Barratt suspends land-buying and furloughs 85% of workforce

News16 Apr 2020Luke Cross

Barratt Developments has announced it is suspending its land-buying activity, while also furloughing over 5,500 employees.

Barratt has taken further measures in response to COVID-19 (picture: Getty)

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Barratt suspends land-buying and furloughs over 5,500 employees in continued response to COVID-19 #ukhousing

Providing an update to the markets today (16 April 2020), Barratt said it continues to put health and safety as a top priority following its decision to temporarily close all of its sales centres, construction sites and offices due to the COVID-19 pandemic. The shutdown was completed by 27 March 2020.

The house builder is now suspending all land-buying and postponing non‐essential capital expenditure, while ceasing recruitment and cancelling its interim dividend, which would have seen around £100m paid out to shareholders.

Barratt is in the process of furloughing around 85 per cent of its employees, albeit they will receive “normal pay” until at least the end of May 2020.

All executives, non-executives and regional managing directors have agreed to a voluntary 20 per cent reduction in base salary and fees “until such time as the group is able to restart work on site”.

They have also agreed to waive any salary or fee increase for the current financial year.

Between 23 March 2020 and 12 April 2020, Barratt said it delivered 1,349 completions, including joint ventures. That takes it to 11,713 homes in the period to 12 April 2020, compared with 10,954 homes in 2019.

Barratt said it continues to be “financially strong, with a well-capitalised balance sheet and a robust cash and liquidity position”.

At 14 April 2020, it had around £450m of cash, along with committed facilities and private placement notes of £900m, made up of a £700m undrawn revolving credit facility and fully drawn US private placement notes.

It added: “Our experienced board remains focused on taking the right actions and planning for the future, so that when appropriate to do so, we can re-start our sales centres, construction sites and offices safely and are well-placed to continue to deliver the high-quality homes the country needs.”

Barratt’s update comes as the Construction Leadership Council released its third version of coronavirus guidance in the space of three weeks, incorporating the latest advice from Public Health England on social distancing in the workplace.