a change in product and geographical mix and benefiting from a number of high value sales in premium London locations. On an underlying basis, excluding the effect of change in product mix, the average selling price decreased by approximately 5%.
• Operating margin(2) decreased to 15.5% (2007: 16.9%(3)) and was down 1.7% on a like-for like(1) basis.
• Profit before tax pre exceptional costs decreased by 13.0% to £392.3m (2007: £451.0m(3)). Exceptional costs(2) totalled £255.0m and comprised £208.4m impairment of inventories, £30.7m impairment of goodwill and intangible assets and £15.9m restructuring costs (2007: £26.2m). Profit before tax was £137.3m (2007: £424.8m(3)).
• Adjusted basic earnings per share before exceptional costs(2) was 79.6 pence (2007: 123.0 pence(3)). Basic earnings per share was 25.0 pence (2007: 115.4 pence(3)).
• Owned and controlled plots of land totalled 78,700, 4.2 years supply at current completion rates.
• Net borrowings were £1,652.4m (2007: £1,301.2m), and have decreased by £86.1m since 31 December 2007.
• Financial structure strengthened, with revised covenant package agreed and £400m refinancing completed.
• Forward sales at 30 June 2008 were £697.6m (2007: £1,413.8m). £538.7m of the £697.6m forward sales were contracted as compared to £865.9m contracted in the prior year, a decline of 37.8%. As of 31 August 2008, forward sales had increased to £783.3m.
• Given the performance of the business for the full year and the Board’s view on the outlook for the current year, no final dividend for 2007/8 will be paid. The total dividend paid for the year ended 30 June 2008 is 12.23 pence per share, being the interim dividend paid in May.

(1) ‘Like-for-like’ basis assumes that the acquisition of Wilson Bowden was completed upon the first day of the comparative financial period. Wilson Bowden achieved 6,052 completions, revenue of £1,422.1m, operating profit of £219.2m, and a profit before tax of £191.7m in the 12 months ended 30 June 2007. Prior to acquisition, Wilson Bowden achieved 4,401 completions, revenue of £1,042.5m, operating profit of £165.3m (including £22.7m of exceptional costs) and a profit before tax of £141.2m.
(2) Before exceptional costs, comprising impairment of inventories, goodwill and intangible assets, and restructuring costs of £255.0m of which £173.1m related to the housebuilding business and £81.9m to the commercial developments business (2007: £26.2m, of which £25.6m related to the housebuilding business and £0.6m to the commercial developments business). Post-tax exceptional items include related tax of £66.8m (2007: £6.5m).
(3) The results for the year ended 30 June 2007 have been restated as explained in note 2.

Mark Clare, Group Chief Executive of Barratt Developments commented:

“Whilst we have produced a satisfactory set of results in an extremely challenging market, there is little prospect for any material improvement in trading conditions until mortgage finance and customer confidence return. In the meantime, we have successfully refinanced our business. Our focus today and looking forward is to maximise sales revenues, reduce costs and generate cash to reduce debt.”