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Annual Report and Accounts 2023
Strategic Report
Non-financial and sustainability information statement
The information below is intended to help stakeholders understand
our position on these key non-financial matters. We have
considered these non-financial matters and disclosed in the
relevant sections, when determining what information should
be included in the Annual Report and Accounts, the information
needs of different stakeholders and their relative importance as
well as the relevant time horizons in each matter. The following
complies with the non-financial reporting requirements contained
in Sections 414CA and 414CB of the Companies Act 2006.
Description of the business model
Our business summary
Our business model
Non-financial key performance indicators relevant to
the company’s business
Social matters
Market review
Our sustainability focus areas
Affordability
Employees
Development and training
Diversity
Wellbeing
Employee engagement
Gender pay gap
Board diversity
Human rights
Human rights
Third parties
Anti-bribery and corruption
Group policy
Working with suppliers
Environmental matters
Climate-related financial disclosures
Waste
Building sustainably
Greenhouse gas emissions disclosure
Policy, due diligence and outcomes
Risk management
Principal risks
Long-term viability statement
Audit Committee Report
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14
16
20
40
30
36
38
38
35
37
84
39
39
39
39
78
33
40
97
71
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99
124
Our fifth integrated report
We are committed to being a sustainable and responsible
business. This is demonstrated in this integrated Annual
Report. Our focus is the connection of economic, environmental,
social and governance matters to create and preserve long-
term value for all our stakeholders.
For a detailed description of our approach to integrated
reporting, go to the Appendix on page 243.
Notice regarding limitations on Directors’ liability
under English law
Under the Companies Act 2006, a safe harbour limits the
liability of Directors in respect of statements in, and omissions
from, the Strategic Report contained on pages 2 to 100 and the
Directors’ Report contained on pages 101 to 171. Under English
Law, the Directors would be liable to the Company (but not to
any third party) if the Strategic Report and/or the Directors’
Report contains errors as a result of recklessness or knowing
misstatement or dishonest concealment of a material fact, but
would not otherwise be liable.
Strategic Report and Directors’ Report
Pages 2 to 100 inclusive, and the Non-financial and
sustainability information statement here, comprise the
Strategic Report, and pages 101 to 171 inclusive comprise the
Directors’ Report, both of which have been drawn up and
presented in accordance with, and in reliance on, English
Company Law. The liabilities of the Directors in connection with
the reports shall be subject to the limitations and restrictions
provided by such law.
Cautionary statement regarding
forward-looking statements
The Group’s reports, including this document and written
information released, or oral statements made, to the public
in future by or on behalf of the Group, may contain forward-looking
statements. Although the Group believes that its expectations
are based on reasonable assumptions, any statements about
future outlook may be influenced by factors that could cause
actual outcomes and results to be materially different. Nothing
contained in this Annual Report or on the Group’s website
should be construed as a profit forecast or an invitation to deal
in the securities of the Company.
Alternative performance measures
In addition to the Group using a variety of statutory performance
measures it also measures performance using alternative
performance measures (APMs). Definitions of the APMs and
reconciliations to the equivalent statutory measures are
detailed on pages 235 to 237. The definition of net cash is
included in note 18 of the Financial Statements.
Cover image 1: Orchards Rise, Swindon
Cover image 2: Victoria Chalmers, Site Manager at Hopecroft and NHBC
Pride in the Job Award winner
We are leading the
future of housebuilding
for our customers
96
NHBC Pride in the Job Quality Awards
Strategic Report
Highlights
Investment case
Chair’s Statement
At a glance
Business model
Key performance indicators
Marketplace
Chief Executive’s Statement
Our strategy
Building sustainably
Section 172
Stakeholder engagement
Chief Financial Officer’s review
Risk management
Climate-related risks and opportunities
Viability Statement
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9
10
12
14
16
20
23
29
40
50
54
66
71
78
99
Corporate Governance
Board of Directors and Company Secretary
Executive Committee
Regional Managing Directors
Corporate Governance Report
Nomination Committee Report
Audit Committee Report
Safety, Health and Environment
Committee Report
Remuneration Report
Other statutory disclosures
Statement of Directors’ Responsibilities
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106
107
108
116
124
133
137
169
171
Financial Statements
Independent Auditor’s Report
Consolidated Income Statement and
Consolidated Statement of
Comprehensive Income
Statement of Changes in Shareholders’
Equity – Group
Statement of Changes in Shareholders’
Equity – Company
Balance Sheets
Cash Flow Statements
Notes to the Financial Statements
Definitions of alternative
performance measures and
reconciliation to IFRS (unaudited)
Five-year record (unaudited)
Glossary
Integrated reporting approach
Group advisers and Company information
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188
235
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240
243
244
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Barratt Developments PLC Annual Report and Accounts 2023
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Sustainability
We are determined to be the leading
national sustainable housebuilder.
We were recognised on the CDP Climate
Change A List for Leadership, one of
fewer than 300 companies worldwide.
We believe that fundamental to building
quality homes is building a positive
environmental, social and economic
legacy for future generations. This is
reflected in our ambitious targets
and clear plans and actions.
Leadi
Employees committed
to excellence
Our site managers compete every year to secure
industry-wide recognition for their management
of excellent site standards and build quality, through
the Pride in the Job Awards. Our site managers won
96 awards in 2023 – more than any other housebuilder
for the 19th year running.
96
Pride in the Job Awards
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Build quality
Build quality is monitored across our developments by the NHBC.
There are five key stages in the home building process, each
marked by NHBC inspections and the logging of reportable items,
(RIs). Barratt has delivered the lowest rate of RIs across the
major housebuilders consistently for each of the last four years,
highlighting our focus on build quality controls and high standards
across our developments.
0.16
reportable items (RIs) in FY23
See page 33
Leadi
ng
Scale
We are the largest housebuilder in
the UK with our operations spanning
England, Scotland and Wales and
encompassing both greenfield
development and brownfield
regeneration activities. Through our
network of 29 divisions, we deliver
more homes than any other
housebuilder across the UK.
17,206
homes completed in FY23
Building at scale and great
customer service is at
the heart of what we do
Everything was
perfect and as
we wanted it.”
Francesca and Jordan,
Barratt customers
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Future Homes Hub
Our Chief Executive and other members of the senior leadership
team are playing leading roles in the Future Homes Hub. This
organisation brings together the housebuilding sector, the wider
supply chain, the infrastructure sector, finance and the
Government to ensure we, as an industry, have a long-term
delivery plan for the sector in line with the Government’s legally
binding net zero target.
See page 64
the
futu
Innovation in future
home design
Through partnerships with our supply chain and academia,
Barratt is leading innovation in both the products we use
and in our construction methods, to ensure the industry
can deliver zero carbon homes, at scale, in the future.
The eHome2, built within a climate chamber at the Energy
House 2.0 at the University of Salford, is a zero carbon home
which is testing the effects of climate change and analysing
how new homes can cope with more extreme weather
conditions, whilst reducing energy and water use.
See page 34
eHome2 Link
Scan to view more
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Strategic land
Land remains the foundation of our business. Our current land
bank provides the land we require in the short to medium term
to support our development activity. Our strategic land supports
our long-term growth, securing land for future development
but without committing to current land values.
During the year we have expanded our strategic land bank
by more than 10,000 plots and we held 101,784 plots of strategic
land at the year end.
Future leaders
Through our internal development programmes we are
committed to developing the potential of our employees and
developing our leaders of the future.
Our “Catalyst” programme is designed to help high potential
female employees develop their careers within the Group.
Our “Rising Stars” programme seeks to identify and support our
diverse future leaders across all aspects of the Group’s activities.
See page 35
futu
re
of house building
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Customer
satisfaction
93% of our customers said they would
recommend Barratt to a friend in the latest
annual HBF National New Homes
Customer Satisfaction survey. As a result,
Barratt was awarded a 5 star rating for
customer satisfaction, making us the only
major housebuilder to be awarded this
accolade for 14 consecutive years.
93%
of customers said they would recommend
Barratt to a friend
See page 30
Discover some of our outstanding
developments
Scan to view more
for our
custo
Helping address cost
of living pressures
Our customers unlock significant annual
savings by moving into our new build homes.
The average new house buyer is saving more
than £180 per month or £2,200 per year on
energy bills, when compared with purchasers
of equivalent older houses. Our customers also
benefit from lower utility costs through reduced
water usage. Beyond the compelling financial
benefits, our new homes dramatically lower
carbon emissions for our customers too.
£2,200
average savings per year on energy bills,
when compared with purchasers of equivalent
older houses.
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Homes for everyone
Everyone deserves a safe and affordable home,
whether buying, or renting in the public or private
rental sectors. We build homes for everyone.
During the year, we completed 12,456 homes for
private homebuyers and those looking to rent in
the private rental sector, as well as 3,922 affordable
new homes, sold at 55% below the average price
of private new homes completed in the year.
55%
below the average price of private new homes
completed in the year
See page 26
custo
mers
This is the first time we have moved
home in over 20 years. We chose
Barratt not just because of the style,
layout and design of the development
but also the sales team. They’re friendly,
helpful, have great knowledge and
always on hand to answer questions;
we felt absolutely at ease with them.”
Darren and Katie,
Barratt customers
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Highlights
2023 highlights
Operational and sustainability highlights
17,206
Total home completions1
(FY22: 17,908)
4.31
Waste intensity3
(FY22: 4.97)
96%
Health & safety (SHE audit compliance)
(FY22: 97%)
23.7%
Carbon reduction4
(FY22: 23.2%)
367
Average active sales outlets2
(FY22: 332)
4.3
Land bank years
(FY22: 4.7)
5 star
HBF 5 star customer satisfaction
(FY22: 5 star)
84.4%
Employee engagement score
(FY22: 79.4%)
Financial highlights
21.2%
Adjusted gross margin5
(FY22: 24.8%)
£884.3m
Adjusted profit before tax5
(FY22: £1,054.8m)
67.3p
Adjusted basic EPS5
(FY22: 83.0p)
£1,069.4m
Year-end net cash5
(FY22: £1,138.6m)
18.3%
Gross margin
(FY22: 17.1%)
£705.1m
Profit before tax
(FY22: £642.3m)
53.2p
Basic EPS
(FY22: 50.6p)
22.2%
ROCE4
(FY22: 30.0%)
1 Total home completions, including JVs, were 17,206 (FY22: 17,908) for the year. Privately, wholly
owned completions were 12,456 (FY22: 13,327), affordable home completions were 3,922
(FY22: 3,835) and JV home completions in which the Group had an interest were 828 (FY22: 746).
2 Including JV active sales outlets.
3 Waste intensity is measured in tonnes relative to 100m2 of legally completed build area in the
financial year.
4 Scope 1 and 2 GHG emissions reduction from an FY18 baseline. Our science-based target is to
achieve 29% reduction by FY2025.
5 In monitoring its performance, the Group uses a number of alternative performance measures.
These measures are defined on pages 235 to 237.
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In focus
∙ Awarded 96 Pride in the Job
Awards for outstanding site
management in the June
2023 NHBC Awards, more
than any other housebuilder
for the 19th consecutive year
∙ Awarded maximum 5 star
HBF customer satisfaction
rating for the 14th consecutive
year, more than any other
major housebuilder
∙ Our sustainability
performance recognised with
the Group joining the CDP’s
Climate Change A List for
Leadership, one of just 300
companies worldwide and the
top-rated UK housebuilder
∙ Sales rate of 0.55 net private
reservations per active outlet
per week during the year
(FY22: 0.81)
∙ Total forward order book
(including JVs) at 30 June
2023 of 8,995 homes at a
value of £2,223.4m (30 June
2022: 13,579 homes at
£3,622.3m)
∙ Strong balance sheet with net
cash of £1,069.4m, after
dividend payments of
£360.0m and the completion
of the £200m share buyback,
reflecting strong working
capital discipline
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Investment case
Reasons to invest
H o w we add value
Highly
experienced
build and sales
teams
Quality and
service
Strong
balance sheet and
cash generation
Nationally
diversified
Shorter owned
land bank
Putting customers
at the heart of
everything we do
Leading in
sustainability
The backdrop
The housebuilding industry is in a period of adjustment, reflecting the impact of inflation and the
subsequent changes in the cost of living and mortgage interest rates. These dynamics remain
significant in the near term but the long-term need for additional housing is clear.
We will manage these near-term challenges and ensure we emerge a stronger business,
capable and ready to deliver the high quality, energy efficient, sustainable homes the
country so desperately needs.
Shorter owned land bank
We operate an efficient “build and sell”
model. We seek to run one of the shortest
but most developable land banks in the
industry. As soon as land is acquired, we
look to begin development at the earliest
opportunity, to drive our build efficiency and
home completions. This minimises capital
employed and brings forward returns,
resulting in greater value for investors.
Strong balance sheet
and cash generation
We maintain strong financial discipline,
recognising the cyclicality of the industry
in which we operate. We maintain a
strong balance sheet with a focus on
cash generation and a clearly defined
operating framework.
Highly experienced build
and sales teams
We have an experienced management team
and workforce as well as long-standing
and committed sub-contractors who
schedule, manage and deliver our high
quality, sustainable homes to exacting
standards. Our experienced teams also
leverage our reputation around build
quality, customer service, national scale
and financial strength to unlock additional
sales channels with our significant
expansion in the private rental sector.
Quality and service
Build quality and customer service are
fundamental to our business and customer
trust. Our build quality is recognised as
industry-leading through the external
checks on our homes during the build
process, as well as a 19-year unbroken
record in the industry’s Pride in the Job
Awards. We are the only major housebuilder
to be awarded a 5 star rating for customer
satisfaction for 14 consecutive years.
Nationally diversified
We operate throughout England, Scotland
and Wales. We design and build homes
that meet local market demand, from
one-bedroom apartments to five and
six-bedroom homes. We deliver homes
for private homebuyers, social landlords
and the private rental sector, supplying
the desperately needed high quality,
sustainable new homes across this
variety of tenures.
Leading in sustainability
We are the leading national sustainable
housebuilder. Our ambitious targets are
supported by clear plans and action.
We lead the industry in developing and
testing the step-change in future home
designs, which will allow the industry
deliver net zero at scale. We believe that
fundamental to building quality homes is
building a positive environmental, social
and economic legacy for future generations.
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Chair’s Statement
Strong and resilient
The Group is well placed to navigate the challenging market
backdrop, continuing to deliver the high-quality, sustainable
homes that are needed across the country.
Committed to leading the future of housebuilding
for our customers
I am pleased to present my first Annual Report as Chair, having
taken over from John Allan on 30 June 2023. I joined the Group
at the end of a financial year in which we delivered a strong
operational and financial performance whilst maintaining our
industry-leading quality, customer service and sustainability
credentials, against a backdrop of both political and economic
instability. Our balance sheet, with net cash of £1,069m, is
robust and provides the financial strength and flexibility to
ensure we can manage through this period of uncertainty and
emerge well positioned for the future.
As part of my induction, I have met with our senior leadership
team, employees and external stakeholders, which has helped
me to gain a good understanding of the business and how it
operates. It is evident that there is a strong internal culture of
‘doing the right thing’, as well as a desire throughout the
organisation to ensure everyone has the opportunity to develop
to their full potential within a diverse and inclusive workplace. I
have been very impressed with the dedication and commitment
of our senior leadership team, and with the passion and purpose
of all our colleagues across the business.
Our focus on leading the industry in terms of customer service,
quality and sustainability is evidenced through the achievement
of the HBF 5 star rating for the 14th consecutive year, 96 NHBC
Pride in the Job Awards for our site managers and by the Group
joining the CDP Climate Change A List for Leadership, one of
fewer than 300 companies worldwide. The industry’s
contribution to climate change makes it imperative that we
continually scrutinise and challenge the ways in which we
operate, as well as the environmental and social impact of
our business. I am delighted to have joined a Group with both
a successful history and a clear focus on its leading role in
developing the sustainable homes of the future. (For more
information on the HBF customer satisfaction survey see
pages 30, on Pride in the Job Awards see page 33 and on
our approach to sustainability see pages 40 to 49.)
The Board recognises that we must manage the Group through
what is likely to be a more challenging period of trading, but we
will remain focused on managing these risks and challenges
whilst ensuring the Group is in the best possible position to
create long-term value for all our stakeholders.
Caroline Silver
Chair
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Board changes
There have been several changes in the composition
of the Board during FY23.
Jasi Halai joined the Board as an Independent Non-Executive
Director on 1 January 2023 and, as announced later in January,
I joined as a Non-Executive Director and Chair designate on
1 June 2023. Full biographical details and membership of
Committees can be found on pages 102 to 105 and details of the
recruitment processes can be found on page 119.
John Allan stepped down from the Board on 30 June 2023. John
played a key role in the Group’s development since joining the
Board in August 2014 and taking up the role of Chair in
November 2014. His experience and dedication were invaluable
and the Board wishes John well for the future.
As announced in January this year, Dame Sharon White decided
to step down early from her position as a Non-Executive Director
on 30 June 2023, after more than five years of service on the
Board, due to her other commitments. The Board would like to
express thanks to Sharon for her dedication and service.
Finally, I am pleased that Nigel Webb has agreed to join the Board
as a Non-Executive Director with effect from 1 October 2023.
Nigel brings a wealth of property, construction and land
experience to the Board, which complements the skills of the
existing Board members. Further details can be found on page 117.
We will continue to assess our composition and that of our
committees, considering the recommendations of the FTSE
Women Leaders Review, the Parker reviews and the McGregor-
Smith review. For information on the diversity of the Board
please see page 117.
Shareholder returns
The Board declared an interim dividend for FY23 of 10.2 pence
per share (FY22: interim dividend of 11.2 pence per share) and is
pleased to recommend a final FY23 dividend of 23.5 pence per
share (FY22: final dividend of 25.7 pence per share) in line with
our dividend policy of maintaining cover at two times.
Subject to shareholder approval, the final dividend will be paid
on 3 November 2023 to shareholders on the register at the
close of business on 29 September 2023. Shareholders who
elect for the Dividend Reinvestment Plan should do so by
13 October 2023.
The total proposed dividend for FY23, including the interim
dividend paid in May, is 33.7 pence per share (FY22: 36.9 pence
per share) lower than last year, reflecting the reduction in
adjusted earnings per share, offset by the reduction of dividend
cover to two times. We also returned surplus capital during the
financial year with a £200m share buyback programme.
The Board has reviewed our capital allocation policy in light of
current market conditions. In principle, the Board continues to
believe that excess capital should be returned to shareholders
when it is appropriate to do so. Whilst the Company remains
in a strong financial position, the UK housing market remains
difficult and the outlook remains uncertain. We have therefore
agreed that whilst our reduction in dividend cover to 1.75 times
will apply from FY24 as planned, there will be no further share
buybacks at this stage. The Board will continue to review the
capital allocation policy as market conditions develop.
The future
Looking ahead, we recognise that there are significant
macro-economic headwinds, most notably the continuing
inflationary pressures and the resulting interest rate
environment which is impacting mortgage affordability and
availability in the UK as well as economic growth, employment
and consumer confidence and spending.
We are in a strong position to deal with these challenges with a
proven operational team, a prudent net cash balance and a solid
forward sales position. The experienced senior management
team are responding to market conditions by driving revenue
through the efforts of our sales teams across the country
with the focused use of incentives, as well as diversification
to secure sales into the private rental sector.
The Board will continue to monitor changes in both the housing
and land markets, as well as the wider economy, but our
operating disciplines, forward order book and strong financial
position provide us with resilience and flexibility to adjust to
changes in the operating environment in the year ahead,
and as the market evolves thereafter.
Finally, on behalf of the Board, I would like to express our
thanks to our colleagues and our supply chain for their
commitment to the Group, both over the last year, and as we
look forward to the year ahead. On a personal note, I also look
forward to meeting many more colleagues as I get around more
of the Group’s operations in the coming year.
Caroline Silver
Chair
5 September 2023
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At a glance
Our business at a glance
Our purpose
To lead the future of housebuilding by putting customers at the heart of
everything we do.
We will achieve our purpose by continually innovating and applying best
practice across our four strategic priorities.
Our strategic priorities
See page 29
Customer first
We put customers at the heart
of everything we do.
We deliver customer
satisfaction through building
high quality, energy efficient
and sustainable homes.
Great places
We build long-term
relationships to secure
attractive land opportunities
where people aspire to live.
Through great design and
planning expertise, we
create positive legacies
for communities.
Leading construction
Investing in our people
We seek to deliver the highest
quality homes by focusing on
excellence across each stage
of construction.
We work with our supply chain
partners to ensure security of
supply, minimise waste and
promote the use of MMC and
development of new technologies.
People are at the heart of our
business and we aim to attract
and retain the best by investing
in their development and success.
We have established apprenticeship
and degree apprenticeship
schemes to attract the next
generation to our industry.
See page 40
Building sustainably
Nature
We preserve and enhance the natural
world by using resources responsibly
and creating places where people and
nature can thrive together.
Places
We design and build great places that
meet the highest standards, and that
promote sustainable, healthy and
happy living for our customers.
People
We believe everyone has the right to be
respected and treated fairly at work.
We do the right thing, nurturing diverse
talent and prioritising the wellbeing
of our people and partners.
Being a trusted
partner
Building meaningful,
long-term relationships
that make us the
developer of choice for
our partners. Innovating
with our supply chain
to drive efficiency
and sustainability,
whilst meeting our
customers’ needs.
Our principles
Building strong
community
relationships
Engaging fully with local
communities and
customers when creating
our developments.
Ensuring we create
places where our
customers aspire to
live and local
communities thrive.
Safeguarding
the environment
Minimising the
environmental impact
of our operations and
supply chain while
increasing the energy
and resource efficiency
of our homes. Seeking
to enhance habitats,
biodiversity and local
environments across all
of our developments.
Ensuring the
financial health
of the business
We maintain financial
discipline across all
aspects of our
operations. This
enables us to deliver
our operational targets
whilst maintaining our
industry-leading
standards of customer
service and build quality.
Keeping people safe
Putting health and safety
first by committing to the
highest industry
standards. Embedding
health and safety as a
core value for which we
are all responsible.
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Our homes
We are committed to building high-
quality energy efficient homes and
have been awarded 96 NHBC Pride in
the Job Awards – more than any other
housebuilder – for 19 consecutive years.
Our customers
We put our customers, at the heart
of everything we do, throughout their
home-buying journey, with our long-
standing commitment to exceptional
customer service.
Completions by unit type
15%
35%
30%
2%
8%
10%
1 and 2-bedroom homes
3-bedroom homes
4-bedroom homes
5 and 6-bedroom homes
Flats London
Flats Non-London
15+
9+
Help to Buy
Part-exchange
Traditional private
Investor
Affordable
9%
6%
53%
8%
24%
Completions by deal type
Central
3,189
2022: 3,546*
West
2,091
2022: 2,413*
Our brands
Housebuilding
Commercial development
Land promotion
Scotland
1,951
2022: 1,938
Northern
2,821
2022: 2,751
East
3,400
2022: 3,281*
London and Southern
3,754
2022: 3,979
* Comparatives for 2022 have been restated to reflect the movement of divisions between regions.
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Business model
How we build value
Our resources
People
Barratt recruits, trains and retains an
experienced and committed workforce.
Our people’s experience supports
delivery of a high quality product.
Expertise
The Group, established in 1958, has deep
knowledge and expertise in the design
and construction of housing in the UK,
both in conventional brick built properties
and through the use of timber frame.
Barratt continues to advance its
capabilities through investments such as
in the Zed House and Energy House 2.0.
Stakeholder relationships
Barratt builds great places to live
through partnerships in the supply chain,
with JV partners in our build programmes,
and with local communities as part of our
site planning and development.
We develop innovative products to
support home ownership in conjunction
with mortgage lenders. Our strong
relationships with our stakeholders are
critical in developing the products that
our customers want.
Land and planning
Barratt’s owned land bank is short
by design, but is complemented by
investment into strategic land and
promotional agreements. Through its
acquisition of Gladman in 2022, the Group
has sought to increase its level of
in-house land expertise to drive margin
and deliver a better return on capital.
Finances
The Group’s financial position and
balance sheet are robust, giving the
Group confidence, irrespective of market
conditions, to deliver homes into the
market at the right price and to engage
in the land market with value-accretive
bids. The Group held c. £1.1bn of cash
as at 30 June 2023.
14
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Competitive edge
Value for our stakeholders
We build
homes in which
customers want
to live, in locations
where people
want to live
We do this with an
experienced team
which delivers the
best homes on
the market
We operate
nationally and
at scale, rapidly
converting our land
bank to cash
We see
sustainability
as a differentiator,
and a way to
create value
We have the financial resources, in-house
expertise and stakeholder network to allow
us to tender for land in desirable locations
around the UK. We use our knowhow and
the experience of our people, supported by
our three complementary brands, to design
and build developments which delight our
customers, support local communities and
deliver competitive returns for our investors.
Total home completions
17,206
Our customers tell us that our homes are
the best in the market. For 14 years in a
row, we have been 5 star rated by the Home
Builders Federation, meaning over 90% of
our customers would recommend us to a
friend. In addition, in 2023, our site managers
won 96 Pride in the Job Quality awards, the
19th year in a row that Barratt has won more
awards than any other housebuilder.
HBF customer satisfaction rating
5 star
We are the UK’s biggest housebuilder by
volume and we operate with a national
footprint. This allows us to leverage
economies of scale across our supply chain,
deploy our capital into attractive development
opportunities across the country and more
easily navigate an increasingly complex
regulatory environment.
Average active sales outlets
367
We seek to lead the industry to a more
sustainable future, both as a responsible
home builder, and to develop better, more
affordable products for our customers which
are easier to finance. We are investing in
projects such as the Energy Home 2.0 to
understand how this can be done, both to
see how such housing can be built and to
understand how our customers can benefit
from the change.
Scope 1 & 2 carbon intensity
23.7% reduction
vs. FY18
Customers
We deliver high quality, energy efficient
homes, with 99% of our homes being
EPC A or B-rated. This means our homes
should have running costs that are lower
than average.
Employees
We offer a great place to work which is
focused on performance and personal
development and invest in our people both
through training and longer-term career
development. We support our people through
economic challenges with help such as our
£1,000 cost of living payment and invest in
their health and wellbeing.
Shareholders
We deliver capital returns, having declared
dividends each year since 2013, and in 2023
we completed a £200m share buy-back
programme. With our operating framework,
we aim to balance business growth with cash
returns and seek to develop markets for our
products, whether through private sales, bulk
deals or the private rental sector.
Suppliers
We nurture our supplier relationships by
being honest and transparent, giving forward
visibility on both demand and workload. We
work with our suppliers to help develop the
next generation of housing.
Communities
We seek to create a positive legacy in our
developments, incorporating affordable
housing alongside private sales. We increase
biodiversity on our sites, creating a space for
nature and for communities to thrive, and
invest to improve community infrastructure
as part of our planning gain contributions.
Wider society
In 2023 we paid £186.0m in direct taxation
and a further £251.7m in indirect taxes,
driven by the sale of 17,206 homes, and
employed 6,728 people at the year end.
As the largest housebuilder in the UK, we
take our responsibility to support the industry
and our supply chain in our journey to a
net zero future seriously. We are investing
to understand how to get to a zero carbon
future and are committed to reaching
that destination.
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Key performance indicators
How we measure progress
for the future
Non-financial
1
2
3
HBF 5 star customer
satisfaction
Land approvals
Scope 1 and 2
carbon emissions (tCO2e)
5 star
2022: 5 star
(812)
2022: 19,089
5 Star
5 Star
5 Star
5 Star
5 Star
18,448
18,067
19,089
24,909
2022: 25,074
30,582
29,265
21,963
25,074
24,909
9,441
2019
2020
2021
2022
2023
2019
2020
2021
2022
Target
HBF 5 Star customer satisfaction.
Target
Replace plots utilised in year.
(812)
2023
Definition
The percentage of homebuyers
who would recommend us to family
and friends taken from the HBF
Homebuilder Survey.
Why it’s a KPI
Customer satisfaction is a strategic
priority and fundamental to our business.
HBF Homebuilder Survey is an industry
recognised independently measured
indicator of our customer service and
build quality.
Key metric for assessing performance
for Executive Directors’ remuneration.
Link to strategy
Definition
The number of plots approved
for purchase, less the number
of approvals withdrawn.
Why it’s a KPI
Monitors whether the Group is
approving the appropriate amount of
land for purchase to support future
business activity.
Ensures land is approved at minimum
hurdle rates.
Link to strategy
2019
2020
2021
2022
2023
Target
Reduce absolute scope 1 and 2
greenhouse gas emissions by 29%
by 2025 from 2018 levels.
Definition
Tonnes of greenhouse gas emissions
associated with our scope 1 and market
based scope 2 emissions, which includes
energy and fuel use on our sites, in our
offices and in our company vehicles.
Why it’s a KPI
Monitors the environmental impact of
our business activities and our exposure
to climate-related transition risk.
Scope 1 and 2 carbon emissions intensity
is a key metric for assessing performance
for Executive Directors’ remuneration.
To achieve net zero by 2040, we must
reduce absolute emissions, therefore
we have revised our KPI to be in line
with our approved science-based target.
Link to strategy
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4
5
6
Waste intensity
SHE audit compliance
4.31
2022: 4.97
7.70
6.53
5.89
4.97
4.31
96%
2022: 97%
96%
Employee
engagement score
84.4%
2022: 79.4%
96%
97%
97%
96%
84.5%
84.2%
79.4%
84.4%
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
N/A
Target
Reduce construction waste intensity
(tonnes per 100m2 of legally completed
build area) to 5.67 by 2025.
Definition
Tonnes of waste generated from above
ground construction for every 100m2
of legally completed build area.
Why it’s a KPI
Monitors the efficiency of operations
and the use of materials in the
construction process.
Key metric for assessing performance
for Executive Directors’ remuneration.
Link to strategy
Target
Over 94% SHE audit compliance.
Target
Exceed 75th percentile score in the
engagement survey.
Definition
The percentage of internal inspections
which are compliant with SHE guidelines.
Why it’s a KPI
Demonstrates compliance with safety
standards on our sites. Lead indicator
highlighting areas of SHE focus.
Key metric for assessing performance
for Executive Directors’ remuneration.
Link to strategy
Definition
The percentage level of satisfaction of
our people measured using an annual
independently conducted survey.
Why it’s a KPI
Monitors employee engagement and
satisfaction, whilst also providing a
forum for view-sharing, to ensure we
retain and invest in the best people and
focus on their development and success.
Link to strategy
Link to strategy
See page 29
Great places
Leading construction
Investing in our people
Customer first
On track
Achieved
Monitor
Below target
Target not met
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Key performance indicators continued
Financial
1
2
3
Total home completions
Adjusted gross margin
Gross margin
Adjusted PBT (£m)
Profit before tax (£m)
17,206
2022: 17,908
21.2%
18.3%
2022: 24.8%/17.1%
884.3
705.1
2022: 1,054.8/642.3
17,856
17,234
17,908
17,206
12,604
22.8%
18.5%
18.0%
24.8%
23.2%
21.0%
21.2%
920.0
909.8
17.1%
18.3%
1,054.8
919.7
812.2
884.3
642.3
705.1
505.7
491.8
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Target
Growth to 21,500 in the medium term.
Target
Achieve minimum 23% gross margin.
Target
Informed by consensus at the start
of the financial year.
Definition
Legally completed homes during the year
including JV homes legally completed
in which the Group has an interest.
Why it’s a KPI
Reflects activity and growth.
Monitors business capacity.
2023 performance
See page 26
Definition
Gross profit divided by total revenue,
expressed as a percentage.
Why it’s a KPI
Key internal metric for assessing
site profitability.
Enables consistent comparison
of land acquisitions.
2023 performance
See page 67
Definition
Profit before tax including the applicable
share of profits from JVs and associates.
Why it’s a KPI
Shows the profitability of the Group
relative to market expectations.
Key metric for assessing performance
for Executive Directors’ remuneration.
2023 performance
See page 68
18
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4
5
6
7
Return on Capital
employed
Net cash (£m)
Adjusted basic EPS (p)
Basic EPS (p)
Total shareholder
return
22.2%
2022: 30.0%
1,069.4
2022: 1,138.6
67.3
53.2
2022: 83.0/50.6
10.6%
2022: (4.9)%
29.9%
30.0%
27.8%
15.5%
22.2%
765.7
1,138.6
1,069.4
74.1
73.2
83.0
73.5
64.9
67.3
59.8%
50.6
53.2
36.8%
40.5
39.4
308.2
317.4
6.1%
10.6%
(4.9)%
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Target
Minimum 25%.
Target
Year-end net cash.
Definition
Earnings before amortisation,
interest, tax, operating
charges relating to the defined
benefit pension scheme and
operating adjusting items for
the year, divided by average net
assets adjusted for goodwill
and intangibles, tax, net cash,
derivative financial instruments
and provisions in relation to
legacy properties.
Why it’s a KPI
Ensures efficient and effective
use of capital.
Key metric for assessing
performance for Executive
Directors’ remuneration.
2023 performance
See page 167
Definition
Cash and cash equivalents,
bank overdrafts, interest-
bearing borrowings and
prepaid fees.
Why it’s a KPI
Monitors business liquidity,
resilience to risk and ability
to take advantage of
opportunities, including
investments and land
acquisition. Allows for
distributions to shareholders.
Net cash is key to understanding
the strength of the business
and has been added as a new
KPI this year.
2023 performance
See page 68
Target
Informed by consensus at the
start of the financial year.
Definition
Profit for the year attributable
to ordinary shareholders
divided by the weighted
average number of ordinary
shares in issue during the
year, excluding those held by
the EBT on which no dividend
is paid.
Why it’s a KPI
Shows profit attributable
to each share.
Key metric for assessing
performance for Executive
Directors’ remuneration.
2023 performance
See page 68
Target
To grow total shareholder
return against FTSE
companies (those within 50
above and 50 below the
Company in the index) and the
Housebuilding sector.
Definition
Measure of the performance of
the Group’s share price over a
period of three financial years.
It combines share price
appreciation and dividends
paid to show the total return
to the shareholders expressed
as a percentage.
Why it’s a KPI
Shows the appreciation and
income a shareholder receives
from holding each share.
Key metric for assessing
performance for Executive
Directors’ remuneration.
2023 performance
See page 234
On track
Achieved
Monitor
Below target
Target not met
Barratt Developments PLC Annual Report and Accounts 2023
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Marketplace
Trends in our markets
The UK economy
UK economic output has grown by 1%1 during the 12 months to 30
June 2023 with the last quarter to June 2023 registering 0.2%
growth on the previous quarter from January 2023 through
March 2023. UK monthly GDP at the end of June was 0.8% ahead
of that prior to the onset of the pandemic in February 2020. The
outlook for the UK economy in the remainder of 2023 and into 2024
is uncertain. Stubborn inflationary pressures being experienced
across the whole economy are being exacerbated by limited labour
availability and resulting labour cost inflation. Government
economic policies and the Bank of England’s decisions around
interest rates, to further dampen inflation, will be critical in the
months ahead, most notably with the Autumn Statement.
In its March 2023 “Economic and fiscal outlook”, the Office for
Budget Responsibility forecast a GDP decline of 0.2% in 2023 and
growth of 1.8% in 2024. HM Treasury‘s August collated consensus
economic forecasts suggested limited GDP growth of just 0.3%2
in 2023 and 0.6%2 in 2024.
Housing supply and demand
There remains a fundamental shortage of homes in the UK.
This is evidenced both by the long-term growth in home prices
relative to incomes and the significant inflationary pressures
being seen in the rental market, as an ever increasing number
of households are being failed by inadequate housing supply.
New build housing additions in England were 210,0703 in the
last reported 12-month period to 31 March 2022, growth of 9.5%
on the 191,820 in the year to 31 March 2021. This recovery
reflected strong home-buying demand following the pandemic,
along with the industry’s drive to recover build activity following
the national lockdown, although labour and building material
supply chain constraints moderated the pace of this recovery.
As a result, new home additions recovered but remained some 4%
below the 219,120 homes completed in the year to 31 March 2020.
Net new build additions may register growth when data is released
in the winter of 2023, with respect to the year to 31 March 2023
but new build additions look set to fall in the current year. This
decline reflects the end of Help to Buy, higher mortgage interest
rates and the consequent change in mortgage affordability. The
participation of first time buyers in the market has sharply
reduced in 2023.
Whilst house prices peaked in August 2022, affordability
constraints have seen house prices move lower in the ten months
through to June 2023. The average UK house price had reduced
by 3.5%4 in nominal terms according to the Nationwide Building
Society over the 12 months to 30 June 2023, which equates to a
real terms decline, after adjusting for CPI, of 10.1%.
The shortage of new homes for sale has created additional
demand in the rental sector, increasing the average household
rent by 10.4%5 over the year to 30 June 2023, with every region
of the UK experiencing significant rent cost increases,
according to the HomeLet Rental Index. Based on the HomeLet
Rental Index data, rents have increased by 22.0% over the past
two years to June 2023 and absent a significant reduction in
mortgage interest rates, rental demand will continue to grow
as potential homebuyers remain unable to buy.
The housing shortage is increasingly evident across all tenures
and is a critical issue for the UK economy and the economic
health and wellbeing of its population.
England - new build home
additions (RHS)
England - planning consents (‘000s)
– revised series (RHS)
Savills UK Greenfield Development
Land Price Index (LHS)
English planning consents and net new build home additions
and Savills UK Greenfield Land Price Index
100.0
53.3
158.7
99.6
339.5
95.7
291.2
270.6
237.1
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Barratt Developments PLC Annual Report and Accounts 2023
Strategic Report
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Land supply and the planning system
The steady and consistent supply of land within a predictable
planning system is critical to the housebuilding industry. There are
a number of risks and uncertainties being managed by developers:
∙ the typical size of development sites, which is growing,
and requiring additional time and resources;
∙ the uncertainty as to the timing of when construction
activity can commence on a site given pre-development
clearances required;
∙ the speed with which labour and building materials
can be procured for build activity;
∙ the scheduling and consistency of workload for the sub-contract
labour required to sustain the industry over the medium
to long term; whilst also,
∙ ensuring build activity is delivered to required quality
standards, whilst ensuring the health and safety of the
workforce, as well as customers and homeowners, on
new housing development sites.
Following the pandemic, planning consents reached a peak of
339,4736 in the 12 months to 30 June 2021, a level consistent
with the Government’s target to deliver 300,000 homes annually
by the mid-2020s. However, this level has not been maintained,
falling by 20% to 270,5596 in the year to 31 March 2023.
The political backdrop has not been conducive to delivering the
number of planning consents needed by the industry, including
five changes in Housing Minister in the last 18 months. There has
been a noticeable shift in delivery since the announcement in
December 2022 that local housing targets were “advisory” rather
than “mandatory”, as well as to end the obligation on local
authorities to maintain a rolling five-year land supply where they
have a local plan in place. This has allowed 58 local authorities
to stall, delay or withdraw their local housing delivery plans,
with 28 doing so following the December announcement7.
Halifax Mortgage Affordability Index
60%
1990 Q2, 56.4%
Halifax Affordability Index
55%
50%
45%
40%
35%
30%
25%
20%
Average (1985 - Q1 23)
2007 Q3, 46.4%
2023 Q2, 40.8%
32.9%
2020 Q2, 27.7%
5
8
9
1
7
8
9
1
9
8
9
1
0
9
9
1
1
9
9
1
3
9
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1
5
9
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In addition to this, Natural England, a non-departmental public
body sponsored by the Department for Environment, Food and
Rural Affairs, intervened in the planning process in March 2022
and advised 74 local authorities that developments should not
proceed if they increased the level of nutrients in water courses
and failed to deliver “nutrient neutrality”. It is estimated that
more than 145,0007 planning consents have been blocked
across the 74 local authority areas, with new housebuilding
effectively under a moratorium in these areas and many smaller
housebuilders facing business closure.
The Government announced plans to amend the Levelling Up
and Regeneration Bill on 29 August 2023 in order to unblock
homes currently held up by nutrient neutrality mitigation
measures. The details around these measures, their successful
passage into legislation, as well as the speed with which the
changes come into force, remain uncertain.
Finally, despite the growing complexity of planning applications,
the resourcing of local authority planning departments has
failed to match growing planning demands. National Audit
Office analysis has shown that between 2010/2011 and 2019/2020
funding for planning services reduced by £1.3bn or 55%8.
All of these factors are conspiring to create a continuing and
accelerating decline in planning consents which, in the first
quarter of calendar 2023, declined by 24.7% to 63,013, when
compared to 20226.
The mortgage market and housing affordability
The step-change in mortgage interest rates is charted below
and highlights the challenge now faced by homebuyers requiring
mortgage finance. Based on Bank of England data9, mortgage
borrowing costs for new mortgages steadily declined for more
than 12 years to a low of 1.51% in November 2021. This has
though seen a sharp reversal in less than 18 months, with the
average cost of new mortgages advances in June 2023
increasing to 4.64%, a threefold increase from the low point,
with mortgage interest rates back at levels last seen in 2009.
The Halifax Mortgage Affordability Index combines the
prevailing mortgage interest rate on new advances with
current home prices, and as can be seen in the chart opposite,
the purchase of a new home now equates to 40.8% of after tax
income, materially ahead of the long-term average at 32.9%.
In the coming months, this affordability measure looks set to be
impacted positively by the rate of nominal wage growth but will
then ultimately be dependent on the future movements in both
mortgage rates and house prices.
We are continuing to work with banks and building societies and
other financial institutions to introduce additional lenders to the
new build sector and increase lender understanding as to the
advantages of new build lending. The development of green
mortgages remains an important initiative in this regard. We
are also playing an active role in increasing the understanding
amongst residential valuers through the Future Homes Hub,
as well as developing and promoting advantageous mortgage
products, which reflect the energy efficiency and lower running
costs, as well as the environmental credentials and the absence
of future retrofit spending on the insulation of our homes.
Barratt Developments PLC Annual Report and Accounts 2023
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Marketplace continued
Building materials and labour
We experienced an elevated rate of build cost inflation
at between 9% and 10% throughout FY23. This reflected:
∙ the relatively positive outlook for continued housing growth,
in the second and third quarters of calendar 2022, which, against
a backdrop of relatively constrained supply, created upward
pressure on forward building materials supply agreements; and
∙ the underlying inflationary pressures on labour costs experienced
across the wider UK economy during the year; and the lagged
impact of the dramatic increase in energy costs, which began
in the autumn of 2021 and was further compounded by the
conflict in Ukraine. These increases took time to feed through
supply chains, given production timeframes and suppliers’
energy hedging arrangements.
Through our centralised procurement team, careful scheduling
of our building materials demands and the support of our
long-standing supply chain partners, we are focused on ensuring
security of supply as well as sustainable but competitive pricing.
As a result of the combination of weaker forecast activity, falling
energy costs and increased competition in the supply chain for
future orders, we expect total build cost inflation will slow
to around 5% in FY24.
Future regulatory changes
The industry faces future regulatory changes with respect to
biodiversity net gain, as well as the Future Homes Standard
over the coming three years.
Biodiversity net gain
Under legislation which will come into force in November 2023,
all of our developments will be required to identify and deliver a
minimum biodiversity net gain of 10%. This requires our developments
to create plans to deliver at least a 10% measurable improvement
in the biodiversity of the site developed, relative to the site had
development not occurred.
How we are prepared
From January 2023 we have identified a minimum biodiversity
net gain of 10% across all new development designs submitted
for planning – more than nine months ahead of legislation.
We have also embedded a comprehensive operational framework
to deliver this change across our divisions, including colleague
training, calculation tools, automated data collection,
workshops with external consultants, a review of external
consultant capacity and capability, and a network of divisional
representatives championing BNG.
Future Homes Standard
From 2025 the FHS will require new homes to produce 75-80%
less carbon emissions than standards applicable through to
June 2022. The detailed requirements and performance
measurement around this new Standard are not yet finalised
with the timing and transition arrangements for this new
Standard, along with industry consultation, yet to be initiated.
How we are prepared
We are evolving our house types and trialling new technologies,
with the eHome2 project at the University of Salford, in
particular, testing evolving solutions which will be adopted
to meet this new standard.
1 GDP monthly estimate, UK: June 2023
https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/
gdpmonthlyestimateuk/june2023
2 HM Treasury: forecasts for the UK economy August 2023
https://assets.publishing.service.gov.uk/government/uploads/system/
uploads/attachment_data/file/1180276/forecomp_Aug1.pdf
3 DLUHC: Housing supply: net additional dwellings
https://www.gov.uk/government/statistics/housing-supply-net-
additional-dwellings-england-2021-to-2022/housing-supply-net-
additional-dwellings-england-2021-to-2022
4 Nationwide House Price Index – June 2023
https://www.nationwidehousepriceindex.co.uk/reports/house-prices-
relatively-stable-in-june-but-annual-growth-remains-in-negative-territory
5 HomeLet Rental Index June 2023
https://homelet.co.uk/homelet-rental-index
6 HBF Pipeline Report 1Q 2023 – Published July 2023
https://www.hbf.co.uk/documents/11892/HPL_REPORT_2022_Q1_final.pdf
7 HBF Report – 30 June 2023
https://www.hbf.co.uk/news/nutrient-neutrality-four-years-of-
government-failure/#:~:text=New%20estimates%20published%20
today%20suggest,year%20until%20solutions%20are%20found.
8 Levelling Up, Housing and Communities Committee – Reforms to
national planning policy – 10 July 2023
https://publications.parliament.uk/pa/cm5803/cmselect/cmcomloc/1122/
report.html#
9 Bank of England Mortgage lending data:
https://edu.bankofengland.co.uk/boeapps/database/fromshowcolumns.
asp?Travel=NIxAZxSUx&FromSeries=1&ToSeries=50&DAT=RNG&FD=1&F
M=Jan&FY=2010&TD=11&TM=May&TY=2025&FNY=Y&CSVF=TT&html.
x=66&html.y=26&SeriesCodes=CFMBJ95&UsingCodes=Y&Filter=N&title=
CFMBJ95&VPD=Y
Bank of England – average mortgage interest rate on new advances (%)
Average mortgage interest rate
Long-term trend
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
7%
6%
5%
4%
3%
2%
1%
0%
22
Barratt Developments PLC Annual Report and Accounts 2023 Strategic Report
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Chief Executive’s Statement
Strong performance
in a challenging year
Introduction
During what has been a year of economic and political
uncertainty, we have delivered a strong operational and a good
financial performance, given the market backdrop. I would like
to thank our employees, sub-contractors and supply chain
partners for their hard work and commitment which enabled us
to manage our site-based construction activity effectively,
delivering high-quality efficient homes and great service to
our customers.
Our purpose remains clear: to lead the future of housebuilding
by putting customers at the heart of everything we do.
Reflecting our position as Britain’s largest and leading national
sustainable housebuilder, we are committed to playing a key
role in addressing the housing shortage and delivering the
sustainable, high-quality and energy-efficient homes and
developments needed across England, Scotland and Wales.
We will continue to operate the business in a flexible way, with
a short land bank aimed at maximising our delivery of housing
from our efficient and resilient balance sheet.
Performance overview
We delivered a strong performance against a challenging
backdrop this year, while maintaining or focus on both build
quality and customer service.
Our performance is a testament to the disciplines embedded
by our operating framework as well as the commitment of
our employees, sub-contractors and supply chain partners.
Barratt Developments PLC Annual Report and Accounts 2023
23
David Thomas
Group Chief Executive
Strategic Report
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Chief Executive’s Statement continued
Performance overview continued
∙ Total home completions were 17,206 (FY22: 17,908).
∙ We achieved a 21.2% adjusted gross margin (FY22: 24.8%), with
adjusted gross profit of £1,130.4m (FY22: £1,308.1m), with reduced
profitability reflecting the fall in customer demand, overall house
price inflation running below build cost inflation and the
operational gearing impact as the market has slowed down.
∙ The impact of adjusting items, which reflected legacy property
costs associated with building safety related remediation
activities, resulted in reported gross profit of £974.9m (FY22:
£899.9m) and a reported gross margin of 18.3% (FY22: 17.1%).
∙ We generated an adjusted profit before tax of £884.3m
(FY22: £1,054.8m) in line with market expectations. Reported
profit before tax, after deducting adjusting items, was £705.1m
(FY22: £642.3m).
∙ Our balance sheet strength has been maintained with year-end
net cash of £1,069.4m (FY22: £1,138.6m) after dividend payments
of £360m and completion of the £200m share buyback.
∙ ROCE has reduced by 780 bps to 22.2% (FY22: 30.0%), largely due
to reduced profitability.
Our priorities for the year ahead
Against the backdrop of the current more challenging market,
our strategy is centred on four key areas.
Driving revenue
Firstly, driving reservations and home completions. This centres
on using our industry leading quality and customer service to
attract our core private homebuyers and then helping them to
access affordable mortgages, thereby enabling them to buy.
As evidenced in FY23, we are also focused on securing
reservations from other channels, building on our strategic
partnership with Citra Living, as well as our long-standing
relationships with registered providers of social housing, public
sector bodies and other investors, all of which will support our
build activity and completions in FY24.
Controlling costs
We will manage build activity and build costs and control our
indirect cost base to be as efficient as possible, whilst ensuring
we have in place the operational capacity to deliver growth
when market conditions improve. When the market slowdown
accelerated following the mini budget in late September 2022,
we implemented a recruitment freeze which has already
reduced our headcount by 6% from 1 October 2022 through to
30 June 2023.
Maintaining land investment discipline
We will maintain our highly selective approach to land buying,
particularly as prevailing land prices have not yet adjusted to
the changed market conditions. We will continue to apply our
long-standing hurdle requirements for land investment, which
require a minimum gross margin of 23% and ROCE of 25%.
Leading sustainability
Finally, we will continue to lead the industry on sustainability,
with a particular focus on reducing our environmental impact
and increasing the future resilience of the business through our
continued drive to reduce construction waste, our development
of zero carbon homes and our targeted reduction of carbon
emissions from our own operations. We have clear action plans,
and targets, as we look to the future to build the energy-efficient,
sustainable homes the country needs.
24
Keeping people safe
Our fundamental priority is always to provide a safe
environment for all our employees, sub-contractors and
customers, and we are committed to achieving and maintaining
the highest health and safety standards. We are continually
developing our processes, challenging unsafe behaviours, and
looking at ways we can further improve our procedures.
During FY23 we were disappointed that our Injury Incidence
Rate (IIR) increased to 289 per 100,000 workers (FY22: 262),
reflecting increased levels of slips and trips. Our SHE audit
compliance was broadly maintained at 96% (FY22: 97%).
To drive improvement, we engaged with our employees,
sub-contractors and our supply chain, seeking their views on
how we can further enhance our safety, health and environmental
performance. We continue to refine our working practices in
line with the latest guidance from Government, Public Health
Authorities and the Construction Leadership Council.
Responsible development
Fire safety and external wall systems
On 13 March 2023 the Group signed the Self-Remediation Terms
and Contract with the UK Government. This incorporated into
contractual arrangements the commitments made by the Group
under the Building Safety Pledge, signed in April 2022.
On 31 May 2023 the Group also signed the Scottish Safer Building
Accord, an industry commitment supporting the remediation
and/or mitigation of external wall cladding systems on buildings
of 11 metres and above. We are working with Homes for
Scotland and the Scottish Government to agree a legally binding,
long-form contract to give effect to the principles of the Accord.
There remains uncertainty around the extent of remediation
which will be required in Scotland. Our existing provisions for
Scottish buildings have been made on a consistent basis with
England and Wales.
During the year, through the changes in inspection parameters and
testing, we identified a further 55 buildings on 20 developments
requiring potential remedial works. This change, in combination
with an update to cost estimates across the portfolio, offset by an
increase in the discount rate applied to the provision, resulted in an
additional charge of £117.7m (FY22: £377.7m), recognised as an
adjusted item.
Leading the future
Going the extra mile
for our customers
See page 30
Barratt Developments PLC Annual Report and Accounts 2023 Strategic Report
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Reinforced concrete frames
Our remediation activities with respect to concrete frame
design and construction continued during the year with the
majority of developments proceeding in line with plan, but
against a backdrop of inflationary build cost pressures. During
the second half we also finalised remediation plans for the one
remaining development from the Citiscape review, where work
is required across five buildings. Finalisation of this remediation
plan as well as ongoing remediation activities resulted in
an additional charge of £51.5m, of which £21.3m related to JV
legacy developments.
In addition, we identified two further developments where
remediation work might be required. At the year end £2.4m had
been spent on one JV development and £7.6m has been provided
in relation to future remediation costs. The sum provided is
below the initial estimate, detailed in our July trading update,
but remains subject to further detailed analysis, which is
ongoing and is expected to conclude over the next six months.
Our dedicated Building Safety Unit is managing our overall
ongoing building safety remediation programme, which we
anticipate will be delivered over the next five years, with
building safety considerations informing the prioritisation and
scheduling of works.
More details around the adjusted item charges with respect to
building safety can be found in the Chief Financial Officer’s
review on page 66.
Further details on our approach to building safety can be viewed
on our website at: www.barrattdevelopments.co.uk/about-us/
our-approach-to-building-safety.
Competition and Markets Authority (CMA)
The CMA announced on 16 August 2022 that, after more than
three years of investigation, it had closed its investigation into
the Group in relation to the sale of leasehold homes with no
action being taken.
On 28 February 2023 the CMA launched a market study into
housebuilding in England, Scotland and Wales. We welcome
the study, which will provide an opportunity for the industry to
explain in detail the current challenges it is facing. We have
taken a proactive and constructive approach in engaging with
the CMA to assist with their study. The CMA reported on 25
August 2023 that its review was continuing and we will continue
to work constructively with the CMA through this process.
The Barratt Foundation
Now in its third year of operation, the Barratt Foundation is
fulfilling our commitments to charitable giving and social
responsibility. We believe it is important to bring together both
our financial resources and the commitment and enthusiasm of
our employees to support charitable causes locally and at a
national level.
In FY23, we raised £6.3m (FY22: £5.1m) for charitable causes
through the Barratt Foundation, including the Group donation of
£4m. Notable grants during the year included £900,000 in grants
to five new national charity partners. The five charities receiving
grants were: Whizz-Kidz (£350,000), Place2Be (£300,000), Refuge
(£100,000), Bookmark (£100,000) and the Lighthouse Club
(£50,000). Each of these charities was carefully selected by the
Barratt Foundation Trustees, reflecting their alignment with the
Foundation’s key priorities centred around promoting social
inclusion, mental health and education.
Barratt and David Wilson Community Fund
The Barratt Foundation also continued to support the Barratt
and David Wilson Community Fund throughout the year. This
enables each of our divisions and Group offices to support local
charities that really matter to them by donating £1,500 to a
different local charity each month. Building on this, and
reflecting the challenges faced by many over the Christmas
period in 2022, the Barratt Foundation also provided an
additional £5,000 to each of the Group’s divisions and two Group
offices with donations going to 48 small local charities such as
hospices, food banks and homelessness charities.
Employee engagement in our charitable activities
To encourage our employees to raise funds for local causes,
the Barratt Foundation matches funds up to £15,000 per division
and up to £2,000 per employee for employee fundraising. The
Group also partners with Payroll Giving in Action to enable
employees to make regular, tax-free donations to their
chosen charities.
In FY23, Barratt employees and divisions raised a record £1.3m
(FY22: £0.7m) for charities and good causes, with an additional
£0.8m (FY22: £0.3m) provided by the Barratt Foundation in
matched funding, after doubling the available match funding for
employee fundraising at the start of the year.
More details around the Barratt Foundation and its activities
can be found at: www.barrattfoundation.org.uk.
Operational review
Reservation activity
Our net private reservation rate in FY23 was 0.55 (FY22: 0.81).
The decline across FY23 reflected a significant deterioration in
trading following the fiscal event in September 2022, which
continued to the end of the calendar year and was also impacted
by the closure of the Help to Buy scheme, which closed to new
reservations on 30 October 2022.
Relative political stability, a modest recovery in consumer
confidence and an easing in mortgage interest rates helped
improve the reservation rate from the start of January 2023
through to early May 2023, before it reduced again, reflecting
growing uncertainty around inflation and mortgage interest
rates for our potential customers.
Barratt Developments PLC Annual Report and Accounts 2023
25
Strategic Report
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Chief Executive’s Statement continued
Operational review continued
Reservation activity continued
Net private
reservation rate
FY23
FY22
H1
0.44
0.79
H2
0.65
0.84
FY
0.55
0.81
FY23 vs FY22 (%)
(44.3%)
(22.6%)
(32.1%)
Reservation activity in the year also reflected the more
challenging backdrop for first time buyers finding it harder to
raise deposits following the end of the Help to Buy scheme in
October 2022 and the sharp increase in mortgage interest rates
and reduced availability of 95% mortgages following the fiscal
event in September 2022. There was more resilient demand
from existing homeowners who tend to have access to larger
deposits, where limited numbers of homes for sale in the
wider market, the energy efficiency of our new homes and
the backdrop of significant rental cost growth helped to
support demand.
Our reservation rate in FY23 was augmented by increased
multi-unit sales into the private rented sector along with
additional private unit sales to registered providers of social
housing (“RPs”). This has partly mitigated sales risk during the
period, supported our construction activity and ensured more of
our homes will be made available for both the private rental and
affordable homes market. The net private reservation rate
into the private rented sector, along with additional private
units to RPs, contributed 0.10 (FY22: 0.03) in the year.
During the year, we operated from an average of 367 active
sales outlets (FY22: 332) including eight active JV sales outlets
(FY22: seven). Growth in active outlets reflected two factors.
Firstly, we made solid progress on new site openings, despite
both ongoing planning delays and our step back from the land
market, launching a total of 104 new sales outlets (including JVs)
in the year (FY22: 118). Secondly, the significantly lower private
reservation rate on existing sites extended the sales activity of
several outlets.
At the end of the year we were operating from 389 active
sales outlets (30 June 2022: 352), including nine JV outlets
(30 June 2022: nine).
In FY24, we expect to see average active sales outlets reduce
by around 6% reflecting both reduced outlet openings given our
step back from the land market and the impact of sites ending
where sales activity was extended by lower reservation rates.
Construction activity adjusted to slower demand
Reductions in demand from late September 2022 required
adjustments to construction activity across our operations.
The result was on average 322 (FY22: 352) equivalent homes
(including JVs) built per week in the year.
During FY24 our construction activity will reduce further as
we align it with sales reservation activity and ensure efficient
deployment of working capital across our sites.
26
Home completions
Total home completions reduced by 3.9% in FY23. The strength
of our order book and demand in the first quarter of the year
supported growth of 6.9% in total home completions in the first
half. However, the significant change in reservation activity
during the second quarter, the closure of the Help to Buy
scheme to new reservations from 31 October 2022, and the
slower rate of reservations from the start of the new calendar
year created a 12.8% decline in total home completions in the
second half. As a result, the affordable housing share of wholly
owned home completions increased to 23.9% (FY22: 22.3%) and
the Help to Buy share of completions declined to 9% (FY22:
19%).
Completions
(homes)
Private
completions
Of which: PRS
Affordable
completions
Wholly owned
completions
JV completions
Total (including
JVs)
FY23
FY22
Change
12,456
258
13,327
36
(6.5%)
616.7%
3,922
3,835
2.3%
16,378
828
17,162
746
(4.6%)
11.0%
17,206
17,908
(3.9%)
The average selling price (ASP) of wholly-owned completions
increased by 6.5% to £319.6k (FY22: £300.2k). The private ASP
increased by 7.9% to £367.6k (FY22: £340.8k), up 13.6% in the
first half, benefitting from the strong private order book position
carried into FY23, as well as steady pricing during the first
quarter. Following the turbulence in mortgage markets, the
private ASP in the second half only grew by 3.2% reflecting the
softening in demand seen following the September fiscal event
and increased sales incentives.
Within our private completions, we completed 258 homes
(FY22: 36) for Citra Living. The ASP of these PRS completions
was £280.9k (FY22: £172.3k) with the significant step up in
the PRS ASP reflecting a more typical mix of the 2 and 3-bed
homes being sought and acquired by Citra Living to the limited,
and apartment dominated, completions in FY22.
Affordable ASP increased by 4.9% to £167.2k (FY22: £159.4k),
reflecting an increased proportion of completions from our
outer London operations. We anticipate that the affordable ASP
in FY24 will be at a similar level to that reported in FY23.
Land and planning
As market conditions changed, we stepped back from the land
market in September 2022. We have adopted a highly selective
approach to buying land, particularly as prevailing land prices
have not yet adjusted to the changed market conditions. As a
result, gross site approvals increased by 31 new sites during
the year, including two sites through planning amendments.
These were offset by 33 previously approved sites which are no
longer economically viable, resulting in a net decrease of two
sites in the year (FY22: net approval of 102 sites). Given our
current view of the market, land prices and our existing
development pipeline, we do not expect our approach to land
acquisition to change for the foreseeable future.
Barratt Developments PLC Annual Report and Accounts 2023 Strategic Report
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The approved sites along with planning amendments added
4,821 plots, at a cost of £345.2m, with 5,633 plots removed with
respect to the sites no longer proceeding, at a previously
agreed cost of £360.1m. The result was a net reduction of 812
plots in the year (FY22: net addition of 19,089 plots) and a net
decrease in our land approval commitments of £14.9m (FY22:
net increase of £1,396.1m).
We invested £822.8m (FY22: £1,036.0m) on land acquisitions
and the settlement of land creditors during the year and we now
expect to spend between c. £500m and £700m on land in FY24,
largely settling existing commitments.
We continue to target a geographically balanced land portfolio
in the medium term with a supply of owned land of c. 3.5 years
and a further c. 1.0 year of controlled land. We are broadly in
line with this target with the land bank comprising 3.6 years of
owned land (30 June 2022: 3.9 years) and 0.7 years of controlled
land at 30 June 2023 (30 June 2022: 0.8 years).
More than 81% (30 June 2022: 75%) of our owned and
unconditional land bank plots have detailed planning consent,
supporting our sales outlets position and future home completions.
Our land bank at 30 June comprised:
Our land bank
30 June 2023
30 June 2022
Plots with detailed planning
consent
Plots with outline planning
consent
Plots with resolution to grant and
other
Owned and unconditional land
bank (plots)
Conditionally contracted land
bank (plots)
Total owned and controlled land
bank (plots)
Number of years’ supply
JVs owned and controlled land
bank (plots)
Strategic land bank (acres)
Strategic land bank (plots)
Promotional land bank (plots)
Land bank carrying value (£m)
48,270
51,009
9,658
15,957
1,320
721
59,248
67,687
11,142
13,239
70,390
4.3
4,356
16,431
101,784
96,844
3,139.9
80,926
4.7
4,548
15,537
91,440
93,696
3,339.9
At 30 June 2023, the estimated ASP of plots in our owned land
bank was £331k (30 June 2022: £322k) and the estimated gross
margin in our land bank, based on current estimated sales prices
and build costs, is 19.7% (30 June 2022: 25.8%).
Strategic land activity
During the year, we delivered 3,938 (FY22: 4,530) or 24% (FY22:
26%) of our wholly owned home completions from strategically
sourced land, We converted 777 plots (FY22: 1,663) of strategic
land into our owned and controlled land bank during the year.
Our strategic land teams placed increased focus on securing
additional strategic land to support future growth and 21,802
plots across 70 strategic sites were approved during the year
(FY22: 14,620 plots and 61 sites).
At 30 June 2023, around 23% (30 June 2022: around 25%) of our
strategic land is allocated or included in draft local plans. We
are also benefiting from the additional expertise brought by
Gladman Developments’ planning teams who, working with our
strategic land teams, are identifying ways to accelerate delivery
from our strategic land bank.
We continue to target around 30% of wholly owned completions
from strategic and promotional land in the medium term. We
believe this is both appropriate for our business model, and
reflects the development and planning prospects held within
our strategic land portfolio as well as our targeted land bank
length and focus on ROCE.
Notwithstanding that, along with the rest of the industry, we
have experienced problems with the ineffective planning system
over the past year, we are well positioned, with all expected
FY24 completions (FY23: all FY23 completions) having outline or
detailed planning consent.
Land promotion activity
Through the acquisition of Gladman we now hold a significant
promotional land portfolio of 96,844 plots (30 June 2022: 93,696
plots), with Gladman continuing to operate as a standalone
business within the Group.
During FY23, Gladman secured an estimated 9,453 plots,
(five months in FY22: 1,882 plots) through new promotional
agreements with landowners. Following several planning
successes, the business received planning consents on 2,437
plots during the year (five months in FY22: 807 plots). Whilst
wider market demand for land weakened from the end of the
first quarter, continued demand for land with planning consent
from smaller developers saw Gladman secure land sales
equating to 1,813 plots, (five months in FY22: 1,332 plots).
Gladman generated revenue of £20.4m and an operating profit,
before amortisation of intangible assets, of £3.8m during FY23,
(five months in FY22: sales of £23.3m and operating profit,
before amortisation of intangible assets, of £12.4m). The
reduction in revenue and profitability reflects the slowdown in
the land market as many housebuilders reduced their land
buying activity.
With access to the Group’s financial resources, Gladman
continues to engage with new and existing land promotion
partners around alternative routes to unlocking value from
their respective land positions. Reflecting the changing needs
and aspirations of land promotion partners, Gladman offers the
ability to convert promotional agreements into option, hybrid or
freehold sale arrangements for all, or part, of their land
promotion partners’ holdings.
Barratt Developments PLC Annual Report and Accounts 2023
27
Strategic Report
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Chief Executive’s Statement continued
Operational review continued
Maintaining efficiency and controlling costs
Maintaining the efficiency of our operations and controlling
costs remain key focus areas for the Group. Our supply chain
is robust and carefully managed, with approximately 95% of our
building materials sourced by our centralised procurement
function, and around 90% of our building materials are
manufactured or assembled in the UK.
We remain committed to working with our supply chain
partners to secure sustainable, competitive pricing, while
maintaining security of supply to support our site-based
operations and we have supply agreements in place for 73% of
our material requirements to 31 December 2023 (FY23: 73% to
31 December 2022), and 14% of our requirements until 30 June
2024 (FY23: 12% to 30 June 2023).
We are starting to see some of the inflationary pressure on
the cost of skilled labour abating, reflecting the slowdown in
housebuilding activity across the country and the desire of
sub-contractors and skilled trades to secure future workload.
We are looking to drive further construction efficiency through
standardisation in our house types and increased use of timber
frame to reduce our labour requirements and reducing waste.
During FY23, total build cost inflation (including infrastructure
costs, materials and labour) was between 9% and 10%, with the
rate of inflation moderating towards the end of the year.
Reflecting the slowdown in the market, and assuming no further
material changes in the costs of energy or key commodities, we
expect total build cost inflation to abate through FY24, with
average total build cost inflation at around 5%.
We are also pro-actively managing our overhead base. As the
slowdown in the market became apparent in late September
2022, we began a headcount freeze which has reduced our
number of employees by 6% since the end of the first quarter.
We have continued to invest in priority areas including
sustainability, building safety and in our IT infrastructure but
are only hiring where additional skills are required by the
business. We have also scaled back discretionary spend in
other areas.
Current trading and outlook
Long-term housing market fundamentals reflect a continued
and deteriorating imbalance between housing supply and
demand. Despite this imbalance, the market is currently
impacted by significant macro-economic headwinds, most
notably persistent inflation and a higher interest rate
environment. This backdrop has had a negative impact on UK
economic growth, employment, mortgage affordability and
consumer confidence and spending.
We entered FY24 with a solid forward sales position and at
27 August 2023 we are 49% forward sold with respect to private
wholly owned home completions for FY24 (28 August 2022 for
FY23: 62%) with 51% of the private order book exchanged
(28 August 2022: 59%).
Since the start of the new financial year our net private
reservation rate per active outlet per average week for the
period to 27 August 2023 was 0.42 (FY23: 0.60). This reflects
both traditional seasonality but also the continued affordability
challenges faced by potential homebuyers. During the period
there was minimal impact from sales to the private rental
sector and registered providers of social housing, which
contributed 0.02 (FY23: 0.05) to the reservation rate.
Based on current market conditions, we are targeting total
home completions of between 13,250 and 14,250 in FY24,
including c. 650 home completions from our JVs and c. 750
completions for the private rental sector, whilst ensuring we
maintain our industry-leading standards of build quality and
customer service. We currently estimate that around 45% of our
completions will be delivered in the first half of the financial
year.
27 August 2023
28 August 2022
Variance %
£m
1,527.6
752.0
2,279.6
157.7
2,437.3
Homes
4,440
4,691
9,131
477
9,608
£m
2,421.5
1,079.6
3,501.1
307.8
3,808.9
Homes
6,467
6,658
13,125
933
14,058
£m
(36.9%)
(30.3%)
(34.9%)
(48.8%)
(36.0%)
Homes
(31.3%)
(29.5%)
(30.4%)
(48.9%)
(31.7%)
Forward order book
Private
Affordable
Wholly owned
JVs
Total
28
Barratt Developments PLC Annual Report and Accounts 2023 Strategic Report
Strategic Report
Strategic Report
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Our strategy
Building Britain
better homes
Barratt Developments is well-placed to navigate
through the current headwinds and deliver on
its long-term growth strategy.
Guiding all our actions
are our principles
Keeping people safe
6
1
2
5
Being a trusted partner
3
Building strong community
relationships
2
1
6
e
l
p
o
e
P
Safeguarding the environment
5
t
i
n
g
Ensuring the financial health
of the business
3
t
s
4
sto m e r fi r
u
C
I
n
v
e
s
i
n
o
4
P
l
a
c
e
s
3
Gre
a
t
p
4
l
a
c
e
s
5
6
1
2
3
N ature
n
o
g constructi
4
Our purpose
To lead the future of
housebuilding by putting
customers at the heart
of everything we do
ur people
2
1
6
L e a
d i n
5
Key
Non-financial KPIs
Sustainability commitments
1
3
Strategic priorities
HBF 5 star customer
satisfaction
Scope 1 and 2 carbon
emissions
5
SHE audit
compliance
2
4
6
Land approvals
Waste intensity
Employee
engagement score
Barratt Developments PLC Annual Report and Accounts 2023
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Our strategy continued
Customer first
Leading the industry in consistent
customer service
Our customers are at the heart of everything we do. We believe
our industry leadership in customer service is fundamental to
our success and we are the only major housebuilder to have
now been awarded the maximum 5 star rating by our customers
in the HBF Customer Satisfaction Survey for 14 consecutive
years, with a customer satisfaction rating at 92.8%.
New Homes Quality Code
Building on investment and training during 2022, we
successfully adopted the New Homes Quality Code and
activated our registered developer status with the New Homes
Quality Board in the year. We welcome the Quality Code, which
is centred on fairness throughout the customer journey. The
Quality Code covers the period from initial enquiry through
to completion and then two years post-occupation of the new
home. We are pleased that since activating the Quality Code,
there have been no adjudications required by the New Homes
Ombudsman Service with respect to our homes and customers.
Delivering service beyond home completion
for our customers
As we seek to ensure our customers receive the best possible
service throughout their home buying journey and in the
period post-completion, we have invested in additional training
and workshops to enhance our service and our customers’
experience beyond the handover of their new home.
We have continued to drive improvements to the customer
journey and have adapted our processes to help our customers
through the volatility in the mortgage market during the year.
We will continue to work with lenders to ensure our customers
have access to the most attractive and suitable mortgage
products available.
Addressing mortgage access and the affordability
challenges faced
Given the affordability challenges now faced by potential
homebuyers, we are continually looking at how we can help
with numerous offers, which include:
∙ the housebuilding industry’s “Deposit Unlock” scheme
which is available to our customers who only have access
to a 5% deposit;
∙ our “Key Worker Deposit Contribution” scheme, where we
offer a 5% contribution, as well as flooring included in their
new home;
∙ our “Deposit Boost” scheme for customers with a 10% deposit
where we can boost it with a further 5% contribution of the
purchase price allowing access to 85% LTV lending rates;
∙ our “Parent Power” scheme where first time buyers with
parental support can access a matching deposit contribution
up to 5% of the purchase price of their new home; and
∙ our “Armed Forces Deposit Contribution” scheme where
military service personnel will be offered a 5% contribution,
up to £15,000.
We also continue to promote our part-exchange offers to customers.
We were the first housebuilder to introduce part-exchange and
we have a long record of helping existing homeowners in their
purchase of a Barratt or David Wilson home using one of our
five tailored part exchange schemes.
“ This is one of the most helpful
companies I've ever dealt with;
the staff are absolutely lovely and
are really thorough and invested
in getting you the best deal.”
Trustpilot score
4.4
Jasmine and Kim,
Barratt customers
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Growing the private rental opportunity
Finally, recognising the ongoing demand for housing of all
tenures, we have developed our relationship in the private
rental sector, with Citra Living, on our developments across the
country.
New build advantages for our customers
We are continually seeking to improve the energy and water
efficiency of our homes and adapting our home designs to
respond to changing homebuyer demands, the Future Homes
Standard and other changes to Building Regulations. We aim to
build high quality homes that optimise internal space, deliver
excellent energy and water efficiency and, as a result, unlock
lower lifetime costs for our customers.
We actively promote the lower energy cost and environmental
advantages of our homes across all our communication
channels and in our sales centres. This is an increasingly
important purchasing consideration for our customers.
A typical Barratt or David Wilson home can unlock energy
savings of up to £2,200 annually when compared to an average
existing home. In FY23 99.2% of our home completions were
EPC rated “B” or above, a level of energy efficiency shared by
just 3.2% of the existing housing stock. In addition, all of our
homes are built to a water use standard of 105 litres per person
per day, creating the potential to reduce consumption by 26%
when compared to the national average and creating further
cost savings for our homeowners.
Green mortgages: leading valuation and mortgage
developments across the sector
Mortgage lenders, driven by their own sustainability initiatives,
the growing recognition of future retrofit costs in relation to
energy efficiency for existing homes, and the scale of annual
savings for customers buying a new home, are increasingly
engaging with the housebuilding industry around green mortgages.
As the leading national sustainable housebuilder we have
adopted a dual approach to green mortgage development.
Firstly, we are continuing to work directly with lenders to
develop enhanced products that recognise the advantages
of our new build homes. During FY23, we collaborated with
The Leeds Building Society to support the launch of a new
green mortgage product. This product, which recognises the
advantages inherent in our new homes and has the potential
to unlock up to a 10% uplift in lending available for our
energy efficient homes.
Secondly, through Government engagement, notably through
the Future Homes Hub, Barratt’s Head of Mortgage Lender
Relations chairs the “Valuation Oversight Group”, which is
considering how the value of sustainable benefits of new
homes can be recognised in the mortgage valuation process.
The financial and environmental advantages of new build homes
have never been as significant as they are today, and we are
committed to enhancing both the access and affordability of
our new homes in partnership with both lenders and surveyors.
Customer First Objectives
0–1 year: We will target our continued 5 star customer
service and drive improvement in our nine-month survey
score. We will also launch a single portal covering our
customers throughout their journey with the Group,
encompassing the marketing and sale process through to
customer care post-occupation.
1–3 years: We will develop new technology-based solutions
to improve the planning, scheduling and efficiency of
our customer care teams, internal technicians and
external sub-contractors. We will continue engagement
on green mortgage development with lenders, surveyors
and Government.
3+ years: We will be developing immersive augmented and
virtual reality tools to improve and further personalise each
customer journey.
Barratt Developments PLC Annual Report and Accounts 2023
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Our strategy continued
Great places
Land supply
We build homes in locations where our customers want to live, with
good access to open space and amenities, transport connections,
schools and workplaces. Our specialised divisional land teams,
including the Gladman team, possess extensive local knowledge
and strong relationships with landowners. This, combined with
detailed research into local market conditions, means we can
secure land in locations of strong customer demand.
Built For Life
Placemaking principles are fundamental to our business: our
customers want to live in great places that create a positive
legacy and for land owners too, the future legacy created by
a site can be critical to successful land acquisition.
Our internal Great Places design principles are aligned to
the Government-endorsed “Building for Life 12” criteria and
the updated “Building for a Healthy Life” standard, which
incorporates additional health and wellbeing criteria. As a
result, Great Places puts greater emphasis on development
design to support good physical and mental health and
wellbeing. We deliberately shape our developments around
existing ecology, green spaces, walkways and cycle paths to
encourage social interaction and a sense of community and
appreciation of the surroundings created.
During FY23, 19 developments achieved Gold awards under
Great Places with a further 46 developments receiving Silver
awards and 4 developments achieved commendations under
the “Building for a Healthy Life” standard, with Phase 4 of our
West Hendon development achieving an “Outstanding” rating
from the judges.
We also launched our new “Green Spaces” awards in FY23 to
recognise and encourage developments with integrated and
accessible green spaces.
Warren Grove Storrington
Upton Gardens
32
Biodiversity net gain adoption ahead of legislation
With our national rollout programme embedding biodiversity
best practice across all regions completed in the year, all our
development designs submitted for planning from January 2023
identified a minimum biodiversity net gain (BNG) of 10% and we
remain ahead of the legislation.
An important ingredient in delivering BNG is landscaping.
To drive our leadership in this area, we launched a new
“Landscaping Handbook” which sets out best practice for the
design and delivery of landscaping across our developments.
Alongside the launch, we appointed divisional “BNG Champions”,
ensuring landscaping best practice is both adopted and
reported looking to the future.
BNG also relies on the long-term stewardship of our
developments, as such, measures have been put in place to
ensure landscaping and BNG performance are also incorporated
in the terms of operation for the management companies
responsible for our developments post-completion.
Water resilience for our customers
Water resilience is becoming increasingly important and
we have a responsibility to mitigate against future risks
of geographical water scarcity and flooding. We do this
by increasing the water efficiency of both our homes, as
highlighted earlier, but also by increasing the resilience of our
sites to water scarcity and flooding through careful design and
development landscaping.
In FY23, 83% (FY22: 72%) of our developments used above-
ground, landscape-led Sustainable Urban Drainage Systems,
which manage surface water volumes and flow rates, reducing
the impact of urbanisation and flood risk. We are committed
to further sustainable drainage adoption to address water
management on our developments.
Objectives
0–1 year: We will embed BNG best practice and ensure our
sites are delivering accurate reporting on BNG performance
and progress.
We will work with Government and other interested parties
to seek to overcome the challenges faced around nutrient
neutrality to unlock future housing development.
1–3 years: We will further improve the layout and landscaping
of our developments with a particular focus on inclusivity for
all, including improvements to play areas and green spaces
on our developments.
3+ years: Our focus will remain on leading the development
of sustainable places that satisfy the country’s need for
more housing whilst creating a positive economic, social
and environmental legacy.
Barratt Developments PLC Annual Report and Accounts 2023 Strategic Report
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Leading construction
Industry leading build quality
Our absolute commitment to excellent build quality is embedded
throughout our business. We believe a key measure of build
quality is delivered through the NHBC’s five-stage inspection
of our homes throughout their build. Issues relating to build
are identified as “Reportable Items” (RIs) at each inspection.
Throughout FY23, and for the fourth consecutive year, we have
maintained our industry leading position amongst the major
housebuilders, with the Group once again registering the
lowest RIs per NHBC inspection. The Group achieved an average
0.16 RIs per NHBC inspection (FY22: 0.13 RIs), the lowest of all
major housebuilders. The strength of our site management, the
standards we set for our long-standing sub-contractors, their
familiarity with our housetypes, the photographic records taken
of each home at key stages and our use of high-quality building
materials all contribute to this result.
Site management excellence for a record 19th year
Our build quality also continues to be recognised through the
NHBC Pride in the Job Awards for site management. At the
2022 Regional NHBC Pride in the Job Awards, 34 site managers
won “Seals of Excellence” and our site managers secured
five out of the nine Regional Awards where we operate in the
“Large Builder” category. Finally, at the NHBC Pride in the Job
Supreme Awards in January 2023, Kirk Raine, Site Manager
at Doseley Park in our Mercia Division, was named Supreme
Winner in the Large Builder category.
In June 2023 at the 2023 National NHBC Pride in the Job
Awards 96 site managers secured awards, more than any
other housebuilder for the 19th consecutive year. No other
major housebuilder has achieved this level of success and
consistency, in terms of the recognition for the management
of site standards and build quality. All of our sites also
operate under the Group’s certification to the Environmental
Management System standard ISO 14001, and Health and Safety
standard OHSAS 18001.
Innovation through modern methods of construction (MMC)
We delivered 5,578 homes using MMC equating to 32% of our
total home completions (FY21: 4,846 homes and 27% of total
home completions). MMC creates opportunities to build with
greater speed and efficiency, mitigate the impact of the skills
shortage facing the industry, reduce on-site waste, reduce
embodied carbon and diversify the types of materials we use.
The various MMC used across our total home completions are
detailed below.
MMC
Timber frame
Roof cassettes
Offsite ground floors
Large format block
Light gauge steel frame
TotalA
Percentage of completionsA
FY23
4,564
224
560
230
—
5,578
32%
FY22
3,736
194
614
226
76
4,846
27%
A Total and percentage of completions include JVs and have been adjusted
for homes where more than one technology has been used.
New timber frame facility moving into operation
Underpinning our growth in the use of MMC is the more
widespread use of timber frame construction across our
developments. Supporting this growth, we completed
construction of the Group’s new Oregon timber frame facility
at Infinity Park, near Derby.
The new 186,000 square feet facility has been constructed to
exacting requirements around its sustainability performance
and has achieved a BREEAM “Very Good” rating and an EPC “A”
rating. The facility also incorporates a wide range of energy-
efficient features including photovoltaics, air source heat pumps
and LED lighting, as well as electric vehicle (EV) charging points
across 10% of the parking spaces. This £45m investment has
been commissioned and will increase production through FY24.
Waste reduction
Waste reduction and resource efficiency remain clear
priorities for the Group, notwithstanding our industry leading
performance. Reflecting our workforce’s ability to drive waste
reduction, bonus arrangements across the Group in FY23 once
again included waste reduction targets and this will continue
in FY24.
Supported by our dedicated Group Waste Project Manager,
detailed action plans and incentives, and monthly waste
monitoring, we have delivered a further improvement in our
waste intensity with a 13.3% reduction to 4.31 tonnes per 100m2
of legally completed build area (FY22: 4.97 tonnes per 100m2
legally completed build area. In the year, our absolute waste
tonnage decreased by 17.1% (FY22: decreased by 15.5%).
We continue to promote the segregation of waste and the
efficient use of skips across our business; our diversion of
waste from landfill remained at 96% during the year (FY22:
96%). In FY23, more than 36,000 paint tins across our sites
were recycled (FY22: more than 30,000), and 392,363 pallets,
used in the supply of building materials to site, were recycled
(FY22: 366,408 pallets).
Lightweight compactible materials continue to represent the
largest portion of our remaining waste, particularly plastic and
packaging materials. Several waste reduction initiatives were
trialled in FY23 seeking to reduce packaging waste through
specific supplier arrangement, to minimise damage to building
materials in transit, combined with site best practice around
building material storage on site. Future waste reduction
initiatives will also involve revisions to our housetypes, with
increasing standardisation of key components e.g. staircases
and the introduction of a specific kit of parts reducing
waste materials.
Barratt Developments PLC Annual Report and Accounts 2023
33
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Our strategy continued
Leading construction continued
Water efficiency on site
We are committed to reducing operational water use on
our sites and throughout our estate. Currently 80% of our
operational sites have provided water consumption data (FY22:
61%) and through our metering rollout plan we are targeting
that all of our sites will have water metering by the end of FY24.
This will provide data on our baseline water use against which
we can plan actions to reduce water consumption and measure
our performance.
New building regulations
During FY23 our Group Design and Technical team, following
the release of the Government’s SAP calculator in autumn
2022, fine-tuned our solutions to ensure all our housetypes
met the requirements of new 2021 Building Regulations.
The new standards became effective on new development
sites on 15 June 2022 and applied to all development sites from
15 June 2023.
The Zed House and the Future Homes Standard
The Zed House completed extended periods of occupation,
monitoring and testing during FY23. This has yielded invaluable
performance information which is being used to inform the
Group in determining the most effective changes to our
housetypes to meet the Future Homes Standard in 2025 and
the different legislative requirements in England, Scotland and
Wales, while also ensuring we create the best possible homes
for our customers.
Future homes for our customers – eHome2
To achieve the Government’s carbon reduction targets, the
UK will require a step-change in the design of new homes.
As the leading sustainable housebuilder we are committed to
developing homes that will meet the future challenges of both
carbon emissions reduction and adaptation to climate change.
A further milestone on this journey for the Group has been
the construction of eHome2 where we have collaborated with
Saint-Gobain to build a concept home within the “Energy House
2.0” on the University of Salford campus. Built within one of
two environmental chambers inside the “Energy House 2.0”, the
largest facility of its type in the world, the eHome2 can test the
effects of climate change and look at ways new houses can cope
with more extreme weather conditions, whilst cutting energy
and water usage.
The three-bedroom family home will test both innovative
building products and new technologies designed to meet
the Future Homes Standard and builds on our knowledge and
understanding gained from the Zed House. The eHome2 has
been constructed using an advanced closed panel timber frame
solution with an offsite pre-insulated ground floor system and
both lightweight alternative brickslip and render systems to
the external façade. The eHome2 was also built in less than
14 weeks – half the time it takes to build a traditional home.
The eHome2 will also test zero carbon performance in different
temperatures and weather conditions to replicate extreme
changes in the climate and the long-term expected increase in
temperatures faced here in the UK.
With Saint-Gobain and the University of Salford, we are working
together to create a blueprint that will enable the industry to
design and build the low carbon homes of the future that will
not only be attractive to our customers, but also future proofed
for climate change and less expensive to run through their
dramatically improved energy efficiency.
Objectives
0–1 year: Develop the design of our new house type portfolio
supporting the FHS and our growth in MMC.
Working with Government and the Future Homes Hub
on realising the FHS.
1–3 years: Delivering our new house types encompassing
changes in infrastructure connectivity, alternative building
materials and new home technologies.
Further development of our MMC strategy, notably around
further expansion of timber frame adoption across our
housetype range.
3+ years: Further development of our zero carbon strategy
for homes in use from 2030 and from our own operations
in 2040.
Development of our embodied carbon strategy to drive
emissions reduction through alternative building materials
use and supply chain collaboration.
Zed House project
Energy House 2.0
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Investing in our people
Male and female employees
PLC Directors
Female
Male
Total
2023
63%
5
38%
3
62+
68+
Employees
Total
Male
Total
Female
Total
2023
68%
4,345
32%
2,044
2022
67%
6
33%
3
2022
68%
4,401
32%
2,099
2022
83%
271
17%
57
Senior Managers
Female
Male
Total
2023
82%
272
18%
59
82+
71+
Total
Executive Committee
Male
Total
Female
Total
2023
71%
5
29%
2
2022
83%
5
17%
1
Reports to Executive Committee
69+
Male
Total
2023
69%
27
31%
12
Female
Total
2022
66%
21
34%
11
Our continued success is ultimately achieved through the
hard work and dedication of our employees. We aim to attract
and retain the best people by engaging with our employees,
investing in their development to maximise their potential,
supporting their wellbeing and recognising their commitment by
ensuring our employee packages are effective and competitive.
We are also committed to becoming more diverse and inclusive
organisation, as we believe this will create a stronger, more
dynamic business for our customers, and also make us a more
attractive employer.
The volatility and uncertainty in the market in the last year
necessitated a pause in Group-wide recruitment, other than
recruitment for a small number of critical roles, since the end
of the first quarter. Recognising the need to develop young
talent, our graduate and apprenticeship programmes have
continued, albeit at reduced intake levels.
This pause to recruitment has created opportunities to increase
our attention on our existing employees, ensuring we are
engaging and developing our employees to their full potential
and that they feel recognised and valued.
Engaging with our employees and recognising their
commitment
Our 2022 employee engagement survey was completed in
October 2022. This year’s survey delivered an engagement
score of 84.4% (2021 survey: 79.4%). The improvement in the
2022 engagement score was welcomed and highlighted:
∙ The benefits of the Group’s proactive policy changes in FY22
around the provision of private medical insurance for all
employees, an additional day’s holiday for all employees to
celebrate a special day, and increased time for employee
volunteering.
∙ The positive impact on our employees of the Group’s decision
to award a cost of living salary supplement of £1,000 to all
employees below senior management for the period from
1 July 2022 through 31 December 2022.
∙ The introduction of enhanced family friendly policies including
extended maternity, paternity and carer leave, effective from
October 2022.
Following the 2022 engagement survey and reflecting our
desire to positively respond and engage with our workforce,
a number of new initiatives were introduced though the balance
of FY23. These included:
∙ A Group-wide survey on health and safety seeking employee
views on how we can further improve our safety, health and
environmental performance with future targeted actions.
∙ A further cost of living salary supplement of £1,000 to all
employees below senior management for the period
1 January 2023 through 30 June 2023.
∙ Tiered salary increases effective from 1 July 2023, designed
to ensure our lower paid employees were cushioned from the
withdrawal of the cost of living salary supplements, which
drew to a close on 30 June 2023.
Barratt Developments PLC Annual Report and Accounts 2023
35
38
+
S
32
+
S
31
+
S
18
+
S
29
+
S
Strategic Report
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Our strategy continued
Investing in our people continued
ASPIRE
Degree Apprenticeships
Intermediate & Advanced
Apprenticeships
Investing in the development and training of
our employees
We continue to play a leading role to address the industry’s
skills shortage.
In total, we have developed, or are developing, 136 delegates
through our Armed Forces transition programme. Skills developed
in the Armed Forces transfer well to site management, and
the programme has brought a large number of high-calibre
individuals into our business.
Our ASPIRE graduate development programme takes between 15
and 30 graduates annually. The programme goes from strength
to strength, attracting candidates from all degree backgrounds.
ASPIRE is designed to provide a broad understanding of
our business, coupled with both personal and professional
development opportunities through a two-year programme,
with the aim of creating leaders of the future.
During FY23, we completed recruitment for our fourth degree
apprenticeship with Sheffield Hallam University, in real estate.
Sitting alongside existing programmes in construction, quantity
surveying and technical design and management this makes us
the first housebuilder to deliver degree apprenticeships across
the three main build functions and real estate.
Apprenticeships remain a vital route to develop skilled
tradespeople for our industry
Our programmes for bricklaying and carpentry apprentices
enable participants to achieve apprenticeship level within a
shorter timeframe while maintaining the same high standards.
Our schemes focus on bringing new talent to the industry and
on retaining it for the future. To date, within the bricklaying
and carpentry apprenticeship programmes, 374 apprentices
(FY22: 256) have attended, and 147 apprentices (FY22: 102)
are due to complete the course in FY24, with a further 54
(FY22: 160) recruited in FY23 for our FY24 intake.
We currently employ 483 apprentices, graduates and trainees
(FY22: 391), around 7% (FY22: 6%) of our workforce, reflecting
our ongoing commitment to developing future talent.
With respect to apprentice recruitment in the year, 13% (FY22:
29%) of our apprentices were recruited from the most deprived
areas according to the Index for Multiple Deprivation.
We engage with our future workforce through our work with
schools, national apprenticeship bodies, universities and
Armed Forces resettlement organisations. This includes getting
involved with campus activities, attendance at careers fairs and
employer-led events. For a second year we also engaged with
more than 1,200 schools and colleges to promote careers in
construction and housebuilding and, in collaboration with the
HBF, the School Outreach programme now engages with over
3,100 schools across the UK.
36
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Retaining the best talent
It is vital for us to develop talent within our business to ensure
we have the necessary skills for continued operational delivery
and growth into the future.
As part of our response to engagement survey feedback and the
pause in recruitment, we are working to improve the visibility
of career paths in all functions, with individual development
plans, line manager development and the proactive prioritising
and tracking of internal promotions. Remuneration and benefits
are an important element of employee retention. We continue
to review our employee packages to ensure they are effective
and competitive.
Identifying and supporting our leaders of the future, along with
effective succession planning, are important elements in our
long-term success. In FY23, 344 (FY22: 269) high-potential
employees have attended or are attending our
“Rising Stars” programme.
Our Construction and Sales Academy programmes develop
talent within our business and we continue to work with the
Home Building Skills Partnership around employee training,
learning and development. We also seek to address skills
shortages and prepare for the future by developing our people
through access to continuous learning. Our MyLearning mobile
app provides colleagues with flexibility and choice in how they
access and consume learning content.
Growing our employee networks
Our employee networks have also become an increasingly
important way for us to create a more open and inclusive
business, and enable us to listen directly to the needs of our
people. Our networks include our gender network to support
female colleagues and groups which connect parents, LGBTQ+
colleagues and allies, ethnic minority communities and “Barratt
Connect”, a group for anyone who has felt isolated or misses the
social interaction created by reduced office-based working. We
are delighted to have launched “Scaffold”, a new network set
up to raise awareness of disability in the workplace, influence
policy decisions and connect disabled people and their allies
across all divisions and functions.
Gender and Ethnicity Pay Gap Report
Real Living Wage accreditation
During the year, we maintained our Living Wage Foundation
accreditation, reflecting the Group’s commitment to paying
our employees and supply chain employees an independently
calculated rate of pay, based on the actual cost of living. The
real Living Wage exceeds the national Living Wage (set by the
Government) and covers all employees aged 18+, as well as
incorporating a London weighting. Holding this accreditation
demonstrates our clear and continuing commitment to our
employees, suppliers and sub-contractors.
Our standard sub-contractor terms and conditions also
mandate the payment of the real Living Wage within our supply
chain. To support this, we implement spot checks by divisions
on higher risk trades and operate internal remediation feedback
systems. Where we find instances of non-compliance, we
require this to be rectified, with follow-up audits conducted
to ensure full compliance. For those working in jurisdictions
other than the UK, our expectation, included within our contract
requirements, is that local statutory minimum wages are paid.
Gender and ethnicity pay gap reporting
In December 2022, we published our annual Gender Pay Gap
Report and, for the first time, we also included our Ethnicity Pay
Gap Report, as part of our commitment to transparency and to
enhance our work through our Diversity & Inclusion Strategy to
improve the representation of all groups across the business.
Our mean gender pay gap increased from 6.2% to 8.8%, and
the median pay gap increased from (0.4%) to 6.3%. Although
our mean gender pay gap is smaller than the average for UK
businesses in 2022 at 13.9%, we remain committed to further
action in this area and delivering against our 2025 Diversity
& Inclusion Strategy.
Our mean ethnicity pay gap reduced from 11.0% to 7.7%,
and the median ethnicity pay gap reduced from 7.1% to 5.9%.
In order to deliver change in both of these areas, we will
continue to build on the work already in place to support
our teams through talent programmes, employee networks,
succession planning and early careers. We will continue to
work to close our gender and ethnicity pay gaps and ensure
that we build an open and inclusive working environment.
Expanding employee participation in share ownership
for our business
In April 2023, we invited all eligible employees to participate
in the 15th grant under the Group’s Sharesave scheme, which
allows eligible employees to contribute a maximum of £500 per
month in one or more Sharesave schemes. As at 30 June 2023,
51.4% of our employees participated in one or more of the active
schemes, compared to 51.2% as at 30 June 2022.
In recognition of the continued dedication, commitment and
loyalty of our employees, in FY23 the Board agreed that an
annual share award would be made to all employees below
Managing Director level. Accordingly, in July 2023, an award
of shares equating to £1,250 (July 2022: £1,250) was made
to all qualifying employees. This award will vest in July 2025.
Reflecting the challenges faced by our industry as well as our
recruitment freeze implemented at the end of September 2022,
our total Group employee turnover reduced to 15% for the year
to 30 June 2023 (FY22: 17%). Our target over the medium term
remains at 15%.
Barratt Developments PLC Annual Report and Accounts 2023
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Our strategy continued
Investing in our people continued
Promoting both physical and mental wellbeing
of employees
A key objective for the Group during FY23 has remained the
physical, mental and financial health and wellbeing of our
employees. During the year, we continued to progress our
health and wellbeing programmes, including the development
of a health and wellbeing strategy. We have continued to deliver
“manage the conversation” training to our manager population,
grow our network of mental health first aiders and enhance,
through additional investment, the support available to our
mental health first aiders.
We have continued to strive to reduce stigma and encourage
openness around mental health across our employee and sub-
contractor population, with suicide awareness training made
available to all employees and promoted to both our employees
and well as our sub-contractors and allied trades. Continuing
this theme, in June, in conjunction with the Barratt Foundation,
we launched a collaboration with the Lighthouse Club
Construction Industry Charity, which has seen a series of site
tours being supported by the charity bringing wellbeing advice,
help and support to our site-based teams and sub-contractors.
In order to support the financial wellbeing of our people, we
have extended our partnership with our benefits providers to
offer access to enhanced financial wellbeing support through
innovative platforms and webinars. We continue to support our
people’s physical health through investment in private medical
support and annual health assessments, which are made
available to all employees.
Anti-bribery and corruption policy
Diversity and inclusion
We aim to create a working environment that provides equal
opportunities for all and we are a signatory to the Business
in the Community Race at Work Charter.
Selection for employment and promotion within Barratt is
based on merit, following an objective assessment of ability
and experience, and after giving full and fair consideration
to all applicants. We are also committed to ensuring that our
workplaces are free from discrimination and that everyone is
treated with dignity and respect. We strive to ensure that our
policies and practices provide equal opportunities in respect
of training, career development and promotion for existing and
potential employees, at all levels throughout the business,
irrespective of age, disability, gender, gender reassignment,
marriage and civil partnership, pregnancy and maternity, race
and ethnicity, nationality, religion or belief, sex, and sexual
orientation. We also remain signatories to the Social Mobility
Pledge, committing us to providing opportunities to people
from all different backgrounds.
A detailed review of our employee representation across all
protected characteristics, by both function and level within
the organisation, was completed during the year. This identified
both our strengths and where there are clear opportunities
to improve and a new three-year strategy has been put in place
to drive measurable improvement through to FY25 and ensure
everyone who works within the Group feels they belong and
are comfortable to be themselves.
38
Barratt Developments PLC Annual Report and Accounts 2023 Strategic Report
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Gender diversity
Improving our gender diversity has been recognised as an
initial priority with a support programme, a particular focus
on graduate recruitment and early career intake and through
carefully considered succession planning.
To drive improvement the Group:
∙ Is now measuring gender representation in each function
and level within the Group on a quarterly tracking basis;
∙ Has refreshed our recruitment processes, to ensure have
balanced and diverse shortlists; and
∙ Has increased the female cohort on our Accelerated
Leadership Programme, which is designed to identify
our future Managing Directors.
Catalyst, our existing development and support programme,
designed to help high-potential female employees develop
their careers within the Group, is a key part of our gender
diversity strategy. This programme is showing positive results
with 48% of participants being either promoted or having their
roles extended.
As well as Catalyst, we also worked with the Home Builders
Federation and Women in Construction during the year
to launch a nationwide employment programme for
women, helping to address the gender imbalance in the
construction workforce, which currently sees just 16% female
representation.
As at 30 June 2023, women held 18% (FY22: 17%)
of senior manager roles within the Group.
The gender diversity statistics for our employees as a whole,
our senior managers, the direct reports to the Executive Committee,
Executive Committee and PLC Directors are shown on page 35.
Further information regarding the diversity (including ethnicity
of our PLC directors and Executive Committee members can be
found in the Nomination report on page 120.
Ethnic diversity
Increasing the ethnic diversity of our organisation is also a clear
target over the coming years. In October 2022 we launched our
ethnic minority community support programme, “Spotlight”.
This is an eight-month externally facilitated programme, which
includes feedback from the participants on actions needed,
as well as a Group-wide EMC employee network. We were
also delighted to have been part of the 30% Club’s “Leaders
for Race Equity” inaugural programme, alongside nine other
organisations seeking to share best practice and establish
tangible actions for change.
As at 30 June 2023, 7% (FY22: 7%) of employees were from
ethnic minority backgrounds and 3.0% (FY22: 2.1%) of senior
leadership positions were held by ethnic minority employees.
Disability
Every effort is also being made to retain and support employees
who become disabled during their time working within the
Group and we continue to remove physical barriers for disabled
colleagues or applicants. Our “Scaffold” network, detailed
earlier, is an important forum to ensure we understand the
issues faced and are supporting our disabled employees.
Human rights and anti-bribery
Our respect for human rights is embedded within our strategic
priorities. We have policies and procedures in place that
support the core values of the UN Universal Declaration of
Human Rights and the UN Guiding Principles of Business and
Human Rights, and we act in accordance with our principles
regarding diversity and the Modern Slavery Act 2015. Concerns
can also be raised anonymously via our whistleblowing process.
We are currently undertaking a thorough review of our approach
with the aim of developing a more consistent, leading practice
approach to managing material human rights risk across
our value chain. In line with this, this year, we conducted
an assessment to identify our most salient risks and key
opportunities, and have also put in place measures to build on
our existing due diligence systems. These have included:
∙ Updating signposting on our sites to encourage potential
victims of modern slavery to seek help and, recognising
that language barriers that may exist, our signposting
has included QR coding for multiple languages.
∙ Recognising that the transition to net zero has the potential
to increase human rights risks, particularly in relation to
new technologies and new suppliers operating outside
of our traditional supplier base and in more distant and
less regulated markets. In one particular product area,
photovoltaic panels, we are co-sponsoring the development
of a procurement guide for responsible sourcing addressing
the sourcing of materials and labour and the supply chain.
Our non-financial KPIs regarding health and safety and
employee engagement reflect our belief that it is a fundamental
human right to work in a safe and supportive environment.
Employees undertake training on modern slavery and site
managers are given additional training in helping identify
risks around modern slavery.
We have a strict anti-bribery and corruption policy and
conduct our business in a fair, open and transparent manner.
All employees are required to undertake regular training on
our anti-bribery and corruption policy.
We also work closely with our partners to ensure our standards
are applied to our extended workforce. We are signatories to
the Gangmaster and Labour Abuse Authority Construction
Protocol, helping us to share and receive information and
training materials to identify and prevent modern slavery. It
is a condition of all our supplier and sub-contractor contracts
that they comply with the Bribery Act and our anti-bribery and
corruption policy.
Objectives
0–1 year: Increase leadership capability in key people
management skills, developing inclusive leadership.
Focused people planning including diverse hiring.
1–3 years: Embed the Company’s new purpose and values
and employee value proposition across all areas of the
employee experience.
3+ years: Enhance the employee experience through technology.
David Thomas
Chief Executive
Barratt Developments PLC Annual Report and Accounts 2023
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Building sustainably
Leading sustainability
We are determined to be the leading national sustainable housebuilder.
We believe that fundamental to building quality homes is building
a positive environmental, social and economic legacy for future
generations. To us, that means putting our customers at the heart
of everything we do to create great homes and great places that are
designed and built for better living and to meet the challenges of
the future.
Building Sustainably Framework
We preserve and enhance the natural world
by using resources responsibly, building
resilient, low-carbon homes, and by creating
places where people and nature can thrive.
See page 44
Nature
e , N a t u r a l Resources, Carbon Reductio
n, R
e
12
13
n
c
e
s
il
i
e
r
u
t
a
d N
n
Biodiversity a
6
15
7
11
P
l
a
c
e
m
a
k
i
n
g
,
P
l
a
c
e
s
G
r
e
e
n
F
i
n
a
n
c
e
We design and build
great places that meet
the highest standards,
and that promote
sustainable, healthy
and happy living for
our customers.
See page 45
Link to the SDGs
Building
Sustainably
3
5
e
l
p
o
e
P
r
u
O
,
e
f
a
ple s
o
e
ple
Peo
n rig hts, Keeping p
8
u m a
H
We believe everyone
has the right to be
respected and treated
fairly at work. We
do the right thing,
nurturing diverse
talent and prioritising
the health and safety
and wellbeing of our
people and partners.
See page 45
3 Good health and wellbeing
7 Affordable and clean energy
12 Responsible consumption and production
5 Gender equality
8 Decent work and economic growth
13 Climate action
6 Clean water and sanitisation
11 Sustainable cities and communities
15 Life on land
40
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Our Building Sustainably Framework
The last year has been one of extraordinary economic, social
and environmental shifts, and this is expected to continue.
Global conflicts amplified what was an emerging energy
and cost of living crisis. This has had consequences across
our entire value chain – from the sourcing of raw materials
through to consumer sentiment. Political upheavals in the UK
have also challenged the ability of business to respond and
adapt. Against this, a backdrop of increasingly urgent warnings
about climate change and nature depletion.
At Barratt, our response to this is simple, yet focused. We are
responding to the most urgent issues by ensuring we are driving
the delivery of our Building Sustainably Framework, in line
with our targets and commitments. We view the progress on
our environmental and social ambitions as essential to future
proofing our business in the long term. The framework is
built around three pillars: Nature, Places and People. These
cover the material issues for our business and are informed by
industry understanding, as well as the opinions and challenges
offered by our stakeholders.
This focus is reflected in all that we have achieved. We are
building resilient, low-impact homes that will make our
customers and our country future-ready. We are creating
places where people, nature and local economies thrive
together, whilst also addressing the skills gap and supporting
under-represented and disadvantaged groups. We are
unlocking affordability for more people and rewarding
customers who make sustainable choices.
At a global level, our framework aligns with nine of the UN’s
2030 Sustainable Development Goals (UN SDGs), which are
detailed within the framework wheel. We became a signatory to
the UN Global Compact in July 2021, a voluntary initiative based
on CEO commitments to implement universal sustainability
principles, and to take steps to support UN goals. Our
Communication On Progress qualifies for the Global Compact
Advanced level. Nationally, our framework aligns with the
UK Government’s 2050 net zero greenhouse gas emissions
commitment and its 2025 Future Homes Standard.
Creating value
It is crucial that, through our sustainability activities, we realise
these benefits for all stakeholders. This means ensuring our
sustainability programmes address societal challenges, drive
greater financial productivity, and aid effective management of
climate and socio-political risks and opportunities. Within each
area of our framework, we seek to innovate, create genuine
impact and support long-term value creation.
What matters most?
Our Building Sustainably Framework has been created as a
“living blueprint”, one that will evolve according to emerging
sustainability risks and opportunities. This is why, periodically,
we undertake a materiality review to understand which sustainability
issues matter most to our stakeholders. Using the Future
Fit Business Benchmark as a guiding framework, we have
completed an extensive engagement programme of interviews
and surveys. The next stage is to examine the findings, identify
the issues that matter the most, and use these to advance our
strategy, using an approach that considers business needs and
potential for social and environmental value creation. These will
be reported in 2024.
External industry bodies
and stakeholders
Suppliers
63
Employees
576
21
Stakeholders
consulted
1+
2,462
1,802
Customers
Leading sustainability
Creating value
What do our customers think?
We are well positioned as the industry leader to inform and educate those in the market to buy a home. Sustainability forms
part of our annual customer research and insight programme, which has allowed for over 25,500 interactions, reaching over
2,700 of our customers and an additional 22,600 UK residents in the past three years. This further helps us understand their
attitudes towards sustainability in the home and sustainable lifestyles.
There is a clear appetite and expectation for sustainable homes. The majority of customers care about the environment and
want to reduce their carbon emissions, and place value on homes that provide lower running costs.
63%
Say the cost of living and
affordable energy is one
of the top 3 issues facing
the UK at this time*
62%
Say net zero commitments
are an important factor when
choosing a housebuilder**
80%
State “sense of community” is very or quite important
when purchasing a home***
*
Online survey of 780 recent purchasers or those in market to buy in the next two years, April 2023.
** Online survey of 1,800 BDW customers, recent purchasers, or those in market to buy in the next two years and those in market, April 2023.
*** Online survey of 2,000 BDW recent purchasers, or those in market to buy in the next two years and those in market, April 2023.
Barratt Developments PLC Annual Report and Accounts 2023
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73
+
3
+
23
+
T
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Building sustainably continued
How we manage sustainability
An established and robust governance structure underpins the framework. We have a clear process – from identifying our
most material issues to the operational delivery of action plans – across each of the framework pillars and their corresponding
priorities. This allows us to create supporting work streams, which drive our implementation plans and create clear accountability
around each issue. The Board delegates day-to-day delivery of our framework to the Executive Committee, which is supported
by operational cross-business working groups. Regular monitoring of targets enables us to continually identify and re-prioritise
areas for improvement.
This year, we improved our internal reporting mechanisms – in particular enabling divisional management teams to benchmark
and monitor carbon and energy performance to a site level to put performance improvements in place where they are most
needed. We will include new management metrics in FY24. See page 91 for further detail on our transition pathway.
Our governance framework
Board
Group Board
Chief Executive accountable for sustainability
Scrutiny, oversight and approval of sustainability strategy
Nomination
Committee
Audit
Committee
Sustainability
Committee
SHE
Committee
Remuneration
Committee
Executive
Risk Committee
Land Committee
SHE Operations Committee
Management Working Groups
Biodiversity Net Gain
Sustainable Homes
Stakeholder Engagement
Sustainable Operations
Sustainability and People
ESG Data and Controls
Waste
Sustainability Committee
Our Sustainability Committee, chaired by our CEO, debates,
reviews and scrutinises the sustainability strategy and
implementation plan, and approves plans to mitigate risks and
leverage opportunities. At least one member of the Committee
must have sustainable development-related skills.
External experts are also invited to sessions to share deeper
insights on specific topics. This year external experts provided
input on the subject of environmental economics, the potential
impact of carbon pricing and the transition to net zero in hard to
abate sectors.
The Committee’s full terms of reference can be found here: https://
www.barrattdevelopments.co.uk/investors/corporate-governance
In this financial year, the Committee reviewed and approved
updated sustainability policies, and agreed the outcomes of
a Human Rights saliency assessment.
Furthermore, progress against our strategy and objectives
around waste, carbon, biodiversity and water were reviewed,
with focus areas and future opportunities identified.
Climate related issues are a standard agenda item at meetings
– this year, the Committee reviewed our net zero transition
pathway, international approaches to decarbonisation, carbon
pricing and embodied carbon assessments. See page 91 for
further detail.
42
The Committee also reviewed future reporting requirements,
including likely nature related requirements. It provided input
into the approach for the measurement and monitoring of
biodiversity net gain and offsetting requirements and also
considered requirements for nature positive business.
Meeting attendance
There were three meetings held during the year ended 30 June 2023.
The table below shows the attendance of each member of
the Committee.
Attended
Did not attend
David Thomas1
Steven Boyes
Katie Bickerstaffe
Jasi Halai2
Jock Lennox
Tina Bains
Bukky Bird
Jeremy Hipkiss
1 David Thomas did not attend the March meeting due to a previous
commitment. Prior to the meeting, David provided his views on the
meeting agenda which were shared with the other Committee members
during the meeting. Following the meeting, he was briefed on the
business of the meeting and any decisions taken.
2 Jasi Halai was appointed on 1 January 2023.
Barratt Developments PLC Annual Report and Accounts 2023
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Our performance
Performance is monitored throughout the year and reported to the Sustainability Committee biannually, and to the Board
annually. Performance against our sustainability metrics is set out on page 48 and https://www.barrattdevelopments.co.uk/
building-sustainably. To drive progress against our priorities, we have included a carbon reduction target in our LTPP since 2021
and a waste intensity target in our annual bonus scheme since 2022. New bonus-related incentives at a divisional level have been
introduced to encourage the reduction of waste across the business.
Joined CDP’s Climate Change A List for Leadership, one of just
300 companies worldwide. The top-rated UK housebuilder and in
the top 23% of global construction companies.
Climate: A
Water: B
Forests: B
Included in top-rated ESG Companies List.
Listed as an ESG Regional (Europe) top-rated company,
and an ESG Industry (Homebuilders).
Top-rated company (second out of 86 global
homebuilding companies).
1st out of 232 in the global
construction industry.
Leading national housebuilder.
Gold Award for seventh consecutive year
Crystal award for Transparency for the
third time.
Innovation Award for the Zed House.
Advanced.
We are the only UK company
in the “Household Goods and
Home Construction” sector to
achieve this (and only achieved by
around c.10% of all participating
companies worldwide).
Transparency
Transparency underpins our Building Sustainably Framework.
Our disclosures are critical for providing insight into and
challenging our progress on meaningful industry-wide
improvement around sustainability. We are committed to
continuously enhancing our disclosure to meet evolving
stakeholder needs. This means that as well as celebrating
success, we share where we fall short of our own expectations,
and flag areas for improvement. As a result, all information
on our strategy, targets, and performance is publicly available
through our website and other publications.
By completing the most material benchmarks and indices
throughout the year, we allow our stakeholders to track our
progress consistently, and to assess our performance in
accordance with global and national standards.
Our performance
Barratt Developments PLC Annual Report and Accounts 2023
43
Collaboration
We can’t achieve all that we do in isolation and we acknowledge
the opportunity to be a catalyst for change across the sector,
as well as develop shared solutions to shared challenges.
We take an active role in a number of industry groups and
engage with government bodies to implement policies and
action for a sustainable future. See page 54 for further detail.
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Building sustainably continued
Sustainability highlights
Nature
Advancing modern methods of construction
Modern Methods of Construction (MMC) creates opportunities to build
with greater speed and efficiency, mitigate the impact of the skills
shortage facing the industry, reduce on-site waste, reduce embodied
carbon and diversify the types of materials we use.
32%
homes built using MMC
See page 33
Supplier emissions data visibility
Collaboration with our suppliers and sector-wide groups is a critical
part of delivering on our decarbonisation plan. We engaged our top
suppliers and subcontractors (representing 20% of our supply chain
emissions) to understand with more accuracy how much carbon is
emitted by our supply chain.
22
of our top suppliers and subcontractors engaged on their
carbon plans
See page 94
Alternative fuels powering our transition
Hydrotreated vegetable oil (HVO) is a critical transition fuel, whilst we
await innovation in electric site plant. We have invested significantly in
responsibly sourced HVO to reduce site-based emissions associated
with diesel, which account for 65% of our footprint.
2,791
tonnes of carbon abated
See page 94
44
Enhanced timber sourcing transparency
We are committed to purchasing all timber and timber products from
well-managed forestry sources, and have enhanced our timber survey
to improve visibility of sustainability risks.
99.8%
certified sustainable
See page 48
Zero carbon home collaborative research
We launched eHome2, our sector-leading research collaboration to
enable us to test a range of technologies and build techniques within
climate controlled extremes. This is a key element of our roadmap
to zero carbon homes, and decarbonising our value chain.
Over
40
partners collaborating on eHome2
See page 34
Reduced waste intensity significantly
We continue to promote the segregation of waste and the efficient
use of skips across our sites supported by bonus arrangements
to incentivise performance.
14,000
tonnes less waste generated in 2023
See page 17
Fleet electrification
The uptake of electric company cars has been faster than forecast,
enabling us to move our target for fleet decarbonisation forward
from 2030 to 2028.
66%
of company car fleet are electric or hybrid
See page 91
Fleet composition
45+
Electric
Diesel
Hybrid
Petrol
45%
23%
21%
11%
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Places
Achieving biodiversity net gains
We have embedded a comprehensive operational framework to deliver this change
including training, calculation tools, automated data collection and a network
of divisional representatives championing it. In achieving this, we drive progress
towards creating great places where people and nature can thrive.
100%
sites submitted for full or outline planning with 10% minimum BNG since January
2023, excluding joint ventures
See page 32
Greenspace focus in placemaking
We have integrated greenspace awards into our Great Places design principles.
96
of our schemes achieve Built for
Life accreditation.
See page 32
4
of our developments were
awarded Building for a
Healthy Life Commendations.
Championing green mortgages
We have played an instrumental role in encouraging mortgage lenders to develop
affordability calculations which incentivise homeowners to invest in energy efficient homes.
Leeds Building Society offers
Up to 10%
uplift in lending for an energy efficient new home.
See page 61
Leading the industry
People
Refreshed diversity
and inclusion
targets
A detailed review of our
employee representation
across all protected
characteristics, by both
function and level within
the organisation, was
completed during the year.
31%
female appointments
7%
of employees from
ethnic minorities
See page 39
13%
of our apprentices were
recruited from the most
deprived areas
according to the Index
for Multiple Deprivation
Our commitment to
developing future talent
continues recognising
the industry’s skills
shortages and we
promote opportunities
to people from all
different backgrounds.
7.2%
workforce in a graduate,
apprenticeship or
trainee role
Carbon and
energy efficiency
dashboard launched
Improving visibility
of key sustainability
performance data across
our divisions and regions
is critical to delivery of
our framework ambitions.
See page 98
Leading sector-wide
sustainable change
We have taken a leadership
role to ensure the whole
sector can deliver
sustainable outcomes,
industry initiatives and
policy development.
1st
Our CEO, David Thomas
has been appointed as
the first chair of the
Future Homes Hub
See page 64
Leading in
sustainability
benchmarks and
indices
Our performance in
benchmarks and indices
has been strong, retaining
either a global or national
leadership position.
One of fewer than
300
companies globally to be
CDP Climate Change “A
List” for Leadership
See page 63
^ Online survey of 1,300 of recent purchasers or those who
intend to buy in next three years, May 2022.
Linking
performance to
a sustainability-
linked facility
Our existing revolving
credit facility has
been amended to a
sustainability-linked
facility which includes
sustainability linked
performance measures.
£700m
Sustainability-
linked facility
See page 61
Leading on the
customer voice
We continue to gather
extensive insights from
customers and those in
market on sustainability
topics including: Future
Homes Standard
technologies, appetite
for energy efficient
homes, green mortgages,
nature and greenspace,
water, placemaking,
and the materiality of
sustainability issues.
70%
see cheaper household
bills as a benefit of living
in a low carbon home^
See page 31
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Building sustainably continued
Building sustainable
homes for the future
With 40% of the UK’s carbon emissions coming from households, the
residential sector has a critical role to play in meeting the nation’s
climate goals. New build homes are already demonstrating their worth
with 84% in England rated with an EPC of A or B compared to only 4% of
existing housing stock.1
Zero carbon ready homes require fundamentally rethinking the
design as well as the way we build. Solutions must meet the
challenge practically, and the risks associated with innovating
quickly and at scale across the country must be managed.
Barratt has a clear roadmap to zero carbon in the homes we
build, working with our supply chain and partners, to ensure we
deliver high quality, sustainable homes that our customers love.
Our roadmap is phased and we are currently trialling new
technologies as part of our ongoing research and development
programmes – more recently through eHome2 and the Zed
House – to help refine our design and technology decisions.
See page 34 for further detail. We have begun to incorporate
some “zero carbon ready” technologies, for example at
Delamere Park, our first gas-free development.
Our “fabric-first” approach means making sure the building
envelope maximises its insulation performance and is as
airtight as possible whilst maintaining good indoor air quality
which saves carbon an energy without the need for upgrading
technology. Focusing efforts on the comparatively long-lived
building fabric helps to “future proof” homes meaning they will
be less likely to require difficult and expensive refurbishment
upgrades at a later date.
1 https://assets.publishing.service.gov.uk/government/uploads/system/
uploads/attachment_data/file/1050357/EPB_Cert_Statistics_Release_-_
Q4_2021.pdf
Designing for nature
Most of our homes have their own
private gardens. We have worked
with the RSPB to maximise the
potential of the gardens we create
by installing gardens into our show
homes that are packed with features
such as “hedgehog highways”,
wildlife-friendly planting and bee and
bug houses to inspire our customers
to recreate these in their own homes.
Materials
The majority of carbon emissions
released during the lifecycle of a
home occur before construction
phase through materials, including
extraction, manufacturing and
transport. We are the only major
housebuilder to sign up to support
the proposed Building Regulations
for limiting embodied carbon (“Part Z”).
See our transition pathway on page
91 for further detail on our roadmap
to net zero across the value chain.
Adaptive homes
We want to ensure the home can
be more agile to the customer’s
needs over time. Our homes are
incorporating smart technology
that simplifies how customers
interact with them in order to live
comfortably and save money. In
addition we are trialling technology
to support an ageing population –
see page 34.
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31%
carbon reduction
75-80%
carbon reduction
Zero
carbon
Building regulations 2021
Future homes standard
Beyond Future homes standard
Net zero and beyond 2030+
All new housetypes to be zero carbon
(regulated energy) in use. Features being
considered include:
∙ Batteries
∙ Smart energy tariffs
∙ Vehicle to home energy storage
∙ Smarter homes through automation solutions
Current build
Our homes are designed to achieve a 31%
carbon reduction* in line with the update
to Part L of the Building Regulations
(2022). We are achieving this through:
∙ Enhanced fabric efficiency in walls, floors,
roofs and windows
∙ Reduce airtightness from 5 to 4
∙ Photovoltaics
∙ Efficient gas boilers
∙ Waste Water Heat Recovery
∙ Flue Gas Heat Recovery integrated in
combination boilers
∙ Smart cylinders
∙ Introduction of decentralised mechanical
extract ventilation
∙ Larger radiator and pipes to future proof
for low carbon heating such as air source
heat pumps
∙ Electric vehicle charging points
* When compared to 2013 standards.
FHS 2025
“Zero carbon ready”. We are now taking
steps to prepare for the introduction of
the Government’s full Future Homes
Standard in 2025 which will enhance
the specification of our homes further,
to achieve a 75-80% carbon reduction
against current regulations. Further
features should include:
∙ Enhanced fabric efficiency in external walls
and enhanced double glazing
∙ Air source heat pumps
∙ Underfloor heating
∙ Hot water cylinder in every home
∙ Smart technology
∙ Further reduced airtightness from 4 to 3
∙ Mechanical ventilation with heat recovery
∙ Electric vehicle charging point in every home
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Building sustainably continued
Sustainability goals
Nature
Biodiversity and nature
Target
Demonstrate a minimum
biodiversity net gain (BNG) of
10% across all development
designs submitted for planning
from 2023.
Waste and
circular economy
Target
Reduce construction waste
intensity by 20% by 2025 vs.2015.
FY23 performance
FY23 performance
100%
of sites delivering an average
BNG of 36% for area habitats,
76% for hedgerow habitats and
13% for river habitats.*
* Excluding joint ventures
See page 32
39%
See page 17
Target
Maintain 95% diversion of
construction waste from
landfill annually.
FY23 performance
96%
Carbon reduction
Target
Reduce absolute scope 1 & 2
(operational) carbon emissions
by 29% by 2025 (from 2018
levels) and to net zero by 2040.
Zero carbon homes
Target
All new housetypes to be
zero carbon from 2030
(regulated energy).
Deforestation
Target
100% of timber certified for net
zero deforestation annually (for
all timber procured via Group
agreements, BD Living, Oregon
and sub-contractor fencing).
FY23 performance
99.8%
Modern Methods of
Construction (MMC)
Target
Use offsite based products
and systems in 30% of
homes by 2025.
FY23 performance
32%
See page 33
Renewable energy
Target
Ensure 100% of own electricity
is on renewable tariffs by 2025.
Sustainable travel
Target
100% of company car fleet free
of diesel and petrol cars by 2030.
See page 47
FY23 performance
87%
See page 91
FY23 performance
66%
of fleet are electric
vehicles or hybrid
See page 91
FY23 performance
23.7%
See page 16
Target
Reduce scope 3 (indirect)
emissions intensity by 24%
by 2030 (from 2018 levels).
FY23 performance
242.13
tCO₂e/100m2
See page 97
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Performance versus target
On track
Achieved
Monitor
Below target
Target not met
Places
People
Great Places
Development
Attraction
Employee engagement
Target
All completed developments
designed to achieve our
minimum Great Places
standard on an annual basis.
Target
Maintain an average
of four training days
per employee per year.
Target
Maintain 7% of workforce
in a graduate, apprenticeship
or trainee role.
Target
Exceed 75th percentile score
in the engagement survey.
FY23 performance
FY23 performance
FY23 performance
90%
4
Achieved
People
Reward and benefits
Target
Gender & Ethnicity pay gap reporting.
FY23 performance
Gender:
Mean
Median
8.8%
6.3%
Ethnicity:
Mean
Median
7.7%
5.9%
FY23 performance
84.4%
Achieved
7.2%
Achieved
Target
Increase in apprenticeships
with a minimum of one
lower socioeconomic
background indicator*.
New target
Diversity and inclusion
Target
35% of all employees to be female
by the end of FY26 vs. FY23.
Target
Overall 10% increase in ethnic
minority employees by the end
of FY26 vs. FY23.
FY23 performance
FY23 performance
31%
of all employees are female
7%
of all employees are
from ethnic minorities
* Target to be finalised in FY24.
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Section 172
Section 172 statement
The Board recognises the importance of working and engaging
with a number of key stakeholders in order to promote the
long-term success of our business. Such engagement helps us
to gain a better understanding of what areas our stakeholders
are interested in or concerned about and how our decisions
impact them. Healthy engagement with our stakeholders
underpins our governance framework, which is embedded
throughout our business and helps to ensure we maintain
high standards of business conduct. Engagement with
our stakeholders supports the Board’s regard to the likely
consequences of any decision in the long term. In accordance
with the requirements of the Companies Act 2006, the following
pages set out how the Board acts in a way that promotes the
long-term success of the Company, whilst considering various
matters including those set out in s.172(1) of the Act:
Key matter of which the Board must have regard
Key matter of which the Board must
have regard
The likely consequences of
any decision in the long term
How the Board takes each of the matters into consideration
Our business is cyclical in nature and it is therefore imperative that the Board takes a long-term
approach to its decision making. This supports our ability to deliver our purpose and strategic
priorities and create long-term sustainable value for our stakeholders. It also helps prepare
the business for changes in Government and regulatory policies that impact our industry. For
example, the introduction of the Future Homes Standard that becomes mandatory in 2025, will
require all of our homes to produce 75-80% less carbon emissions than they do now. To meet
these types of requirements within the prescribed timescales we have to act now, details of
which can be found on page 47.
In addition, the Board regularly assesses emerging risks that may impact the business and the
way in which it operates in the future. It also reviews its Principal Risks annually to ensure that
they remain appropriate and that the correct internal controls and mitigations are in place. For
more information on our approach to risk management see pages 71 to 77. Our approach towards
climate-related risks and opportunities can be found on pages 78 to 98.
Taking a longer-term view helps the Board to assess the viability of the business over a
three-year period on an annual basis. Our Viability Statement can be found on page 99.
The interests of the
Group’s employees
Details of how we have regard to each of these and our engagement with them can be found
on pages 35 to 39 and 55 to 56.
The need to foster
the Group’s business
relationships with suppliers,
customers and others
The impact of the Group’s
operations on the community
and the environment
The desirability of the Group
maintaining a reputation
for high standards of
business conduct
The need to act fairly as
between members of
the Company
50
Details of how we have regard to each of these and our engagement with them can be found
on pages 54, 55 and 59 to 61.
Details of how we have regard to each of these and our engagement with them can be found
on pages 62 to 63.
The Board sets the culture of the business from the top. This culture seeks to promote the right
behaviours throughout the organisation in line with our values. In addition, all employees are
required to understand all policies and procedures including those that look to ensure high
standards of conduct. These include our policies and procedures around Health, Safety and
Environment; Whistleblowing; Anti-Bribery and Corruption; Human Rights; and Modern Slavery.
All of our employees participate in training sessions around diversity and inclusion and dignity
and respect to better understand the behaviours that are acceptable and those that are not.
We have reviewed our purpose and values during the year to further promote high standards of
business conduct. The new purpose and values will be launched internally later this year and
will be reported on in next year’s Annual Report and Accounts. For further information on our
culture and values see page 112. Copies of our conduct policies can be found on our website at
www.barrattdevelopments.co.uk/building-sustainably/our-publications-and-policies/policies.
The Board is cognisant of the need to act fairly between members of the Company. Regular
engagement with shareholders takes place throughout the financial year to understand their
views and act in their best interests. Details can be found on pages 57 to 58. All shareholders
have equal voting rights with one vote per share. We ensure that information is shared to all
of our shareholders at the same time via a variety of communication channels such as our
dedicated investor section on our website, postal mailings, emails and RNS announcements. In
addition, all shareholders are invited to attend the Company’s AGM, either physically or virtually,
where they can meet with Board members and ask questions. For those shareholders who are
unable to attend the AGM, we have set up a dedicated shareholder email address barrattagm@
barrattplc.co.uk for them to submit their questions ahead of the meeting. These are answered via
a Q&A document that is added to our website after the meeting.
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The Board considers each of these factors, amongst others,
when setting and implementing our strategy. In addition, as
part of its decision making process it considers the current and
emerging risks (both financial and non-financial) and the impact
that they may have on the long-term success of the Company
and the Group’s Principal Risks. The Company’s approach to
Risk Management can be found on pages 71 to 77, with climate-
related risks and opportunities set out on pages 78 to 98.
Our stakeholders
The following pages set out the engagement that has taken
place with the following key stakeholders:
∙ Customers (see page 54)
∙ Employees (see page 55)
∙ Shareholders (see page 57)
∙ Sub-contractors and supply chain (see page 59)
∙ Banks (see page 61)
∙ Local communities and the environment (see page 62)
∙ Government, opposition parties and regulators (see page 64)
The Board has identified each of these as a key stakeholder
due to their influence on the success of our business model
and our strategy and because they represent the key resources
and relationships that support the generation and preservation
of value in the Group. Each financial year, the Board reviews
the stakeholders that it considers to be key to ensure that
they remain appropriate and to ensure that they have a good
understanding of their interests and how these may have
evolved. The Board also looks to identify any new stakeholders
whose interests may impact the long-term success of the
Company and therefore need to be taken into account as part of
the decision making process. For each key stakeholder we have
set out:
∙ Why we engage;
∙ How we engage;
∙ Metrics – how we measure effectiveness;
∙ Interests and concerns;
∙ Outcomes of engagement; and
∙ The impact on Board decisions.
How the Board makes decisions
Throughout the year, the Board remained mindful of the
implications that its decisions may have on our stakeholders
and the potential reputational risk for the Group. This has
highlighted the continual need for regular, clear and comprehensive
engagement with our workforce, suppliers, shareholders and
customers throughout various decision making processes
to ensure that we continue to do the right thing and mitigate
against matters that may potentially harm the reputation of
the Group. Regular updates on the engagement undertaken
and the outcomes are provided to the Board by the Executive
Directors and there is an annual agenda that includes deep
dive discussions on topics such as Diversity and Inclusion,
ESG, Customers, and Investor Relations. Whenever possible,
the Board (or members of the Board) will engage directly
with our stakeholder groups. For example, the Chair of the
Remuneration Committee annually engages with shareholders
on Executive Directors’ remuneration in person, via video
calls or through written correspondence. Feedback from this
engagement is discussed by the Remuneration Committee.
Any decisions or changes made as a result, are communicated
to shareholders via this Annual Report and Accounts for them
to vote on at the AGM (details of this year’s engagement and
outcomes can be found on page 57). In addition, the Designated
NED for Workforce Engagement will report back to the Board
the topics discussed and issues raised at the Workforce Forum
meetings and how these are going to be addressed. Actions
taken as a result of these discussions are communicated back
to the Workforce Forum and via the Group’s intranet in the form
of a “You said, we did” notification.
The Board appreciates that there may be situations where
conflicts will arise between different stakeholder groups.
In such circumstances, the Board will seek to understand
the needs and priorities of each stakeholder group during
its discussions and as part of its decision making process.
It manages such conflicts by assessing shareholder and
stakeholder interests from the perspective of the long-term
sustainable success of the business, as is illustrated in the
significant decisions examples set out on pages 52 to 53. Such
actions and decisions by the Board also seek to align with the
Group’s culture of customer focus, resilience and adaptability.
In addition, the Board ensures that our culture encourages our
wider workforce to take pride in what we do, and to do the right
thing when in contact with customers, members of the local
communities in which we operate, and other stakeholders.
Significant decisions
The main activities and decisions of the Board are set out
on page 111. The following are just a couple of examples
of significant decisions made by the Board, how they were
made and, where applicable, how conflicts between different
stakeholders were managed. Other significant decisions
made by the Board are set out in the main activities section
on page 111.
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51
Stakeholders considered:
∙ Customers;
∙ Employees;
∙ Shareholders;
∙ Sub-contractors and supply chain; and
∙ Local communities.
How the Board made its decision:
Management undertook a number of conversations with a variety
of stakeholders ranging from employees to local authorities and
the supply chain. This highlighted the importance of environmental
and social sustainability to our key stakeholder groups. Five
possible territories focusing on sustainability and the environment
were presented to the Executive Committee for consideration,
who reduced them to three. These were presented to a sub-group
comprising of representatives from the Executive Committee,
Group Communications and Group HR who proposed three
definitions for a new purpose and values to the Chief Executive.
The agreed purpose and values were then presented to the Board
together with the narrative that will accompany each, in terms of
the importance of each element for the Group and the alignment
with shareholder expectations of the business. The Board also
considered the proposed plan to launch and embed the new
purpose and values throughout the business. The key risk identified
by the Board was ensuring buy-in from the business to the new
purpose and values. The Board suggested ways of supporting this
for example using real live examples to better illustrate the values
and including the purpose and values in the induction process for
all employees to ensure clarity as to what is expected.
The Board was mindful of the work and cost that the launch
and embedding of a new purpose and values would incur on
employees but was confident that Management would monitor
the level of resource required and adjust as required. In addition,
it was noted that the cost of this would utilise cash that could
potentially be used to increase the returns to shareholders. The
Board was however satisfied that the new purpose and values
would promote the long-term success of the Company as it will
help drive positive behaviours and result in a more inclusive and
engaged workforce who are able to fully articulate what the
business stands for. Accordingly, the Board approved the
purpose and values and the proposed launch plan.
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Section 172 continued
New purpose and values
At its meeting in March 2023, the Board considered a new
purpose and values for the Group together with a potential
launch plan. The aim of this process is to deliver a fresh,
memorable, distinctive and forward-looking purpose, together
with a set of core values and associated behaviours that will
help us deliver against it. When embedded and activated
through decision making, the purpose and values will help
position the Group for the next decade and will:
(i)
Support the Company’s ambition to continue to be
recognised and understood as a leader, differentiated from
others within the sector;
(ii) Enable leaders and employees to articulate with consistency
what we stand for, and be clear about the behaviours
required to enable delivery against the purpose; and
(iii) Help to build trust, engagement and reappraisal across our
internal and external stakeholder groups.
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Protecting the Group’s resilience
In August 2022, the Board considered various levers it could
pull to protect the Group’s resilience and to mitigate against
the challenging market conditions that the business was facing
as it moved into the final quarter of 2022.
Share Buyback Programme
During the financial year the Board kept under review
opportunities for further investment in the business and
prevailing equity market conditions with a view to returning
excess capital to its shareholders at the appropriate time.
Stakeholders considered:
∙ Employees; and
∙ Shareholders.
How the Board made its decision:
Management updated the Board on the Group’s capital
structure to enable the Board to assess the balance between
the capital requirements of the business and returning excess
capital to shareholders, and continuing to maintain balance
sheet strength and flexibility. In line with its Dividend Policy, the
Board agreed to make a final dividend payment to shareholders
for FY23, but recognised that it had the ability to return
additional surplus capital to its shareholders.
The Board considered the capital requirements of the business,
the market backdrop, balance sheet position and shareholder
expectations as part of its deliberations. The Board also took
into account the advice from the Group’s corporate brokers,
Credit Suisse and UBS, who confirmed that in the context of
historical trading and the Group’s valuation at the time, it was
economically sensible to participate in a Share Buyback
programme. Other methods, such as a special dividend, were
also considered by the Board, who concluded that a share
buyback programme would benefit shareholders, specifically
through the opportunity for increased future dividends per
share on the remaining shares and would also result in an
increase in earnings per share. In addition, given that many of
our employees are also shareholders, they too would benefit
from future dividends opportunity.
Accordingly, the Board approved a share buyback programme
to return up to £200m of surplus cash to shareholders during
the course of FY23.
Stakeholders considered:
∙ Customers;
∙ Employees;
∙ Shareholders;
∙ Sub-contractors and supply chain;
∙ Local communities; and
∙ Government, opposition parties and regulators.
How the Board made its decision:
At its meeting in August 2022, the Board received a trading
update from Management which signalled a possible slowdown
in the market. Given the cyclicality of the business, the Board
were cautious about taking any immediate action and agreed to
monitor activity on a month by month basis. During this period,
the Board considered actions taken during previous downturns
to see if any were relevant to the current circumstances,
compared our recruitment headcount plans against our target
operating model to ensure that we continued to have the right
organisational structure and levels of resource in place and
assessed our business plan against developments in
the market.
As the uncertainty in market conditions continued, Management
recommended the following actions to the Board:
∙ to restrict the acquisition of land to those divisions without a
sufficient land bank, where there was a commitment
to buy the land and paused new investments;
∙ to introduce a recruitment freeze other than for critical roles;
∙ to reviewed both overhead and non-overhead costs to identify
potential savings;
∙ to increase focus on driving leads and appointments through
higher incentive levels and more specific marketing activity; and
∙ to slow down the build rate to align it with the sales rate to
avoid having too much work-in progress.
The Board were at all times aware of the potential impact that
their decisions would have on various stakeholders. For example
existing employees would need to undertake roles for colleagues
who were not being replaced; sub-contractors and the supply
chain would be losing out on work and orders respectively. The
Board was however satisfied that the actions they were taking
would promote the long-term success of the Company. Less
expenditure on land would help preserve the Group’s cash
balance and the increased marketing activity and incentives
would hopefully appeal to more customers and drive sales.
Accordingly, the Board agreed to implement each of the actions
recommended by Management.
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Stakeholder engagement
Engaging with our stakeholders
Stakeholder engagement is an important part of our operations.
The Board is appraised of the feedback received and takes this into
account when making decisions that may impact our stakeholders
either collectively or individually.
Customers
Why we engage
Customers are at the heart of everything we do. Without them
there is no business for us to operate. It is imperative that we
understand their needs and adapt our business processes and
product accordingly.
For value for our customers see page 30.
How we engage
We utilise different channels of engagement with our customers
depending on the information that we are trying to gain or provide.
Company engagement
We ask for regular feedback from our customers directly
through Trustpilot, and both the 8 week and 9 month National
New Homes Customer Satisfaction surveys to help us make
improvements to our service and their home buying journey.
We have continued to engage with our customers on cladding
and fire-safety to address any of their issues and concerns.
We continuously update our website with up-to-date information
about Barratt: where we are building, our key credentials (such
as sustainability and energy efficiency) and ways in which
we support our customers in their search for one of our high
quality homes. We also provide customers with guidance on
home and garden maintenance.
Social media community management and social listening
provides two-way engagement across a range of channels.
We monitor key social media platforms and review sites to
identify comments of both positive and negative sentiment.
We engage where appropriate to develop a positive social
community, address customer issues and advocate our brands.
We have an established customer and insight programme
that helps us stay engaged with our customers and deliver
action led insights. We involve our customers and those in the
market to buy a new home in research to understand their
perceptions and preferences on matters such as the cost of
living crisis, how they search for their new home, our brand
positioning, our product, and their living preferences. We also
review the specification of future homes to aid decision making
and future business planning. We collect insight to understand
customer awareness of sustainability within housebuilding,
specifically around energy and water efficiency and changing
legislation, and how this impacts their buying decisions. This is
done through the use of quantitative and qualitative research
methods reaching thousands of customers in any one year.
We know from our research that expectation from low carbon
homes is high. Three quarters of those in market expect
new build properties to include features that make them as
energy efficient as possible, and the desire for this technology
remains high. For example, we are collecting insights on
our our first gas-free site, Delamare Park, to gain direct
feedback from customers living with the technology required
to meet The Future Homes Standard, as well as detailed
technical monitoring, which will continue to feed into our
design and planning decisions. Through engagement with our
customers we have determined new ways of helping them
better understand the cost savings they can achieve through
purchasing a new build home (see page 31 for further details)
and introduced new incentives and selling schemes to help them
with affordability challenges (see page 30).
Board level engagement
The Group Customer and Change Director, Jeremy Hipkiss,
updates the Board annually on actions taken to engage with
customers and the outcomes of such engagement, as well as
providing insight on what else could or should be done. During
the year, Katie Bickerstaffe, one of our Non-Executive Directors,
continued to support the review and enhancement of the
customer journey by bringing insight from her Executive role.
Metrics – How we measure effectiveness
The following metrics are reported to the Board by the Chief
Executive and/or the Group Customer and Change Director
to enable it to consider and agree what, if any, changes to make
in how and when we engage with our customers:
∙ 8-week HBF National New Homes Customer Satisfaction
rating – we achieved, 5 Star rating for the 14th consecutive
year, meaning that 90% or more of our customers are willing
to recommend us to a friend.
∙ 9-month NHBC National New Homes Survey rating measures
the satisfaction of our customers after being in their new
home for a period of nine months. This is included as a metric
in the annual bonus scheme.
∙ Defect resolution – measures the number of open defects
and time taken to resolve.
∙ Complaint resolution – looks at the formal complaint volumes
and resolution timescales.
∙ Trustpilot scores – provides genuine feedback from
customers about their buying and service experiences –
for FY23 we were 4.4 for Barratt and 4.3 for David Wilson
Homes (FY22: 4.3 for both brands).
∙ Open rate for our seasonal newsletter emails to customers
was 29.9% with click through rate at 7.65%.
∙ Customer research and insight.
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Interests and concerns
During FY23, the key interests and concerns of our customers
remained focused on the cost of living, particularly running
costs, energy efficiency and removing financial barriers to
entering the market. Access to green open space remained
a priority, as well as an appetite for sustainable homes.
Outcomes from engagement
We constantly look to improve in response to any feedback or
information from our customers. During FY23 our marketing
plans focused on communicating the benefits of our homes to
our customers, focusing on the cost savings associated with
our energy efficient homes, how we are designing homes to
support flexible living and the changes being made due to the
requirements of the Future Homes Standard.
We continued to engage with lenders to encourage mortgage
product innovation to support affordability challenges and improve
mortgage products, process and criteria for our customers.
Effect of engagement with customers on Board decisions
The Executive Committee continued to drive defect and
complaint resolution across the divisions and issued revised
policies and procedures to ensure compliance following our
activation with the New Homes Quality Board for reservations
from November 2022. They also closely monitored build stage
movements to ensure customers received handover of their
new home within agreed timescales and agreed action plans
to support those sites not selling in line with build.
With interest rates rising sharply and inflation continuing to
outstrip wages, affordability is a challenge for many prospective
customers. In order to support customers with the challenge of
affordability, particularly after the closure of Help to Buy to new
business on 31st October, we have, for example:
∙ Continued to support Deposit Unlock which allows 95%
lending on new build homes.
∙ Worked with lenders to promote the launch of Green
Mortgages which take into account the savings from energy
efficiency in affordability assessments.
∙ Reviewed the digital options available to us to engage with our
customers at the earliest opportunity to establish affordability
and support them on their home ownership journey.
See page 30
Link to strategy
Strategy key
Great places
Investing in our people
Leading construction
Customer first
Employees
Why we engage
Without our employees we would not be able to build the high
quality sustainable homes that our customers need. It is due
to their hard work and commitment that we are strong, both
operationally and financially. We must therefore attract, recruit
and retain the best people. To do this we need to understand
what matters most to them and ensure we have the right
policies, processes and procedures, remuneration, as well as
progression, training and development opportunities in place
to support them. Engagement with our employees enables
the Board to better understand the issues that are important
to them and helps nurture a mutual understanding between
senior management and their teams.
For the value to our employees see page 35.
How we engage
We use a variety of channels of engagement which enable
two-way interaction with employees and allow them to voice
their concerns or thoughts either directly or anonymously.
Company engagement
Our Workforce Forum is developing into an important tool for
providing insight to the thoughts and opinions of our employees
and what matters most to them. In FY23 the Workforce Forum
met three times, twice virtually and once in-person. We also
arranged a site visit for the workforce to see the Insight House
and understand the role it plays in supporting local schools to
see the sustainable elements we build into our current homes.
Topics discussed included hybrid working, sustainability
(renewable energy and waste), the cost of living, training,
development and progression, the results of our engagement
survey, health and wellbeing and Executive Director and employee
remuneration strategies. An overview of our Diversity and
Inclusion strategy was also shared with the forum and feedback
was taken on how to better reach the differing office and site
teams on this topic.
Employees can directly contact the Designated NED for Workforce
Engagement on any matters relating to the workplace, on a
confidential basis through a dedicated email address.
We regularly send out emails (to Barratt or personal email
addresses), newsletters, webinars and video messages to
update our employees on issues that may be of interest to them,
such as benefits, training, health and safety, hybrid working,
sustainability and charitable giving. We have begun a programme
of site visits by the HR team, to support those who spend less
of their role online to ensure they are able to sign up to and
receive the range of benefits available. We have established five
employee networks (see page 37 for more details) and collectively
they deliver an annual plan of key events and religious festivals,
from webinars, book clubs and lead discussions, allowing our
people to develop a wider insight and understanding of the
business as well as develop a network that they can rely on.
Our annual engagement survey provided great insight into the
issues that matter most to our employees. Local action plans
were put in place with individual functions and teams to either
improve or enhance the engagement that they undertake with
their teams. The Executive Committee received an analysis
of the verbatim comments received to consider and address
as appropriate. In 2023 we also ran a dignity and respect
survey, to understand the specific issues, the results of which
were shared with the leadership teams and action plans are
in development.
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Stakeholder engagement continued
Employees continued
How we engage continued
Company engagement continued
We also surveyed all employees as part of our materiality
assessment to understand which issues are of most importance
to them. The findings will be critical to the advance of our
sustainability strategy during FY24.
Board level engagement
During FY23, the Board received regular updates from Sharon
White, the Designated NED of Workforce Engagement on the
activities and discussions of the Workforce Forum, the Chief
Executive on the topics discussed and decisions made by the
Sustainability Committee, the SHE and Construction Director on
health and safety matters, the HR Director on people strategy
and diversity and inclusion, and from the Trustees of the Barratt
Foundation. These updates include what engagement has taken
place with our employees, the outcomes and the actions to be taken.
The Board has this year reinstated its physical site visits, visiting
the London and Central regions in March and May respectively.
Board members received a regional update from the senior
management team and met site and sales employees.
Following the success of the Town Hall event in 2022, the Chief
Executive, David Thomas, the Chief Operating Officer, Steven
Boyes and the Chief Financial Officer, Mike Scott, held our
second one in January 2023. Colleagues across the Group were
able to hear directly from them and on behalf of the Board on
topics such as current market conditions, the cost of living
crisis, and progression and development. Employees had the
opportunity to suggest, in advance, any topics they wanted to
hear about and to ask questions on the day. These included
hybrid working, bonuses, our plans for the future, incentives
for our customers to the importance of our employee networks,
our plans for offices and the performance of our share price.
A full Q&A document was issued afterwards and the event was
recorded for those who were not able to join on the day.
Health and safety remains a fundamental priority for the
business. The Chair of the SHE Committee, Chris Weston, now
attends all SHE Operations Committee meetings and can make
suggestions for improvement and hear first-hand the issues
and challenges being faced by the teams. The membership of
the SHE Operations Committee has been extended to include
representatives from site. For more information on the SHE
Committee see pages 133 to 136.
The Board entered into a rolling three-year funding agreement
with the Barratt Foundation to further engage employees
with charitable giving and enable the Foundation to enter into
multi-year partnerships, which employees can support and
take advantage of the volunteering opportunities available.
Metrics – How we measure effectiveness
The following information is reported to the Board by the Chief
Executive to enable it to consider and agree what, if any changes
to make in how and when we engage with our employees:
∙ Employee engagement scores – provides a quantified
measurement of engagement.
∙ Employee turnover – provides insight into the number of
colleagues leaving the business and enables benchmarking
across the industry.
∙ IIR – measures the Company’s safety performance against
the national average for the same industry and provides
an insight into areas of improvement to lower the rate
to increase the level of safety of our employees.
∙ Diversity – helps us monitor the diversity of our workforce
and inclusivity of our working environment.
∙ Gender and ethnicity pay gap – helps us ensure equality
in remuneration across the organisation.
∙ Reports to the whistleblowing line – helps us ensure that we
continue to do the right thing and tackle any issues in a timely
and efficient manner.
Interests and concerns
Throughout FY23, the key interests and concerns of our
employees related to remuneration, resource, training,
development and progression, health and wellbeing, flexible
working, the cost of living, and their own and the Group’s carbon
footprint and it’s impact on the environment.
Outcomes from engagement
The engagement with our employees has seen significant
positive movement on employee wellbeing, open
communication, and reward and recognition, reflected in
higher scores in these areas. We have also been able to better
understand our employees areas of focus; collaboration and
communication, equal and fair treatment, and customer focus.
Supporting collaboration and communication has seen changes
to the way we share Group information, with a number of
webinars and videos to link teams throughout the business.
We have extended our family policies, to ensure both parents
and carers feel supported at key life stages, and reviewed our
mental health first aider’s support following feedback from the
Workforce forum.
As part of our Diversity and Inclusion strategy we have
established a network for our ethnic minority colleagues,
to better understand different perspectives and created a
programme of informative sessions to increase understanding
of different cultures and religious beliefs.
We have also updated our Diversity and Inclusion policy and
established a zero tolerance approach, supported by dignity
and respect training for our existing and new employees.
We launched an energy efficiency campaign on our intranet site,
sharing easy ways to save energy at home and in the office. The
blog posts advice and tips from the Energy Saving Trust on how to
improve energy efficiency, reduce carbon emissions and save money.
Effect of engagement with employees on Board decisions
The cost of living crisis has had a significant impact on our
employees. Accordingly, the Board agreed to extend salary
supplement payment of £1,000 for a further six months
to June 2023. The payment was made in equal monthly
instalments to each employee below our senior leadership team
(95% of our employees) (see page 138).
∙ The amount of fundraising by employees – provides an insight
into the level of engagement with Barratt Foundation initiatives.
Other benefit improvements included the extension of our
maternity and paternity leave and paid leave for carers.
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Strategy key
Great places
Investing in our people
Leading construction
Customer first
The Board continue to provide funding to the Barratt Foundation
to support the work that it is undertaking with the divisions
across the business and charitable partners to further
engage employees to participate in charitable giving and
volunteering opportunities.
See page 35
Link to strategy
Shareholders
Why we engage
Shareholders own the Company. It is therefore imperative that
we listen to what they have to say and operate the business in
a way that delivers long-term value growth and sustainable
returns. The Company’s reputation could be damaged and it
could be prevented from attracting new investments without
the full understanding and support of its shareholders.
For value for our shareholders see page 11.
How we engage
Investors and retail shareholders appreciate contact, and whilst
virtual meetings dominated during the year, we increased in-person
meetings with a number of shareholders. We intend to offer
both virtual and in-person meetings in the future.
Company engagement:
The Executive Directors and the Group Investor Relations Director
follow a comprehensive programme of investor meetings and
calls to discuss investors’ questions and areas of concern,
particularly following the release of annual and half year results
and trading updates. These included a combination of in person
and virtual investor roadshows with shareholders in the UK,
Europe and North America, following the Group’s final FY22 and
interim FY23 results, and ad-hoc one-to-one meetings (including
in-person and virtual conferences and fireside chat events) and
Group investor meetings at a number of conferences during the
year. The use of virtual meetings has again helped to improve
our engagement with smaller institutions, regional pension
funds and private wealth managers on results and non-results
cycle roadshows.
We continue to engage actively on our sustainability strategy.
The Group Investor Relations Director and the Group Sustainability
Director attended various ESG conferences and meetings and
responded to incoming queries from analysts to provide insight
into the Group’s activities. Key areas of shareholder focus
included the Future Homes Standard and the changes this will
require in the homes we build; our value chain carbon footprint
and our response to the impacts of climate change; our
approach to expanding our use of timber frame construction
and modern methods of construction; diversity and inclusion,
and modern slavery benchmarking studies.
During the year two visits were arranged to see the Group’s future
home development activities at the University of Salford. These
visits involved presentations and tours of the Zed House and
eHome2 by members of the Group Design & Technical team and
were attended by more than 60 analysts, investors and advisers.
We issue regular trading updates via the London Stock Exchange
Regulatory News Service. These are normally published in May,
July and October with our half and full year announcements
in February and September respectively. Reflecting the
challenging trading conditions in the final quarter of calendar
2022, we issued an additional trading update in early January,
ahead of our interim results announcement, to update our
investors and the analysts in a timely manner. During the year
we also issued specific announcements with respect to the
progress of the share buyback programme (see page 53), the
signing of the Self-Remediation Terms and Contract, as well
as, the Scottish Safer Building Accord, addressing necessary
fire-safety issues on all our buildings of 11 metres and above,
built in the last 30 years (see page 24). Finally, at the end of
June, we also announced a portfolio sale of 604 future homes
to Citra Living (see page 26).
Our website is a valuable engagement tool and is continuously
updated to reflect current information on matters such as
sustainability, governance and building safety.
The Company Secretarial team, together with the Company’s
Registrars, have engaged with various retail shareholders and
dealt with enquiries relating to their shareholdings or other
information requests. The Company Secretary normally notifies
the Chairman and the Chief Executive of any areas of concern or
importance raised by retail shareholders. No such queries were
raised during the year.
We continue to encourage retail shareholders to request
digital communications, in support of our work to enhance our
sustainability credentials and reduce our carbon footprint as
well as setting up dividend mandates, to enable them to receive
their dividends faster and more securely.
Board level engagement:
The Chief Financial Officer, the Company’s brokers and the
Group Investor Relations Director update the Board on a regular
basis on the Company’s investor relations activities and shareholder
and analyst feedback on the Group’s trading updates and
interim and full year results as well as ad hoc announcements,
to ensure that all Directors are aware of, and have a clear
understanding of, the views of our major shareholders.
All Board members are available at the AGM to answer questions
submitted in advance (by post or via email to agmquestions@
barrattplc.co.uk) or on the day. Shareholders can attend in
person or via a live webcast. The Chief Executive also updates
shareholders on the Group’s performance and activities during
the year. The Notice of AGM is circulated to all shareholders at
least 20 business days prior to the meeting. All resolutions are
voted on by way of a poll.
In May 2023, the Remuneration Committee Chair consulted with
major shareholders and proxy voting agencies on the Group’s
FY23 remuneration outcomes, the Remuneration Policy and
its implementation in FY24 (see page 138). The Chairman, the
Senior Independent Director and other Non-Executive Directors
are available to attend meetings with major shareholders to
gain an understanding of any issues and concerns.
Following her appointment on 1 June 2023, Caroline Silver, our
newly appointed Chair, met with a number of our shareholders
to gain a better understanding of their interests and concerns.
Barratt Developments PLC Annual Report and Accounts 2023
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Stakeholder engagement continued
Shareholders continued
Metrics – How we measure effectiveness
The following information is reported to the Board by the Chief
Executive and the Group Investor Relations Director to enable it
to consider and agree what, if any, changes to make in how and
when we engage with our shareholders:
∙ Share register movements – provides insight into the number
of shareholders buying or selling shares in the Company.
∙ Results of qualitative investor feedback – helps to improve
engagement and understanding of key interests and concerns.
∙ The number of meetings attended – shows the level of
engagement led by the Company. In FY23 the Executive
Directors, supported by Senior Management, attended
169 investor meetings (FY22: 155), 131 one-to-one
meetings (FY22: 137) and 38 Group meetings (FY22: 18)
engaging with around 46.6% (FY21: 45.6%) of shareholders
(by shareholding value).
Interests and concerns
The key areas of interest and concern for our
shareholders included:
The impact of significant changes in homebuyer demand due to
inward migration, the war in Ukraine and the cost of living and
mortgage rates on the private reservation rate during the year.
On capital allocation, shareholders have sought to understand
more, both with respect to the Group’s future dividend policy in
combination with the potential, over the short but also medium
term, to return additional surplus capital.
Sustainability matters, notably, the potential impact of the
Future Homes Standard, the Zed House and eHome2 projects
and details around our value chain emissions and our strategy
to mitigate the impacts of climate change.
Our approach to human rights and Modern Slavery, our developing
diversity and inclusion strategy, the gender and ethnicity pay
gaps, and our commitment to paying the real Living Wage.
Increased understanding as to the speed with which we can
deliver new product innovation into the homes we build; the
ability for customers to pay a premium for such improvements;
and the lessons being learnt on the incremental costs looking
to the Future Homes Standard changes in 2025.
The impact of signing the remediation terms in England on
legacy properties on the financial position of the Group.
Outcomes from engagement
Shareholders have been kept informed through timely and clear
disclosure of the private reservation rate, as well as the transparent
detailing of the contribution from alternative sales channels.
Our engagement also gave investors the opportunity to share
their views on the relative merits of ordinary dividends and
potential returns of surplus capital either by way of special
dividends or through buybacks.
The visits to the Zed House and eHome2 projects allowed
investors and analysts to see the prototypes and the new
technologies being tested as well as ask questions of the
Group Design & Technical team.
The Group enhanced its regular investor presentation materials
to include additional details around our sustainability actions
and targets and the various issues on which shareholders and
wider stakeholders wished to increase their understanding.
Effect of engagement with shareholders on
Board decisions
The Board gained further understanding of shareholder
expectations in respect of ESG matters, particularly climate
change risks and opportunities, following our publication of
TCFD disclosures in the FY22 Annual Report.
Reflecting additional shareholder feedback, the Board has
included further development around our TCFD disclosures in
this Annual Report and Accounts (see pages 78 to 98 inclusive),
as well as reaffirming its commitment to developing future
investor communications which increasingly integrate ESG
related issues with financial and operational performance.
The Board periodically reviewed the Group’s ordinary dividend
policy in combination with potential returns of surplus capital,
following on from the £200m buyback effected during FY23.
In principle, the Board continues to believe that excess capital
should be returned to shareholders when it is appropriate to do
so. Whilst the Company remains in a strong financial position,
the UK housing market remains difficult and the outlook
remains uncertain. We have therefore agreed that whilst our
reduction in dividend cover to 1.75 times will apply from FY24 as
planned, there will be no further share buybacks at this stage.
See page 11
Link to strategy
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Strategy key
Great places
Investing in our people
Leading construction
Customer first
Sub-contractors and supply chain
Why we engage
Without our sub-contractors and supply chain we would not be
able to build high quality, sustainable products at the volume
expected by the market. It is therefore important for us to build
relationships with them to secure continuity of supply of materials,
support our productivity levels, manage costs of materials
and sourcing alternative suppliers and avoid undue delays in
construction. We must have a good understanding of what they
expect from the Company in return for their continued support.
For value for our sub-contractors and supply chain see page 46.
How we engage
The following methods of engagement give us the opportunity
to speak to sub-contractors and our supply chain as a group
which ensures consistency in the messaging and opportunity
for networking and sharing ideas and best practice. Individual
meetings allow us to focus on specific areas or issues relevant
to that stakeholder.
Company engagement:
We held our annual Supply Chain conference in person in
March 2023. It was attended by 120 of our key Group suppliers.
We shared our immediate and medium-term plans and thoughts
on the role our suppliers can play in helping us to achieve our
objectives, including the reduction of Scope 3 carbon emissions,
and gained an understanding of the issues they were facing and
how we could support them.
We shared relevant demand forecasting information with all
key material suppliers to enable them to ensure appropriate
manufacturing capacity is available to meet our requirements.
We continue to support suppliers in the completion of our
Supplier Sustainability Maturity Matrix to drive progress and
develop shared solutions in the priority areas of carbon, waste,
modern slavery, and governance. This was created with the
Supply Chain Sustainability School, of which we are a Gold
member, to inform and shape the provision of targeted learning
and training resources.
In support of this, we have built on the waste reduction workshop
we held with a cross section of suppliers in 2022 and continue
with one-to-one meetings to discuss the use of alternative
packaging and fuels such as electricity, HVO and hydrogen.
A key area of focus is working with our highest emitting
suppliers and sub-contractors to better understand our Scope
3 emissions and how we might be able to help to reduce them.
More information was requested from an expanded pool of
suppliers, including an understanding of their carbon reduction
strategies. Further information can be found on page 92.
Our divisions held sub-contractor and supplier days to discuss
local business plans and “Thank you” events to show our
appreciation for their continued support.
We have had some engagement with our brick suppliers to
reduce plastic packaging, with initiatives leading to significant
reductions in waste generated, with longer term strategies now
being implemented by suppliers. We have also started working
with a packaging design consultant (Valpak), who will be engaging
with our supply chain to advise on potential alternatives that
may reduce waste or improve recyclability.
Board level engagement:
Members of the Board attend the Supplier Conference
(the Chief Executive, the Chief Operating Officer, and the
Group Sustainability Director all presented). The Chief
Operating Officer provided an update on the supply chain and
sub-contractor performance at each Board meeting The Group
Procurement Director is invited to attend the Board or the Audit
Committee to directly answer any queries members may have.
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Stakeholder engagement continued
Sub-contractors and supply
chain continued
Metrics – How we measure effectiveness
The following information is reported to the Board by the Chief
Operating Officer and/or the Group Procurement Director to
enable it to consider and agree what, if any, changes with our
sub-contractors and supply chain:
∙ Feedback received from a survey following the annual
conference to help improve the conference in the following year.
∙ Availability of materials and services to support our build
delivery programme despite shortages and/or challenges
in the industry.
∙ Supplier performance data, captured via our Supplier
Relationship Management Portal and Quarterly Divisional
supplier performance feedback process.
∙ We maintain a dynamic supplier risk management
assessment matrix to identify potential future issues and plan
mitigating action.
∙ Supply Chain Sustainability School Membership – assesses
the number of our sub-contractors and suppliers signing
up as members to show their commitment to upskilling
their employees in areas such as sustainability and diversity
and inclusion.
Interests and concerns
The key interests and concerns of our sub-contractors and
supply chain related to the health and safety of their employees
whilst working on our sites, modern slavery, living wage and
our actions and progress in respect of our sustainability and
carbon reduction strategies and initiatives. Given the current
cost of living crisis, it is not surprising that our sub-contractors
and supply chain are concerned with being paid in a timely
manner. Details of our prompt payment practices can be found
on our website. In addition, our sub-contractors are concerned
with the availability of materials given the rise in build cost
inflation. No materials will mean no work for them on our sites.
Outcomes from engagement
We have received positive feedback regarding our leadership
on sustainability issues ranging from carbon and waste to
our commitments on modern slavery and the real Living Wage.
We closely monitor our prompt payment performance to ensure
we are supporting our partners. We have established long-term
relationships with our sub-contractors and suppliers which
60
have helped to ensure delivery and performance standards
are mutually understood and have also enabled us to secure
materials to support build requirements during a period of
shortage of certain components. It has also helped us gain a
better understanding on the availability of carbon emission
data, and the challenges associated with reporting this data.
The majority of our suppliers have now completed the Supplier
Sustainability Maturity matrix with 87% of suppliers completing
the assessment and 52% of target badges having been met.
Suppliers completed the Supplier
Sustainability Maturity Matrix
87%
Effect of engagement with the supply chain on
Board decisions
Engagement with sub-contractors and the supply has given
the Board a better understanding of the challenges they are
facing in respect of collating the emissions data to enable
our business to better measure our scope 3 emissions. The
Board therefore agreed with the Remuneration Committee
that to allow our sub-contractors and the supply chain more
time to implement and embed their processes to collect the
relevant data, scope 3 emissions should not be included in the
sustainability metric for the 2023 LTPP. The Board, guided by
the Remuneration Committee, will reconsider this for the 2024
LTPP. In addition, hearing that the uncertain market conditions
were causing a number of sub-contractor and supply chain
firms to cease trading, the Board requested Management
to ensure that those that support us are paid promptly.
See page 46
Link to strategy
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Banks
Why we engage
We need sufficient finance and working capital to settle liabilities,
manage working capital, respond to changes in the economic
environment, and take advantage of appropriate land buying and
operational opportunities to deliver strategic priorities. In addition,
it is important to understand the banks’ views on the market and
their risk appetite for lending as well as identifying ways in which
the parties can collaborate to support mutual customers.
How we engage
The following methods of engagement are effective in ensuring
continued mutual understanding of our respective businesses and
of the services the banks can provide to us and to our customers.
Company engagement:
The Chief Financial Officer and Group Treasurer regularly
engage with each of the banks in the RCF and USPP investors,
including calls after each trading update and two site visits each
year. Additional calls and meetings were held as appropriate
throughout the year. We worked closely with the Banks to
amend our existing RCF to a Sustainability Linked Loan which
includes sustainability linked performance measures, aligned
with our Building Sustainably strategy. The Head of Treasury
has a schedule of regular diarised calls on a one to one
basis with the Relationship Director of each of the banks who
participate in the RCF.
Our Head of Mortgage Lender Relations held regular meetings
with the top 10 mortgage lenders, some of which are supported
by the Executive Directors.
In order to support customers with the challenge of
affordability, particularly after the closure of Help to Buy to
new business on 31 October, we have, amongst other things:
∙ continued to support Deposit Unlock which supports 95%
lending on new Build homes;
∙ worked with lenders to promote the launch of Green
Mortgages which take into account the savings from energy
efficiency in affordability assessments – reviewed the digital
options available to us to engage with our customers at the
earliest opportunity to establish affordability and support
them on their home ownership journey; and
∙ convened an industry forum for the top five surveying firms,
supported by the HBF and the Future Homes Hub, to collaborate
regarding changes required by the Future Homes Standard.
Board level engagement:
During the year, key meetings with members of the RCF and
USPP investors were supported by the Executive Directors
and members of the Executive Committee and have included
site visits and other face to face meetings. The Chief Financial
Officer and the Chief Executive provide regular updates to
the Board on engagement activities with the RCF banks and
mortgage lenders and on any actions being taken as a result
of the information received.
Metrics – How we measure effectiveness
The banks’ willingness to engage with us and discuss new
opportunities to support us and our customers is the key metric
that is reported to the Board by the Chief Financial Officer to
enable it to consider and agree what, if any, changes to make
in how and when we engage with our banks.
Strategy key
Great places
Investing in our people
Leading construction
Customer first
Interests and concerns
The key interests and concerns of our banks identified related
to our progress with our sustainability strategy in particular
energy efficient homes, the potential for a sustainability linked
RCF, and the viability for green mortgage products and new
high loan to value lending products for our customers.
Outcomes from engagement
Engagement with our banks has given us the opportunity to
discuss the market environment and recent trends as well as
our latest results. It has also enabled the banks to broaden
their understanding of our business and how we operate,
as well as the sustainability and environmental challenges,
particularly around climate risk and carbon mitigation, facing
the business, what we are doing to address these and what
they can do to support us and our customers. This engagement
enabled us to agree the sustainability linked performance
measures in the RCF with the banks. We have engaged with
a broader range of mortgage lenders, allowing customers
to access mortgage products that are most suitable for their
needs. Both parties have gained a greater understanding of
each other’s priorities and agreed overlapping objectives, with a
view to evolving improved lending terms for energy efficient homes.
The strong engagement with Lloyds Bank has enabled strategic
partnership to be created with Citra Living, a subsidiary of
Lloyds, with Barratt selling a portfolio of homes to Citra, where
they will retain ownership of the homes and rent them out
acting as a corporate landlord.
Effect of engagement with banks on Board decisions
The Board was mindful that with the impending end of Help to
Buy, large numbers of our customers may struggle to gain the
financial support that they need to purchase their new home.
The Board therefore agreed to support the launch of Deposit
Unlock (see page 30) and explore alternatives to Help to Buy.
See page 31
Link to strategy
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Stakeholder engagement continued
Local communities
and environment
Why we engage
It is important for us to engage with the local communities in
which we build to ensure that we are responding to local needs
and are able to create value whilst considering the impact
that our business has on the local environment and the use
of natural resources in our build process. We need to protect
habitats and resources as we focus on creating sustainable
homes. Regular and open engagement helps ease the whole
build process, in particular planning, as it mitigates against
objections from members of the community which could lead
to undue delay and increased costs.
How we engage
We use a range of engagement methods to enable the local
communities to better understand how we can benefit them
and how we will protect the local environment around them.
Details of how we engage with each of our key stakeholders on
the environment and other sustainability matters can be found
in the respective sections on pages 54 to 65.
Company engagement:
To ensure that community needs and considerations, including
impact on the local environment, are taken into account at the
earliest stage of the development process, we hold meetings
and site specific consultations which all local residents are
welcome to attend. We also hold in-person and virtual public
exhibitions as well as regular meetings with other national and
local organisations who are key to enhancing our environmental
impact. These include parish/town councils, local planning
authorities, environmental regulators, Local Water Authorities
and Natural England. At these meetings we consult and seek
views on our plans and look to incorporate the feedback we
receive. We pay particular attention to residents’ concerns
about how our activities might impact the natural environment.
We frequently share the contact details of site managers with
relevant figures at the local parish council, to allow them to be
contacted quickly and any issues with construction to be rectified.
62
We work closely with local schools, to emphasise the
importance of site safety and to keep everyone safe. This also
teaches children about the construction process, the careers
available, and the initiatives that we have implemented to create
sustainable homes and places to live, such as through the
interactive Insight House on our Heritage Grange development
in Warwickshire (see page 55).
Those that we engaged with can provide feedback through
a multitude of channels both online and offline. A dedicated
project website is often set up to provide information and
updates for local residents and interested parties.
We write to inform the local community of upcoming works
that have the potential to cause disruption, such as highway
and infrastructure works. On many sites we distribute
a quarterly newsletter update on development progress
so the local community can see what is happening in more
detail and have forewarning about any disruptions.
We use signage in and around our sites to demonstrate our
credentials and the value that our activities bring to local
communities. We highlight the number of jobs and businesses
supported, amount of green space created and retained, and
section 106 contributions to local infrastructure and services.
New developments are publicised in the local press, as are
positive news stories about our beneficial activities and impacts
of our developments. We have a network of seven PR agencies
promoting the business to national, regional and local media.
We promote the resilience and sustainability credentials of
our homes to the wider community to demonstrate the reduced
impact they have on the natural environment at a local and a
global level.
The Barratt Foundation continues to grow, increasing its
charitable activity by entering into a number of partnership
agreements (see page 25 for more details). The Barratt
Foundation team have been engaging with our divisions to
support them with their charitable giving and creating volunteering
opportunities with its national partners for our employees.
Board level engagement:
The Chief Executive and the Chief Operating Officer keep the
Board appraised of any local issues that have been identified
and have the potential to escalate into a wider matter that may
impact the business as a whole. There are also two updates a
year from the Group Construction and SHE Director as well as
regular updates from the Sustainability Committee. The Board
also receives an update from the Barratt Foundation twice
a year including the impact our donations are having on our
local communities and the protection of the environment.
Metrics – How we measure effectiveness
The following information is reported to the Board by the Chief
Executive and/or Chief Operating Officer to enable it to consider
Continued support for Deposit Unlock,
supporting 95% lending on new homes
95%
Barratt Developments PLC Annual Report and Accounts 2023 Strategic Report
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“ This is one of the most helpful
companies I've ever dealt with, the
staff are absolutely lovely and are
really thorough and invested at
getting you the best deal.”
Jasmine and Kim,
Barratt customers
and agree what, if any, changes to make in how and when we
engage with our local communities:
∙ The extent of local opposition to our developments.
∙ The level of planning appeals – 95% of the units we build are
approved at a local level and do not require a planning appeal.
∙ The amount donated to, and the feedback from, charities that
we have supported and the impact we had.
Interests and concerns
The key interests and concerns of our communities relate to
our local, regional and national socio-economic footprints, our
impact on the environment and the availability of green spaces,
disruption during construction of our developments including
noise and air pollution, the safety and protection of members
of the community around our developments, the impact of
development on the local population, and the potential for
knock-on pressures on the supporting infrastructure and the
impact of the development on the environmental resilience of
the landscape, including on biodiversity, public green space
and flood resistance.
Outcomes from engagement
Our engagement with the local communities in which we
operate has enabled us to better understand their needs and
to develop a positive legacy from building great places to live,
with the facilities that will help the local community thrive. It
has allowed us to connect with local schools and families to
share key messages such as how we keep people safe and how
they can protect themselves. We evaluated the actions that our
supply chain undertakes on environmental matters and how
we can positively partner with them to drive improvements.
We have set internal targets to reduce waste from our construction
process and are considering alternative fuels to diesel for plant
and other equipment with our supply chain.
The protection of the environment is a key area of concern for
the local communities in which we operate. We therefore aim
to be mindful of our impact on the environment in everything
that we do and have put in place steps to support this. We are
accredited to ISO 14001 which demonstrates that we have
robust policies and procedures for environmental management.
We are also externally audited across all our business units.
Our comprehensive Impacts and Aspects Register enables
us to consider any areas where improvements can be made.
Strategy key
Great places
Investing in our people
Leading construction
Customer first
All our Safety, Health and Environmental team are individual
members of the Institution of Environmental Management and
Assessment and provide support and guidance to our Divisional
teams in managing site based environmental aspects and
impacts. We have a team of sustainability practitioners who
assist with considering our wider business environmental and
carbon impacts and drive improvements across our business.
We have put in place environmental and surface water
management plans for all our developments which are
monitored by our Divisional Management teams and SHE
Managers. We expect our construction teams to continually
assess the controls and ensure that we focus on these and the
use of resource. Our SHE Managers record levels of compliance
as part of their regular reviews. We have a specific monthly
monitoring process which focuses on the environmental
impacts on site and, in particular, controls to prevent
contamination of any adjacent watercourse.
We have set stringent science-based targets for carbon
emissions and have a target in place for all homes to be
zero carbon in use (regulated energy) by 2030. We are also
committed to enhancing biodiversity on every site and have a
target in place to demonstrate a minimum biodiversity net gain
of 10% across all development designs submitted for planning
from 2023.
During FY23, each of our divisions donated £1,500 per month
to a different charity that supports the local community
within the areas in which we operate. In addition, divisions are
encouraged to raise funding for local charities and utilise the
match funding available from the Barratt Foundation. During
FY23, our colleagues and divisions raised over £1.3m for good
causes, the most raised in any one financial year. The number
of volunteering days utilised also increased in FY23, with 892
employees supporting local charities through various activities
ranging from painting schools to tidying up gardens and
cleaning beaches.
Effect of engagement with local communities and
the environment on Board decisions
We monitor and report our impact publicly across a range
of environmental indicators, including carbon emissions,
water usage, waste generation, environmental incidents and
prosecutions. The Board, through its Remuneration Committee,
utilises this information to determine appropriate non-financial
metrics for both our short- and long-term incentive schemes.
The Board are keen to ensure that the Group continues to
support and enhance the local communities in which it operates
(and that we support them as much as we can). The Board
entered into a three-year rolling funding agreement with
the Barratt Foundation enabling it to engage in multi-year
charitable partnerships and have a real positive impact on
the communities in which we operate.
See page 25
Link to strategy
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Stakeholder engagement continued
Memberships
Many of these meetings are organised by various organisations
of which we are a member, or workstreams to which we
contribute. We were invited to join the Government’s Energy
Efficiency Taskforce, Net Zero Council and Green Jobs Delivery
Group, were members of Climate Change Committee’s
Business Advisory Board and contributed to the Rt Hon Chris
Skidmore MP’s review of net zero. The Group supports the
Energy Efficiency Taskforce on policy development, including
the creation of a long-term cross sector roadmap to net zero
with clarity on targets and standards, growing consumer
confidence, a green finance framework and net zero skills.
We also continue to inform Government on sustainability issues
as well as providing leadership and expertise to the Future
Homes Hub, a joint industry and Government initiative, designed
to deliver a whole industry transition to net zero. David Thomas,
our Chief Executive, was appointed as chairman of the Future
Homes Hub and our Group Head of Biodiversity is Chair of the
Future Homes Hub’s Biodiversity Net Gain working group.
Our Group Sustainability Director sits on the Climate Change
Committee’s Advisory Group on Business – a group convened to
share the different ways in which UK businesses can accelerate
progress towards net zero. The group has published a new
report which looks at how we successfully transition to a net
zero economy. At the centrepiece of this is a recommendation
that a partnership with Government is urgently needed to meet
the UK’s commitment to be net zero by 2050.
Housebuilding is suffering from a severe skills shortage. The
CITB estimates that almost 200,000 extra workers1 are required
to build the homes the country needs between now and 2027.
Many EU workers have left the UK in the wake of Brexit and the
pandemic. As part of our role on the Green Skills Taskforce
and through our membership of the Future Homes Hub, we
are working with Government to ensure that the necessary
skills and workforce are available as we scale up to building
zero carbon homes at scale. A key area is to provide support
to those currently working in high carbon industries, enabling
them to retrain into a high quality, long-term green career, as
a key component of a just transition. We are also working with
manufacturers and our trades to ensure that specialist training
is in place so that we are in a position to scale-up delivery of
new technologies such as solar panels.
Conferences
Key to our engagement is the party conference seasons in the
autumn. This year, David Thomas attended panel events hosted
by the RSPB and the NHBC, alongside the then-Housing
Minister Lee Rowley. At the Labour Conference, Bukky Bird,
Group Sustainability Director, attended a series of meetings,
including the Labour Business Forum events. At both
conferences representatives from the Corporate Affairs team
and other business functions held further meetings with party
representatives.
Site visits
Site visits are an important strand of our stakeholder
engagement, as they enable us to demonstrate the quality of
our developments first-hand. During the year we welcomed the
Leader and Deputy Leader of the Labour party to our Centurion
Village development near Preston. We also hosted a number of
stakeholders to the Zed House and Energy House 2.0 projects,
including the Mayor of Greater Manchester Andy Burnham, and
the author of the independent review of net zero, Chris Skidmore.
1 Construction Skills Network Outlook 2023 – 2027.
Government, opposition parties
and regulators
Why we engage
The government is responsible for creating the legislative
environment in which we operate, which is enforced by
regulators. Opposition parties can influence this environment
through their scrutiny of government and by proposing
alternative approaches. They may also form the next
government. We engage with these stakeholders so that they
understand the challenges facing the business, and the likely
implications of any current or proposed policies, and so that
we understand what future policy is likely to be and how it will
be implemented. We also emphasise our positive credentials and
build positive relationships to ensure we are well-regarded by
these stakeholders and are able to contribute constructively to
policy development.
How we engage
We engage with ministers, MPs and regulators through a range
of channels.
Company engagement:
Meetings
Senior representatives from the business regularly meet with
political stakeholders. During the year David Thomas met with
the Chancellor to discuss the economy, the Secretary of State
for the Department of Levelling Up, Housing and Communities
(DLUHC) to discuss the impact of planning reform, and a
number of Housing Ministers. We also hold regular meetings
with key representatives from DLUHC and other government
departments like the Treasury, Department for Environment,
Food and Rural Affairs, Department for Energy Security and Net
Zero and the Department for Business and Trade. We have also
engaged in ongoing discussion with policy representatives from
the Labour party, with the Chair and Chief Executive attending
meetings with the Leader of the Opposition, Shadow Chancellor
and other relevant Shadow Ministers. We have also provided
evidence to the House of Lords Built Environment Committee.
We continue to raise concerns with Government and opposition
parties on the disproportionate impact of nutrient neutrality
policies on new housebuilding. The housebuilding industry is
engaging positively with Government to find a solution, including
credit schemes and other approaches to mitigation, to unlock
housebuilding in areas where water treatment works may not
be upgraded until 2030.
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Strategy key
Great places
Investing in our people
Leading construction
Customer first
Letters
We also regularly write to our political stakeholders, to showcase
our positive credentials and to directly explain our positions
on certain issues. We wrote to 81 MPs who had one of our 98
Pride in the Job-winning site managers in their constituencies,
resulting in nine site visits. We also wrote introductory letters to
each of the four new housing ministers and three Secretaries of
State we saw during the year, as well as other new ministers.
Complaints
On the rare occasion that customer complaints are elevated to
the point that they feel the need to contact their MP, the relevant
Regional Managing Director will investigate the issue and prepare
a response with the assistance of the Corporate Affairs team.
Oversight of any such issues is maintained by the Group and used
to inform the ongoing stakeholder engagement strategy.
Consultations
Much of our contribution to policy development comes in the
form of responses to government consultations, which are
prepared by the relevant Group functions with assistance
from the Corporate Affairs team. This year Government
consultations responded to by the Group included those on
the forthcoming Building Safety Levy, changes to the National
Planning Policy Framework, the requirement for two staircases
in new high-rise buildings, increases in planning fees, and the
Infrastructure Levy.
CMA
We continue to co-operate with the Competition and Markets
Authority’s study into the housebuilding market.
Board level engagement:
At each Board meeting the Chief Executive provides an update
on engagement with policymakers and regulators, covering
knowledge gained and any potential impact on the business.
This information is also regularly provided by the Group
Corporate Affairs team.
Metrics – How we measure effectiveness
The following information is reported to the Board by the
Chief Executive to enable it to consider how we engage with
government and regulators and what, if any, changes to make:
∙ The business’s political engagement strategy – to ensure
we are engaging with the right people to fully understand
any policy changes and effectively communicate our key
messages in line with our broader strategic aims.
∙ A comprehensive overview of our engagement with key
political stakeholders, including meetings, site visits, mutual
attendance at events, correspondence and public statements,
so that we can track our relationships with our key stakeholders
and assess the progress of our engagement strategy.
∙ Our responses to Government consultations and emerging
legislation on relevant policy areas, such as the Building
Safety Levy, Infrastructure Levy, and draft changes to the
National Planning Policy Framework. We assess the extent
to which policy and legislative outcomes accord with our
representations to policymakers.
Supply and planning – how to reconcile the desire to build
300,000 homes a year with political opposition and the wider
levelling up agenda.
Sustainability – how to reduce carbon emissions and protect
the natural environment while achieving energy security and
growing the economy.
Inflation – the impact of increases in the cost of living and their
knock-on impacts on interest rates, mortgage costs, house
prices, employment and GDP growth.
Quality – making sure new homes are built to the highest quality
and consumers are protected should things go wrong.
Building safety – addressing defects in historic buildings,
making sure the costs of doing so are borne by parties across
the industry, and promoting trust in the new regulatory regime.
Skills – ensuring there are enough workers to build the homes
the country needs, and that people have access to training to
build the energy efficient homes of the future.
Outcomes from engagement
Our engagement with government, opposition parties and
regulators has helped us build positive relationships with
key figures, so that we can continue to be involved and inform
conversations about the future of housing policy. Our continued
positive engagement has meant we are frequently the housebuilder
of choice for officials seeking a representative of the sector.
It has helped us to understand upcoming policies and the
broader operating environment, and to influence any proposed
changes through meetings with key figures and responses to
government consultations. Meetings with Ministers and MPs
helped us understand the drivers behind proposed changes
to government planning policy, while meetings with senior
opposition ministers saw us emphasise the value of housebuilding
sector for the economy and the country’s social fabric.
We have also improved our reputation with those key
stakeholders by showcasing the good work we do, which
helps ensure our perspective and the impact on the industry
is understood and taken into account when developing future
policy. This enables us to explain the challenges facing the
sector, and the opportunities it can provide, so that future policy
can support new housebuilding and avoid adverse outcomes.
Visits by MPs to Pride in the Job award-winning sites enable
us to demonstrate first-hand the positives of our activities.
Effect of engagement with Government, opposition
parties and regulators on Board decisions
Engagement with key political stakeholders assists the Board
in understanding the risks and opportunities presented to the
business by changes to the operating environment, allowing them
to make decisions in line with the strategic interests of the business.
The Board signed the Developer Remediation Contract
following extensive engagement with Government.
The Board has also gained knowledge of how evolving housing
policy can impact the housing market at a local and national level,
and therefore affect land bids which enables it to consider if the
process and policies in place remain appropriate.
Interests and concerns
Some of the key areas of interest and concern to Government
and regulators are:
See page 24
Link to strategy
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Chief Financial Officer’s review
Robust performance
The Group is in a very strong position with substantial net cash,
and an excellent forward sales position and land bank.
Our financial results have reflected the change in market
demand, triggered by the Fiscal Event in September 2022 and
subsequent higher interest rate environment. FY23 saw a sharp
contrast between our first half performance, which reflected
the strength of our forward order book and robust house prices
coming into the financial year and the second half, which
reflected reduced reservation activity, an adjustment in
achieved home prices and slower construction activity against a
background of mortgage interest rate uncertainty.
Our performance reflects the flexibility and resilience of our
operating model which is supported by a strong balance sheet
and the commitment and dedication of our employees, sub-
contractors and supply chain partners in what has been
a challenging year.
“ Our performance also reflects
the flexibility and resilience of our
operating model which is supported
by a strong balance sheet and the
commitment and dedication of our
employees, sub-contractors and
supply chain partners in what
has been a challenging year.”
Mike Scott
Chief Financial Officer
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Results to 30 June 2023
Income Statement
Group revenue was £5,321.4m in FY23 (FY22: £5,267.9m)
with Group wholly owned completions 4.6% lower at 16,378
(FY22: 17,162), reflecting weaker completions in the second half
following the decline in reservation activity seen from September
through December 2022 and the slower rate of reservations
from the start of the new calendar year.
Our private average selling prices increased by 7.9% to £367.6k
(FY22: £340.8k), reflecting underlying house price inflation and
minor changes in product and geographic mix, as well as the
dilutive impact of PRS growth. The increase in the average
selling price of our wholly owned completions was 6.5% to
£319.6k (FY22: £300.2k). The lower increase reflected a greater
proportion of affordable homes which accounted for 23.9%
(FY22: 22.3%) of completions.
Adjusted gross profit reduced by 13.6% to £1,130.4m
(FY22: £1,308.1m), with the adjusted gross margin reducing
by 360 bps to 21.2% (FY22: 24.8%). The reduction in adjusted
gross margin reflected the impact of build cost inflation during
the financial year and the dilutive effect of completion volume
decline, which reduced incremental fixed cost efficiency. In
FY23 our contribution margin was c. 32% (FY22: c. 34%) after
land and direct build costs.
Movements in operating margin in FY23
After operating adjusted items, totalling £155.5m (FY22: £408.2m)
relating to legacy property costs, reported gross profit was
£974.9m (FY22: £899.9m), and reported gross margin was
18.3% (FY22: 17.1%).
Administrative expenses in the year were £270.8m (FY22:
£256.4m). This increase included:
∙ the impact of salary increases, as well as additional salary
supplements of £2,000 for employees below senior
management levels;
∙ incremental costs reflecting expansion in the Group’s Building
Safety Unit;
∙ the full year impact of Gladman Developments’ administrative
expenses; and
∙ a further reduction of £4.5m in sundry income.
After deducting administrative expenses and a modest net gain
of £3.3m on part exchange activities (FY22: £3.1m), the Group
delivered an adjusted profit from operations of £862.9m (FY22:
£1,054.8m), with an adjusted operating margin of 16.2% (FY22:
20.0%). The 380 bps decline in the adjusted operating margin is
analysed further below.
7.7%
20.0%
(0.3%)
(1.7%)
(0.2%)
(0.6%)
16.2%
(0.7%)
(0.3%)
Increase
Decrease
Total
13.3%
(2.9%)
12.3%
20%
15%
10%
5%
0%
FY22
Reverse
adjusted
items
FY22
Adjusted
Volume
impact
Net
inflation
London
mix increase
Completed
developments
provision
Mix/
other
Admin
expenses
FY23
Adjusted
Adjusted
items
FY23
Completion
volumes
The decline in our wholly
owned completion
volumes, with a 4.6%
or 784 homes decrease,
created a 30 bps negative
impact (FY22: 10 bps
positive impact).
Net inflation
Sales price inflation
relative to higher
underlying build cost
inflation produced
a 170 bps negative
impact (FY22: 140 bps
positive impact).
London
A significant increase in
the share of completions
from our London
operations, 8% in FY23
(FY22: 6%), where
margins are lower than
in the regional business,
resulted in a 20 bps
negative margin impact.
Completed
developments
provision
Reflecting the
increasingly extended
time periods being
experienced in relation
to the adoption of roads
and public space by local
authorities on completed
developments, an
increase in this provision
created at 60 bps
negative margin impact.
Mix and
other items
Changes in sales mix,
increased selling costs,
abortive costs in relation
to land transactions no
longer proceeding and
other smaller items
created a 70 bps negative
impact (FY22: 40 bps
negative impact).
Net
administrative
expenses
As detailed above, offset
by the small increase
in part-exchange
income, increased net
administrative expenses
deducted 30 bps (FY22:
deducted 100 bps)
from the adjusted
operating margin.
Barratt Developments PLC Annual Report and Accounts 2023
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Chief Financial Officer’s review continued
Results to 30 June 2023 continued
Income Statement continued
After deducting adjusted items, on a reported basis we delivered
an increase in profit from operations to £707.4m (FY22: £646.6m)
and a reported operating margin of 13.3% (FY22: 12.3%).
Net finance charges were £11.1m (FY22: £27.6m) reflecting
increased interest income on cash balances held throughout
FY23. The cash component of the finance charge was a credit
of £13.4m (FY22: £8.3m cost) with non-cash charges of £24.5m
(FY22: £19.3m). In FY24, finance costs are expected to increase
to c. £20m reflecting a cash component credit of c. £20m and
non-cash charges of £40m. The anticipated increase in non-
cash finance charges reflects the impacts of the increase in
legacy property provisions and the higher discount rate applied
to these provisions arising from the increase in the gilt rate.
Our JVs delivered adjusted profit for the year of £32.5m
(FY22: £27.6m). The JV results included adjusted charges for
JV legacy properties of £23.7m (FY22: £4.3m) with JV reported
profits being £8.8m (FY22: £23.3m) as a result.
Consequently, reported profit before tax for the year increased
to £705.1m (FY22: £642.3m).
The Group’s tax charge for the year increased to £174.8m
(FY22: £127.1m), which included the final quarter impact of the
600 bps increase in the rate of corporation tax increasing from
19% to 25% from 1 April 2023. The tax charge comprised:
∙ A corporation tax charge on adjusted profit before tax of
£188.1m (FY22: £200.8m);
∙ A full year impact of the Residential Property Developer
Tax (RPDT) which equated to a FY23 charge of £26.0m
(FY22: £8.8m); and
∙ Tax credits with respect to adjusted items, which totalled
£39.3m in FY23 (FY22: £82.5m credit).
Adjusted earnings per share decreased by 18.9% to 67.3 pence
per share (FY22: 83.0 pence per share). The decline in adjusted
earnings per share consisted of a 16.2% decline in adjusted
pre-tax profitability, a further 5.4% impact from increased
taxation, which was only partially offset by a 2.2% benefit from
the reduced average count, reflecting the initial FY23 impact
of the buyback.
Basic earnings per share increased by 5.1% to 53.2 pence per
share (FY22: 50.6 pence per share).
Reflecting the decline in adjusted profitability but disciplined
management of capital employed throughout the year, ROCE
declined to 22.2% (FY22: 30.0%).
Adjusted items
Adjusted items recognised in the year related to costs
associated with legacy properties and totalled £179.2m
(FY22: £412.5m). Of this total charge £117.7m (FY22: £377.7m)
related to future commitments in relation to fire safety and
external wall systems with £51.5m (FY22: £34.8m) relating to
remedial works arising from the review of reinforced concrete
frames we announced in July 2020, following the issues we
discovered at Citiscape. A further c. £10.0m was expensed in
the second half of the year in relation to two other developments
where investigations are ongoing.
Fire safety and external wall systems
In relation to fire safety and external wall systems, the additional
costs relate to:
∙ an increase in the number of buildings within scope, from 223
at 30 June 2022 and 228 at 1 January 2023, to 278 at year end,
following the signing of the Self-Remediation Terms and
Contract in March 2023; and
∙ an update to cost estimates across the portfolio, reflecting
the latest building material and labour cost information.
This resulted in an additional provision of £172.3m prior to
discounting to present value. The enlarged provision, as well as
the discount rate applied to the provision, reflecting the
increase in the UK gilt rate applied at 30 June 2023, resulted in
a credit of £51.9m and the recognised net charge of £117.7m.
In addition, we signed the Scottish Safer Buildings Accord on
31 May 2023. Industry negotiations over the legal agreement
between the Scottish Government and Homes for Scotland are
ongoing and there remains uncertainty around the extent of
remediation required in Scotland. Existing provisions for
Scotland have been made on a consistent basis with England
& Wales.
Reinforced concrete frames
In relation to the Citiscape associated review our remediation
activities continued during the year with the majority of
developments proceeding in line with plan. During the second
half of the year we also finalised remediation plans for the one
remaining development in that review, where work is required
across five buildings. Finalisation of this remediation plan, as well
as ongoing remediation activities, resulted in an additional charge
of £51.5m of which £21.3m related to JV legacy developments.
In addition to this review, we identified two further developments
where remediation work may be required. In FY23 £10.0m was
charged to the Income Statement for remediation works at these
developments, including a JV charge of £2.4m. Of the £10.0m
charge, £2.4m was spent in the second half with £7.6m in the
provision at 30 June 2023.
Whilst the charges in respect of legacy properties reflect our
current best estimates of the extent and future costs of work
required, as assessments and work progress, estimates may
have to be updated.
Cash flow
Net cash decreased to £1,069.4m at 30 June 2023 (30 June 2022:
£1,138.6m). The main components of the change in net cash
position were:
∙ a £465.5m net cash inflow from operating activities
(FY22: £417.6m cash inflow);
∙ a £55.4m net cash inflow from investing activities
(FY22: outflow of £222.4m), with the reversal reflecting
increased cash received from joint ventures and the cash
outflow impact of the Gladman acquisition in FY22; and
∙ a net financing cash outflow of £590.6m (FY22: outflow of
£378.4m), principally reflecting dividends paid of £360.0m
(FY22: £337.0m), as well as the £201.3m outflow in respect
of the £200m share buyback including Stamp Duty and fees
of £1.3m.
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The major drivers of the £465.5 net cash inflow from operating
activities in the year was our profit from operations, which
increased to £707.4m (FY22: £646.6m), offset by a net cash
outflow from working capital and provisions of £64.9m (FY22: £118.2m
cash outflow) and net interest and tax payments, which
increased to £196.3m (FY22: £140.2m).
The net £64.9m outflow (FY22: £118.2m outflow) with respect
to working capital and provisions was largely related to a
significant decrease of £337.6m (FY22: £10.7m decrease) in
payables, driven by the reduction in land creditor balances
as we settled existing commitments, alongside a significant
reduction in land acquisition and construction activity. This was
offset by other net inflows in working capital including a £48.9m
decrease in inventories (FY22: £543.4m increase) which also
arose from reduced land activity and tighter control of work
in progress, and a £163.4m net increase in provisions
(FY22: £415.1m increase) which resulted from additional
building safety charges during FY23. During FY23 £32.9m was
spent on the remediation of legacy properties
Balance sheet
The Group’s net assets at 30 June 2023 totalled £5,596.4m
(30 June 2022: £5,631.3m) after the payment of dividends totalling
£360.0m (30 June 2022: £337.0m) and the return of surplus
capital through the buyback totalling £201.3m. The Group bought
back 48m shares at an average share price of 415 pence during
the year, with all shares being cancelled.
Net tangible assets were £4,548.6m (467 pence per share) at
30 June 2023 (30 June 2022: £4,573.0m; 447 pence per share).
Land, net of land creditors, and work in progress totalled £4,540.3m
(466 pence per share) at 30 June 2023 (30 June 2022: £4,444.1m;
435 pence per share).
Goodwill and intangible assets reduced to £1,047.8m (30 June 2022:
£1,058.3m) reflecting amortisation charges in the year.
At 30 June 2023, the Group held net cash balances of £1,069.4m
(30 June 2022: £1,138.6m). Whilst we continue to defer payment
for some land purchases to optimise ROCE, the pause in land
buying has seen land creditors reduce, whilst remaining within
our operating framework range. At 30 June 2023, land creditors
were £506.7m (30 June 2022: £733.6m) and equated to 16.1%
(30 June 2022: 22.0%) of the owned land bank.
Our minimal year-end total net indebtedness target was
achieved with a net surplus of £562.7m at 30 June 2023
(30 June 2022: £405.0m net surplus).
During FY24, £321.5m of land creditors will fall due for
payment (30 June 2022, during FY23: £498.2m). Land creditors
due beyond 30 June 2024 totalled £185.2m at 30 June 2023
(30 June 2022: £235.4m due beyond 30 June 2023).
Capital returns
The Board has reviewed our capital allocation policy in light of
current market conditions. In principle, the Board continues to
believe that excess capital should be returned to shareholders
when it is appropriate to do so. Whilst the Company remains in
a strong financial position, the UK housing market remains
difficult and the outlook remains uncertain. We have therefore
agreed that whilst our reduction in dividend cover to 1.75 times
will apply from FY24 as planned, there will be no further share
buybacks at this stage. The Board will continue to review the
capital allocation policy as market conditions develop.
Operating framework and capital structure
Our operating framework and appropriate capital structure
continue to serve us well. We continue to target an appropriate
capital structure as part of our disciplined operating framework
with shareholders’ funds and land creditors funding the
longer-term land requirements of our business, and term loans
and bank debt funding the shorter-term requirements for
working capital.
Our operating framework remains unchanged, and our performance against targets at 30 June 2023 and 2022
are summarised below:
Land bank
Operating framework
c. 3.5 years owned and c.
1.0 year controlled
Positions at 30 June 2023
3.6 years owned and
0.7 years controlled
Land creditors
Maintain at 15 - 25% of the land
bank over medium term
16.1%
Positions at 30 June 2022
3.9 years owned and
0.8 years controlled
22.0%
Net cash
Modest average net cash over
the financial year
FY23: average net cash of £759.1m FY22: average net cash of £957.4m
Year-end net cash
£1,069.4m
£1,138.6m
Total
indebtedness
Minimal year-end total
indebtedness in the medium term
Treasury
Appropriate financing facilities
Total net surplus of £562.7m
Total net surplus of £405.0m.
£700m Revolving Credit Facility
extended to November 2027;
£200m US Private Placement
Notes maturing August 2027
£700m Revolving Credit Facility
extended to November 2025;
£200m US Private Placement
Notes maturing August 2027
Dividend policy
Dividend cover of 1.75x adjusted
earnings per share in FY24
FY23: Total ordinary dividend of
33.7p per share
FY22: Total ordinary dividend of
36.9p
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Chief Financial Officer’s review continued
Results to 30 June 2023 continued
Treasury
The Board sets and approves the Treasury Policy and senior
management control day-to-day operations. The Group’s
Treasury Policy seeks to maintain an appropriate capital
structure and provide the right platform for the business
to manage its operating risks.
Cash management and relationships with our banking partners
are coordinated centrally by the Group Head of Treasury.
During the year, we extended our £700m revolving credit facility
to November 2027 with two further one-year extension periods
through to November 2029, if agreed between the Group and
its lenders.
Looking to the future and aligning our credit facilities with our
Building Sustainably Framework, our revolving credit facility
has also been amended to include three sustainability linked
performance measures to be assessed and verified annually.
The three performance measures are: (1) science-based target
aligned scope 1 & 2 emissions reductions; (2) waste intensity
reduction; and (3) improving the sustainability of our homes.
Tax
The Group does not enter into business transactions that are
for the sole purpose of reducing potential tax liabilities. The
Group’s tax strategy is to only utilise any available reliefs
and exemptions, which have been set out in any current tax
legislation, to minimise the Group’s tax liabilities.
The rate of corporation tax for the year ended 30 June 2023 was
24.8% (FY22: 19.8%), which was marginally above the standard
effective rate of tax of 24.5% (inclusive of RPDT) (FY22: 20.0%).
70
Looking ahead, the Group’s tax charge and effective rate
of tax is expected to increase, reflecting changes in the rate
of corporation tax, which increased from 19% to 25% from
1 April 2023. With the full year impact of the increase in
corporation tax, the Group’s effective tax rate is expected
to increase to approximately 29.0% in FY24.
Pensions
Defined contribution pension arrangements are in place for
current employees. Defined contribution scheme charges with
respect to qualifying employees totalled £19.1m (FY22: £14.9m).
Pension contributions are based upon a fixed percentage of
each qualifying employee’s pay and, once paid, the Group
has no further obligations under these schemes.
Guidance for FY24
Looking to FY24, our guidance is summarised in the table below:
Completions
c. 13,250 - 14.250 total home
completions including c. 750 PRS and
c. 650 from JVs
Affordable mix broadly in line with
FY23
Average sales outlet
movement (inc. JVs)
c. 6% decline
Build cost inflation
c. 5%
Administrative
expenses
Interest cost
Land approvals
c. £290m - £300m (including
amortisation of intangible asset
charges of c. £10m)
c. £20m charge
(c. £20m cash credit,
c. £40m non-cash charge)
Maintain our highly selective
approach to land buying
Land cash spend
c. £0.5bn - £0.7bn
Year-end net cash
c. £0.7bn-£0.8bn
Taxation
Ordinary
dividend cover
Effective tax rate of 29% reflecting
current corporation tax rate at 25%
and 4% RPDT
1.75x ordinary dividend cover based
on adjusted EPS
Well positioned for an uncertain outlook in FY24
Despite significant economic headwinds and persistent
challenges to affordability for our customers, the Group is in
a strong position. We entered FY24 with substantial net cash,
a solid forward sales position and an excellent land bank. Our
operating framework and our strong financial position create
the platform to focus on delivering high quality, sustainable
homes and developments throughout the country, as well as
the flexibility to react to changing market conditions and
opportunities as they evolve.
Mike Scott
Chief Financial Officer
5 September 2023
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Risk management
In pursuing our strategic priorities to create value for stakeholders,
we are exposed to risk. The Board is responsible for risk
management and ensuring the Group maintains the appropriate
level of risk exposure to achieve its objectives.
Board
Board Committees
Executive Committees
Risk Committee
Risk type
How are risks
assessed?
Where are
risks and
controls
captured?
Key sources
of assurance
Enterprise risk management (ERM) framework
Group-
level risks
Top-down risk
assessment
Group
risk register
Risk Assurance
mapping
Regional and
functional risks
Bottom-up risk
assessments
Regional
and functional
risk register
2nd line
monitoring
MRR*/DBM**
Risk and internal control framework
Process risks
Control-self
assessment
Policies and
procedures
documentation
and internal
control matrices
2nd line
monitoring and
3rd line internal
audit programme
The risks which the Group face could have a material adverse
effect on the implementation of the Group’s strategy, business,
financial performance, shareholder value and returns, and
reputation. Changes in the economic or trading environment
can affect the likelihood and potential impact of risks, and may
create new and emerging risks.
Risk management controls are integrated into all levels of our
business and across all operations, including at site, divisional,
regional and Group level, and are monitored to ensure controls
are in line with risks as they evolve. Our risk management
framework and the roles and responsibilities of the Board, its
Committees and levels of management in the identification and
management of risk are summarised below.
Responsibilities
Board and Board Committees
∙ Responsible for corporate strategy, governance,
performance, internal controls and risk management.
∙ Monitor the effectiveness of the Group’s risk management
and internal control systems.
∙ Promotes an appropriate culture to support effective and
embedded risk management throughout the Group.
∙ Set risk appetite, considering the expectations of
stakeholders, and the macroeconomic context.
∙ Monitor principal and emerging risks.
∙ Assess risks against the Group’s strategy and the interests
of stakeholders, and gain assurance on their management.
Executive Committee and Risk Committee
∙ Monitors business and operational performance and changes
to key risks.
Fraud risk framework
Fraud risk
Fraud risk
assessment
Fraud risk
register
Internal control
matrices
3rd line
internal
audit programme
∙ Through the Risk Committee, assess and monitor identifies
risks using a scoring system based on the likelihood of the
risk materialising and the potential impact of the risk on
the business.
Internal Controls over Financial Reporting (ICoFR) framework
Financial
reporting
risk
Financial
reporting risk
assessment
Policies and
procedures
documentation
and risk and
control
matrices
3rd line
internal audit
Key
controls (ICoFR)
testing
External audit
* Management Regional Reviews
** Divisional Board Meetings
∙ Implements mitigation strategies to effectively manage
key risks within the Group’s risk appetite.
∙ Responsible for ensuring that risk management is embedded
within the business and appropriate actions are taken to
manage risk.
∙ Delegate risk oversight to appropriate management committees.
Group, Regional and Divisional Management
∙ Apply specialist knowledge to identify new risks and monitor
changes to existing operational and strategic risks at a
divisional, regional and functional level.
∙ Responsible for risk management and control within relevant
divisions, regions or Group disciplines.
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Risk management continued
Responsibilities continued
Site management, assessments and valuations
∙ Identify and assess operational risks affecting housebuilding
activity at site level, including construction, sub-contractor
and SHE risk.
∙ Maintain an effective system of site-level risk management
and internal control.
Risk activities conducted during the year
As part of the Group’s risk management framework all regions
and key Group functions conducted risk workshops to review and
identify their current risks and any potential emerging risks.
These workshops presented a robust challenge to the principal
risks identified at an executive level. During this process,
management have reviewed the policies and methodologies
behind our risk management framework to ensure that our
procedures suitably allow key risks and the specific events that
may cause them to materialise are identified, so that the Group
can focus on mitigating these areas.
The Group continues to assess the potential impact of both the
physical impact of climate change and the regulatory and social
measures that may be adopted to mitigate against it. In line with
the recommendations of the Taskforce on Climate-related
Financial Disclosures (TCFD), the Group has disclosed its
response on pages 78 to 98. Climate-related risk is one of
several challenges arising from the environment in which the
Group operates and the Board recognises the business’
responsibility to be a sustainable partner and comply with
environmental, social and governance (ESG) regulation. The
Board has therefore broadened its principal climate risk to
cover all ESG issues.
The Board no longer considers the availability of finance and
working capital to be a principal risk. We continue to have a
strong balance sheet, with minimum debt financing and a
strong cash position, and have recently refinanced our
Revolving Credit Facility to November 2027. In our Viability
Statement and going concern conclusions, we set out our
liquidity and viability in the short, medium and long term,
identifying limited risk. See page 99.
Reputational risk could potentially arise from a number of
sources including external and internal influences relating to
the housebuilding sector that, when combined or over a period
of time, could create a new principal risk. The Group actively
manages the impact of reputational risk by carefully assessing
the potential impact of all the principal risks and implementing
mitigation actions to minimise those risks. Reputational risk is
therefore covered by the management of each of our individual
risks and is not presented as a principal risk in its own right.
Heat map of principal risks net of mitigation
Substantial
>£50m
Major
£10m–£50m
K
G
I
J
Moderate
£5m–£10m
Minor
£1m–£5m
t
c
a
p
m
I
Low
<£1m
C
E
D
H
A
F
B
Likelihood
Very
unlikely
Low
Likely
High
Very
likely
High risk
Medium risk
Low risk
Risk velocity
Due to the changing internal and external environment in the
year and the need to be mindful of the speed at which risks can
materialise, the Board has this year assessed the velocity of the
Group’s risks. This will assist the Board in assessing the
mitigating actions to ensure that responses are sufficiently
timely. Velocity is categorised as follows:
Rapid: Risk can materialise immediately, or, impact felt within
one month of occurring.
Moderate: Risk can materialise quickly, or, impact felt between
1 and 12 months of occurring.
Slow: Risk can materialise slowly, or, impact felt after 12 months
of occurring.
Principal risks
The Group has identified 11 principal risks that it considers
to be of material impact and likelihood:
A Economic environment
B Land and planning
C
Government regulation and political risk
D Construction quality and innovation
Overall assessment
The Board has completed its assessment of the Group’s
principal and emerging risks, including those that could threaten
its business model, future performance, solvency or liquidity.
E Supply chain resilience
F Legacy properties
G Safety, health and environment
The current risk profile is within our tolerance range as the
Group is willing to accept a moderate level of operational risk
to deliver financial returns.
There may be instances where these risks could have a
moderate adverse impact on the Group – either financially or
operationally. To ensure the Group’s business model remains
resilient over the medium and long term, the Group has
modelled these scenarios alongside achievable mitigating
actions. The results are presented in the Viability Statement
on pages 99 to 100.
H
Attracting and retaining high-calibre employees
I
Information technology
J Environmental, social and governance
K Business resilience and continuity
The principal risks are detailed on pages 73 to 77, categorised
by the strategic priorities to which they relate. Risk levels are
presented net of any mitigation that is in place and the risk appetite
defines the level of risk that the Board is comfortable with.
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Customer first
A Economic environment
Risk level: H
Velocity: Moderate
Risk appetite: M
Risk description
Changes in the UK macroeconomic
environment may lead to falling
demand, tightened mortgage
availability, or reduced purchaser
liquidity especially in the first time
buyer market. This could reduce the
affordability of our homes, resulting in
reduced sales volumes and our ability
to provide profitable growth.
Response/mitigation
∙ Continual monitoring of the market at Board,
Executive Committee, regional and divisional levels,
leading to amendments in the Group’s forecasts and
planning as necessary.
∙ Comprehensive sales policies, regular reviews of
pricing in local markets and development of good
relationships with mortgage lenders.
∙ Disciplined operating framework with an appropriate
capital structure and strong balance sheet.
Great places
B Land and planning
Risk level: H
Velocity: Moderate
Risk description
Lack of developable land due to delays
in planning approval, failure of a clear
and consistent government policy or
insufficient consented land and
strategic land options at appropriate
cost and quality could affect our ability
to grow sales volumes and/or meet our
margin and site ROCE hurdle rates.
Risk appetite: M
Response/mitigation
∙ All land acquisitions are subject to formal appraisal
and approval by the Land Committee.
∙ Group, regional and divisional review of land
currently owned, committed and identified
against requirements.
∙ Regular meetings with external stakeholders
including land agents, promoters and land owners.
∙ Review by Land Committee and management
on strategic land and sites.
∙ Robust review of land appeals before resubmission.
Responsibility:
Executive Committee
Key risk indicators
Internal: Gross and operating
margins, PBT, ROCE, EPS,
TSR, total home completions.
External: GDP growth, CPI
inflation, mortgage approvals,
mortgage affordability, new
housebuilding site starts.
Responsibility:
Land Committee
Key risk indicators
Land approvals (plots), UK
quantum of consented housing
units per year, UK quantum of
applications decided within
statutory periods.
C Government regulation and political risk
Risk level: H
Velocity: Moderate
Risk appetite: L
Responsibility:
Operations Committee
Risk description
The housebuilding industry is subject
to increasingly complex regulations,
government intervention and policy
changes, for example building
regulation, legal, NHQC, CMA and
environmental regulation. Deviation
from regulations or failure to
implement the changes effectively
within our processes could lead to
financial penalties, damage to the
Group’s reputation or increased costs
due to inefficient processes.
Response/mitigation
∙ Robust and rigorous design standards for the homes
and places we develop that exceed current and
expected statutory requirements.
Key risk indicators
Gross and operating margin,
PBT, ROCE, EPS, TSR, total
home completions.
∙ Policies and technical guidance for employees on
regulatory compliance and the standards of business
conduct expected.
∙ Legal and compliance risks monitored by the
Risk Committee.
∙ Consultation with government agencies and
membership of industry groups to help monitor,
understand and plan for proposed regulation change.
Risk level/appetite
H High risk
M Medium risk
L Low risk
Change from previous year
Increase
Decrease
No change
N New
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Risk management continued
Principal risks continued
Leading construction
D Construction quality and innovation
Risk level: H
Velocity: Moderate
Risk appetite: L
Risk description
Failure to achieve excellence in
construction, through an inability
to develop and implement new and
innovative construction methods or
to be a market leader with changes
in technology advancement in line with
the Future Homes Standard, could
increase costs, expose the Group
to future remediation liabilities,
and result in poor product quality
and reputational damage.
E Supply chain resilience
Risk level: M
Velocity: Rapid
Risk description
Not adequately responding to shortages
or increased costs of materials and
skilled labour, or the failure of a key
supplier in the current economic
environment, may lead to increased
costs and delays in construction.
Response/mitigation
∙ Continuous review of design and materials, which
are evaluated by technical experts including the NHBC,
to ensure compliance with all regulations.
∙ Monitoring and improving the environmental and
sustainability impact of construction methods
and materials.
∙ Implementation of modern methods of construction
by design and technical teams.
∙ Detailed build programmes supported by robust
quality assurance.
∙ Use of qualified engineers through an approved panel.
∙ Group Construction and Group Technical reviews
of local divisions in key risk areas.
Risk appetite: L
Response/mitigation
∙ Centralised team procures most materials from
within the UK, ensuring consistent quality and cost.
∙ Development of long-term supplier and sub-contractor
partnerships with all significant supply agreements
fixed in advance, usually for 12 months.
∙ Development of multiple supplier relationships for
labour and material supplies, with contingency plans
should any key supplier fail.
∙ Build and material cost controls throughout
build programmes.
∙ Adherence to the Prompt Payment Code to support
our partners.
Responsibility:
Operations Committee
Key risk indicators
Customer service, total home
completions, gross margin,
operating margin, PBT, ROCE,
EPS, construction waste
intensity and carbon intensity.
Responsibility:
Operations Committee
Key risk indicators
Customer service, gross and
operating margin, PBT, ROCE,
EPS, TSR, total home
completions.
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F Legacy properties
Risk level: H
Velocity: Moderate
Risk description
In March 2023 we signed the Self
Remediation Terms and Contract with
the UK Government to support
leaseholders by funding or remediating
life-critical fire safety works in buildings
of over 11 metres which we have played a
role in developing over the last 30 years.
The amounts provided in the Financial
Statements reflect the best estimate of
the extent and costs of work required;
however, these will be updated as work
progresses or as government legislation
or regulations develop.
Risk appetite: L
Responsibility:
Operations Committee
Response/mitigation
∙ A dedicated Building Safety Unit (BSU) has been
set up to manage the remediation work.
Key risk indicators
Gross and operating margin,
PBT, ROCE, EPS.
∙ BSU undertakes independent reviews and
investigations of legacy buildings.
∙ BSU Steering Committee meets fortnightly to
review ongoing remedial work, investigations
and current valuations.
∙ Assumptions on the estimated financial costs
have been tested and challenged robustly.
Responsibility:
Safety, Health and Environment
Operations Committee
Key risk indicators
Health and safety (SHE)
audit compliance.
Investing in our people
G Safety, health and environment
Risk level: M
Velocity: Moderate
Risk appetite: L
Risk description
Health and safety or environmental
incidents or compliance breaches can
impact employees, sub-contractors,
customers and site visitors, and
undermine the creation of a great place
to work and visit.
Response/mitigation
∙ Dedicated internal health and safety team.
∙ Regular health and safety monitoring, internal and
external audits of all operational units, and regular
senior management reviews of developments.
∙ SHE management system that continually reinforces
Group SHE policies and procedures.
∙ Dedicated SHE Board and SHE Operations Committee
that review key performance indicators and
improvement plans.
∙ Quarterly performance reviews by divisional
management in all operating units.
∙ Independent external reviews of our SHE processes.
Risk level/appetite
H High risk
M Medium risk
L Low risk
Change from previous year
Increase
Decrease
No change
N New
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Risk management continued
Principal risks continued
Investing in our people continued
H Attracting and retaining high-calibre employees
Risk level: M
Velocity: Slow
Risk appetite: L
Responsibility:
Executive Committee
Risk description
Increasing competition for skills may
mean we are unable to recruit and/or
retain the best people. Having sufficient
skilled employees is critical to delivery
of the Group’s strategy of volume
growth whilst maintaining excellence
in all of our other strategic priorities.
Underlying all priorities
I
Information technology
Risk level: M
Velocity: Rapid
Risk description
Failure of any of the Group’s key
systems, particularly those for financial
and customer information, surveying
and valuation, through a successful
cyber attack or lack of investment
leading to outdated systems, could
restrict operations and disrupt progress
in delivering strategic priorities.
Response/mitigation
∙ Comprehensive HR programmes covering
Key risk indicators
Employee engagement score.
apprenticeships, graduate development, succession
planning and training academies.
∙ Personal development plans for all employees.
∙ Development of a hybrid working model.
∙ Monitoring of employee turnover, absence statistics
and independent feedback from exit interviews.
∙ Annual employee engagement survey to measure
employee satisfaction.
∙ Remuneration benchmarking against competitors.
∙ Diversity and Inclusion Strategy and policy.
Risk appetite: L
Responsibility:
Risk Committee
Response/mitigation
∙ Regular external reviews to reduce the risk of
successful cyber attacks, including vulnerability and
penetration tests by third parties.
Key risk indicators
Customer service, gross
and operating margin, PBT,
ROCE, EPS.
∙ Group-wide compliance and policies on passwords
and transferring data to third parties.
∙ Mandatory information security training programme
for all employees.
∙ Adoption of the recognised NIST control framework.
∙ Cyber security insurance policy.
∙ Continued investment in IT infrastructure.
∙ IT disaster recovery plan.
∙ Development of critical process business
continuity plans.
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J Environmental, social and governance
Risk level: M
Velocity: Moderate
Risk appetite:
L
Risk description
In the short to medium term, if the
Group does not further enhance its
sustainable business practices to
respond to loss of biodiversity, water
usage reduction and climate change
regulations, as well as meeting its
social and governance responsibilities
relating to modern slavery and human
rights, this will result in a failure to meet
customer and investor expectations.
Response/mitigation
∙ Board Sustainability Committee to oversee the
business’ response to climate risks.
∙ Committed to reducing the Group’s carbon
emissions, including those from its completed homes
and supply chain.
∙ Review of Future Homes Standard, effective in 2025,
to adapt and plan for compliance.
∙ Climate risk and opportunities continually being
embedded within everyday business operations.
∙ Progressed scenario analysis to determine the
resilience of the Group’s business model under
different climate-related scenarios.
Responsibility:
Sustainability Committee
Key risk indicators
Carbon intensity, waste
intensity, health and safety
audits. In line with our
sustainability goals on
page 48 and 49.
K Business resilience and continuity
Risk level: M
Velocity: Rapid
Risk appetite: M
Responsibility:
Executive Committee
Risk description
Inability to continue the business due
to a major unexpected incident or event
out of our control, such as a natural
disaster, global pandemic or UK
epidemic, or disruption to national
infrastructure, could cause significant
disruption to the Group’s business
operations, employees, customers,
supply chain, or other third party.
Response/mitigation
∙ Development of business continuity plans for critical
business processes.
Key risk indicators
Total indebtedness/surplus,
IT testing, KPS’s.
∙ Stress-testing of the Group’s available financing facilities
to ensure resilience to a sudden economic shock.
∙ Formation of the Business Resilience Steering Group.
Risk level/appetite
H High risk
M Medium risk
L Low risk
Change from previous year
Increase
Decrease
No change
N New
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Strategic Report
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G
F
F
Climate-related risks and opportunities
Leading the industry in
response to climate change
Understanding
the future
To plan for how the business will operate
in a future climate, we must first
understand what that future may be. The
outcomes from climate change, both the
physical impacts and the regulatory
response, are uncertain, so we have
updated our scenario analysis to
understand how each possible outcome
will affect our industry, the homes we
build and our customers.
See page 88 for our scenario analysis
See page 83 for the most significant risks
and opportunities that will arise from
these scenarios
This analysis guides our strategy to ensure
we continue to provide value to all of our
stakeholders in the new trading environment
Guiding
our business
Our climate is changing, and so is the
world in response. We want to be at the
forefront of the UK’s climate strategy and
make sure our business is well
positioned for the future.
Page 80 shows how the response to climate
change is governed in our business
Pages 82 to 87 detail how we assess the risks
and opportunities that may arise as society
and the environment evolve
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Barratt Developments PLC Annual Report and Accounts 2023
Aligning our operations
to net zero carbon
Our analysis shows that reducing our greenhouse gas
emissions is not only important for the planet, but also for
protecting the profitability of our business. First, we must
lead by example. We are working to better understand our
carbon footprint (through the data monitoring improvements
highlighted on page 94) and working towards our science-based
targets (see page 98).
Our greatest impact, and our greatest opportunity to affect
change, is within our supply chain. We are working with our
partners to understand and reduce their emissions.
Strategic Report
Strategic Report
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G
F
F
Homes for
the future
As detailed on page 47, the provision of
new homes is essential for the nation to
achieve its net zero targets and our
customers are increasingly conscious of
their energy efficiency and the resilience
of the homes they buy to changes in
climate. We are meeting these challenges
by leading the industry in researching
technologies and developing house
designs with the future in mind.
Building regulations, Energy House
and Zed House – see page 34
Overheating adjustments – see page 47
Local weather adaptation – see page 82
A sustainable business
model
The business has a duty to its stakeholders to ensure that it can
operate sustainably over the long- term. Our scenario analysis
allows us to stress-test the resilience of our business model to
climate change.
Page 89 shows the financial effect on the business and on page 90 we
conclude that our planning has made us resilient to all outcomes
However, we want to do more and our pathway to transition to a more
sustainable business is shown on page 91
Helping our
customers
Families are already feeling the effect of
rising energy costs and higher interest
rates on mortgages. Energy efficient
homes can reduce costs and unlock
access to green mortgages for
our customers.
Our work with lenders on green mortgage
opportunities is discussed on page 31
Our home energy efficiency targets, and
progress against them, are on page 47
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Climate-related risks and opportunities continued
CLIMATE GOVERNANCE
Leading the business in its climate response
The Board has ultimate responsibility for overseeing our
response to climate change. The Chief Executive is the Board
member who holds individual responsibility.
The Sustainability Committee, chaired by the Chief Executive,
is the Board sub-committee responsible for debating, reviewing
and scrutinising our sustainability and climate change strategy,
monitoring its implementation and the approval of plans to mitigate
risks and leverage opportunities.
Implementing strategy
The Sustainability Committee approves and oversees initiatives
to react to the climate-related risks and opportunities and
assists the wider Board in integrating climate thinking into
the Group’s wider strategy. Actions taken in the year included:
∙ approval of the net zero transition pathway (page 91);
∙ oversight of improvements to climate data collection
and monitoring (page 98);
∙ review by the Chief Financial Officer of the climate-related
scenario (pages 88 to 89) analysis;
∙ advising on the appropriate metrics and targets to monitor
and drive the achievement of our climate goals; and
∙ monitoring performance in those metrics (pages 96 to 98).
Other climate-related responsibilities delegated to sub-
committees of the Board include:
∙ design of incentives to achieve our climate targets
(Remuneration Committee, page 137);
∙ SHE-related risk and compliance (SHE Committee, page 133); and
∙ integrity of disclosure (Audit Committee, page 124).
Remuneration Committee
(page 137)
Designs the Group’s remuneration
policy to incentivise performance
against climate-related targets,
as detailed on page 96.
Monitors performance against
targets and approves
remuneration accordingly.
SHE Committee
(page 133)
Monitors the effect of climate-related
SHE risks, such as the impact of
weather patterns on our workforce,
and compliance with certain site-
based environmental initiatives, such
as waste reduction.
Audit Committee
(page 124)
Monitors the integrity of climate-
related disclosures and data
reporting through internal and
external assurance of the reporting of
climate-related metrics and ensures
compliance with external climate-
related reporting requirements.
Risk Committee
Evaluates the Group’s internal control policies and procedures over
the identification, assessment, and reporting of climate-related risks.
Reviews the Group’s overall risk profile, examining climate-related risks in the context
of the Group’s other principal risks and its significance to strategy.
The structure of the Group’s governance is shown in detail on page 114.
Staying informed
Climate understanding and the world’s response to it continue
to evolve. To ensure that the Group’s short-, medium-, and
long-term strategies are responsive to climate change risks,
the sub-committee aims to stay up to date with evolving
climate change developments. During the year, the
Sustainability Committee received the following updates
relating to climate change:
∙ The Chair of the Energy Transitions Commission delivered
a presentation on environmental economics, the potential
impact of carbon pricing, and the difficulties in transition
to net zero for hard to abate sectors.
∙ The Group Sustainability team took the committee through
a number of working sessions advising on the available
approaches to managing the Group’s emissions. This included
analyses of various elements of the net zero transition pathway,
international best practice examples, internal carbon pricing
and carbon offsetting.
The Committee also continues to be attended by an independent
expert. During the climate risk assessment process, and on
an ongoing basis through the Sustainable Operations Group,
senior management also receive updates on the current and
emerging climate understanding to ensure the organisation is
well briefed when developing responses to climate challenges.
80
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Taskforce for Climate-related Financial
Disclosures (TCFD)
The Group aims to be the leading national sustainable
housebuilder and our TCFD programme is a reflection
of that intent.
Our strategy and approach to risk management includes
scenario analyses and assessing the potential financial impacts
of climate change risks and opportunities on the business.
As we have worked through our assessment, the Group has
used internal subject matter experts, as well as external
advisers to support robust and thorough analysis. Our
established targets and metrics are shown in this report,
though we expect these to continue to develop over time as
our understanding of climate change risk evolves.
TCFD area
Governance
Strategy
Risk management
Metrics and targets
Page reference to content
42
90
82
96
The Company can state that in accordance with Listing Rule
9.8.6 R, these Annual Report and Accounts include climate-
related financial disclosures consistent with 11 out of 11 TCFD
recommendations and recommended disclosures.
Assurance
Deloitte has provided independent third-party limited
assurance in accordance with the International Standard for
Assurance Engagements 3000 (ISAE 3000) and Assurance
Engagements on Greenhouse Gas Statements (ISAE 3410)
issued by the International Auditing and Assurance Standards
Board (IAASB) over the TCFD on pages 80 to 98 and selected
metrics on page 96. Deloitte’s full unqualified assurance
opinion, which includes details of the selected metrics assured,
can be found at www.barrattdevelopments.co.uk/building-
sustainably/our-publications-and-policies/publications.
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Climate-related risks and opportunities continued
CLIMATE RISK MANAGEMENT
The outcome of climate change is uncertain and will depend on
the world’s success in limiting the rise in global temperatures,
as well as the specific regulatory responses where we and our
supply chain operate. The effects will be wide ranging, including
the physical impacts of new weather patterns (physical risks) and
the regulatory, social, and economic effects of transitioning to a
low carbon economy (transition risks). Opportunities may also
arise as the country looks to industry leaders to drive sustainable
developments and provide homes fit for the future.
As the climate changes, Barratt will need to adapt to ensure we
can continue to deliver the homes our customers need within the
changing environment. These changes offer both opportunities
and risks to Barratt, which overall the Group identifies as a
principal risk built into its risk management process detailed on
page 83.
Climate-related risks relevant to each region or function are
considered in individual bottom-up risk assessments. These
include climate-related legislation or regulations that are
applicable to their field, for example the Future Homes Standard
for building regulations.
In addition, all climate risks and opportunities are considered
together as part of the assessment of Group-level risks. A review
of all the potential effects of climate outcomes on our business
requires an understanding of the climate predictions and the
collective knowledge of our business experts. We therefore
undertake a thorough annual risk and opportunities assessment
in addition to our risk management process, as detailed here:
Climate risk and opportunities assessment process
Identify
We identify the possible outcomes of climate change by considering varying
levels of global response and resultant change in weather patterns.
The scenarios considered are shown on page 83.
Consider Impact
The possible climate outcomes are shared with business leaders and local
management, who are asked to consider the impact of these circumstances
on the business. All risks are included in a climate risk register.
Review
The risks and opportunities identified are discussed in workshops of internal
subject matter experts, local and Group senior management and external
climate experts, using the benefit of our housebuilding experience to
determine which risks and opportunities are most likely to manifest and have
the highest potential impact. In FY23 we were able to call upon the strategic
land expertise of Gladman for the first time.
The most relevant risks and opportunities are listed on pages 84 to 87. These
are reported to the Risk Committee.
Highest potential impact
risks and opportunities
Emerging risks and
opportunities
After further consultation with
business experts, we identify the
underlying data and assumptions
required to estimate the financial
impact of the risks and opportunities.
We estimate the unmitigated financial
impact under each climate outcome
in the short, medium and long term.
The financial effects are considered
individually and in aggregate
through our climate-related risk &
opportunities register and scenario
analysis on pages 84 to 87 and 89
respectively.
Low impact
risks and
opportunities
are subject to
a high-level
assessment to
consider those
that should be
subject to future
monitoring.
External
experts are
also engaged
to highlight any
emerging risks
that have not
been identified,
including any
new or potential
regulations.
We consider
whether
any should
be subject
to detailed
modelling in
the next cycle.
The results of the risk assessment are reviewed by senior management
and the Sustainability Committee to inform Group strategy going forward,
as detailed on page 90.
Risk assessment criteria
The likelihood and potential impact of each risk are rated in line
with the Group’s risk assessment process, shown in the Risk
assessment criteria table on pages 84 to 87.
The impact assessment reflects the estimated profit impact of a
risk/opportunity within the financial year and climate scenario in
which the financial impact is likely to be most severe. Where the
profit impact of a long-term obligation would be recognised up
front, the financial impact is spread over the period that it will be
realised for this purpose. Our definition of a substantial financial
impact of over £50m is within the range set by our statutory
auditor over recent years for Group financial materiality.
This assessment considers short-term (2025), medium-term
(2030), and long-term (2040-2050) time horizons. This range of
time horizons considers a longer period than our usual
operational cycle and has been selected to align to our existing
science-based emissions reduction targets, whilst capturing
transitional and physical risks that manifest over the longer
term. The short-term timeframe aligns with our owned land
bank, while the medium- to long-term encompasses our
strategic land options and promotion agreements.
82
Short term
Medium term
Long term
Risk assessment timeframes
2023
2025
Scope 1&2 SBTi
Future Homes Standard
2030
Scope 3 SBTi
Barratt zero carbon home targets
Barratt target to achieve
net zero by 2040
2050
Paris Agreement and UK target for net zero
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Climate outcome scenarios
The potential climate outcomes considered this year when reviewing climate risks and opportunities ranged from a sustainable
transition scenario that limits global warming to 1.5°C, to an adaptation scenario where emissions continue on the current pathway,
which leads to around 4°C warming, such that they cover both high physical and high transition risks. Qualitative assessments for each of
these climate scenarios are outlined below. Together with the quantitative analyses summarised on page 89, these narratives provide a
holistic view on the potential impacts to Barratt in each of these climate outcomes.
1.5°C
Sustainable transition
We have used the IEA’s “Net Zero Emissions by
2050” (NZE2050) to model a long-term orderly
transition to a low carbon economy occurring
over the long term as sufficient regulatory
action is taken to limit the global temperature
rise to the Paris goal of 1.5°C by 2100, resulting
in significant transition risks, while minimising
physical risks.
2.0°C
Disorderly transition
We have developed a bespoke scenario,
adjusting IEA’s “Net Zero Emissions by
2050” model such that it reflects a disorderly
transition, whereby limited regulation is in place
until 2030, requiring extreme policies to be
introduced from this date to limit warming to
2°C by 2100. This sudden, disorderly transition
to a low carbon economy, occurring over the
medium term, results in maximum transition
risk, while limiting physical risks to a low level.
4.0°C
Adaptation
Global policy shifts away from prevention and
towards adapting to a new climate, leading to a
global temperature rise of 4°C by 2100, giving
rise to maximum physical risks.
Velocity of regulatory environment
Significant
Delayed then significant
Low
Increasingly stringent building regulations go
beyond the Future Homes Standard, placing
greater emphasis on reducing embodied
carbon and resource intensity within the
home. Additionally, local planning authorities
increasingly require developments to exceed
building regulations, placing greater emphasis
on sustainable communities.
The Future Homes Standard is introduced as
planned, but building and planning regulations
steeply increase sustainability requirements
from 2030.
While regulations such as the Future Homes
Standard still come in as planned, the demand
for sustainable developments from planning
authorities eases and carbon pricing reduces.
Customer engagement with climate action
Proactive
There is increased customer demand for green
homes, which is supported by the availability of
green mortgage products, enabling customers
to benefit from the improved affordability
of energy efficient new homes.
Reactive
Until 2030 customer demand and the availability
of green finance for low carbon homes remain
at current levels, but these also increase
sharply from 2030 onwards.
Inactive
Consumers typically continue to lead energy
intensive lifestyles with little demand for
resource efficiency measures in new homes.
Supply chain engagement with climate
Proactive
Reactive
Inactive
The transition to net zero is supported by supply
chains, which offer innovative low carbon
solutions, encouraged by high carbon prices
associated with carbon intensive materials/
processes. Technological progress is fast,
though may require additional upskilling for
employees and sub-contractors.
To discourage the use of high carbon materials,
significant increases in carbon prices are
implemented from 2030 onwards. Similarly, the
increased demand for sustainable materials
and technologies also drive steep increases in
costs from 2030.
Supply chain action to reduce emissions is
minimal, with limited innovation in low carbon
alternatives to existing materials. Global supply
chains are also susceptible to severe weather
resulting in risk of delays, as well as indirectly
driving up prices as demand for raw materials
increases from less affected areas.
Physical impact
Low
Low
High
The impacts of physical risks such as
overheating and flooding continue at
manageable levels, with existing/planned
regulation and planning requirements sufficient
to manage these impacts.
The impacts of physical risks such as
overheating and flooding continue at
manageable levels, with existing/planned
regulation and planning requirements sufficient
to manage these impacts.
Increased frequency of severe weather leads to
increased disruption on site, giving rise to risk
of damage as well as delays. Increased risks of
flooding and water scarcity drive up demand for
land in relatively less affected areas of the UK,
raising land prices in these areas. Additional
cooling solutions are required in homes at risk
of overheating in the worst affected areas.
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Climate-related risks and opportunities continued
CLIMATE-RELATED RISKS AND OPPORTUNITIES
Risk rating
Maximum unmitigated
Financial Statements impact
Timeframe
Short Medium Long
Scenario sensitivity
Our ongoing response
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
We continue to engage Government at ministerial level on a range of critical
sustainability issues, as well as directly with relevant senior officials, via the UK Net
Zero Buildings Council. We also support the Net Zero All Party Parliamentary Group
and input into conversations around supply chain challenges to meet future energy
demand for energy efficiency measures.
We were the first national housebuilder to implement science-based targets for our
scope 1 and 2 and scope 3 emissions, allowing us to take a leadership role in driving
down emissions. We have commissioned a carbon price exposure analysis to establish
its potential impact and have identified opportunities for mitigation through our net
zero transition pathway on page 91.
Through market research, product testing, university and research partnership,
prototype test houses, and grant endorsed trials, we examine low carbon products,
systems and processes for our housing types. We have accelerated these
programmes through the Zed House and Energy House 2.0 to ensure a full view of
available technology.
Our specialised divisional land teams, as well as the Gladman team, possess extensive
local knowledge and strong relationships with landowners which are vital to ensure
we remain the developer of choice. To support further engagement and ensure our
sustainability credentials are recognised when we bid for land, we have developed a
sustainability toolkit for use by our land and planning teams. This includes detailed
information on our approach to the Future Homes Standard, zero carbon homes,
biodiversity and socio-economic outcomes.
We are aware of the growing significance of water scarcity in the UK, which has
resulted in a new climate-related risk. We are constantly communicating internally
with our innovation, utilities and infrastructure teams performing water scarcity scenario
analysis on land and regions that will be affected across the UK. Water recovery systems
and net water consumption are important mitigating variables in our response.
Transition risks
Housing regulations
Changes to house specifications
required due to Government legislation
designed to reduce home emissions,
for example the Future Homes Standard,
including varying standards across
the UK.
Carbon pricing
Increasing material and sub-contractor
costs due to Government legislation
designed to reduce emissions, for example
carbon taxation on suppliers/increased
demand for low-carbon materials.
New technologies
Implementation of new technologies
in homes and new methods of
construction, requiring high capital
investment and upskilling of labour.
Planning requirements
Increasing planning or site
infrastructure requirements from
Government and local authorities
result in reduced viability of land
in certain regions.
Water scarcity
Increased water scarcity in areas of
proposed developments leading to a
lack of consistent water supply for
new homes.
H
H
H
H
M
Increased build cost of sales
by £5m-£205m
Increased build cost of sales
by £50m-£620m
Increased build cost of sales
by £10m-£30m
Increased build cost of sales
by £25m-£75m
Increased build cost of sales
by up to £5m
Risk level /appetite
H High risk
M Medium risk
L Low risk
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Scenario sensitivity key
Low
High
Maximum unmitigated
Timeframe
Risk rating
Financial Statements impact
Short Medium Long
Scenario sensitivity
Our ongoing response
Transition risks
Housing regulations
Changes to house specifications
required due to Government legislation
designed to reduce home emissions,
for example the Future Homes Standard,
including varying standards across
the UK.
Carbon pricing
Increasing material and sub-contractor
costs due to Government legislation
designed to reduce emissions, for example
carbon taxation on suppliers/increased
demand for low-carbon materials.
New technologies
Implementation of new technologies
in homes and new methods of
construction, requiring high capital
investment and upskilling of labour.
Planning requirements
Increasing planning or site
infrastructure requirements from
Government and local authorities
result in reduced viability of land
in certain regions.
Water scarcity
Increased water scarcity in areas of
proposed developments leading to a
lack of consistent water supply for
new homes.
H
H
H
H
M
Increased build cost of sales
by £5m-£205m
Increased build cost of sales
by £50m-£620m
Increased build cost of sales
by £10m-£30m
Increased build cost of sales
by £25m-£75m
Increased build cost of sales
by up to £5m
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
We continue to engage Government at ministerial level on a range of critical
sustainability issues, as well as directly with relevant senior officials, via the UK Net
Zero Buildings Council. We also support the Net Zero All Party Parliamentary Group
and input into conversations around supply chain challenges to meet future energy
demand for energy efficiency measures.
We were the first national housebuilder to implement science-based targets for our
scope 1 and 2 and scope 3 emissions, allowing us to take a leadership role in driving
down emissions. We have commissioned a carbon price exposure analysis to establish
its potential impact and have identified opportunities for mitigation through our net
zero transition pathway on page 91.
Through market research, product testing, university and research partnership,
prototype test houses, and grant endorsed trials, we examine low carbon products,
systems and processes for our housing types. We have accelerated these
programmes through the Zed House and Energy House 2.0 to ensure a full view of
available technology.
Our specialised divisional land teams, as well as the Gladman team, possess extensive
local knowledge and strong relationships with landowners which are vital to ensure
we remain the developer of choice. To support further engagement and ensure our
sustainability credentials are recognised when we bid for land, we have developed a
sustainability toolkit for use by our land and planning teams. This includes detailed
information on our approach to the Future Homes Standard, zero carbon homes,
biodiversity and socio-economic outcomes.
We are aware of the growing significance of water scarcity in the UK, which has
resulted in a new climate-related risk. We are constantly communicating internally
with our innovation, utilities and infrastructure teams performing water scarcity scenario
analysis on land and regions that will be affected across the UK. Water recovery systems
and net water consumption are important mitigating variables in our response.
Barratt Developments PLC Annual Report and Accounts 2023
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Climate-related risks and opportunities continued
CLIMATE-RELATED RISKS AND OPPORTUNITIES continued
Risk rating
Maximum unmitigated
Financial Statements impact
Timeframe
Short Medium Long
Scenario sensitivity
Our ongoing response
Physical risks
Overheating in homes
Changes to house specifications
required to mitigate long-term shift in
climate patterns, such as prolonged
increased temperatures in summer.
Flood mitigation
New site infrastructure required
to mitigate extreme weather events,
for example flood barriers and
balancing ponds.
Weather disruption
Disruption to build activity due to
increased frequency of severe weather,
being heat, cold or precipitation, or
damage to construction sites from
extreme weather events.
Supply availability
Reduced supply availability (for instance
timber) as a consequence of long-term
shift in climate patterns and extreme
weather events (e.g. wildfires, flooding)
where the supply is sourced.
Opportunities
Demand for and affordability
of green homes
Eligibility for green mortgages and cost
savings from energy efficiency allow for
a premium to be charged on new homes.
Green developments
Increased land buying and local
partnership opportunities through
strong low-carbon credentials and
offer of low-carbon developments,
for instance partnering with councils
to deliver low carbon homes.
Cost of capital
Barratt’s sustainability performance
opens green financing opportunities,
providing access to lower interest rates.
Sustainable practices
Proactive adoption of low-emission
materials and processes, ahead of
regulation, provides a cost advantage
and improves reputation.
L
M
L
L
H
H
L
L
Increased build cost of sales by
up to £35m
Increased build cost of sales by
up to £5m
Increased build cost of sales
and decreased revenue by up to
£5m
Increased build cost of sales by
up to £5m
Increased revenues by
£30m-£320m
Decreased land cost of sales by
£30m-£70m
Decreased finance costs by up
to £2m
Decreased build cost of sales by
up to £10m
Risk level /appetite
H High risk
M Medium risk
L Low risk
86
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Barratt has created an industry-leading project that will test the effects of climate
change and look at ways that the homes of the future can withstand more extreme
weather conditions. Known as Energy House 2.0, the specially-built climate chamber
recreates temperatures ranging from -20˚C to +40˚C, as well as simulating wind, rain,
snow and solar radiation. This research will inform us of how various overheating
adaptation technologies perform.
Flood risk assessments are a key part of our land appraisals. We are proactively
mitigating this risk through ongoing programmes of work, continual horizon scanning
and engaging with key stakeholders to conduct extensive research through highly
skilled internal and external experts.
We closely monitor weather forecasts to ensure worker safety and prepare or adjust
build schedules as appropriate. A crisis management plan is in place for extreme
weather events. Modern Methods of Construction (MMC), such as timber frame, allow
for parts of the construction process to occur offsite, increasing build speed and
reducing exposure to the elements before it is sealed. Mitigation is largely through
MMC, building efficiency and supply chain engagement.
We regularly engage with our suppliers on availability of materials and sustainable
sourcing both directly and through our Supply Chain Sustainability School. We purchase
99.84% of our timber from FSC or PEFC certified sources and consider supply
sustainability at tender and contract renewal stage. The management of sustainability and
climate change risks and opportunities in the supply chain is intrinsic to our operations and
procurement framework.
We are working directly with mortgage lenders to develop enhanced mortgage
products that recognise the advantages of our new build homes. During FY23, we
collaborated with The Leeds Building Society to support the launch of a new green
mortgage product which recognised the advantages inherent in our new homes and
has the potential to unlock up to a 10% uplift in lending. Moreover, through Government
engagement and notably through the Future Homes Hub, Barratt’s Head of Mortgage
Lender Relations chairs the “Valuation Group”, which is considering how the value of
sustainable benefits of new homes can be recognised in the mortgage
valuation process.
We engage with landowners regularly via our land and planning and dedicated public
land function. In the past year, we have seen increased direct engagement with
landowners on sustainability, with the Group Sustainability Director attending three
presentations with national and regional landowners to spotlight on sustainability.
Within our Building Sustainably Framework, we outline our commitment to “unlocking
green lending and finance”, including “exploring the potential of new green finance
products for our business”. We have linked our Revolving Credit Facility (RCF) to
sustainability performance through a sustainability-linked loan mechanism – see page 45.
We previously conducted detailed comparative studies of timber waste in partnership
with our timber frame company, Oregon Timber Frame and other key suppliers. This
involved a close examination of the origin of the waste created in the building lifecycle,
the type of waste and wood type.
Barratt Developments PLC Annual Report and Accounts 2023
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Scenario sensitivity key
Low
High
Maximum unmitigated
Timeframe
Risk rating
Financial Statements impact
Short Medium Long
Scenario sensitivity
Our ongoing response
Physical risks
Overheating in homes
Changes to house specifications
required to mitigate long-term shift in
climate patterns, such as prolonged
increased temperatures in summer.
Flood mitigation
New site infrastructure required
to mitigate extreme weather events,
for example flood barriers and
balancing ponds.
Weather disruption
Disruption to build activity due to
increased frequency of severe weather,
being heat, cold or precipitation, or
damage to construction sites from
extreme weather events.
Supply availability
Reduced supply availability (for instance
timber) as a consequence of long-term
shift in climate patterns and extreme
weather events (e.g. wildfires, flooding)
where the supply is sourced.
Opportunities
Green developments
Increased land buying and local
partnership opportunities through
strong low-carbon credentials and
offer of low-carbon developments,
for instance partnering with councils
to deliver low carbon homes.
Cost of capital
Barratt’s sustainability performance
opens green financing opportunities,
providing access to lower interest rates.
Sustainable practices
Proactive adoption of low-emission
materials and processes, ahead of
regulation, provides a cost advantage
and improves reputation.
L
M
L
L
H
L
L
Increased build cost of sales by
up to £35m
Increased build cost of sales by
up to £5m
Increased build cost of sales
and decreased revenue by up to
£5m
Increased build cost of sales by
up to £5m
Decreased land cost of sales by
£30m-£70m
Decreased finance costs by up
to £2m
Decreased build cost of sales by
up to £10m
Demand for and affordability
H
of green homes
Eligibility for green mortgages and cost
savings from energy efficiency allow for
a premium to be charged on new homes.
Increased revenues by
£30m-£320m
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Sustainable transition
Disorderly transition
Adaptation
Barratt has created an industry-leading project that will test the effects of climate
change and look at ways that the homes of the future can withstand more extreme
weather conditions. Known as Energy House 2.0, the specially-built climate chamber
recreates temperatures ranging from -20˚C to +40˚C, as well as simulating wind, rain,
snow and solar radiation. This research will inform us of how various overheating
adaptation technologies perform.
Flood risk assessments are a key part of our land appraisals. We are proactively
mitigating this risk through ongoing programmes of work, continual horizon scanning
and engaging with key stakeholders to conduct extensive research through highly
skilled internal and external experts.
We closely monitor weather forecasts to ensure worker safety and prepare or adjust
build schedules as appropriate. A crisis management plan is in place for extreme
weather events. Modern Methods of Construction (MMC), such as timber frame, allow
for parts of the construction process to occur offsite, increasing build speed and
reducing exposure to the elements before it is sealed. Mitigation is largely through
MMC, building efficiency and supply chain engagement.
We regularly engage with our suppliers on availability of materials and sustainable
sourcing both directly and through our Supply Chain Sustainability School. We purchase
99.84% of our timber from FSC or PEFC certified sources and consider supply
sustainability at tender and contract renewal stage. The management of sustainability and
climate change risks and opportunities in the supply chain is intrinsic to our operations and
procurement framework.
We are working directly with mortgage lenders to develop enhanced mortgage
products that recognise the advantages of our new build homes. During FY23, we
collaborated with The Leeds Building Society to support the launch of a new green
mortgage product which recognised the advantages inherent in our new homes and
has the potential to unlock up to a 10% uplift in lending. Moreover, through Government
engagement and notably through the Future Homes Hub, Barratt’s Head of Mortgage
Lender Relations chairs the “Valuation Group”, which is considering how the value of
sustainable benefits of new homes can be recognised in the mortgage
valuation process.
We engage with landowners regularly via our land and planning and dedicated public
land function. In the past year, we have seen increased direct engagement with
landowners on sustainability, with the Group Sustainability Director attending three
presentations with national and regional landowners to spotlight on sustainability.
Within our Building Sustainably Framework, we outline our commitment to “unlocking
green lending and finance”, including “exploring the potential of new green finance
products for our business”. We have linked our Revolving Credit Facility (RCF) to
sustainability performance through a sustainability-linked loan mechanism – see page 45.
We previously conducted detailed comparative studies of timber waste in partnership
with our timber frame company, Oregon Timber Frame and other key suppliers. This
involved a close examination of the origin of the waste created in the building lifecycle,
the type of waste and wood type.
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Climate-related risks and opportunities continued
Next steps
Physical risks in the wider supply chain
The Group currently considers the impact of climate change
on supply chain disruption in timber. However, working with
others, we are investigating the potential physical impact of
climate change on our supply chain, expanding our existing
coverage to other key materials. The findings of this assessment
are expected to be shared later in FY24.
Standing water flooding
The Group’s current assessment of physical risk considers
potential increases in both river and coastal flooding at
a development level. However, at the time of modelling,
projections for standing water flooding to the required
granularity were not available. These projections are
expected to be available for FY24, allowing the Group to
update its viability assessment. This will allow the Group
to ensure its current flood risk assessment procedures
will remain appropriate in the medium and long-term.
Land viability
The variance maps below illustrate our assumed ability to pass
climate-related costs onto land vendors through land prices.
Under the “Adaptation” scenario, our limited exposure
to transition risk and proactive measures to minimise physical
risk suggest that land viability would not be significantly
impacted within the modelled timeframes.
However, the maps for the “Sustainable transition” and
“Disorderly transition” scenarios highlight regions, such as
the North East, where residential land prices are less resilient.
Without taking action to reduce our exposure to transition risks,
we may face limitations in passing through land costs in these
areas, which could potentially result in lower margins. It is
important to note that this assessment does not account for
any mitigating actions taken or consider the impact of the UK
Government’s “levelling up” agenda.
CLIMATE SCENARIO ANALYSIS
Modelling methodology
The Group’s extended forecasts (as considered in its viability
review and impairment assessments) are based on the
International Energy Agency’s “Stated Policies” model, whereby
global climate commitments are met in full and on time, leading
to a global temperature rise of 2.7°C by 2100, giving rise to both
physical and transition risks. For the UK, this includes the Ten
Point Plan, the 2020 Energy White Paper and achievement of the
2021 net zero transition targets. This forms the basis of our
financial planning, as discussed on page 82.
We conducted an assessment of climate-related risks by
analysing a sample of our existing land bank and supply chain
sites. We utilised local climate data, obtained at a resolution of
90m2, based on the latest IPCC CMIP6 global climate models.
This enabled us to project potential impacts under each of our
time horizons and climate scenarios (defined on pages 82 and
83 respectively), considering indicators such as cold, flood,
heat, precipitation, and wind.
The projections obtained were utilised to evaluate the potential
unmitigated impact on our divisions and supply chain under each
climate scenario. We considered the specific vulnerabilities and
risks associated with our business model, including the capacity
to pass on industry-wide development costs to land vendors. As
such, we assumed that the land price paid for a site could be
reduced up to the extent it remained above the price that a
landowner could achieve for an alternative use, assumed to be
the land cost per acre for industrial use, as estimated by the
Valuation Office Agency.
This comprehensive assessment provides us with valuable
insights into the potential risks and impacts that our divisions
and supply chain may face due to climate change. By integrating
this information into our strategic decision-making processes,
we are better positioned to address climate-related risks and
identify opportunities for sustainable development. The
unmitigated financial impact and scenario sensitivities for each
of the key climate-related risk and opportunities are presented
in the risk table on page 84.
While quantitative climate scenario analysis is a valuable risk
management tool, to ensure a comprehensive understanding of
climate-related risks and opportunities, we have complemented
quantitative analysis with qualitative assessments of each
climate scenario. Page 83 provides an overview of the wider
impact of each scenario.
Regional maps by scenario showing trading margin impact
Sustainable transition
Disorderly transition
Adaptation
Extent of the margin impact in 2050
0.0%
10%
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Overall financial impact
Variance in profit before tax between climate scenarios and Stated Policies
The below chart illustrates our best endeavour estimates of the potential unmitigated variance to profit before tax under each
climate scenario compared to the “Stated Policies” baseline. See the risk table on page 84 for detail of our responses to each
climate-related risk, which will improve financial performance.
300
250
200
150
100
50
0
-50
-100
-150
-200
2025
2030
2050
Stated Policies
Sustainable Transition
Disorderly Transition
Adaptation
Short term (to 2025)
Medium term (2025 to 2030)
Long term (2030 to 2050)
Sustainable Transition
Carbon prices increase in line with
current policy commitments.
Slow uptake of green
mortgage products.
Disorderly Transition
Carbon prices increase in line with
current policy commitments.
Minimal uptake of green mortgages.
FHS is introduced from 2025 as planned.
Carbon pricing increases from $90/
tCO2e to $140/tCO2e.
Increased take-up of green mortgages.
Land acquisitions are increasingly
conditional on enhanced sustainability
credentials.
Industry-wide costs start to be reflected
in the land bidding process.
FHS is introduced from 2025 as planned,
with additional building regulations
introduced in 2030.
Carbon pricing increases from
$87/tCO2e to $135/tCO2e.
Majority of mortgage sales use green
mortgages.
Land acquisitions are increasingly
conditional on enhanced sustainability
credentials.
Industry-wide costs start to be reflected
in the land bidding process.
Additional building regulations
introduced from 2030 onwards.
Increased demand for sustainability
and smart technologies in homes.
Carbon pricing increase steadily to
$250/tCO2e by 2050.
Majority of mortgage sales use green
mortgages.
Land acquisitions are increasingly
conditional on enhanced sustainability
credentials.
Further building regulations are
introduced from 2040.
Increased demand for sustainability
and smart technologies in homes.
Carbon pricing continues to increase
sharply to $291/tCO2e by 2050.
Land acquisitions are increasingly
conditional on enhanced sustainability
credentials.
Adaptation
Carbon prices rises are significantly
lower than current policy commitments.
Carbon prices decrease significantly
to below 2023 levels.
Limited opportunities.
Limited financial impact of physical
risks, due to proactive mitigations
currently in place.
Impact of severe weather intensification
outweighed by reduced carbon pricing
and regulatory requirements.
One off costs associated with additional
mitigation measures.
Increased investment in flood defences
in certain regions.
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Climate-related risks and opportunities continued
WHAT IT MEANS
Strategic impact
Our analysis indicates that whilst climate change will come at a
cost under all scenarios and timeframes, our business model is
expected to remain profitable in each case. This holds true even
when assuming we take no additional mitigating actions beyond
those already incorporated into our business plan.
While undesirable, the adaptation scenario is shown to have the
lowest financial impact on the Group. The physical impacts of
climate change on the Group are manageable, testament to the
proactive measures we are already taking such as design
changes to prevent overheating, and conducting flood risk
assessments prior to bidding for land.
A sustainable transition, though better for the climate, brings
higher transition costs. However, due to its potential opportunities,
this scenario is likely to be more advantageous than if climate
policies continue as currently planned.
Due to its disruptive nature, the Group faces its greatest impact under
a disorderly transition, particularly through steep carbon pricing
hikes from 2030 onwards. However, our analysis indicates our
business remains profitable even under this worst-case scenario.
In order to be best positioned to thrive in whichever climate
scenario we face, this analysis highlights key areas in which
we must continue to progress.
Impact on the Financial Statements
Our scenario analysis shows that the financial impact of
climate change will increase over time as physical changes or
transitionary regulation intensify. Its financial relevance is not
limited to the future; climate change is already a factor in our
financial planning and our future forecast, both of which affect
the financial information we are reporting today.
Going concern and long-term viability
In preparing these Annual Report and Accounts, we must
assess whether there are any material uncertainties over the
ability of the business to continue to operate as a going concern
(see note 1 to the Financial Statements on page 188. We must
also assess the prospects of the business over the longer term
for disclosure in our Viability Statement (see page 99).
To do this, we stress-tested our financial forecasts for the
impact of our principal risks manifesting to a severe but
plausible level over the three-year period to 30 June 2026.
As part of this, we assumed that the Group would experience
climate-related transition risk in line with the Sustainable
transition scenario, including the effects of the Future Homes
Standard and carbon pricing. It was determined that, even
when climate risk manifests alongside our other high-impact
principal risks, the Group remains able to meet its
commitments and continue trading over the review period.
Site profitability
The expected costs of compliance with Parts F and L of the
Building Regulations, applicable from 15 June 2022, and
design changes required to mitigate overheating in homes
have been factored into the estimated costs to complete of
developments in line with the accounting policy described in
note 3 to the Financial Statements on page 191. These costs
are reflected in the carrying values of inventories and the
margins recognised for developments for which future
completions will be affected.
90
Given our supply chain accounts for 67% of our value chain
emissions (see pages 92 to 93 for more detail), the Group’s
greatest exposure to climate-related risk is through rising
carbon prices. It is imperative for us to work with our supply
chain to reduce embodied carbon in the materials and services
we procure, mitigating the impact of carbon prices. See detail
on our progress to date in our transition pathway on page 91.
Increasingly stringent building regulations associated
with reducing emissions and improving resilience to rising
temperatures is another key risk, which will require us to
update home designs and construction techniques. Examples
of how we are responding to this risk are showcased in our
concept eHome2 on page 34 and detail of how we are adapting
house designs is provided on page 34.
Recent rises in energy costs and the increasing importance of
sustainable living to our customers mean that we must leverage
our sustainability expertise to provide energy-efficient homes
on green developments at affordable prices. We are proactively
promoting green mortgages with our lender partners to ensure
that mortgage terms reflect the energy savings from living in our
homes (see page 31).
In order to monitor and assess progress towards reducing
our exposure to climate-related risks and maximising our
opportunities we have identified several metrics and targets,
detailed on page 96.
The Group operates under a three-year forecasting cycle.
All known material climate-related impacts are factored
into the forecast and site-specific climate considerations
are reflected in our assessments of site profitability.
In preparing the Financial Statements for the year, the financial
impact of climate change has been reflected as follows:
Land acquisitions
The Group uses the latest flood risk assessments when
reviewing potential land acquisitions or options for
strategic sites. If any sites require additional flooding
mitigation, this is factored into our viability assessments,
tender offers and forecast margins for those sites.
The carrying value of land and work in progress is assessed
at the year end as described in note 16 to the Financial
Statements on page 207. Our assessment of changes in
flood risk under our climate scenarios has not identified any
sites within our current portfolio for which the cost of
enhanced flood defences would result in an impairment.
Goodwill and intangible assets
Each year, we review the carrying value of goodwill and
intangible assets with an indefinite useful life held on the
balance sheet. To do this, we calculate the present value of
forecast future cash flows, as described in note 10 to the
Financial Statements on page 200. The cash flows forecast
for years three to five reflect the likely outcome of announced
policies, as modelled in the Group’s climate scenario analysis
for FY25, and extrapolated to perpetuity, thereby reflecting
the short to medium-term effect of climate change in
the valuation.
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TRANSITION PATHWAY
99% of our value chain emissions arise upstream and
downstream of our operations. We have a science-based target
to reduce our scope 3 emissions intensity by 24% by 2030
compared to 2018 levels and an ambition to be net zero across
our full value chain by 2040.
Our carbon transition programme is fundamental to achieving
this ambition. The programme describes the co-ordinated
activity designed to ensure we achieve our targets and how
we see our business decarbonising over time.
Achieving our targets will greatly reduce our exposure to
climate-related risks in high-transition-risk scenarios and
maximise our potential to take advantage of climate-related
opportunities. Reducing both direct and indirect emissions will
minimise our exposure to the potentially significant carbon
pricing increases that are anticipated if global temperature
rises are to be limited to sustainable levels.
For a further breakdown of our greenhouse gas emissions
and commentary of performance in the year see page 97.
Our direct operations
We are empowering divisional teams to understand and take
action to reduce their carbon emissions. See page 98 for
detail on how we are using carbon and energy dashboards
to achieve this.
To date this has contributed to the reduction of 23.7% of our
absolute scope 1 and 2 emissions since 2018, against a target of
29%. Whilst our direct operations represent only 1% of our full
value chain emissions, we continue to show sector leadership
in driving emissions reductions through efficiency programmes
and the targeting of lower emission energy sources.
HVO is synthesised from 100% renewable materials such
as vegetable and animal oils, reducing net greenhouse gas
emissions by up to 90%. Our decision to expand its use
followed a comprehensive best practice review, covering
environmental, social and ethical impacts, and a detailed
viability assessment as an alternative to conventional
diesel. Our rigorous due diligence includes sourcing from
ISCC-certified waste palm oil as well as RFAS-verified
feedstocks, ensuring best practices. We remain vigilant,
continuously monitoring complex supply chains for
emerging sourcing risks to adjust our HVO purchasing
strategy accordingly.
70%
of telehandlers with Stage V engines at 30 June
Ensuring all plant on Barratt sites is the most fuel efficient we
can obtain. We lease construction machinery (telehandlers)
with the latest energy efficient diesel engines, upgraded as
leases are renewed; and monitor telehandler usage to prevent
idling and to promote efficient use.
87%
of electricity on REGO-backed renewable tariffs
Connecting sites to the grid using renewable electricity
contracts, and where diesel generators are unavoidable,
reducing the amount of time these are used on sites; and
continuing to apply best practice energy efficiency at plots,
show homes and offices.
16%
of total site fuel consumed was HVO
Expanding the use of HVO (Hydrotreated Vegetable Oil) in our
on-site plant as part of the transition to alternatives such as
the use of electric plant.
32%
of generators were hybrids at 30 June
In trials conducted by Barratt, using hybrid generators was
found to save over 20% of fuel compared to a
conventional generator.
66%
of company car fleet vehicles were EVs or plug-in hybrids
at 30 June
We have a target in place for 100% of company car fleet free
of diesel and petrol cars by 2030 with no further diesel cars
offered from the end of June 2022 and no petrol cars offered
from end of June 2024. By 2028, owing to the natural cycle of
fleet replacement, there will be no petrol fleet cars at Barratt.
For a detailed overview of our scope 1 and 2 decarbonisation programme see
our website.
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Climate-related risks and opportunities continued
TRANSITION PATHWAY continued
Decarbonising the value chain
With scope 3 emissions representing 99% of our value chain
emissions, the key to finding solutions is through genuine
collaboration and the sharing of knowledge and insights
between us and our suppliers, as well as sector-wide groups
we lead or participate in. Alignment with the Future Homes
Standard will play a significant role in decarbonising our
downstream emissions and the choices that the Group can
make in respect of materials choices (see page 34) for detail
sustainable homes of the future case study.
We have analysed our full value chain and developed a transition
pathway. However, we recognise there are uncertainties around
reductions of scope 3 emissions including: measurement of
supply chain emissions, sectoral commitments, national policy,
and technological advancements.
Going forward, we will continue to work through these issues
with our partners and will update our transition pathway as
needed. Future work will be underpinned by the ongoing
development of models and tools that allow us to continue to
factor in underlying assumptions such as sector decarbonisation,
identification of priority initiatives for action, and increasing
direct measurement of supply chain partners emissions.
100%
99%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Key
Scope 1 and 2
(1%)
Grid decarbonisation*
(3%)
Building standards
Building techniques
(32%)
(7%)
Diesel substitution
Main contractors
Bricks & blocks
Timber
(3%)
(3%)
(1%)
(1%)
2023
2025
2030
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Value Chain – assessing our impacts
We have assessed and reported our value chain impacts using
the Environmentally Extended Input Output Methodology (EEIO),
which is recognised in the Greenhouse Gas Protocol technical
guidance for calculating scope 3 emissions published by the
World Resources Institute and the World Business Council for
Sustainable Development. EEIO is based on the amount spent
on products and services, multiplying this by a greenhouse gas
factor for each individual product or service. For more detail on
our methodology, please refer to our website www.
barrattdevelopments.co.uk/building-sustainably/our-
publications-and-policies/publications.
We currently use EEIO (as above) but recognise the opportunity to
improve on the accuracy of this and have over the last two years
developed a programme to begin the transition to a hybrid
methodology to determine our scope 3 emissions. We’re making
good progress – to date, we have engaged with 11 subcontractors
and 20 suppliers covering groundworks and several of the critical
sectors referred to in the table below, representing an estimated
20% of our total value chain emissions.
We also recognise the importance of national policy on our
decarbonisation pathway for example we currently assume
a proportion of our reductions will come from the decarbonisation
of the grid. We therefore engage with central government on
a regular basis to share our insights (see page 64).
Value chain
Scope 1 and 2
Homes in use:
32%
To read more about our sustainable
homes, see page 46
Site preparation and building
techniques (excluding
materials): 10%
Construction materials:
57%
1%
3
e
p
o
c
S
%
9
9
Concrete & cement
Lime & gypsum (plasterboard)
Additional materials
Material choices
(5%)
(7%)
(18%)
(22%)
Notes:
Groundwork raw materials have moved into
construction materials.
Anticipated contribution to value. Chain
emissions shown in brackets.
* Grid decarbonisation initially assessed
as contributing 3%. This is combined
with homes in use from 2030.
2040
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Climate-related risks and opportunities continued
TRANSITION PATHWAY continued
Improving supply chain data and information
During the year we have continued to collaborate with our supply
chain to improve the quality of specific supplier emissions data
so that we can capture our scope 3 performance more accurately.
This has allowed us to develop a greater understanding of
supplier carbon reduction strategies, which is proving
invaluable in driving action where it is needed most.
A key area of focus going forward is therefore to drive a more
granular understanding of our supply chain emissions, using
data collected directly from our partners.
Our analysis to date gives us a clear view of where we need to focus
our efforts: 75% of supplier-related emissions in our value chain
arise from around 70 suppliers; whilst 50% of subcontractor-
related emissions are estimated to arise from a similar number.
The contribution of key sectors to the
Group transition pathway
We recognise that some partners in our value chain, by the very
nature of the products they manufacture, have higher emissions
associated with their activities. The decarbonisation of these
critical sectors is a fundamental part of our carbon reduction
pathway for scope 3. During the year we therefore analysed the
wider commitments of relevant sectors, to identify specific
activities our own transition pathway is reliant on and to
facilitate a more direct engagement programme in the coming
years. This will allow us to track and monitor the most important
emissions pathways, and to encourage action where needed.
Grid decarbonisation
The UK government has committed to a decarbonised grid by
2035. This, tied in with future building standards, the cessation
of gas boilers in new homes, and the Group having homes that
can be zero carbon in use from 2030 would see a significant
reduction in our downstream carbon emissions. This would
require government to deliver on its goals by deploying
sufficient solar and wind, along with other low or zero carbon
energy sources, and driving overall grid efficiencies.
Future home standards (FHS) and building techniques
From 2025, the FHS will require new homes to produce at least
75% less carbon emissions from homes compared with 2013
building regulations. This contributes a reduction of around a
third of total value chain emissions from 2030 because of the
stringent energy efficiency requirements.
We continually work to improve the energy efficiency of our
homes and are adapting our home designs in response to
current regulations and the subsequent changes within the
Future Homes Standard. In FY23, 99.2% (FY22: 98.8%) of our
home completions were EPC rated A or B.
For more detail see pages 46 to 47.
Additionally, a key element to both our MMC and carbon
reduction strategy is the delivery of an increased share of
timber frame homes. Timber frame provides an efficient
method of construction with lower levels of embodied carbon,
and we delivered 5,578 homes using MMC equating to 32% of
our total home completions (see page 33 for further details).
Alternative fuels during groundworks
and site preparation
Our groundworks supplier partners utilise diesel-powered
equipment. As with our own approach to plant on site, we
anticipate that heavier plant used in site preparation will
continue to move to the most efficient engines available, use
HVO as a transition fuel in the short term, and, over the longer
term beyond 2030, move to the use of batteries. Beyond this,
some manufacturers are investigating hydrogen fuel cells,
though this is still a nascent technology.
Materials choices
Investigations into low carbon building materials has continued
this year, for example we have trialled bricks with lower
material volumes in our Kent Division, which in turn lowers
the embodied carbon content. This is an illustration of the
opportunities that could be scaled through supply chain
engagement. We continue to investigate materials which
contribute to lowering the embodied carbon of our homes.
Supply Shocks and Uncertainties
Recent significant events such as the arrival of COVID-19
or the invasion of Ukraine have been of macroeconomic
significance and had a significant impact on supply chains
globally, with the Group seeing rapid inflation in the price
of materials and the cost of energy for example. Due to the
spend-based nature of the EEIO methodology, this naturally
has an impact on the calculated size of our value chain
emissions and is another driver for moving to a hybrid
model incorporating direct measurement.
Agile management of our transition pathway will be vital
in the coming years to allow us to respond to supply shocks
and balance out shortfalls in one area with additional
reductions driven through other sectors.
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Supply chain actions under investigation
Critical sectors
Key carbon reduction levers
Concrete and cement
(including mortars)
∙ Move to renewables and lower carbon products.
∙ Waste management and circularity, decreasing use of virgin materials and lowering
energy required in production.
∙ Modern methods of construction (MMC) and innovative products to reduce volumes required.
Bricks and blocks
∙ Reduced volume and higher recycled content bricks.
∙ Kilns fired with renewable energy, including hydrogen and syngas.
Lime and gypsum
(plasterboard)
Ceramics
(including roof tiles
for example)
∙ Increased use of renewable energy.
∙ Increased use of recycled materials and reduction in volume of virgin materials.
∙ Increased use of gasification of biomass, industrial heat pumps, hybrid drying,
and extended tunnel kilns. Hydrogen as an alternative to gas and heat recovery.
∙ Increased recycled content and reuse of “waste” materials to avoid use of virgin products
and lower embodied carbon.
Plastics
(including pipework
and windows for example)
∙ Recycling of plastic and encourage large scale adoption of green plastics and bioplastics.
∙ Promote usage of waste plastic in innovative products, e.g. plastic concrete.
Timber
∙ Waste management and circularity, decreasing use of virgin materials and lowering
energy required.
∙ Alternative building materials e.g. cross-laminated timber elements where appropriate.
Ferrous metals
(including steel)
∙ Updated production such as direct reduced iron and smelting reduction.
∙ Move towards hydrogen-based steel making.
∙ Promote usage of green steel.
Main Contractors
– direct purchase of materials
Additional materials across
our operations
∙ Identification of products with lower embodied carbon. Adoption of products with
Environmental Product Declarations.
∙ All the above initiatives will likely contribute, especially where products are made
from multiple materials.
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Climate-related risks and opportunities continued
On track
Achieved
Monitor
Below target
Target not met
METRICS AND TARGETS
To monitor progress of our response to risks and opportunities, management monitor several indicative performance metrics.
We are focused on reducing the emissions of the homes we build, to offer our customers even better energy efficiency as well as
resilience to climate change. We acknowledge the current obstacles to effectively reducing value chain emissions, including the lack
of data, and inconsistent standards, and we therefore anticipate greater progress will be made over the medium- to long-term. Whilst
we face headwinds in the short term, our immediate plans for improvements in data collection and stakeholder engagement will drive
our performance towards these goals.
Metric
Scope 1 & 2
(market-based)
greenhouse gas
emissions
(tCO2e)
Scope 3
(market-based)
greenhouse gas
intensity
(tCO2e/100m2)
Average DER
for completed
properties
(kgCO2/m2/yr)
Risk/
Opportunity
Carbon pricing
Carbon pricing
Description As per our “Disorderly
Transition” scenario
(outlined on page 83),
external carbon prices
could reach up to $291 per
tCO2e by 2050. The Group
monitors its exposure to
carbon pricing through
its direct and indirect
greenhouse gas emissions,
as its energy usage and
emissions of suppliers
act as indicators of the
activity that may be subject
to future increases in
regulatory costs.
To ensure we achieve
emissions reductions in
line with a 1.5°C transition,
we have committed to
SBTi approved targets
across our value chain,
measuring direct and
indirect emissions against
the baseline year of 2018.
Details of how we will
achieve these targets are
presented in the transition
pathway on pages 91 to 95.
Housing regulations;
Demand for and
affordability of
green homes
With over a fifth of UK
emissions coming from
its homes, reducing
emissions from residential
buildings is a priority for
the UK’s decarbonisation
strategy. This includes
reducing the emissions
generated in new build
homes, which is reflected
in building regulations
such as the Future Homes
Standard, which will
require a reduction in
the Dwelling Emissions
Rate (DER) of 75-80%
compared to 2013 building
regulations.
Use of offsite-
based products
and systems
in homes
constructed
New technologies;
Weather disruption
Percentage
of home
completions
in year achieving
an A or B EPC
rating
Demand for and
affordability
of green homes
Modern methods of
construction utilising
offsite production reduce
build time and increase
resilience to severe
weather. In FY22 we
accelerated our ambition
and updated our 2025
target to apply offsite-
based products and
systems to 30% of homes.
Low running costs
associated with energy
efficiency of new homes is
an important consideration
for homebuyers, with
the average new Barratt
home unlocking savings
of up to £2,200 per
annum compared with
older homes. Therefore,
maintaining at least 99%
of our homes at an EPC
A or B rating will support
us in benefiting from the
opportunities available
for energy-efficient
new homes.
Target performance
Target performance
Target performance
Target performance
Target performance
23,186
169.35
12.91
30%
99%
FY23 performance
FY23 performance
FY23 performance
FY23 performance
FY23 performance
24,909*
242.13
16.02*
32%
99%
32,657
25,074
24,909
23,186
222.83
219.27
242.13
15.89
15.89
16.02
169.35
12.91
27%
32%
30%
99%
99%
Baseline year: 2018
Baseline year: 2018
Baseline year: 2022
Target year: 2025
Target year: 2025
Target year: 2030
Target year: 2025
Target
status
Key
Baseline performance
FY22
FY23
Target performance
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On track
Achieved
Monitor
Below target
Target not met
As per the climate risk register presented on page 84, our greatest exposure to climate change is through transition risks,
particularly those related to building regulations and carbon pricing. All our residential properties are subject to incoming building
regulations, but we are investigating means to monitor adherence to building regulations further. We are also investigating the
implementation of internal carbon pricing to allow future emissions to inform decision making.
Relatively few of our assets or business activities are vulnerable to physical risks since our land appraisal process already
considers physical risks such as flooding. Therefore, rather than applying an overall percentage of business activities subject
to physical risks, we deem it more appropriate to monitor exposure to physical risks through risk-specific metrics. To that end,
we are looking to implement monitoring of overheating and weather disruption over the next 12 months.
Further industry-wide metrics are included within our SASB disclosure on our website and cross-industry metrics are included
in the five-year record on page 239.
Greenhouse gas emissions
Our greenhouse gas emissions are presented below. A further breakdown of our value chain emissions and our plans
to decarbonise in line with our 2040 net zero ambition are presented on page 92.
Greenhouse gas emissions
Scope 1
Scope 2
Total gross scope 1
& 2 emissions
Scope 1 & 2 energy
consumption
Carbon intensity (scope 1
& 2 emissions per 100m2
of legally completed
build area)
Scope 3 category 1:
Purchased goods
& services
Scope 3 category 11:
Use of sold products
Other scope 3 emissions
Total gross scope 3
emissions
Scope 3 carbon intensity
(scope 3 emissions
per 100m2 of legally
completed build area)
Total gross scope 1, 2
& 3 emissions
tCO2e
Market based tCO2e
Location
based
tCO2e
Market based tCO2e
Location
based
tCO2e
2023
2022
23,580*
23,234
1,329*
1,840
5,515*
24,909
4,802
25,074
2021
26,769
2,496
5,973
29,265
2020
20,323
1,640
4,260
21,963
2019
27,169
3,413
5,162
30,582
2018
27,577
5,080
6,716
32,657
29,095
28,036
32,742
24,583
32,331
34,293
MWh
139,718*
128,189
141,945
102,966
127,434
127,496
Market based tCO2e/100m2
1.60*
1.53
1.78
1.80
1.78
1.90
Location
based
tCO2e/100m2
1.86*
1.71
1.99
2.02
1.89
1.99
tCO2e
tCO2e
tCO2e
tCO2e
2,332,213
2,395,642
1,923,397
2,019,509
2,305,017
2,421,559
1,217,738* 1,244,317
1,352,982
930,797
1,311,087
1,273,346
229,378
241,921
144,890
178,479
217,907
160,785
3,779,329
3,881,879
3,421,269
3,128,785
3,834,011
3,855,690
tCO2e/100m2
242.13
236.67
208.12
256.52
222.96
222.83
Market based tCO2e
Location
based
tCO2e
3,804,238
3,906,953
3,450,534
3,150,748
3,864,593
3,888,347
3,808,424
3,909,915
3,454,011
3,153,368
3,866,342
3,889,983
Scope 1, 2 and 3 GHG emissions have been measured in accordance with the operational control method of the GHG Protocol. All scope 1 and 2 GHG
emissions arise in the UK. Emission factors come from BEIS “UK Government Conversion Factors for Company Reporting 2022”.
Scope 1 & scope 2 energy consumption comprises scope 1 energy consumption of 110,996 MWh* and scope 2 energy consumption of 28,722 MWh*.
Other scope 3 emissions is comprised of category 2: capital goods; category 3: fuel & energy related activities (6,234 tCO2e)*; category 4: upstream
transportation & distribution; category 6: business travel (4,016 tCO2e)*; category 7: employee commuting; and category 12: end of life treatment of
sold products.
Deloitte have provided independent third-party limited assurance in accordance with the International Standard for Assurance Engagements 3000
(ISAE 3000) and Assurance Engagements on Greenhouse Gas Statements (ISAE 3410) issued by the International Auditing and Assurance Standards
Board (IAASB) over selected metrics in the tables and footnotes above and across identified with an *. Deloitte’s full unqualified assurance opinion, which
includes details of the selected metrics assured, our full Carbon Reporting Methodology Statement, our ESG Basis of Reporting and a full breakdown of
scope 3 GHG emissions, see our website www.barrattdevelopments.co.uk/building-sustainably/ourpublications-and-policies/publications.
Barratt Developments PLC Annual Report and Accounts 2023
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F
Climate-related risks and opportunities continued
Greenhouse gas emissions continued
Scope 3 restatement
Greenhouse gas emissions
Scope 3 category 1:
Purchased goods & services
Other scope 3 emissions
Total gross
scope 3 emissions
Scope 3 carbon intensity
(scope 3 emissions per
100m2 of legally
completed build area)
Total gross scope
1, 2 & 3 emissions
tCO2e
tCO2e
tCO2e
tCO2e/
100m2
Market
Based
Location
Based
tCO2e
tCO2e
2022 (as
published)
Updates
to EEIO
factors
2022
(restated)
2021 (as
published)
Updates
to EEIO
factors
2021
(restated)
2020 (as
published)
Updates
to EEIO
factors
2020
(restated)
2,131,408 264,234 2,395,642 1,983,082
(59,685) 1,923,397 2,020,341
(832) 2,019,509
220,814
21,107
241,921
148,189
(3,299)
144,890
177,919
560
178,479
3,596,538 285,341 3,881,879 3,484,253 (62,984) 3,421,269
3,129,057
(272) 3,128,785
219.27
17.40
236.67
211.95
(3.83)
208.12
256.54
(0.02)
256.52
3,621,612 285,341 3,906,953 3,513,518 (62,984) 3,450,534
3,151,020
(272) 3,150,748
3,624,574 285,341 3,909,915 3,516,995 (62,984) 3,454,011
3,153,640
(272) 3,153,368
The estimation of scope 3 emissions from our supply chain
applies industry-specific Environmentally Extended Input
Output (EEIO) factors against supplier spend. These factors are
updated annually based on macroeconomic indicators. During
the year, The World Bank issued retrospective updates to these
macroeconomic indicators affecting 2022, 2021 and 2020. As
such, the EEIO factors for these years have been updated, with
the impacts outlined in the table above.
For information and progress on our scope 1 & 2 and scope 3
carbon reduction initiatives and how we plan to decarbonise across
our operations and value chain, see our transition plan on page 91.
How we are building our climate data framework
The Group has set out a roadmap for further ESG reporting
improvements, which includes the monitoring of climate-related
metrics. To support this, we have identified three ESG data
strategy priorities to (i) automate data collection; (ii) enhance
controls over ESG data; and (iii) provide actionable insights
through dashboard reporting.
To support action to achieve emissions-related remuneration
targets (detailed on page 158), local management now receive
regular data on emissions performance, benchmarking their
divisions against other regions and allowing for the
identification of high and low performing sites. We are currently
developing further data reporting that will show the impact of
specific equipment usage at the site level to further drive
energy-efficient behaviours. This will also allow for the
monitoring of initiatives detailed in our transition pathway,
leading the path towards net zero.
Our data priorities will be embedded across the Sustainability
Framework by the end of FY24. This is a rapidly evolving area
and our roadmap to automated and actionable ESG data
reporting will be updated periodically to take into consideration
new priorities for data collection as they become clearer
through regulatory drivers or voluntary targets.
Driving performance
Performance against the Group’s climate-related targets is reported
to the Sustainability Committee, a sub-committee of the Board.
In January 2023 we converted our £700m revolving credit facility
to a sustainability-linked loan. The performance measures are
(1) science-based target aligned scope 1 & 2 emissions
reductions; (2) waste intensity reduction; and (3) improving the
sustainability of our homes by reducing the average Dwelling
Emission Rate.
To drive the implementation of our climate-related targets,
scope 1 and 2 greenhouse gas reduction is included as a
performance measure for the LTPP awarded to Executive
Directors and senior managers, accounting for 15% of the
award. Full details of the 2022 award to Executive Directors
are presented in the Remuneration Report on pages 137 to 168.
Our scope 1 & 2 (market-based) absolute emissions decreased
by 0.7% in the year, representing an overall decrease of 23.7%
compared to our 2018 baseline, reflecting steady progress
towards our science-based target of a 29% reduction by 2025.
However, scope 1 & 2 (market-based) intensity increased by
4.4% in the year, primarily due to timing differences between
what was built versus handed over.
Despite reductions achieved in scope 1 & 2 (market-based)
emissions, we are mindful that our direct energy consumption
has increased by 9.0% in the year. While our efforts on initiatives
such as substitution of diesel with HVO and adoption of renewable
electricity tariffs have resulted in significant emissions savings,
underlying energy requirements have increased. In response, we
are prioritising energy reduction activities and are supporting
this with enhanced carbon emissions reporting to local divisions,
providing greater visibility of energy usage on sites to enable
them to drive a reduction in energy consumption and cost.
Scope 3 absolute emissions decreased by 2.6% in the year,
primarily driven by a reduction in upstream emissions from
purchased goods & services, which we calculate using a spend-
based method, particularly susceptible to high price inflation in
some carbon-intensive sectors of the supply chain. See page 94
for a summary of how we are working with key suppliers to obtain
quantity-based emissions data that is more representative of the
materials we source from them. Like scopes 1 & 2, the lower
volume of properties handed over in the year also had an impact,
and therefore scope 3 intensity increased by 2.3% in the year.
98
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Viability Statement
Going concern
In determining the appropriate basis of preparation of the
Financial Statements, the Directors are required to consider
whether the Group can continue in operational existence for the
foreseeable future. After making enquiries and having
considered forecasts and appropriate sensitivities, the Directors
have formed a judgement, at the time of approving the Financial
Statements, that there is reasonable expectation that the Group
has adequate resources to continue to operate for the
foreseeable future, being at least 12 months from the date of
signing of these Financial Statements. (More information on the
going concern judgement can be found in note 1 to the Financial
Statements.) Therefore, the Directors continue to adopt the going
concern basis in the preparation of these Financial Statements.
Viability statement
In accordance with the Code, the Directors have assessed the
prospects and financial viability of the Group over the longer
term, considering both its current position and circumstances,
and the potential impact of its principal risks. The Group’s
business model is presented on pages 14 to 15 and its future
prospects are primarily monitored through the risk
management processes detailed on page 71.
Assessment period
For the long-term Viability Statement, the Directors consider
that a three year review period is appropriate. This period is
aligned to our operating framework of a 3.5 years owned land
bank, and the time frame over which the majority of our risks
have the potential to manifest. Additionally, the Group’s
bottom-up planning and forecasting cycle, which considers
a wide range of information relating to present and future
business conditions, including those which impact on expected
profitability, cash flows and funding requirements, covers three
years.
As environmental and climate change risks become more
significant, the potential for moving towards five year review
period will be considered for future viability assessments.
The Group’s business plan reflects the anticipated effects of the
current economic environment. The Group is forecast to remain
profitable and in compliance with its financial covenants
throughout the forecast period.
Principal risks
The Group continues to be subject to its principal risks, which
are detailed on pages 73 to 77. This Viability Statement considers
the impact that these risks might have on its ability to meet its
targets in current market conditions over the review period.
The current economic environment presents significant
macroeconomic uncertainties, most notably around interest
rates and their consequent impacts on UK economic growth
and housing affordability, as well as consumer confidence and
spending. The risks that were considered relevant, for which
the impacts were applied in aggregate, were as follows:
Principal risk
Impact modelled
A
E
Economic
environment
Supply chain
resilience
A decline in demand, leading to a
10% reduction in private average
selling prices compared to FY23
levels throughout FY24 and FY25
followed by a 3% recovery in FY26,
and a fall in sales volumes of 25%
in FY24 followed by a 5% recovery
in FY25 and FY26.
A further increase in material
and labour costs of 3% arising
from shortfalls in supply and
inflationary pressures.
C,G
J
Government
regulation and
political risk;
Safety,
health and
environment
Environmental,
social and
governance
A Building Safety Levy of £1,500 per
private plot for potential additional
safety costs that could be imposed
by the UK Government.
Climate-related transition risk will
manifest to a greater degree than
forecast, consistent with a 1.5oC
global temperature rise, including
early implementation of the Future
Homes Standard and increased
carbon pricing, with the impact
being seen from FY25.
An additional cost per plot of £5,500
has been included.
Group resilience to risk impact
modelled
Geographic and product
diversity allows for
flexibility in response to
market conditions whilst
the diverse land bank
allows for selective
development of
future sites.
Key supplier audit
programme, centralised
procurement and
long-standing
relationships ensure
continuity of supply.
Robust cost control
through well-monitored
build programmes.
Strong balance sheet and
net cash position along
with good cost control
through well monitored
build programmes.
Mitigating actions to risk impact modelled
In response to lower volumes,
a reduction in uncommitted land
investment combined with a reduction
in the level of production and therefore
work in progress, as well as a
reduction in overhead base.
Redesign of developments to
emphasise cost savings. Central
procurement review of supply
agreements with significant
agreements fixed in advance.
As an industry-wide cost, any such levy
will likely be factored into future land
bids over the medium term.
Continuous investment
in new technologies and
engagement with the
wider supply chain,
ensuring responsibly
sourced materials.
For further details regarding climate
change risks, refer to the TCFD
disclosures on pages 78 to 98. For the
transition pathway to achieve net zero
by 2040 and mitigating exposure to
carbon pricing, see page 91.
Barratt Developments PLC Annual Report and Accounts 2023
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Strategic Report
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F
Viability Statement continued
Viability Statement continued
Outcome of assessment
To assess the Group’s resilience to adverse outcomes, its
forecast performance over the three-year period was sensitised
to reflect a series of scenarios based on the Group’s principal
risks and the downside prospects for the UK economy and
housing market presented in the latest external economic
forecasts. This assessment included a reasonable worst case
scenario in which the Group’s principal risks manifest to a
severe but plausible level.
Under the described scenario, the Group is able to operate
within its current facilities, meet its liabilities as they fall due,
and remain in compliance with its financial covenants in the
assessed period. The Group has a policy of maintaining a £150m
headroom on its available facilities and would remain in compliance
with this policy throughout the viability review period.
Under the scenario, the Group would undertake mitigating
actions in response to the challenging circumstances modelled.
This would primarily involve a reduction in investment in land and
work in progress in line with the fall in expected sales, and would
not compromise the Group’s ability to grow over the long term.
The Directors have also carried out reverse stress testing to
determine the market conditions in which the Group would
cease to be able to operate under its current facilities within
the three-year review period.
The Group’s base forecast was sensitised to an immediate
reduction in average selling prices from 1 July 2023 by a set
percentage up to the point at which the Group breached its
covenants or headroom policy. A second stress test was
performed in which the base forecast was sensitised to an
immediate reduction in sales volumes from 1 July 2023 by a set
percentage up to the point at which the Group breached its
covenants or headroom policy. A reduction in uncommitted land
spend of 50% was included as a mitigating action in both stress
tests. It was determined that a reduction in average selling
price of c. 31% or a reduction in sales volumes of c. 74% would
result in a breach. The Directors consider such sustained falls
in average selling price or sales volumes to be extremely unlikely.
Mitigations
Furthermore, in such challenging economic circumstances,
additional options would be available to ensure that the Group
would retain the flexibility to react to further risks or
opportunities, including:
(i) further reductions in uncommitted land spend;
(ii) redesign of developments to emphasise cost savings;
(iii) suspension of discretionary bonus payments;
(iv) reduction or suspension of dividend payments;
(v) disposal of interests in joint ventures to partners; and
(vi) sale of land or unsold stock at discounted value.
As these actions could affect the long-term solvency and growth
prospects of the Group, they would only be used to meet immediate
requirements. Nonetheless, their availability in addition to the
actions modelled demonstrates that the Group has further flexibility
to respond to challenges as they arise.
Based on this review, the Directors confirm that they have a
reasonable expectation that the Group will be able to continue
in operation and meet its liabilities as they fall due over the
three-year period of their assessment.
Over the longer term, climate change will present an increasing
risk to the Group. In response to this, and in line with the
recommendations of the Taskforce on Climate-related Financial
Disclosures, the Board has undertaken a review of the climate-
related risks and opportunities that may affect the business out
to 2050, including the modelling of the Group’s resilience under
several climate-related scenarios. The results of this review, as
well as the action being undertaken to ensure the business is
well positioned to thrive in the new physical, socio-economic
and regulatory environment, are set out on pages 78 to 98.
Looking forward, significant macro-economic challenges,
most notably persistent inflation and a higher interest rate
environment, will impact the housebuilding sector in
the medium term. The Directors consider that the Group can
demonstrate its resilience to these challenges with its well-
capitalised balance sheet, strong net cash balance and a solid
forward sales position going into FY24.
The Strategic Report on pages 2 to 100 was approved by
the Board and signed on its behalf by
David Thomas
Chief Executive Officer
5 September 2023
100
Barratt Developments PLC Annual Report and Accounts 2023 Corporate Governance
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Strategic Report
Corporate Governance
G
F
F
Corporate Governance
Contents
Board of Directors and Company Secretary
Executive Committee
Regional Managing Directors
Corporate Governance Report
Nomination Committee Report
Audit Committee Report
Safety, Health and Environment
Committee Report
Remuneration Report
Other statutory disclosures
Statement of Directors’ Responsibilities
102
106
107
108
116
124
133
137
169
171
Barratt Developments PLC Annual Report and Accounts 2023
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Corporate Governance
S
Corporate Governance
F
Board of Directors and Company Secretary
Our Board
Focused on promoting the success and long-term
sustainable value of the Group.
H
E
C
G
102
Barratt Developments PLC Annual Report and Accounts 2023 S
Corporate Governance
F
Board Skills and experience
All Directors are expected to devote the necessary time to
fulfil their responsibilities and duties to the Company, with
the highest standards of integrity. Each Director has
demonstrable experience, skills and knowledge which
complement the skills and experience of other Board
members and enhance Board effectiveness.
A summary of the Directors’ skills is set out on this page,
with further details together with their previous experience
on pages 104 and 105.
Total
Skill
Housebuilding
Property Industry
Retail
Public Policy
Marketing
Governance
Finance/Accounting
Legal
Employment/HR
Sustainability
Digital
Financial services
A
B
F
D
I
Barratt Developments PLC Annual Report and Accounts 2023
103
S
Corporate Governance
F
Board of Directors and Company Secretary continued
C. Steven Boyes
Chief Operating Officer
and Deputy Chief
Executive
H S W
Appointed:
Steven joined the Board as an
Executive Director in July 2001,
Chief Operating Officer in July
2012 and Deputy Chief
Executive in February 2016. He
is responsible for the Group’s
housebuilding operations and
the newly acquired land
promotion business, Gladman
Developments Limited.
Skills and
qualifications:
Steven has over 40 years’
experience in the housebuilding
industry, having joined as a
junior quantity surveyor in
1978. He progressed through
the business to assume the
roles of Technical Director and
Managing Director of Barratt
York, before being appointed
Regional Director for Barratt
Northern in 1999. Steven was
previously a Trustee of the UK
Green Building Council.
External
appointments:
Steven holds no
external appointments.
D. Mike Scott
Chief Financial Officer
E. Katie Bickerstaffe
Non-Executive Director
D
Appointed:
Mike joined the Board as
an Executive Director and
Chief Financial Officer in
December 2021.
Skills and
qualifications:
Mike has extensive experience
in the housebuilding sector and
is a Fellow of the Institute of
Chartered Accountants in
England and Wales. He was
previously Chief Financial
Officer of Countryside
Properties PLC, having joined
as Group Financial Controller
in 2014. Prior to this, Mike held
a number of senior finance
roles at J. Sainsbury Plc,
including latterly as Head of
Investor Relations, and spent
11 years at PwC.
External
appointments:
Mike holds no
external appointments.
A N R S
Appointed:
Katie joined the Board as
a Non-Executive Director on
1 March 2021 and took over
as Chair of the Remuneration
Committee with effect from
4 May 2021.
Skills and
qualifications:
Katie brings extensive business
transformation experience
together with considerable
digital expertise. She was a
Non-Executive Director at
Marks and Spencer Group PLC,
and previously Executive Chair
of SSE Energy Services, where
she led its separation from SSE
plc and subsequent sale to OVO
Group Ltd. She was also a
Non-Executive Director of SSE
Plc and Chair of its
Remuneration Committee until
2018. Prior to this, she worked
in a variety of general
management roles in retail
and manufacturing businesses.
External
appointments:
Katie was appointed as
Co-Chief Executive of Marks
and Spencer Group PLC in May
2022 and is also a Non-
Executive Director of the
England and Wales Cricket
Board, where she was
appointed the Senior
Independent Director
in May 2023.
A. Caroline Silver
Chair
B. David Thomas
Chief Executive
D S W
Appointed:
David joined the Board as an
Executive Director and Group
Finance Director in July 2009,
and was appointed Chief
Executive in July 2015.
Skills and
qualifications:
David brings significant
leadership and finance
experience acquired over
several years in senior
positions, and is an Associate
of the Institute of Chartered
Accountants in England and
Wales. He was previously Group
Finance Director and Deputy
Chief Executive of The GAME
Group plc, and Group Finance
Director at Millennium and
Copthorne Hotels plc. He has
also held senior financial roles
with House of Fraser plc and
Forte plc. David stepped down
as a trustee of the Barratt
Developments PLC Charitable
Foundation in April 2023.
External
appointments:
David is a Non-Executive
Director of the HBF, Chair
of the Future Homes Hub,
a representative on the Green
Jobs Delivery Group, a member
of the Net Zero Buildings
Council and a Senior Adviser
to the Construction
Leadership Council.
N R
Appointed:
Caroline joined the Board on
1 June 2023, succeeding John
Allan as Non-Executive Chair
on 30 June 2023. She became
Designated Non-Executive
Director for Workforce
Engagement in July 2023.
Skills and
qualifications:
Caroline brings a wealth of
knowledge and experience
to the Board across a number
of commercial, financial,
investment banking,
governance and board
leadership roles. Caroline was
Chair of PZ Cussons PLC until
31 March 2023 and was
Non-Executive Director of
Meggitt PLC and M&G PLC. She
served on the Board of the
London Ambulance Service
NHS Trust and as a trustee
of the Victoria and Albert
Museum. She spent over
30 years in the investment
banking sector, holding senior
corporate finance and M&A
positions at Morgan Stanley
and Merrill Lynch, and until
2020, was a partner and
managing director at Moelis &
Company. Caroline started her
career as a Chartered
Accountant at PwC.
External
appointments:
Caroline is currently a
Non-Executive Director
at Tesco PLC, BUPA and
Intercontinental Exchange, Inc.
She is also a member of the
International Advisory Board
of Adobe Inc, a member of the
V&A Foundation, and Chair
of the Audit Committee of the
National Film and
Television School.
Other Directors who served during FY23
John Allan
Non-Executive Chairman
N R
John joined the Board as a
Non-Executive Director in
August 2014 and became
Chairman in November 2014.
He stepped down as Chairman
and as a Non-Executive
Director on 30 June 2023,
having served nine years on
the Board.
104
John brought significant
board, business and retail
experience gained from both
the commercial and financial
sectors. John was Chairman of
Tesco PLC until 16 June 2023,
President of the CBI from 2018
to 2020, stepping down to
become Vice President until
October 2021. He was CEO
of Exel PLC and, when it was
acquired by Deutsche Post
in 2005, he joined the board of
Deutsche Post, becoming CFO
in 2007 until his retirement in
2009. John was also chair of
Dixons Retail plc and, following
its merger with Carphone
Warehouse, was deputy chair
and senior independent
director of Dixons Carphone
until 2015. He had previously
held a number of other
non-executive directorships
of Worldpay Group PLC
(where he was previously
Chair), National Grid plc, the
UK Home Office Supervisory
Board, 3i plc, PHS Group plc,
Connell plc, Royal Mail plc,
Wolseley plc and Hamleys plc,
and chair of London First. John
is currently Chair of the Council
at Imperial College.
Barratt Developments PLC Annual Report and Accounts 2023
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Corporate Governance
F
A
N
Audit Committee
Nomination
Committee
R
Remuneration
Committee
D
Disclosure
Committee
H
Safety, Health
and Environment
Committee
S
Sustainability
Committee
W
Workforce
Forum
Chair of
Committee
F. Jasi Halai
Non-Executive Director
G. Jock Lennox
Senior Independent
Director
H. Chris Weston
Non-Executive Director
I. Tina Bains
Company Secretary
D S
Appointed:
Tina was appointed to the
role of Company Secretary
in January 2016.
Skills and
qualifications:
Tina joined the Group in
2008 as Assistant Company
Secretary, and was promoted to
the role of Deputy Company
Secretary in 2011. Prior to this,
Tina held various Company
Secretarial positions within the
private and professional
services sectors including TMF
Corporate Secretarial Services
Limited and Ernst & Young LLP.
Tina is a Fellow of the
Corporate Governance Institute.
External
appointments:
Tina is a Trustee of the
Barratt Developments PLC
Charitable Foundation.
A N R S
Appointed:
Jasi joined the Board
on 1 January 2023.
Skills and
qualifications:
Jasi brings considerable
financial and business skills
and experience which
complement those of other
Board members. She is a
Chartered Management
Accountant and holds an MSc
in investment management
from the CASS Business
School. Before being appointed
to the Board of 3i Group plc,
she held a variety of posts
there, most recently as Group
Financial Controller. She was
also a Non-Executive Director
and Chair of the Audit
Committee at Porvair Plc until
January 2023.
External
appointments
Jasi is currently Chief
Operating Officer and an
Executive Director of 3i Group
plc, and is also a member of
the 3i Executive, Investment,
Group Risk and
ESG Committees.
A N R S
Appointed:
Jock joined the Board as
a Non-Executive Director in
July 2016 and became Senior
Independent Director on
4 May 2021.
Skills and
qualifications:
Jock, a Chartered Accountant,
brings significant business and
finance experience to the
Board. He was Chairman of Hill
and Smith Holdings plc and
Enquest plc, stepping down
from both positions in 2019.
Jock was previously Senior
Independent Director of Oxford
Instruments plc and
Non-Executive Director
and Chairman of the Audit
Committees of Dixons
Carphone plc and A&J Mucklow
Group plc. He spent 30 years
with Ernst & Young LLP,
holding several leadership
positions in the UK and
globally, including 20 years
as a partner.
External
appointments:
Jock was appointed Chairman
of Johnson Service Group PLC
in May 2021. He is also
currently Chair of the Audit
Committee Chairs’ Independent
Forum, and has indicated his
intention to step down from this
role during September 2023.
A N R H
Appointed:
Chris joined the Board as a
Non-Executive Director on
1 March 2021 and took over as
Chair of the Safety, Health and
Environment Committee with
effect from 4 May 2021.
Skills and
qualifications:
Chris brings to the Board
considerable commercial
experience, driving
performance and growth,
including as former Chief
Executive Officer at Aggreko
Limited and as Managing
Director, International
Downstream at Centrica plc.
Chris joined Centrica after a
successful career in the
telecoms industry working for
Cable & Wireless Plc and One.
Tel. Until June 2023, Chris was
also a Non-Executive Director
on the board of the Royal Navy.
External
appointments:
Chris was appointed a
Non-Executive Director of
Sportquest Holidays Ltd in
August 2023.
Nina Bibby
Non-Executive Director
A N R
Nina joined the Board as a
Non-Executive Director in
December 2012 and did not
stand for re-election at the
2022 AGM.
Nina brought a wealth of
marketing experience to the
Board. She was formerly
Chief Marketing Officer at O2
(Telefonica UK) until July 2021,
and Global Chief Marketing
Sharon White
Non-Executive Director
A N R W
Sharon joined the Board as a
Non-Executive Director in
January 2018 and became
Designated Non-Executive
Director for Workforce
Engagement in May 2021.
She stepped down from these
positions on 30 June 2023.
Sharon brought to the Board
over 25 years’ experience in the
public sector, combined with
Officer at Barclaycard, the
payments subsidiary of
Barclays plc, until 2013.
Previously Nina had been
Senior Vice President, Global
Brand Management at
InterContinental Hotels Group
plc, and Commercial Strategy
Director at Diageo plc. Nina is
currently Senior Vice President
of Consumer Segment
Marketing at Verizon.
Policy Unit, the World Bank
and various Government
departments including the
Department for International
Development, the Department
of Work and Pensions and the
Ministry of Justice.
strong employee stakeholder
experience, as Chairman of the
John Lewis Partnership, the
UK’s largest employee-owned
business. Her previous roles
included Chief Executive of
Ofcom and Director General,
Public Spending and Second
Permanent Secretary to HM
Treasury. She had also held
roles at the British Embassy
in Washington, the No 10
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F
Executive Committee
A
B
C
Executive Committee
The Executive Committee currently comprises of:
David Thomas
Chief Executive
Steven Boyes
Chief Operating Officer and Deputy
Chief Executive
Mike Scott
Chief Financial Officer
Tina Bains
Company Secretary
Bukky Bird
Group Sustainability Director
Tim Collins
Group Corporate Affairs Director
Jeremy Hipkiss
Group Customer and Change Director
Biographies for David, Steven, Mike
and Tina can be found on pages 104
and 105.
The biographies for Bukky, Tim
and Jeremy are as follows:
A. Tim Collins
Group Corporate Affairs Director
B. Bukky Bird
Group Sustainability Director
C. Jeremy Hipkiss
Group Customer and Change Director
Tim is responsible for the Group’s internal and external
communications and public affairs. He is also a Trustee
of the Barratt Developments PLC Charitable Foundation.
Bukky is responsible for the Group’s sustainability
strategy and its delivery. She is a member of the
Sustainability Committee.
Career and experience:
Tim joined the Group in 2014 as a regional Head of
Communications, before becoming Group Head of
Corporate Communications in 2016. He was appointed
to his current role and joined the Executive Committee
in September 2022. Tim brings significant political and
industry experience, having held the roles of Deputy
Director of Communications at the Conservative Party,
Chief of Staff to the Shadow Housing Minister and
Deputy Director External Affairs at the HBF. Tim has
a Law degree from University College London.
Career and experience:
Bukky joined the Group in 2020 and was appointed
to the Executive Committee in September 2022.
She brings a breadth of experience acquired from
leadership roles in strategy, sustainability, business
transformation, engineering, construction and retail
operations. She was previously Chief of Staff to the
Group CEO at Tesco PLC, as well as the Engineering
and Sustainability Director, and before that she worked
at WSP Group PLC where she held senior commercial
and technical roles. Bukky is a qualified Mechanical
Engineer and also holds a Master’s degree in Environmental
Design and Engineering, both from UCL.
Jeremy is responsible for the Group’s customer
journey, including sales, marketing and customer
experience strategy and delivery. In addition, Jeremy
has executive responsibility for IT and business change.
He is also a member of the Sustainability Committee
and a Trustee of the Barratt Developments PLC
Charitable Foundation.
Career and experience:
Jeremy joined the Group in 2008 and has wide
experience in customer experience, marketing and
retail operations, having held a similar role at the Spirit
Group. Prior to that, Jeremy worked for Allied Domecq
PLC and Marston’s PLC, having graduated in economics
from the University of Leeds.
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Regional Managing Directors
A
B
C
D
E
F
G
H
The Group operates through six geographic housebuilding regions, along with a commercial division, Wilson Bowden Developments, and a land promoter Gladman
Developments. The Regional Managing Directors, Managing Director of Wilson Bowden Developments and Managing Director of Gladman Developments are as follows:
A. Doug McLeod
Regional Managing Director –
Scotland
B. Mike Roberts
Regional Managing Director –
Northern
C. David Hesson
Regional Managing Director –
Central
D. Mark Bailey
Regional Managing Director -
East
Doug is responsible for the Group’s
operations in the Scotland Region,
which consists of three divisions and
our timber frame operation at Oregon.
Career and experience:
Doug joined the Group in January 1974.
Formerly Regional Director of Barratt
Scotland and Managing Director of
Barratt North Scotland, he was
appointed to his current role in
January 2017.
Mike is responsible for the Group’s
operations in the Northern Region,
which consists of five divisions. He
is also responsible for the Group’s
commercial function.
Career and experience:
Mike joined the Group in June 2004.
Formerly Managing Director of Barratt
North East, he was appointed to his
current role in January 2017.
David is responsible for the Group’s
operations in the Central Region, which
consists of five divisions. From July
2022, he took over responsibility for
Barratt Partnerships and is also
responsible for Group Major Projects.
Mark has assumed responsibility for the
Group’s operations in the East Region
following Richard Brooke’s retirement
on 31 December 2022. The region
consists of six divisions and BD Living,
our wardrobe manufacturing factory.
Career and experience:
David joined the Group in March 2020 as
Regional Director, and was appointed to
his current position in April 2021.
Career and experience:
Mark joined the Group in 2012 as
Managing Director for the Kent Division,
having previously worked at Redeham
Homes which he owned and where he
was Managing Director. He was
appointed Regional Director of the
Southern Region in October 2016 and
then Group Projects Managing Director
in July 2022. Mark was appointed as
Regional Managing Director – East in
January 2023.
E. Victoria Hesson
Managing Director –
Gladman Developments
F. Russell Glimstead
Regional Managing Director –
West
G. Gary Ennis
Regional Managing Director –
London and Southern
H. Nick Richardson
Managing Director –
Wilson Bowden Developments
Vicky joined Barratt on the acquisition
of Gladman Developments, the land
promotion business acquired by Barratt
in January 2022. In addition to Gladman,
she also provides advice on the Group’s
wider strategic land holdings.
Career and experience:
Vicky has over 20 years’ experience
in the housebuilding industry and has
held various roles within other
housebuilders prior to joining Gladman
in 2013. She has a degree in Architecture
and a Master’s degree in Town and
Regional Planning and is a Chartered
Member of the Royal Town
Planning Institute.
Russell is responsible for the Group’s West
Region, which consists of four divisions.
Career and experience:
Russell joined the Group in 2007
following the acquisition of Wilson
Bowden plc. Formerly Managing
Director of Barratt Bristol, he was
appointed to his current role of Regional
Managing Director for the West Region
in July 2022.
Gary is currently responsible for the
Group’s operations in the London and
Southern Regions, consisting of six
divisions (two in London and four
in Southern).
Career and experience:
Gary joined the Group in 1995. Formerly
Managing Director of Barratt North
London, he was appointed Regional
Managing Director of Southern in
January 2006 and of London in
October 2016.
Nick is responsible for the Group’s
commercial business, Wilson
Bowden Developments.
Career and experience:
Nick joined Wilson Bowden plc in 1991
and was appointed to his current role
in 1999. Nick joined the Group in
2007 following the acquisition of
Wilson Bowden plc. Nick is a
Chartered Surveyor.
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Corporate Governance
Corporate Governance
F
Corporate Governance Report
Introduction and overview
Governance at a glance
Corporate Governance Statement of Compliance
The Company is subject to the Code, which was issued by the
FRC in 2018. The Code can be found on the FRC’s website,
www.frc.org.uk. The Board confirms that, throughout the year
ended 30 June 2023, and as at the date of this report, the
Company has applied all of the principles and complied with all
relevant provisions set out in the Code, except for Provision 38
(Executive Directors’ pension contributions). As set out on page
138 the Company complied with this provision with effect from
1 January 2023 and is therefore now fully compliant. This
report, together with the reports from the Nomination, Audit,
SHE and Remuneration Committees and the other statutory
disclosures, provides details of how the Company has applied
the principles of the Code (pages 102 to 171). The Company has
also complied with the relevant requirements of the FCA’s
Disclosure and Transparency Rules and the FCA’s Listing Rules,
BEIS’s Directors’ Remuneration Reporting Regulations and
Narrative Reporting Regulations and the FRC’s Guidance on
Risk Management, Internal Control and Related Financial and
Business Reporting. The Company’s Board diversity statement
and associated data is included in the Nomination Committee
Report on page 120.
Highlights
During the year, the Board:
∙ agreed the recruitment of a new Chair and Non-Executive
Director;
∙ agreed a 604 unit private rental transaction with CITRA Living;
∙ established a new purpose and values for launch in FY24;
∙ reviewed capital structure and completed a share
buyback programme;
∙ monitored progress on the Diversity and Inclusion strategy; and
∙ signed the Building Safety Long Form Agreement
and the Scottish Safer Buildings Accord.
Caroline Silver
Chair
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Key stats
Gender diversity
62+
Male
Female
Independence
T 13+
62.5%
37.5%
Board tenure
T 62+
12.5%
37.5%
0-3 years
3-6 years
6+ years
Chair
Executive Directors
Independent
Non-Executive Directors 50.0%
62.5%
0.0%
37.5%
Board and Committee attendance
During FY23 the Board held ten meetings. Attendance by each Director while they were a member is set out in the table below.
The Board, led by Jock Lennox as Senior Independent Director, also attended three additional meetings during the year to discuss
the acceleration of the planned Chair Succession1. Attendance at each of the Board Committee meetings is shown on page 116
(Nomination Committee), page 124 (Audit Committee), page 133 (SHE Committee) and page 137 (Remuneration Committee).
Attended
Did not attend
Board
John Allan – Chair
Caroline Silver2 – Chair
David Thomas – Chief Executive
Steven Boyes – Chief Operating Officer and Deputy Chief Executive
Mike Scott – Chief Financial Officer
Katie Bickerstaffe – Non-Executive Director
Jasi Halai3 – Non-Executive Director
Jock Lennox – Senior Independent Non-Executive Director
Chris Weston3 – Non-Executive Director
Nina Bibby4 – Non-Executive Director
Sharon White5 – Non-Executive Director
1 John Allan did not attend any meetings or parts thereof at which his succession was being discussed and stepped down from the Board on 30 June 2023.
2 Caroline Silver joined the Board on 1 June 2023 and took over as Chair on 30 June 2023.
3 Jasi Halai (who was appointed on 1 January 2023) and Chris Weston were unable to attend the January Board meeting due to a prior commitment. Prior to
the meeting, Jasi and Chris provided their views on the meeting agenda which were shared with the other Board members during the meeting. Following
the meeting they were briefed on the business of the meeting and any decisions taken.
4 Nina Bibby did not offer herself for re-election and stepped down from the Board at the AGM in October 2022.
5 Sharon White stepped down from the Board on 30 June 2023. Sharon was unable to attend the June meeting due to another commitment. Prior to the
meeting Sharon provided her views on the meeting agenda which were shared with the other Board members during the meeting. Following the meeting
Sharon was briefed on the business of the meeting and any decisions taken.
Barratt Developments PLC Annual Report and Accounts 2023
109
38
+
37
+
50
+
0
+
38
+
T
S
Corporate Governance
F
Corporate Governance Report continued
Implementation of the Code
Section of the Code
Board leadership and company purpose
The Board:
i.
is responsible for the long-term sustainable
success of the Company, determines
purpose, values and strategy and models the
Group’s culture;
ii.
ensures the necessary resources are available
to the Group; and
iii.
engages with stakeholders to inform its decisions.
Division of responsibilities
The Chair leads the Board, the Executive Directors
manage the business on a day-to-day basis, and
the Non-Executive Directors provide constructive
challenge and strategic guidance.
Board policies and processes are in place to ensure
that the Board functions effectively and efficiently.
Composition, succession and evaluation
The Board regularly reviews its composition to
ensure it remains balanced.
Board appointments are subject to a formal,
rigorous and transparent procedure, and an effective
succession plan is maintained for the Board and
Senior Management.
The Board undertakes an annual evaluation of its
own effectiveness, that of its committees and of
individual Directors.
Audit, risk and internal control
The Board is mindful of the risk environment in
which it operates when making any decisions and
has established formal and transparent policies
and procedures to ensure independence and
effectiveness of internal and external audit functions.
The Board satisfies itself on the integrity of the
financial and narrative statements, and that they
present a fair, balanced and understandable
assessment of the Group’s position and prospects.
It maintains sound risk management and internal
control systems and regularly reviews the principal
and emerging risks impacting the business.
The Board assesses the appropriate appetite for risk
in striving to achieve the Group’s strategic objectives.
Remuneration
The Board, through its Remuneration Committee,
determines Director and Senior Management
remuneration policy and practice in a way
that supports the successful delivery of the
Group’s strategy and promotes its long-term
sustainable success.
The Board ensures Executive remuneration
is aligned to the Group’s purpose and values.
110
How we have applied the Code
Further information
This section details the main activities and outcomes of the Board
in FY23 and how governance contributes to strategy.
The Nomination Committee Report describes management
of conflicts of interest.
The Group’s purpose, strategy, Section 172 Statement and
information on stakeholder engagement (including engagement
with shareholders and employees) are set out in the Strategic
Report. The Group’s culture and values are set out in this report.
Pages 111
Page 118
Pages 2 to 70
Page 112
This section outlines:
∙ Board balance, the division of responsibilities and
delegations; and
Pages 113 to 114
∙ Chair and Non-Executive Director independence.
Page 115
Membership of and attendance at the Board is given in Governance
at a glance, and for the committees in the introductions to each
of the relevant committee reports.
Pages 109, 116,
124.133 and 137
This section details:
∙ the main activities of the Nomination Committee and
their outcomes;
Page 116
∙ the process for Board appointments, succession planning
and promotion of diversity and inclusion; and
Pages 117 to 121
∙ Board and committee evaluation actions and outcomes.
Information on the composition of the Board can be found in
Governance at a glance and the Nomination Committee Report.
Pages 122 to 123
Pages 109 and 116
This section summarises:
∙ the main activities of the Audit Committee and their outcomes;
Page 127
∙ the significant issues the Audit Committee considered regarding
Page 127 and 128
the Financial Statements and how they were addressed;
∙ systems for risk management and internal control and the
Pages 129 and 130
Audit Committee’s review of their effectiveness; and
∙ the Audit Committee’s assessment of the independence and
Pages 130 to 132
effectiveness of the external audit process and the reappointment
of the external auditor.
The Directors’ Statement of Responsibility for a fair, balanced and
understandable Annual Report and Accounts can be found at the
end of the Directors’ Report.
Page 171
The Board’s assessment of the Group’s emerging and principal
risks and information on how these are being managed, together
with the Viability and Going Concern Statements, can be found
in the Strategic Report.
Pages 71 to 100
This section sets out:
∙ information on the Group’s remuneration policy;
∙ how it was operated during FY23, including performance-
based remuneration outcomes, and how independent
judgement and discretion, if any, was applied; and
Pages 142 to 154
Pages 159 to 163
∙ how the remuneration policy will be applied in FY24.
Pages 156 to 158
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Strategic priorities
Strategic principles
Great places
Investing in our people
Leading construction
Customer first
1 Keeping people safe
4 Safeguarding the environment
2 Being a trusted partner
5 Ensuring the financial health
3 Building strong community
of the business
relationships
Main activities undertaken during the financial year
The Board follows an annual agenda to ensure that all key matters are allocated adequate time for discussion. The routine
duties of the Board are detailed in the schedule of matters reserved to the Board (which can be found on the Company’s website
at www.barrattdevelopments.co.uk/investors/corporate-governance). A description of the key non-routine activities of the
Board during the year and how these contributed to the delivery of strategy are as follows:
Key activities and discussions in FY23 and outcomes
Purpose,
strategy, values
and culture
Link to strategic priorities
and principles:
1
2
5
Link to risk:
C
J
Considered and approved proposals for a new Purpose and Values for the Group for launch in FY24.
Reinstated regional visits following COVID and attended sites within the London and Central regions. The Board met
with Senior Management and site and sales office employees who provided an overview of the regional, divisional and
site operations respectively. This enabled the Board to gain a better understanding of how culture is embedded in the
business, and the challenges they face on a day-to-day basis.
Considered the outcome of a review of its Modern Slavery and Human Trafficking Statement, approved the
statement for publication and requested further work was undertaken to obtain positive confirmation the policies
were being adhered to across the Group. The statement can be found on the home page of the Barratt website at
www.barrattdevelopments.co.uk.
Considered progress on diversity and inclusion within the business and discussed ways in which this can be further
embedded in the business including establishing challenging targets for executive and senior management remuneration.
As part of its discussions on driving sales within the current market conditions, the Board explored opportunities
within the private rental sector. Accordingly, it agreed a contract to sell 604 homes to Citra Living, a subsidiary of
Lloyds Bank, see page 26 for further details.
Business
performance
and resourcing
Link to strategic priorities
and principles:
1
2
4
5
Link to risk:
A
B
D
F
K
Approved multiple investments in land. Further information can be found on pages 26 and 27.
Monitored the progress of the Sustainability Committee in embedding sustainability in the Group’s culture and strategy.
Reviewed business resilience in light of the uncertain market conditions and agreed a number of mitigating activities
(further information can be found on page 53.
Reviewed the SHE plan of work, enforcement agency interventions, site monitoring, and IIR. Key areas of future focus
were agreed and are set out on pages 133 to 136.
Discussed Non-Executive Director succession, and the acceleration of the planned Chair succession. Approved the
appointment of a new Non-Executive Director and Chair Designate, on the recommendation of the Nomination Committee.
Reviewed the existing Revolving Credit Facility and agreed to extend it to 2025, linked to internal sustainability targets.
Discussed the allocation of capital and dividend policy and agreed and completed a share buyback programme
to return up to £200m of surplus capital to shareholders.
Risk management
and internal
controls
Link to strategic priorities
and principles:
Reviewed the Company’s appetite for risk, identified emerging risks and reassessed the impact and likelihood
of principal risks and uncertainties affecting the business.
Agreed for management to co-operate with the CMA on their market study into land banking and planning, and
to attend four deep dive sessions to provide the CMA with a better insight into the areas of land banks, planning,
competition and management companies.
Following signature of the Building Safety Pledge to address fire safety issues on buildings 11 metres and above
in FY22, carefully considered the implications of entering into the Building Safety Pledge – Long Form Agreement
and determined that it was in the best interests of the Company and its stakeholders to do so.
Signed up to the Scottish Safer Building Accord, committing to remediate life-critical fire safety works in buildings
over 11 metres that we have developed or refurbished over the last 30 years in Scotland.
1
2
3
5
Link to risk:
F
G
I
Stakeholder
engagement
Link to strategic priorities
and principles:
Reviewed relationships with stakeholders and their views and focus for engagement going forward.
Reviewed the customer journey and suggested a number of elements for possible change.
Considered how to support employees through the cost of living crisis and agreed monetary support
for all employees below senior leadership level to the end of June 2023.
Undertook a corporate broker tender, and appointed UBS as joint corporate broker with Credit Suisse Group AG.
Following the merger of our joint brokers later in the year, appointed Barclays Bank PLC as joint broker in June 2023.
Further details of engagement with our key stakeholders can be found on pages 54 to 65.
1
2
5
Link to risk:
C
E
H
Principal risks
A Economic environment
E Supply chain resilience
B Land and planning
F Legacy properties
C
Government regulation
and political risk
D Construction quality and innovation
G Safety, health and environment
H
Attracting and retaining high-
calibre employees
I
J
Information technology
Environmental, social
and governance
K Business resilience and continuity
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Corporate Governance Report continued
Board leadership and company purpose
Culture in the workplace
The Board sets the culture and tone from the top. It is responsible for ensuring that the right culture is embedded throughout the
business, including in our dealings with stakeholders. It derives from our Vision and Purpose, which has been undergoing a review
with the outcome due to be announced later in FY24. A strong culture that furthers our purpose, and is firmly embedded across the
workforce, underpins our success through the following values agreed by the Board.
Our culture
Do the right thing
Ensure what we do is in line with
our policies and procedures, and
in the interests of our stakeholders.
Customer focus
Strive to meet the expectations
and needs of our customers,
both internal and external.
Resilience and adaptability
Look for innovative ways to
improve efficiencies across the
organisation and recognise there
is always room for improvement.
Be willing to change the way we do
things to meet the requirements
of stakeholders and those set by
legislation or regulation.
Pride in what we do
Aim to operate in a way that
satisfies the expectations of
our stakeholders particularly
in terms of quality and service.
Culture in action: We have always believed leaseholders should not have to pay for necessary
remediation to fix building safety issues, caused by the design, construction or refurbishment
of their buildings. Following our signing last year of the Building Safety Pledge, we joined the
first wave of developers to sign the Scottish Safer Buildings Accord developer commitment
letter, further details of which can be found on pages 68 and 221. We have developed a model
with the government to support the resettlement of Afghan refugees with 19 homes identified in
tranche 1, and tranche 2 launched since the end of FY23. We are discussing ways to encourage
other housebuilders to participate in the model. Further information on how we look after the
interests of our stakeholders can be found on pages 57 and 58.
Culture in action: During FY23, we continued to monitor the impact of rising mortgage rates
on our customers. Consequently, we adjusted the level of incentives on offer in order to better
serve customers facing cost of living challenges. We also relaunched the Key Worker Deposit
Contribution scheme, which was due to come to an end this year. We continue to engage with
mortgage providers on Green mortgages, which would reward customers for purchasing our
houses which are all EPC rated B or above. We have recently announced an agreement with
Citra to develop a further 604 much needed high quality sustainable homes for private rental
Further details can be found on page 26.
Culture in action: Customer demand for housing declined during FY23, and after satisfying
the forward order book in the first half of the year, our teams switched their focus to carefully
managing build cost inflation and maintaining disciplined investment in work in progress
to match the fall in market demand.
Culture in action: We have won multiple awards throughout FY23 for quality and service,
including an HBF 5 star rating for the 14th consecutive year, and 96 NHBC Pride in the Job
awards. These are detailed on page 15. We are particularly proud to be leading the industry
in sustainability, including participation in the eHome2 project researching and testing new
methods of construction to sustainably mitigate the effects of climate change.
How the Board measures and assesses culture
The Board measures and assesses culture using both
internal and external KPIs, as follows:
∙ Safety, health and the environment – there is zero tolerance
towards breaches relating to the health and safety of our
employees, suppliers, sub-contractors and the general public.
The Group is also conscious of the impact that its operations
have on the environment. The Board is updated regularly on
health, safety and environmental matters, and on any new or
ongoing investigations and their outcomes. The SHE Audit
compliance KPI, which underpins the quality and service annual
bonus performance measure, is set out on page 17, and other
environmental and safety targets are detailed on pages 16 and
17.
∙ Customer satisfaction – this is assessed using customer care
survey responses and recommendation scores (KPIs can
be found on page 16), which form part of the annual bonus
performance measures for Executive Directors, and awards
such as the HBF 5 star rating and NHBC Pride in the Job
awards (details of which can be found on page 15), all of
which are regularly reported to the Board.
∙ Employee engagement survey – a survey is conducted annually
to assess how the business is meeting the expectations of its
employees. It also contains several culture-related questions,
to monitor and assess how well the culture is embedded. The
results of the survey are reviewed by the Executive Committee
and Senior Management team, as well as by the local teams,
with key findings reported to the Board. The outcome of our
latest employee engagement survey is detailed on page 35.
∙ Employee retention – our employees are our greatest asset.
It is important that we do everything that we can to retain them,
and this is one of the pillars of our people strategy. The Board
monitors employee leaver numbers and reasons, and the steps
being taken to attract, recruit and retain employees.
∙ Policies and procedures compliance – core governance
policies are reviewed annually by the Board with employees
required to regularly complete a variety of e-learning modules.
Completion levels are reported to the Board. Business policies,
processes and procedures are reviewed regularly. Our internal
audit team conduct regular reviews of compliance with policies,
processes and procedures, and test that they remain up to date.
The team’s findings are reported to the Audit Committee and
ultimately to the Board. The internal audit team also provides
updates to the Audit Committee on any matters raised via the
Group’s whistleblowing procedure (see page 130).
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Board balance
Board roles and their responsibilities
Chair
Caroline Silver
∙ Leads the Board in the achievement of its objectives, sets its
agenda and chairs its meetings.
∙ Shapes the culture in the Boardroom.
∙ Responsible for the effectiveness of the Board and its
governance.
Senior Independent Director
Jock Lennox
The following are in addition to his role and responsibilities
as an Independent Non-Executive Director.
∙ Available to shareholders, when required, to address any
material issues or concerns which the Chair and/or Chief
Executive have failed to resolve.
∙ Facilitates the effective contribution of Non-Executive Directors
and constructive relations between Executive and
Non-Executive Directors.
∙ Available to shareholders, when required, to listen to their
views to gain a balanced understanding of their issues and
concerns.
∙ Ensures the Board receives accurate, timely and clear information.
∙ Responsible for arranging inductions and continued
development for the Directors.
∙ Evaluates the performance of the Chair, at least annually, with
the Non-Executive Directors, and leads the process for
the Chair’s succession.
∙ Ensures effective communication with shareholders and other
stakeholders, and participates in corporate relations activities.
∙ Acts as a sounding board for the Chair and, if necessary,
an intermediary for the other Directors.
Chief Financial Officer
Mike Scott
∙ Develops and implements the Group’s
financial strategy and policies.
∙ Responsible for the management
of the finance, tax, internal audit,
treasury and investor relations
functions.
∙ Supports the Chief Executive with his
corporate relations responsibilities
with shareholders and other
stakeholders.
∙ Manages the Group’s relationship with
the external auditor.
∙ Manages the Group’s relationships
with its lending banks.
∙ Chairs the Risk Committee.
∙ Co-chairs the Workforce Forum.
Chief Executive
David Thomas
∙ Develops the Group’s strategy for the
enhancement of long-term shareholder
return taking into account the needs of
the Group’s stakeholders.
∙ Leads the implementation of the Group’s
strategy approved by the Board.
∙ Responsible for the day-to-day
leadership and management of the
operational activities of the Group in
accordance with overall strategy and
policy as determined by the Board.
∙ Chairs the Executive Committee through
which he carries out his duties.
∙ Oversees corporate relations with
shareholders and other stakeholders.
∙ Responsible to the Board for
sustainability policies and practices
of the Group.
∙ Co-chairs the Workforce Forum.
Chief Operating Officer and
Deputy Chief Executive
Steven Boyes
∙ Responsible for the Group’s
operations.
∙ Day-to-day responsibility for safety,
health and environment issues,
promoting the well-being of
employees.
∙ Responsible for our procurement
function and our land promoter
business.
∙ Responsible for ensuring stakeholder
requirements are appropriately
addressed.
∙ Chairs the Operations Committee
meetings, the other members of which
include the Regional Managing
Directors.
∙ Co-chairs the Workforce Forum.
Independent Non-Executive Directors
Katie Bickerstaffe, Jasi Halai, Jock Lennox and Chris Weston1
∙ Provide an appropriate level of scrutiny, and constructively
challenge the Executive Directors, holding management to
account and ensuring the needs of stakeholders are
appropriately considered.
∙ Using the broad range of their experience and external
perspective, provide specialist advice and an independent
perspective in developing strategy.
∙ Monitor the implementation of the Group’s strategy within
its risk and control framework and ensure the integrity of
financial reporting.
∙ Ensure that recruitment and succession planning is appropriate
and mindful of diversity and balance.
∙ Review and refresh Remuneration Policy in the context of
stakeholder interests, and ensure it is implemented appropriately.
1 Nina Bibby and Sharon White were Independent Non-Executive Directors
during the year but stepped down on 17 October 2022 and 30 June 2023
respectively. Caroline Silver was an Independent Non-Executive Director
from 1 June 2023 to 30 June 2023 when she succeeded John Allan as Chair.
Company Secretary
Tina Bains
∙ Supports the Chair and Chief Executive in fulfilling their
duties especially in respect of induction, training and
Board and Committee effectiveness evaluations.
∙ Available to all Directors for advice and support.
∙ Keeps the Board regularly updated on governance matters
and best practice.
∙ Ensures Group policies and procedures are maintained
and updated on a regular basis.
∙ Attends and maintains a record of the matters discussed
and approved at Board and Committee meetings.
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Corporate Governance Report continued
Division of responsibilities
Decisions, matters reserved to the Board and delegated authorities
The Board makes decisions on strategy and on items set out in the matters reserved for it. It also delegates various operational decisions to
several Board and management committees (see below). The schedule of matters reserved to the Board and the Terms of Reference of the
Board Committees are available on the Company’s website at www.barrattdevelopments.co.uk/investors/corporate-governance. As sustainability
is integral to the strategy of the business, details of the Sustainability Committee including members, attendance and actions, can be found in the
Strategic Report on page 42.
Board Committee
Group Management Committee
Audit Committee
∙ Monitors the integrity of the Group’s
Financial Statements and formal
announcements on its financial
performance, including reviewing
financial reporting judgements
contained within them.
∙ Advises the Board on whether
the Group’s Annual Report and
Accounts are fair, balanced and
understandable, and provides
the information necessary for
shareholders to assess the Group’s
position and performance, business
model and strategy.
∙ Provides oversight of non-financial
information, including sustainability.
∙ Reviews the Group’s internal
financial controls and its systems
for internal control and risk
management.
∙ Monitors and reviews the
independence, objectivity and
effectiveness of the external auditor
and the internal audit function, and
reviews and recommends to the
Board the reappointment,
remuneration and terms of
engagement of the external auditor.
∙ Develops and implements the
Group’s policy on the engagement
of the external auditor to supply
non-audit services.
Remuneration Committee
∙ Designs and implements the
Group’s overall remuneration
strategy and policy, ensuring
alignment with purpose
and strategy.
∙ Sets the remuneration and
determines the outcomes for the
Executive Directors and Senior
Management.
∙ Monitors performance of long and
short-term incentive schemes
against both financial and
non-financial targets.
∙ Considers the remuneration and
related policies, of the wider
workforce when determining
Executive Directors and Senior
Management’s remuneration
and incentives.
Nomination Committee
∙ Monitors the composition of the
Board and its Committees to ensure
a balance of skills, experience and
knowledge, and their progressive
refreshment.
∙ Reviews succession plans for Board
and Senior Management to ensure
there is a diverse pipeline.
∙ Promotes diversity of Board
Directors and Senior Management.
∙ Undertakes annual effectiveness
evaluations of the Board, its
committees and individual
Directors.
Disclosure Committee
∙ Comprising any two of the Chief Executive, Chief Financial Officer and the
Company Secretary, meets as required to ensure that the Company remains
compliant with the requirements of the UK Market Abuse Regime.
Safety, Health and Environment Committee
∙ Focuses on the prevention and mitigation of key operational risks relating
to SHE.
∙ Monitors compliance with the SHE management system.
∙ Oversees direction and implementation of SHE policies and procedures.
Sustainability Committee
∙ Reviews and scrutinises
sustainability strategy and its
implementation by the business.
∙ Reviews and approves plans by the
business to mitigate risks and
leverage opportunities relating to
sustainability and climate changes.
∙ Develops and implements ESG
policies and monitors compliance
against these.
∙ Scrutinises sustainability
performance incentives for
consideration by the Remuneration
Committee.
∙ Advises the Board on the appetite
and tolerance with respect to ESG
risks.
∙ Oversees carbon emission
science-based targets and
recommends changes
where necessary.
114
Risk Committee
∙ Reviews the effectiveness of the
Group’s internal control policies and
procedures for the identification,
assessment and reporting of risks.
∙ Assesses individual key risks on a
rolling basis (including the
identification of the Group’s principal
and emerging risks) together with the
appropriateness of any mitigations.
Land Committee
∙ Reviews and approves all land
acquisition and disposal proposals
across the Group.
∙ Refers proposals to the Board for
approval depending on the value of the
land acquisition or its complexity, e.g.
joint venture arrangements.
Treasury Operating
Committee
∙ Reviews the Group’s treasury
arrangements and approval of changes
to debt facilities.
∙ Obtains Board approval for certain
types of facility and where the facility
is above the levels delegated to the
Treasury Operating Committee.
Allotment Committee
∙ Approves the allotment of shares
within dilution limits and within the
authorities obtained from
shareholders.
Operations Committee
∙ Manages operational performance.
Safety, Health and
Environment Operations
Committee
∙ Develops the SHE strategy
for the Group.
∙ Ensures that SHE policies and
procedures are adequately
implemented and adhered to.
∙ Monitors the effectiveness of
the Group’s SHE systems.
∙ Keeps up to date with changes in
legislation surrounding SHE matters.
Board
Chief
Executive
Executive
Committee
Chief
Operating
Officer
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Board independence
All of our Non-Executive Directors were independent in
character and judgement during the financial year, which is
vital for them in carrying out their respective roles effectively.
Caroline Silver was considered to be independent on
appointment to the Board and on taking the role of Chair.
This year’s review of Directors’ conflicts of interest confirmed
that none of the Non-Executive Directors have any business or
other relationship with the Group (or other outside interests)
that might influence their independence or judgement. None of
the Non-Executive Directors, or the Chair, has been an employee
of any Group company or had a material business relationship
with them. None of them has close family ties with any of the
Company’s advisers, Directors or senior employees, or holds
cross-directorships or has significant links with other
Directors. None of them represents a significant shareholder.
The Board meets the Code requirement for at least half the Board
(excluding the Chair), to be independent (as defined by the Code)
Non-Executive Directors. A breakdown of the independence of
the Board members is shown on page 109.
The Chair and each of the Non-Executive Directors have
demonstrated their commitment to the business during the
year, through their attendance at several unscheduled Board
calls convened at short notice to discuss a variety of issues
requiring decisions outside the normal scheduled meetings.
The Chair and the Non-Executive Directors meet regularly
without the Executive Directors being present, usually prior
to or immediately following Committee meetings, and five
of these meetings have been held during the financial year.
Internal controls and risk management
The Board monitors and regularly reviews the effectiveness
of the Group’s risk management and internal control systems,
including controls related to the material financial, operational
and compliance performance (see the Audit Committee Report
on pages 124 to 132).
The internal audit team has developed a risk framework for
all business functions, which has been approved by the Audit
Committee. This framework forms the basis of the internal
control audit plan for the year ahead, which tests if key controls
are being applied effectively in each operating division. Material
issues identified during internal audits and follow-up action
plans are reviewed by the Executive Directors and by the Board.
Any necessary actions are immediately taken to remedy any
significant failings in the internal control system. Further
details of the work undertaken by internal audit can be found
on page 130.
The Group’s system of internal control is designed to manage
risks that may impede the achievement of the Group’s business
objectives, and identify and appropriately manage activities
where there is a high risk of corruption (including bribery)
amongst employees, partners or intermediaries, rather than
to eliminate those risks entirely. The system of internal control
therefore provides only reasonable, not absolute, assurance
against material misstatement or loss. The system of internal
control does, however, provide reasonable assurance that
potential issues can be identified promptly and appropriate
remedial action taken. Further details can be found in the risk
management section of the Strategic Report (pages 71 to 100).
The Group operates internal controls to ensure that the Group’s
Financial Statements are reconciled to the underlying financial
ledgers. A review of the consolidated accounts and Financial
Statements is completed by management to ensure that the
financial position and results of the Group are
appropriately reflected.
The Board has not identified, nor been advised of, any failings or
weaknesses that it has determined to be significant. Therefore,
a confirmation of necessary actions has not been
considered appropriate.
Fair, balanced and understandable
The Board has considered and reflected on whether the Annual
Report and Accounts are fair, balanced and understandable.
As part of its considerations, the Board has:
∙ reflected on the feedback shareholders provided on our
2022 Annual Report and Accounts;
∙ set aside adequate time to review and discuss significant
areas of the 2023 Annual Report and Accounts, assessing
its tone, balance and language, while being mindful of the
requirements of the Code and the need for consistency
between the narrative section of the Annual Report and
the Financial Statements; and
∙ considered the recommendation from the Audit Committee
that the report was “fair, balanced and understandable”. The
process undertaken by the Audit Committee to support the
Board’s assessment can be found on page 129.
The Board endorses the recommendation of the Audit Committee
that the FY23 Annual Report and Accounts are fair, balanced
and understandable, and its formal statement on this is
contained within the Statement of Directors’ Responsibilities on
page 171.
On behalf of the Board
Caroline Silver
Chair
5 September 2023
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Nomination Committee Report
Board composition, succession and evaluation
Our approach to Board and
Committee appointments,
succession and evaluation
Committee membership and attendance1
There were three meetings held during the year ended 30 June 2023. The table
below shows the attendance of each Director whilst a member of the committee.
Attended
Did not attend
Meetings attended
Committee members
Caroline Silver1
John Allan2
Katie Bickerstaffe
Jasi Halai3
Jock Lennox
Chris Weston3
Nina Bibby4
Sharon White5
Caroline Silver
Chair of the Nomination Committee
Focus in the reporting year
∙ Undertook a robust recruitment process for the
appointments of both Jasi Halai and Caroline Silver.
∙ Assessed the skills and diversity on the Board
and its Committees.
∙ Reviewed the succession plans for the Executive Directors
and Senior Management.
Priorities for FY24
∙ To further assess the composition (including size and
diversity) of the Board and its Committees.
∙ Ensure completion of Caroline Silver’s induction process.
1 Caroline Silver joined the Board and the Committee on 1 June 2023
and took over as Chair of the Committee with effect from 30 June 2023,
and no Committee meetings have taken place since then.
2 John Allan did not attend any meetings or parts thereof where his
succession was being discussed.
3 Jasi Halai (who was appointed on 1 January 2023) and Chris Weston were
unable to attend the January meeting due to a prior commitment. Prior to
the meeting, Jasi and Chris provided their views on the meeting agenda
which were shared with the other Committee members during the
meeting. Following the meeting they were briefed on the business of the
meeting and any decisions taken.
4 Nina Bibby did not offer herself for re-election and stepped down from
the Board at the AGM in October 2022.
5 Sharon White stepped down from the Board on 30 June 2023.
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Statement from the Chair of
the Nomination Committee
I am pleased to present my first Nomination Committee Report
having taken over as Chair from John Allan on 30 June 2023.
It has been a busy year for the Nomination Committee with a
number of changes taking place with the composition of the
Board. I would like to thank John Allan and Jock Lennox for
steering the Committee through each of these. Full details
of the recruitment processes can be found on pages 119
and are summarised below.
The Nomination Committee has throughout FY23 acted
in accordance with its Terms of Reference (see page 118)
as delegated to it by the Board. The responsibilities of the
Nomination Committee are summarised on page 118.
Board changes and succession planning
Following a thorough recruitment process the Nomination
Committee appointed Jasi Halai as a Non-Executive Director
with effect from 1 January 2023. Jasi succeeds Nina Bibby who,
having completed nine years of service, stepped down from the
Board at the AGM in October 2022. In addition, the Nomination
Committee undertook a robust recruitment process to appoint
me as a Non-Executive Director and Chair to take over from
John Allan, who stepped down from the Board on 30 June 2023.
This search was led by Jock Lennox, and John Allan did not
attend any meetings whilst his succession was being discussed.
I would like to take this opportunity to thank Jock for chairing
the additional meetings held to discuss and come to a decision
on the acceleration of the planned Chair’s succession and for
guiding Board members through the process seamlessly.
As announced in January 2023, Sharon White stepped down earlier
than expected as a Non-Executive Director on 30 June 2023, in
order to reduce her non-executive commitments. Sharon made a
significant contribution to the Board during her five years with us,
including in the last few years as the Designated Non-Executive
Director for Workforce Engagement. I will be taking over as the
Designated Non-Executive Director for Workforce Engagement.
We are pleased that Nigel Webb has agreed to join the Board as a
Non-Executive Director with effect from 1 October 2023. Nigel
brings a wealth of experience and knowledge in property,
construction and land which complement the existing skills on the
Board and address some of the skills gaps identified.
The Nomination Committee will continue to undertake detailed
work on succession planning at Board, Senior Management and
junior levels to ensure we have a sufficiently diverse pipeline
and the right skills and experience to drive our strategy forward.
Skills and experience of the Board
As part of the recruitment process for the new Non-Executive
Director and the new Chair, the Nomination Committee reviewed
the composition, skills, experience and diversity of the Board
and its Committees. This highlighted the need to identify candidates
with skills in, amongst other areas, financial experience to
support the Chair of the Audit Committee, which both Jasi Halai
and I possess. A further review of skills was carried out during
FY23, and it was agreed that any further recruitment would
focus on land/construction, which will be addressed with the
appointment of Nigel Webb.
and experience but also female and ethnic representation.
The Nomination Committee and the Board were therefore
disappointed when more than 20% percent of votes were cast
against the re-election of John Allan at the 2022 AGM. Having
engaged with those shareholders who voted against, it was evident
that this was due to the fall in the level of female representation on
the Board following Nina Bibby’s departure. They did however
acknowledge that had they been aware of the recruitment process
ongoing at the time, the shortlist for which consisted entirely of
female candidates, they would have voted in favour of the resolution.
As set out earlier in my statement, since the October 2022 AGM,
various changes have been made to the composition of the
Board. With my appointment as Chair and of Jasi Halai as a
Non-Executive Director, we meet the recommendations to have
a woman in a senior Board position (Chair, CEO, CFO or SID)
and to have at least one member on the Board from a minority
ethnic background (as defined by the FTSE Women Leaders
Review and the Parker Review). Our female representation
reached 40% on 1 June 2023, when I joined the Board. As a
result of the early departures of Sharon White and John Allan,
our female representation on the Board is currently at 37.5%.
At the point of making an offer to Nigel Webb to join as a Non-
Executive Director, the Nomination Committee was conscious
that female representation on the Board would fall to 33.33%. The
Nomination Committee, and subsequently the Board, decided
that Nigel was the best candidate for the role given that he
possesses the skills, knowledge and experience in property,
construction and land which complement those of the existing
Board members. We are however fully committed to meeting
the recommendation to have at least 40% female representation
on the Board by the end of 2025. This is a key priority for the
Nomination Committee and the Board.
Information on the Board’s diversity targets as required by the
UK Listing Rules, together with accompanying numerical data,
is set out on page 120. In addition, the Nomination Committee
has reviewed its Board diversity policy, which applies to the
Board and its committees, to ensure it remains fit for purpose.
The Nomination Committee also ensured that the Board
considered whether diversity and inclusion across the wider
business was being progressed satisfactorily. This review included
talent succession and attraction, and the business’ credentials as
a diverse and inclusive employer. Further information on the
Company’s progress on diversity and inclusion initiatives can be
found on pages 120 and 121 and in the Strategic Report on pages 35
and 36.
FY24 priorities
Our key priorities for FY24 are the continued focus on succession
planning and training, particularly given the recent changes
to the Board. From FY24 onwards, it has been agreed that
diversity and inclusion at all levels across the business will be a
matter for the Board to monitor directly rather than through the
Nomination Committee. The respective Terms of Reference
have been updated accordingly.
Further details of the work undertaken by the Nomination
Committee during the year are set out on the following pages.
Diversity and inclusion
The Nomination Committee fully understands the importance
of having diversity on the Board, not only in terms of skills
Caroline Silver
Chair of the Nomination Committee
5 September 2023
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Nomination Committee role and activity FY23
Membership and attendance at meetings
The membership of the Nomination Committee and the attendance at each of its scheduled meetings is set out on page 116.
The majority of Committee members are considered independent by the Company and in accordance with the Code. Their
biographies and qualifications are shown on pages 104 and 105.
Role and main activities undertaken by the Committee during the financial year
The Nomination Committee’s responsibilities are set out in its Terms of Reference, which can be found on the Company’s website
at www.barrattdevelopments.co.uk/investors/corporate-governance. In addition to its annual tasks, such as the review of its
Terms of Reference, effectiveness and approval of this report, the Committee carried out the following work during the year:
Priorities
Governance
Work carried out and outcomes
Reviewed the need for training and development in areas identified by Board members including,
but not limited to, digital security and technology, Government relations, ESG/Climate.
Composition and Succession Considered candidates and proposed the appointment of an additional Non-Executive Director
and Chair designate.
Considered succession plans for Non-Executive Directors, Executive Directors, Executive
Committee and Regional Managing Directors, taking into account the need for diversity.
Further information can be found above.
Directors’ conflicts of interest
The Board has authorised the Nomination Committee to oversee
the process for reviewing and making recommendations to the
Board concerning any actual or potential conflicts of interest
that may arise for any Board member, including details of any
terms and conditions that it deems necessary to impose on any
authorisation given. Throughout FY23, the Company Secretary
maintained a register of Directors’ conflicts of interest. A
summary of this register was reviewed at each Board meeting
so that it continues to remain accurate and current. The full
register is reviewed annually by the Nomination Committee, and
recommendations are made to the Board regarding any changes
to the authorisations that may be required. The Board, when
authorising any conflict or possible conflict of interest, does
not count in the quorum the Director whose conflict or possible
conflict is being discussed and reserves the right to exclude a
Director from a meeting whilst a conflict or possible conflict
is being considered. The Board may revoke or vary any
authorisation at any time. The procedures have operated
effectively during the year.
Board changes and succession planning
Succession planning is a live topic at Board and Nomination
Committee meetings. All appointments and succession plans
are objective, based on merit and the need to promote diversity.
For Non-Executive Directors, the Nomination Committee annually
reviews the length of service for each, to determine if a new
appointment needs to be made. The Nomination Committee
takes into account the cyclicality of the business, as lessons
gained through one property cycle can be useful during the next.
For Executive Directors, the Nomination Committee will
annually discuss the succession plans for the other Executive
Directors and Senior Management below Board level with
the Chief Executive. This process helps to identify suitable
individuals who could be able to fill senior managerial or Board
positions in the future and to determine and address their
development needs. As part of their development, senior
managers are invited to attend part of a Board meeting to
present on their specialist area. This also enables the Board
to assess the quality of internal talent, and the individual to
get a greater understanding of the workings of the Board.
Succession plans are in place across the business for the wider
workforce and our work on developing our employees is set out
in the Strategic Report on pages 35 to 39. When considering
succession plans, the Board remains cognisant of the need to
ensure that there is a diverse range of individuals included in
the plan. The business continues to promote diversity and
inclusion from within, and further details of the work that has
been undertaken in this area can be found on pages 35 to 39.
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Board appointment process
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
The Nomination Committee
reviewed the length of tenure
of each Non-Executive Director,
determined the gaps in experience
and considered the existing
balance of gender, ethnicity and
social backgrounds on the Board
to help identify the need to recruit.
With Nina Bibby stepping down in
October 2022 and John Allan due
to complete nine years’ service
in August 2023, the Nomination
Committee agreed to continue the
process to identify and appoint at
least one Non-Executive Director
and a new Chair.
The Nomination Committee
reviewed and approved
an outline brief and role
specification, and appointed
Russell Reynolds1, to
identify suitable candidates
from a diverse pool of
individuals. The Nomination
Committee delegated
authority to two sub-
committees to select
candidates for a shortlist.
The first was led by John
Allan (for the Non-Executive
Director) and the second by
Jock Lennox (for the Chair).
The short-listed
candidates met
with the respective
sub-committee of
the Nomination
Committee, with the
preferred candidates
going on to meet the
remaining members
of the Board.
The Nomination
Committee agreed
the preferred
candidates for each
position, based on
the range of skills,
experience and
knowledge that
complemented
those of the existing
Board members and
recommended the
same to the Board.
The Board considered
each candidate
on their merits
and approved the
appointment of Jasi
Halai as a Non-
Executive Director
with effect from
1 January 2023 and
Caroline Silver as a
Non-Executive Director
and Chair Designate
with effect from
1 June 2023.
1 Russell Reynolds Associates are occasionally requested to assist the Company with searches for senior management positions. They have no other
connection with the individual Directors or the Company. Russell Reynolds Associates is accredited by the Enhanced Voluntary Code of Conduct for
Executive Firms for its support to FTSE 350 Boards in increasing gender diversity. It is also a Co-Founder of The 30% Club, an advocate for improved
gender balance on boards. Specific guidance was given to Russell Reynolds Associates to ensure diversity within the candidate long and short lists
whilst identifying candidates who had the relevant skills and experience required on the Board.
Induction
Jasi Halai has been through a detailed
induction process and Caroline Silver is
part way through hers. The induction
process was designed to give each of
them a good understanding of the
business and how it operates to help
them fulfil their respective roles
effectively. As part of this, they received
a comprehensive induction pack, and
had meetings with each of:
∙ the other Board members;
∙ the Company Secretary;
∙ members of the Executive Committee;
∙ the Regional Managing Directors and
teams (at the Regional offices);
∙ heads of key Group functions;
∙ key external corporate advisers; and
∙ the external auditor.
Their inductions also included site visits,
and details of other opportunities available
as part of the induction process. John
Allan met with Jasi Halai to listen to her
views and feedback on the induction
process, which was seen to be
comprehensive and well structured. Jock
Lennox and/or the Company Secretary will
meet with Caroline Silver to gain her views
on her induction process once completed.
Q&A with Caroline Silver - Chair and Jasi Halai - Non-Executive Director
We asked both Caroline Silver and Jasi Halai about their experience of joining Barratt.
What skills and experience do you
bring to the role?
Caroline: I have considerable experience
in chairing boards to obtain the best
from colleagues, working together in
a challenging yet supportive way. I am
experienced in helping shape strategy
and vision and my financial background
is helpful. I bring lots of experience in
working with investors.
Jasi: I bring particular expertise in finance
and accounting, with financial planning
and analysis to the role.
How have you found the
induction process?
Caroline: It is well organised. I am
spending time with every member of
the leadership team and am enjoying
getting out and about across the
business, meeting colleagues and better
understanding the culture of the business
and the challenges they face.
Jasi: Extremely welcoming, insightful and
effective. I have been pleasantly surprised
by how Barratt delivers. Its people take
pride in what they do and this has been
very evident not only through the Board
and Committee meetings I have attended
but also through the site visits I have conducted.
What were your first impressions
of the business when you were
approached?
Caroline: When I was first approached
for the role, I knew very little about
housebuilders. As I looked, I saw a
company that leads the industry, in terms
of quality, customer and sustainability and
is operationally and financially strong.
Jasi: I was impressed by Barratt’s 60-
year history, and its focus on innovation
in construction. I was also interested
in Barratt’s commitment to building
sustainably for people, nature and places,
whilst providing sustainable financial returns
for shareholders.
What made you decide to join
the business?
Caroline: I was impressed with the
diversity of background and experience on
the Board and the Non-Executive Directors’
understanding and involvement. It was
clear the executive team are professional,
experienced, purpose driven with high
integrity and committed to the long-term
success of the Company. This was key
for me. The key advisers I met endorsed
the impression I had of a financially and
operationally sound company, with a great
team and plenty of ambition.
Jasi: Barratt’s vision and impact, its
contribution to the UK economy and the
communities in which it operates. Barratt
creates great places to live, leaving a
legacy in every project it delivers, and its
regeneration projects are commendable.
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Reappointment and re-election of Directors
Non-Executive Directors are appointed by the Board for up to
three three-year terms subject to annual shareholder re-election
and a particularly rigorous review prior to a third term being
agreed. Non-Executive Directors will normally step down from
their position on the Board and its Committees at the AGM
following their ninth anniversary. The length of tenure of Board
members is shown on page 109. Each of the Directors has been
subject to a formal performance evaluation process during the
year, as set out on page 123. The Nomination Committee and
the Board are satisfied that each Director continues to be
effective in, and demonstrates commitment to, their respective
roles. All Directors will be standing for election or re-election at
the forthcoming AGM. Biographical details of each of the
Directors are set out on pages 104 to 105 of this report, along
with reasons why their contribution is, and continues to be,
valuable to the Company’s long-term sustainable success, and
can also be found in the Notice of the 2023 AGM.
Diversity and inclusion
Board diversity
During the year, the Board reviewed its policy on diversity and
inclusion. The objective of the policy is to ensure that diversity
is reflected within the composition of the Board and throughout
the business in its broadest sense, including gender, ethnicity,
age, disability, religious belief, sexuality, social class, education
experience and ways of thinking. The policy aims for continuous
improvement at Board and Senior Management level on all
these elements of diversity and to identify the most suitable
candidate to join the Board having regard to the individual’s
skills, experience and knowledge. It also seeks to ensure that,
in managing any senior appointment and in succession planning
more broadly, the Nomination Committee has regard to the
recommendations of the Parker and the McGregor-Smith
reviews on ethnicity and race and the benefits of diversity,
including gender, ethnicity, social background and cognitive
and personal strengths. A copy of our Board diversity policy can
be found at: www.barrattdevelopments.co.uk/sustainability/
our-policies.
A full explanation of the diversity on the Board and the steps
being taken to improve our position are set out in the Nomination
Committee Chair’s report on page 117. In accordance with the
Listing Rules, the following tables detail the diversity profile of
the Board and the Executive Committee as at 30 June 2023.
This data was collated from our HR database which has been
populated using information provided by each individual
employee, including Non-Executive Directors. Individuals are
asked to select from a series of options on both sex/gender and
ethnicity including the below options. Diversity information for
employees below the Executive Committee can be found on
pages 35 to 39.
Reporting table on sex/gender representation as at 30 June 20231
Men
Women
Not specified/prefer not to say
Number
of Board
members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number
in executive
management
Percentage
of executive
management
5
3
0
62.5
37.5
0
3
1
0
5
2
0
71.4
28.6
0%
Reporting table on ethnicity representation as at 30 June 20231
White British or other White
(including minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/prefer not to say
Number
of Board
members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number
in executive
management
Percentage
of executive
management
7
0
1
0
0
0
87.5
0
12.5
0
0
0
4
0
0
0
0
0
5
0
1
1
0
0
71.4
0
14.3
14.3
0
0
1 A full explanation regarding diversity is provided in the Chair’s Statement on page 117 of this report.
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Diversity and inclusion throughout the business
The Nomination Committee and the Board recognise the importance of a diverse workforce, at all levels of seniority. Promoting
diversity at Senior Management level, and more generally across the workforce, remains an objective for David Thomas, our
Chief Executive. David, together with the new Group HR Director, will continue to support the Group Head of Diversity and Inclusion,
to drive the agenda forward in this area and undertake a full review of the overall strategy for 2025. The Group’s aim is for its
employee profile to mirror that of the communities in which it operates and provide an inclusive culture, where everyone can thrive.
Further information on the Group’s progress on diversity and inclusion can be found on pages 35 to 39. The main objectives, how
they are implemented and progress towards them are set out below.
Objectives
Implementation
Progress
Talent: HR processes that
support a wide range of
skills and backgrounds
Ensure we have a detailed
understanding of our people
Review the HR lifecycle
activity and ensure it
is inclusive
Tailored support
programmes and
early careers
Leadership: Role
models & allies –
leading the change
Leading inclusivity
workshops
Support difference –
Employee network
sponsorship
Reverse mentoring
A deep dive of data has been undertaken to identify our levels of
representation by grade, role and function for all divisions and Group
Service Centre teams. This is reported monthly and reviewed in a
quarterly scorecard to track change. We also review HR lifecycle data
by gender, ethnicity, sexual orientation and disability, from application
through employee engagement and exit interview data, to ensure a full
understanding of the employee experience for all.
Across the HR lifecycle we have made changes to ensure a more
inclusive approach, including a review of our preferred supplier list
for resourcing agencies, embedding Dignity & Respect into all our
talent and early career programmes, a review and update of family
friendly policies and externally delivered exit interviews.
Catalyst, a female support programme, has run for another successful
year and has been joined by Spotlight our support programme for ethnic
minority colleagues. Employees are encouraged to self nominate and
the sessions are externally facilitated.
All Regional and Managing Directors have received face-to-face
workshops, with external facilitation on creating Dignity and
Respect for all and how they create psychological safety.
Each of our Employee Networks has an Executive Committee
member as their sponsor, who supports the activities and
objectives of the respective group.
Both our gender and ethnicity support programmes include
mentoring, which is an opportunity for both our leadership mentors
and the programme mentees to share and learn.
We were delighted to take part in the inaugural 30% Club, Change
the Race Ratio programme, which includes cross-organisational
mentoring for high potential talent by the Chief Executive.
Shift attitudes:
Support our people’s
understanding to create
the right experience
for all
Hear the employee voice
Role models and celebrations
Zero tolerance on lack
of dignity & respect
We have five Employee Network groups, offering a range of
activities from webinars, leading discussions, marking of key
events and signposting support – Gender, Ethnicity & Religion,
Disability, Families (including Carers) and LGBT+. Each network
is sponsored by a member of the Executive Committee.
We have updated our policy, embedding zero tolerance and shared
this through the business via a range of communication channels.
Please refer to pages 51 and 55 to 56 for more information on the
workforce forum.
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Nomination Committee Report continued
Board and Committee evaluation
Each year, the Board undertakes a formal and rigorous annual evaluation of its own performance and that of its Committees and
individual Directors. Every three years, the Board undertakes an externally facilitated evaluation. The last one was carried out in
2022. This year’s evaluation was carried out internally by the Company Secretary. The next external evaluation is scheduled to be
carried out for FY25.
Progress on FY22 evaluation
Progress made against the outcomes of the internal Board evaluation undertaken in FY22 is set out below:
The Board
FY22
outcomes
Strategy
Diversity and inclusion
Board papers
To hold a strategy day for Directors. To further embed Diversity
and Inclusion throughout
the organisation.
To further shorten and standardise
papers for Board and
Committee meetings.
Progress
made in FY23
The format for a strategy day has
been agreed. However, due to the
change in Chair this will take place
in FY24.
Agreed our Diversity and Inclusion
strategy to 2025, and supported its
rollout across the Group. Requested
annual updates on the progress
being made as well as regular
review of the strategy to ensure it
remains fit for purpose.
The Company Secretary, with
support from the Chief Executive
and the Chair, has worked with paper
authors to streamline content and
make better use of Executive
summaries. This process will
continue to evolve during FY24.
Key areas of improvement for the Committees
Nomination Committee
FY22
outcomes
Succession for all Directors, but in
particular the Executive Directors,
and members of Senior Management
remains a key priority.
Progress
made in FY23
Established an action plan
and allocated more time to
succession planning.
Audit Committee
Remuneration Committee
Consider increasing the number of
Audit Committee meetings held
during the year.
Consider increasing the number of
private meetings with the Chief
Financial Officer (who is relatively
new to the business and whose
agenda is evolving), and with the
Head of Internal Audit due to the
increased level work being undertaken
around internal controls and
assurance in readiness for the
implementation of the audit reform
recommendations.
Kept under review the time allocated
to agenda items to ensure that the
Committee had adequate time to
consider and discuss each item
appropriately.
Increased the number of private
meetings with each of the Chief
Financial Officer and the Head of
Internal Audit to two per financial year.
Consider if there are any ways
in which the Committee could
change their overall approach to
remuneration to better support
the long-term sustainability of
the business.
During the year, with support from
PwC, the Committee has continually
considered how to improve its
approach to remuneration, in
particular, how it can best support
and retain employees within this
cyclical business.
Board and Committee evaluation process for FY23
Online questionnaires issued to Board and Committee members, and also to those who attend Committee meetings
on a regular basis.
The Company Secretary reviewed the responses received and prepared a consolidated report for each of the Board
and its Committees to consider.
The reports were shared with each of the respective chairs.
Results were presented and discussed at the June or August Board and Committee meetings.
Actions for improvement were agreed for the next financial year, as set out below.
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
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FY23 Board effectiveness evaluation outcomes
Overall, the results of the evaluation were positive and showed that the Board continues to be run effectively. It is seen as being
cohesive and comprising the appropriate balance of experience, skills and knowledge to implement the Group’s strategy over the
short term. Board meetings operate in a spirit of openness, fostered by the Chairman, in which Directors are able to challenge
and discuss openly ideas of importance to the Group, its strategy and risk.
Key areas of improvement for the Board
Board composition
FY23
outcomes
Actions for
FY24
To ensure that the Board continues
to have the appropriate skills,
experience and diversity to help
drive the Group’s strategy forward.
To continue to work closely with the
Nomination Committee in assessing
the skills, experience and diversity
required on the Board.
Strategy
Diversity & Inclusion
To review the existing strategy,
market evolution and future
direction of the business.
The Board to re-consider strategy
and future direction on an ongoing
basis as the market evolves.
Focus on further developing the
Group’s Diversity & Inclusion agenda
and increasing diversity on the
Board and throughout the business.
Support the Group Head of Diversity
and Inclusion to drive the Diversity &
Inclusion agenda through setting
challenging yet achievable targets
which will promote engagement and
focus on this area across the business.
The Committees
Nomination Committee
Audit Committee
Remuneration Committee
FY23
outcomes
Continue to focus on Board,
Executive Directors and Senior
Management succession.
Actions for
FY24
To continue to assess the skills and
experience required on the Board
and its Committees and make
changes to their composition as
deemed appropriate, being mindful
of the requirements for diversity
on the Board. To continue with the
succession planning meetings
with the Chief Executive.
To hold additional deep dive and
training sessions to support the
Committee’s understanding of
current and emerging topics,
including the impact of potential
changes to the various governance
and audit landscape.
To continue to consider the structure
of meetings to ensure that there is
sufficient time allocated to address
changes that may be required to the
Committee’s remit in response to the
implementation of any governance and
audit proposals during FY24 or beyond.
To determine an agenda of deep dive
and training sessions for FY24.
To review the annual agenda taking
into account potential changes to the
Committee’s remit that may be
required and determine if the current
structure remains fit for purpose.
Consider ways to streamline the
metrics used for short and long-
term incentive schemes.
To revisit the rationale for including the
metrics within the short and long-term
incentive schemes and ensure that they
continue to align to the Group’s strategy
and ultimately remain fit for purpose.
Any changes to the metrics for
Executive Directors’ incentive schemes
to be discussed with shareholders and
voting proxy agencies prior to the
change being put into effect.
Evaluation of individual Directors
The evaluation of the effectiveness of John Allan as Chairman was conducted by the Senior Independent Director with assistance
from the Company Secretary in May 2023. John was seen as being supportive but challenging, managing meetings with professionalism
and ensuring each Director had the opportunity to express their views. Despite his other commitments, John was seen to be available
and flexible, maintaining a high level of engagement with the Company, management and members of the Board. During FY23, the
Chairman held one-to-one meetings with each Director to assess the effectiveness of their contributions, the appropriateness of
their experience and the effectiveness with which they utilised that experience in furthering the Company’s strategy. Any areas of
improvement or training and development were agreed. There were no issues of any substance arising from these meetings.
This report forms part of the Corporate Governance Report and is signed on behalf of the Nomination Committee by:
Caroline Silver
Chair of the Nomination Committee
5 September 2023
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Audit Committee Report
Audit, risk and internal control
Our approach to
managing risk
Committee membership and attendance
There were four Audit Committee meetings held during the year
ended 30 June 2023. The table below shows the attendance of
each Director whilst a member of the Committee.
Attended
Did not attend
Meetings attended
Committee members
Jock Lennox
Katie Bickerstaffe
Jasi Halai1
Chris Weston
Nina Bibby2
Sharon White3
1 Jasi Halai was appointed on 1 January 2023, and was unable to attend the
January Committee meeting due to a prior commitment. Prior to the
meeting, Jasi provided her views on the meeting agenda which were
shared with the other Board members during the meeting. Following
the meeting, she was briefed on the business of the meeting and any
decisions taken.
2 Nina Bibby did not offer herself for re-election and stepped down from
the Board at the AGM in October 2022.
3 Sharon White was unable to attend the June meeting due to another
commitment. Prior to the meeting Sharon provided her views on the
meeting agenda which were shared with the other Committee members
during the meeting. Following the meeting Sharon was briefed on the
business of the meeting and any decisions taken.
Jock Lennox
Chair of the Audit Committee
Focus in the reporting year
∙ Further strengthened our approach to risk management and
internal control.
∙ Continued to assess the impact of the changing business
environment.
∙ Monitored and assessed the accounting for and control
over provisions for legacy buildings.
Priorities for FY24
∙ Review the annual cycle of work for the Committee in view of
the extending reporting requirements.
∙ Continue to scrutinise control and provisions for legacy
buildings.
∙ Continue to consider the implications of any changes in the
housing market.
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Statement from the Chair of the Audit Committee
I am pleased to present the Audit Committee’s report for the
year ended 30 June 2023. This sets out our work and how our
responsibilities in relation to audit, risk and internal control
have been implemented. In performing our duties, we have
complied with the requirements of the Code and followed FRC
best practice guidance. We work closely with our finance and
internal audit teams, and with Deloitte LLP, our external auditor,
which helps us to ensure that our internal control processes
remain robust and continue to adapt, our financial reporting
remains clear, and our critical accounting judgements and key
sources of estimation uncertainty are appropriate.
Areas of focus FY23
In last year’s report, I set out our priorities for this year and
I am pleased to update these as follows:
Risk management and internal control
During the year, the Committee continued to support the Chief
Financial Officer, Mike Scott, in embedding the Group’s risk
management strategy, including a reassessment of the Group’s
principal risks, details of which can be found on pages 71 to 77.
We have continued to monitor the rollout of the Group’s Risk &
Internal Control framework (BRICk), as well as further projects
to improve the internal control environment and business
continuity planning and develop further the risk management
process. This included updating our Group & Operational
Finance Policy and BRICk, to further enhance our Internal
Controls over Financial Reporting (ICoFR).
The linkage of principal risks with mitigating controls and related
assurance mapping is now a key foundation to the work of the
Committee and the reporting undertaken on risk and control.
Restoring Trust in Audit and Corporate Governance
The Committee has continued to monitor the developments in
the debate around Corporate Reporting and Audit Reform. The
debate’s progress has been slow, nevertheless we have kept an
eye on the potential for change and sought to build constructive
ideas into the reporting and work of the Committee. Our draft
Audit and Assurance Policy continues to evolve and the
principles are guiding our approach to assurance on
sustainability and non-financial statement reporting. The
potential for further developments will be kept under review.
Legacy Properties
At each meeting management has updated the Committee on its
assessment of the Group’s exposure to the risks derived from
both fire safety relating to external wall systems (EWS) and the
remediation required to reinforced concrete frames. In
particular, careful consideration was given to whether any of the
increased costs recorded in the year should have been
recognised in the prior year, following which the Committee
concluded that they all related to FY23. Further, in view of the
identification of new developments requiring investigation relating
to reinforced concrete frames, the Committee received a report
from management on the associated cause and costs. The
Committee agreed the scope of an assessment of the controls in
this area to be undertaken in the coming months. Estimating the
cost to remediate EWS and reinforced concrete frames continues
to be a highly judgemental and complex area as the Group undertakes
to fulfil its commitment to do the right thing. The Committee’s
priority is to ensure that the level and use of the relevant
provisions and the related disclosures, including being classified
as adjusted items, remain appropriate.
Key areas of focus for FY24
We will continue to monitor and assess the potential impact
of the changes for Governance and Audit emanating from the
Audit Reform debate. We welcome the consultation on the changes
proposed to the UK Corporate Governance Code and will be
considering the cost of implementing these as we comment.
We will continue to assess the provisions for legacy properties,
in particular the judgements underpinning the provisions and
their utilisation. We will receive the report from management
on their further assessment of controls relating to reinforced
concrete frames and consider any recommendations for
improvement.
In light of the continuing increase in reporting and scrutiny over
reporting on financial performance, risk, controls and,
sustainability, we will review the annual cycle of the Committee
and consider whether any enhancements or adaptations would
be beneficial.
Jock Lennox
Chair of the Audit Committee
5 September 2023
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Audit Committee Report continued
Role and activity of the Audit Committee
Membership and attendance at meetings
Details of the members and attendance at each of the
Committee’s scheduled meetings is shown on page 124, and the
biographies and qualifications of the members are shown on
pages 104 and 105. In compliance with the Code, the Committee
is comprised exclusively of Non-Executive Directors, and each
member is considered to be independent by the Company.
The Chairman of the Board is not a member of the Audit
Committee. The Board is satisfied that Jock Lennox and Jasi
Halai have recent and relevant financial experience. Jock is a
Chartered Accountant who has previously chaired several other
listed companies’ audit committees. He has also been the Chair
of the Audit Committee Chairs’ Independent Forum since 2016.
Jasi Halai, Chief Operating Officer and an Executive Director at
3i Group plc, whom we have recently welcomed to the Audit
Committee, is a Chartered Management Accountant and has
held a variety of posts at 3i, most recently as Group Financial
Controller. She was also a NED and Chair of the Audit
Committee at Porvair plc. As part of the effectiveness review,
details of which can be found on page 123, the Nomination
Committee was satisfied that the Audit Committee has the
appropriate skills and experience relevant to the sector in which
the Group operates.
In addition, the Company Secretary, Head of Internal Audit, Group
Director of Finance, Chair of the Board, Chief Executive, Chief
Operating Officer, Chief Financial Officer and representatives
from our external auditor, attended each of the Committee
meetings. Other Executives and senior managers attended
when appropriate for specific agenda items.
After each meeting, the Chair of the Committee reported to the
Board on the business undertaken by the Committee and made
recommendations to the Board as appropriate. The Committee
met the Chief Financial Officer, the Head of Internal Audit and the
external auditor separately and independently of management.
In addition, the Chair of the Committee separately meets with the
external auditor and key management and senior financial
managers outside formal meetings.
Role and main activities undertaken by the Committee
during the financial year
The main role of the Committee is to assist the Board in
fulfilling its governance obligations relating to the Group’s
financial and non-financial reporting practices and its internal
control and risk management framework. It follows an annual
work programme to ensure that its roles and responsibilities
are completed throughout the year. In agreeing the annual
programme, the Committee considers the external
environment, internal operation of the business and regulatory
changes to ensure that all the main priorities are included.
The Committee’s responsibilities are set out in its Terms of
Reference, which can be found on the Company’s website at
www.barrattdevelopments.co.uk/investors/corporate-
governance. In addition to the tasks it carries out annually, the
Committee carried out the following work during the year:
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Priorities
Work carried out and outcomes
Integrity of
Financial
Statements and
announcements
Considered management’s analysis of the costs associated with legacy properties and their presentation in the
Financial Statements, concluding that they remain appropriately provided and disclosed. This included matters
in relation to EWS; in England following the signing of the LFA in March 2023, in Scotland following the signing
of Scottish Accord in May 2023, and also our commitments in Wales, each with differing commitments affecting
their presentation in the accounts. In addition, matters in relation to the reinforced concrete frame review were
considered and scrutinised. Particular consideration was given to management’s analysis that the increased
costs appropriately relate to the current year, with which the Committee agreed.
Considered the carrying value of goodwill and concluded that no impairment was required.
Reviewed the level of third party assurance over the Group’s non-financial published information, including
TCFD and certain climate-related information, and confirmed that it was appropriate.
Reviewed the Annual Report and Accounts to ensure it appropriately messages the performance of the
business. Ensured the style and messaging is an appropriate evolution from the prior Financial Statements
and announcements, whilst being in line with the wider Board strategies & communications and the Group’s
statutory requirements.
Considered the use of APMs to ensure they properly reflected the underlying trading performance of the Group
during the year and concluded that the APMs and the associated disclosures were appropriate.
Risk
management
and Internal
control systems
Monitored improvements to the Group’s Risk Management Framework to strengthen the Risk Committee.
This included the reassessment of the Group’s Principal Risks as set out on pages 71 to 77.
Monitored the progress of a Controls Optimisation Project to optimise, rationalise and improve our internal
control framework and key internal controls across the business.
Considered the new Group & Operational Finance Policy and BRICk and the ongoing programme of work
to develop and enhance our Internal Controls over Financial Reporting (ICoFR).
Received a report from management on the cause and cost of the recent experience related to reinforced
concrete frames and agreed the scope of an assessment of the controls in this area to be undertaken in the
coming months.
In light of uncertainties in the housing market during FY23, reviewed sensitivity analyses on a range of possible
outcomes, including in sales rates and average selling prices and their impacts on the business as a going
concern, its viability, and reviews of goodwill, land and work in progress for potential impairment.
Internal audit
Following the IIA assessment last year, the Committee reviewed progress against the recommendations, and
reviewed the internal quality self-assessment carried out by the internal audit function against IIA standards
for FY23, and concluded that the internal audit function continues to be effective.
Challenged how the methodology for delivering significant business change projects should be assessed and
how it was being applied, resulting in a review of the broader business change strategy and relevant roles and
responsibilities.
Approved the annual review and updates to the Risk Assurance Map setting out the assurance provided by each
of the three lines of defence over the effective management of the Group’s principal risks. Reviewed the output
of the annual fraud risk assessment including management controls in place to mitigate the risks identified.
External audit
Reviewed the outcome of the Group’s external audit quality indicator assessment.
Oversaw the induction of the new Deloitte lead audit partner.
The Chair of the Audit Committee met with the Deloitte audit team to discuss their audit plan and risk
assessment.
Governance
Reviewed an update to the finance strategy presented by the Chief Financial Officer, advising on improvement
options. The Committee will continue to monitor the finance strategy as it evolves.
Reviewed the new Document Retention Policy, including piloting the implementation of software to facilitate
the identification of data which could be at risk of being outside policy.
FY23 Financial Statements
Significant issues considered during the financial year
The issues considered by the Committee to be the most significant (due to their potential impact on the performance of the Group’s
activities) in relation to the Financial Statements during the financial year are set out below.
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Audit Committee Report continued
FY23 Financial Statements continued
Significant issues considered during the financial year continued
1. Critical accounting judgements and key sources of
estimation uncertainty
These are set out in the table below and on the following page.
2. Going concern
The Committee:
∙ concurred with management’s conclusion, and recommended
to the Board, that the Company and the Group continue to be
a going concern and that the Financial Statements should
be prepared on a going concern basis;
∙ using the Group’s business plan, assessed the Group’s
available facilities, headroom and banking covenants;
∙ reviewed management’s detailed analysis, which included
forecasts, scenarios and sensitivities;
∙ considered the going concern requirements of the Code
to ensure compliance; and
∙ continued to monitor market conditions to ensure any
appropriate adjustments are reflected.
The Committee also reviewed management’s viability
assessment of the Group and agreed that it was appropriate.
Further details on the Group’s going concern and viability
assessments can be found in note 1 on pages 188 and 189,
and the Group’s Going Concern and Viability Statements can
be found on pages 99 and 100.
3. Financial reporting
The Committee reviewed the integrity of the Financial Statements
of the Group and the Company, and all formal announcements
relating to the Group and Company’s financial performance.
This process included the assessment of the following primary
areas of judgement and took into account the views of our
external auditor.
Significant issues considered by the Committee relating to the Financial Statements for FY23 comprise:
Issue
External auditor challenge Management response
The external auditor
attended valuation
meetings, performed
Group-level analytical
reviews, and undertook
other audit procedures
to challenge the margin
recognised for the year.
Margin recognition
Development costs are
allocated, on a site by site
basis, between homes built in
the current and future years.
The Group’s site valuation
process determines the profit
margin for each site. This
requires the estimation of
future sales prices and costs
to complete. Further detail is
given in note 3 on page 191.
The Committee considered:
∙ feedback from senior management regarding
their attendance at valuation meetings and
their assurances on the efficiency and
consistency of the approach on valuation
throughout the business;
∙ management’s assumptions and estimates
in the assessment of margin recognition
based on site performance, in particular,
sales prices and build cost, given the
dynamic inflationary environment;
∙ ongoing enhancements made to the
valuation internal control process following
completion of the rollout of the new
commercial valuation system and also
BRICk internal controls framework; and
∙ the results of the Group’s internal audit
reviews across the business.
Audit Committee comments
Based on this, the
Committee was
comfortable with the
process and controls
adopted by management
around the estimation of
future income and costs
to complete, and thus the
process by which the
Group’s inventory is
valued and the
margin recognised.
Costs associated with
legacy properties
Estimations of cost provisions
relating to remedial work
associated with EWS and
reinforced concrete frames,
on legacy buildings, have been
appropriately provided for
and disclosed.
This is against the backdrop
of Government guidance,
industry regulation, and
interpretation thereof,
continuing to evolve, requiring
the Group to adjust its
response, similarly as the
Group’s experience of the
scope and cost of remediation
also evolves.
Further detail is given in note 4
on page 192 and note 20 on
pages 212 to 214.
128
The external auditor
challenged the
completeness of the
basis for the estimated
costs, the scope of
buildings, contingency,
assumptions relating to
cost inflation, estimated
timing of spend and
discount rate.
Following the inclusion of further costs
associated with EWS legacy properties as an
adjusted item in the FY23 Income Statement,
the Committee has reviewed and challenged
the provision, assessing its utilisation and
continued adequacy, and has agreed that
the increase has been appropriately judged,
recorded in the correct period, and that
accompanying financial and contingent
liability disclosures fairly reflect the
associated risks and opportunities.
Based on this, the
Committee was
comfortable with the
process and controls
adopted by management
around the disclosures
and estimation of costs
and provisions associated
with legacy properties.
The Managing Director of the Building Safety
Unit attended the Audit Committee at both
half and full year end to further appraise the
Committee, whilst also allowing the Committee
to question and scrutinise as necessary.
Following the recognition of further reinforced
concrete costs, the Committee considered the
appropriateness of the costs recognised and
the related disclosure, and whether such
costs had been recognised in the appropriate
financial year.
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Fair, balanced and understandable considerations
and conclusions
The Committee received a draft of the Annual Report and Accounts
prior to its August 2023 meeting, together with supporting
material from management and the external auditor. At the
meeting, it considered and assessed the process undertaken
in drafting the 2023 Annual Report and Accounts to determine
whether it was fair, balanced and understandable.
∙ financial and management reporting systems under which
financial and operating performance is planned on a three-
year basis and budgeted annually. Financial and operating
performance is consistently reviewed against budget and
forecasts at divisional, regional and Group levels on a monthly
basis, variances are explored and, where appropriate, changes
made; and the information is used in the preparation of the
Annual Report and Accounts;
Considerations
∙ Feedback provided by shareholders on the FY22 Annual
Report and Accounts.
∙ Assurances provided in respect of the financial and non-financial
management information.
∙ The balance between statutory and adjusted performance
measures.
∙ The internal processes underpinning the Group’s reporting
governance framework and the reviews and findings of the
Group’s external legal advisers and external auditor.
∙ A report from the Company Secretary, which confirmed that:
i) the process involved collaboration between various parts
of the Group, including the Group Finance team, Company
Secretariat, Group Communications, Investor Relations and
the Sustainability team; ii) the Annual Report and Accounts
had been reviewed by the Executive Directors; and iii) the
Company had received confirmation from its external
advisers that the Annual Report and Accounts adhered to the
requirements of the Companies Act, the Code, the Listing
Rules and other relevant regulations and guidance.
Conclusions
The Committee concluded that the Annual Report and Accounts
for the year ended 30 June 2023:
∙ clearly, comprehensively and accurately reflect the Group and
Company’s performance in the year under review;
∙ contain an accurate description of the business model;
∙ appropriately reflect the Group and Company’s purpose,
strategy and culture;
∙ includes consistent messaging and clear linkage between
each of its sections; and
∙ includes KPIs, which are consistent with the business plan
and remuneration strategy.
Accordingly, the Committee recommended to the Board that
the FY23 Annual Report and Accounts are fair, balanced and
understandable. The Board’s formal statement on the Annual
Report and Accounts being fair, balanced and understandable
is contained within the Statement of Directors’ Responsibilities
on page 171.
Internal controls and the risk management process
The Committee monitors the Group’s risk management and
internal control systems, including their effectiveness, on
behalf of the Board. The key aspects are as follows:
∙ a clear organisational structure with defined levels of
authority and responsibility at all levels of the business;
∙ identification and review of principal operational risk areas to
ensure they are embedded in the Group’s monthly management
reporting system as routine aspects of managerial responsibility.
Details of the risk management system and the principal
risks are set out on pages 71 to 77;
∙ assessment of compliance with internal control and risk
management systems, including a consideration of controls
over non-financial risks. This assessment is supported by the
Group’s internal audit team, which is responsible for undertaking
a risk-assessed annual audit plan, ad hoc audits and reporting
to the Committee, and, if necessary, the Board, on the operation
and effectiveness of those systems and any material failings.
Following the recognition of additional reinforced concrete
frame provisions, the Committee will review the control
environment over complex building design in FY24;
∙ mapping of assurance procedures to the Group’s principal
risks, to ensure that the mitigating controls are sufficiently
robust; and
∙ consideration and approval of the Group’s tax position
and strategy.
The Group’s operations and financing arrangements expose it to
a variety of financial risks that include the effects of changes in
borrowing and debt profiles, Government policy, market prices,
credit risks, liquidity risks and interest rates. There is a regular,
detailed system for the reporting of daily cash balances and
forecast cash flows from operations to Senior Management,
including Executive Directors, to ensure that risks are promptly
identified and appropriate mitigating actions taken. These
forecasts are further stress tested at a Group level on a regular
basis. In addition, the Group has in place a risk management
programme that seeks to limit the adverse effects of the other
risks on its financial performance, for example limiting its
exposure to institutions with high credit ratings. Financing
activities are delegated by the Board to a centralised Treasury
Operating Committee. Group Treasury operates according to
treasury policies that are approved by the Board and the
Treasury Operating Committee.
Development of an Audit and Assurance Policy
The Committee and the Board support the publication of an
Audit and Assurance Policy in order to bring greater transparency to
the assurance it receives in order to gain comfort over the
Group’s management of risks, and over the accuracy of its
reporting of both financial and non-financial information.
During the year, the Committee reviewed a number of items
which support our Audit and Assurance Policy. These included:
∙ a risk assurance map setting out assurance already in place,
using the three lines of defence model, to identify any gaps or
areas where improvement in assurance is required;
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Audit Committee Report continued
Development of an Audit and Assurance Policy
continued
∙ assurance mapping over the Group’s published financial and
non-financial information which was reviewed and updated
during the year. The Board made the decision to again appoint
Deloitte to provide additional independent assurance over
certain aspects of the Group’s climate-related disclosures,
including TCFD and certain other non-financial information; and
∙ the completion of the annual detailed fraud risk assessment
exercise to identify, consider, and assess fraud risks in place
across the Group and the associated controls and assurance
in place to mitigate and manage these.
The Committee will continue to monitor the development and
formalisation of the assurance in place across the Group’s risks,
key internal controls over financial reporting and financial and
non-financial published information, with the view to publishing the
Audit and Assurance policy in due course.
Whistleblowing
The Group has a clear whistleblowing policy and procedure,
which is communicated to the workforce. Concerns can be
raised by employees with managers, or can be reported by
anyone, anonymously if necessary, to a confidential and
independent hotline. The hotline is available 24 hours a day,
with any matters raised being notified to internal audit
immediately by email. Matters requiring urgent attention
(including corruption, human rights abuse and personal safety)
are notified to the Head of Internal Audit by phone immediately,
including outside business hours. The Head of Internal Audit
reviews matters raised, and ensures each matter is investigated
or refers them to other relevant functions across the business,
such as the Safety, Health and Environment or HR teams, to
investigate as appropriate. Any substantive issues are raised
with the Chair of the Audit Committee as they arise. The Head
of Internal Audit also updates the Committee on all significant
whistleblowing incidents at each of its meetings. The
Committee reviews the overall procedure, investigations and
outcomes, as well as the availability and frequency of use of the
whistleblowing hotline. The Chair of the Committee updates the
Board on whistleblowing reports and investigations on a
regular basis, and the Board reviews the whistleblowing
arrangements and discusses the most significant issues
as appropriate.
Internal audit
Information regarding internal audit matters considered by
the Committee are set out in the table of work carried out
on page 127.
During the year, the Head of Internal Audit completed all
recommendations and improvements from the IIA EQA which
was undertaken during the previous year. This included the pilot
of a guest auditor programme which allowed individuals from
across the business to support the internal audit team with
specialist technical knowledge and expertise in auditing certain
areas of the business. The trial of the programme was successful,
providing additional insight and knowledge to support assurance,
and the programme will therefore continue to operate for the
next year. The Head of Internal Audit conducted a self-assessment
during the year in order to assess the effectiveness of the
function against the required IIA standards and governance
requirements and reported the results to the Committee, who
concluded that the function continued to operate effectively.
130
The Committee again considered the reporting line of the Head
of Internal Audit, and confirmed that it continued to be
comfortable with the existing reporting line to the Chief
Financial Officer given that the Head of Internal Audit had
regular formal meetings with the Chief Executive and any
issues are reported to the Chief Executive in a timely manner.
They were also comfortable with the independent relationship
between the Head of Internal Audit, the Chair of the Committee
and the wider Committee. The Committee confirmed that they
would continue to keep this reporting line under review.
External audit
Audit performance and effectiveness
The Committee annually reviews the external audit plan and
process. This year it again approved the audit of key risk areas
earlier in the year to reduce pressure on the busy financial
reporting period after year end.
In FY22 Deloitte was appointed, after a thorough tender and
interview process, to provide assurance over our TCFD and
certain non-financial disclosures. The appointment and fees
associated with this work are in accordance with our Auditor
Independence and Non-Audit Fees Policy.
In forming its conclusion on performance and effectiveness of
the external audit, the Committee reviewed amongst other
matters:
Feedback from all stakeholders on the external audit.
The external auditor’s fulfilment of the agreed audit plan
for FY23.
Reports highlighting the material issues and critical
accounting judgements and key sources of estimation
uncertainty that arose during the conduct of the audit.
The external auditor’s objectivity and independence during
the process, including its own representation about its
internal independence processes.
The challenges raised by the external auditor during
the audit.
The Chair of the Committee met with the leaders of the external
audit team to assess their experience and understanding of
Barratt, which were considered appropriate.
In assessing the effectiveness and performance of the external
auditor, the Committee also approved the Group’s approach to
assessing audit quality. As in FY22, a questionnaire was
circulated covering five significant audit areas. A wide range of
internal stakeholders were included across the Group’s senior
leadership. All areas were rated as good, with some challenges
identified in project management. The Deloitte team expect to
address the highlighted areas of focus in FY24.
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During the audit, the external auditor challenged management’s
judgements and assertions on the following matters in particular:
∙ margin recognition;
∙ valuation and completeness of provisions related to legacy
developments (EWS and reinforced concrete frames); and
∙ valuation and completeness of completed development provisions.
The Committee’s response to these can be found in the relevant
section of the table of significant issues considered by the Committee
relating to the Financial Statements on page 128.
The FY21 audit was subject to an Audit Quality Review, the
progress of which was regularly reported to the Chair of the
Committee, and has now been completed. The Chair of the
Committee received a full copy of the findings of the AQR team
and has discussed these with Deloitte. Some matters were
identified as requiring improvement and the Committee has
agreed an action plan with Deloitte to ensure these have been
addressed in the audit of the Company’s FY23 Financial
Statements.
The Committee concluded that the external audit process as a
whole had been conducted robustly, the external audit team
selected to undertake the audit had done so thoroughly and
professionally, and the external auditor had applied sufficient
experience and understanding of the housebuilding industry,
consulted with experts as necessary, and is of sufficient size
to conduct the audit. Deloitte’s performance as external auditor
to the Group during FY23 was therefore considered to be
satisfactory.
In addition, the Committee was satisfied that management had
provided the external auditor with appropriate access to
Barratt’s own people, systems, records and supporting
information, whilst acting professionally and with appropriate
challenge, enabling the audit to be conducted effectively.
Auditor independence and non-audit fees
The Company’s Policy on auditor independence and non-audit
fees is available at www.barrattdevelopments.co.uk/investors/
corporate-governance. With effect from 1 July 2021, the policy
caps non-audit fees at 70% of the average audit fees over the
previous three years. The Committee continually monitors the
ratio of non-audit to audit fees to ensure that it does not exceed
this cap. For FY23, non-audit fees (including audit-related
assurance services) for the Company and its subsidiaries and
JV’s were £230k, representing 24.3% of the total audit fee.
Non-audit fees based on the average of the previous three
years’ audit fees were 26.5%. Further details of the audit and
non-audit fees incurred by the Group can be found in note 3
on page 192. The non-audit fees were for work undertaken by
the external auditor for the review of the half year report and
also assurance provided over TCFD and certain non-financial
disclosures included in our FY23 results.
This Policy also sets out the duties of the Committee relating to
the protection of the objectivity and independence of the external
auditor. The pre-approval levels and conditions required for
different non-audit services that might be required from the
external auditor, together with prohibited services, are detailed
in the Policy. It also sets out restrictions on the recruitment of
employees from the external auditor. The Policy was reviewed
and updated in 2023, and is in line with the auditor
independence rules of the FRC’s Revised Ethical Standard 2019
and includes the FRC’s whitelist of permitted non-audit
services. There are no conflicts of interest between the
members of the Committee and the external auditor.
The Committee requires written confirmation annually from
the external auditor that it remains independent. For FY23,
the external auditor provided a comprehensive report to the
Committee verifying that it had performed its audit and
audit-related services in line with independence requirements
and explaining why it believed that it remained independent
within the requirements of the applicable regulations and its
own professional standards. The report also explained why the
ratio of audit to non-audit fees, and the extent and type of
non-audit services provided, was appropriate. The Committee
conducted its own review and endorsed the external auditor’s
conclusions on compliance with the Policy and independence
of the external auditor.
Accordingly, the Committee was satisfied that both the work
performed by the external auditor, given its knowledge of
the Group, and the level of non-audit fees paid to it, were
appropriate and did not raise any concerns in terms of
our external auditor’s independence.
Total audit and non-audit fees
FY23 (£000)
£1,311
43
186
230
FY22 (£000)
£1,189
852
680
37
262
210
FY21 (£000)
£751
35
—
411
305
Company audit
Subsidiaries audit
Audit related services
Other services
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Audit Committee Report continued
Auditor rotation timeline
2007
Deloitte appointed
2017
Deloitte reappointed
following competitive
tender
2027
Competitive tender unless
particular circumstances
require an earlier tender
External audit continued
External audit tender
Deloitte was first appointed as external auditor to the Group in
2007, and was reappointed following a competitive tender in FY17.
The Company has therefore complied with the provisions of the
Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes and
Audit Committee Responsibilities) Order 2014 issued by the CMA on
26 September 2014. Jacqueline Holden replaced Claire Faulkner
as lead audit partner with effect from the FY23 audit following a
period of transition. Jacqueline was selected after an interview
process involving the Chair of the Committee, supported by the
then acting Chief Financial Officer. The external audit team’s
second audit partner was rotated for the FY20 audit and remains
in place.
Under current regulations, the Company is not due to re-tender
its audit until 2027. Given the continuing effectiveness of
Deloitte in its role as external auditor, the Committee currently
believes it is in the best interests of shareholders for Deloitte to
remain in role and for a competitive tender process to be
completed in time for the FY27 audit. The Committee will,
however, continue to monitor Deloitte’s performance as
external auditor and make recommendations accordingly.
The Group has appointed UHY Hacker Young LLP as the auditor
for certain of its subsidiaries and JVs with effect from the FY23
audit. This appointment followed a rigorous tender process. The
timing of this audit work follows completion of the Group audit
and therefore has no bearing on the scope of Deloitte’s audit. As
well as realising some efficiency, this step provides the
opportunity for one of the so called challenger audit firms to
gain experience.
Assessment of the external auditor
Having considered the external auditor’s performance, the
Committee recommended to the Board that the external auditor
remains independent, objective and effective in its role and
therefore should be reappointed for a further year. On the
recommendation of the Committee, the Board is putting
forward a resolution at this year’s AGM to reappoint Deloitte as
external auditor for a further year. The recommendation of
reappointment of Deloitte is free from influence by a third party
and no contractual term of the kind mentioned in Article 16(6) of
the Audit Regulation has been imposed on the Company
whereby there would be a restriction on the choice to certain
categories or lists of auditors.
This report forms part of the Corporate Governance Report
and is signed on behalf of the Audit Committee by:
Jock Lennox
Chair of the Audit Committee
5 September 2023
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Safety, Health and Environment Committee Report
Our approach to
managing safety, health
and the environment
Committee membership and attendance
There were two meetings held during the year ended 30 June 2023.
The table below shows the attendance of each Director whilst
a member of the committee.
Attended
Did not attend
Meetings attended
Committee members
Chris Weston
Steven Boyes
Vince Coyle1
1 Vince Coyle is Group Safety, Health and Environmental Director.
Chris Weston
Chair of the Safety, Health and Environment Committee
Focus in the reporting year
∙ Continued to monitor IIR and launched a further campaign
focusing on the prevention of slips, trips and falls.
∙ Considered enhancements to existing safe systems of
work such as working at height and activities involving
ground workers.
∙ Assessed the SHE culture within our business via a SHE
Climate survey.
Priorities for FY24
∙ Continue to take action to improve our IIR.
∙ Further enhance activities around mental well-being and
occupational health.
∙ Keep under review the requirements of the Building Safety
Act and adapt accordingly.
∙ Continue to review our impact on the environment and how
we mitigate against this.
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Safety, Health and Environment Committee Report continued
insufficient pedestrian/plant segregation being available at the
location where the incident occurred. We were fined £8,000 and
the sub-contractor £32,000. We took immediate action after the
incident to address the circumstances that led to the breaches
identified, including reinforcing our policy on site induction, and
ensuring that contractors take appropriate steps to segregate
workers from their plant movements. We continue to monitor
these on a regular basis.
We recognise the importance of ensuring all who work on
our sites have an effective induction and hold the relevant
competencies for the role they are undertaking. Therefore
this year we have further developed our successful Induction
Manager App to enhance the process. This has proved effective
in ensuring all individuals attending our sites are clear on what
we will provide and do, and what is expected from them. We
have also continued with our positive engagement with key
members of our supply chain in reviewing safe systems of work
and developing enhanced controls for their work activities.
During FY23 we further assessed the SHE culture within
our business via a SHE Climate survey sent to employees,
sub-contractors and suppliers, which was created by the
Health and Safety Laboratories for the purposes of benchmarking
Health and Safety culture in comparison with organisations
across a number of sectors. The overall results were encouraging.
We scored above the benchmark (compared with 130 companies
in all sectors) in all eight categories, which placed us in the top
5% of comparator companies. A particular strength that was
noted, was health and safety communication and Management’s
commitment to always act on safety concerns which is very
encouraging. Detailed action plans are now being developed
across the business to address those areas where there is
room for further improvement with progress being monitored
by the Committee. We intend to repeat the survey bi-annually
going forward, and will endeavour to increase the participation
from our supply chain in further surveys.
FY24 key priorities
Injury prevention remains a key area of focus for the business,
with the aim of improving our IIR. There are further changes
that we will be looking to make in terms of mental wellbeing and
managing occupational health, and we are working with the HR
team to improve business knowledge and awareness. The new
Building Safety Act encompasses wide-ranging statutory
requirements for high risk buildings and other elements of the
built environment and we are looking closely at the detailed
competency requirements included already and those arising
from the anticipated secondary legislation. We are also
committed to minimise the risks to the environment and so in
FY24 a key focus area will be continuing to review and enhance
our silt water management controls to ensure that
contamination events are prevented.
I would like to thank the SHE team, our employees and
sub-contractors for the great work that they undertake
each day to keep our people safe.
Chris Weston
Chair of the SHE Committee
5 September 2023
Statement from the Chair of the SHE Committee
I am pleased to present this report as Chair of the SHE Committee.
The health and safety of our workforce, customers and the
public, and the protection of the environment around our
developments, remain a fundamental priority for the Group and
is embedded within the day-to-day operations of the business.
Overall, our site teams continue to be recognised for achieving
high standards of health and safety. Our culture and approach
has been further verified by achieving champion status as part
of an assessment by Building Safer Futures, a non-profit
organisation set up as part of the drive for improvements
to building safety in the construction industry.
FY23 areas of focus
Injury and ill health prevention has remained a key area of focus
for the business throughout the year. Following the reduction in
the Group IIR in FY22, and despite the ongoing action plan for
continuous improvement, the IIR has unfortunately increased
this year from 262 per 100,000 persons in FY22 to 289 in FY23.
Our analysis indicates that the primary contributing factor is
slips and trips, which is reflected industry wide, and a further
campaign has been put in place which is described below.
We have continued to review all working practices and
considered enhancements to existing safe systems of work,
especially around working at height and those activities
involving ground workers. With effect from 1 July 2022, all
ride-on dumpers of six tonnes or more operating on our sites
were required to have an enclosed cab to protect the operator.
We have worked closely with our sub-contractors to ensure that
this new requirement can be adhered to.
During the year, a hearing took place in relation to an incident
involving an employee of one of our sub-contractors that occurred
within our West Scotland division in 2017. A dumper collided at
low speed with the sub-contractor’s employee. The sub-contractor
had not presented their employee to our site team for an induction
on their first day, but based on strict liability and the fact the
individual had not been inducted, we accepted responsibility as
the Principal Contractor for this technical breach. In addition,
both Barratt and the sub-contractor pleaded guilty to
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Role and activities of the SHE Committee
Membership and attendance at SHE Committee meetings
The membership of the SHE Committee and the attendance at each of its scheduled meetings is set out on page 133.
Only members of the SHE Committee have the right to attend meetings, however, other individuals may be invited, at the request
of the Chair, to attend all or part of any meeting where it is deemed appropriate.
Role and main activities undertaken by the Committee during the financial year
The SHE Committee’s activities continue to remain focused on the prevention and mitigation of the key operational risks relating to
health and safety, and the protection of the environment. By receiving reports and challenging those tasked with SHE performance
where necessary, the SHE Committee helps the business to improve its SHE standards. It supports and oversees the direction and
implementation of SHE Policy and procedures which encourage efficient working practices, prevention of injury and illness, and
support our continuous improvement strategy and ongoing sustainability of the Group.
The SHE Committee continues to work closely with the SHE Operations Committee, which is responsible for the implementation and
oversight of the Group’s overall SHE improvement strategy on a day-to-day basis. The SHE Operations Committee reports directly
to the SHE Committee. The Group Construction and SHE Director presents SHE update reports to each of these Committees and to
the Board. The SHE Committee has at least one joint meeting with the SHE Operations Committee each financial year. In addition,
the SHE Committee Chair is now invited to attend all SHE Operations Committee meetings. This enables the Committee and its Chair
to enhance its understanding of the operational issues faced by the workforce, and to discuss them, and ways to improve them,
directly with those responsible for day-to-day SHE management.
The SHE Committee’s responsibilities are set out in its Terms of Reference, which can be found on the Company’s website at
www.barrattdevelopments.co.uk/investors/corporate-governance. In addition to the tasks carried out annually, such as a review
of its Terms of Reference and approval of this report, the SHE Committee carried out the following work during the year:
Priorities
Work carried out and outcomes
IIR
Continued to monitor SHE performance targets, key performance indicators and IIR, all of which are available
on pages 17 and 24.
Launched the campaign for increased Near Miss reporting in January 2023, to enable the business to have
greater depth of insight into emerging risks and trends.
Considered, developed and launched a new SHE campaign to focus on slip, trip and fall incidents.
SHE training
and compliance
Reviewed the outcome of a benchmarking exercise with HBF members on our Drugs and Alcohol Policy and
approach to testing, which showed our Policy was robust compared to others in the industry, and agreed
a number of changes on testing.
Considered and approved the detailed plan of work for the integration of Oregon and Gladman into Barratt
SHE management.
Considered the outcome of the HSE Safety Climate survey, and agreed the actions arising from it.
Reviewed the new Health and Wellbeing strategy and requested a review of how to measure its effectiveness.
Considered and agreed a new policy on the arrangements in place for the security and protection of our
construction sites.
Sponsored a review of the documentation site managers are required to complete during the lifecycle
of a project and agreed a number of efficiencies which were implemented in FY23.
SHE management system
Our SHE management system continues to be accredited to the
international standards ISO 14001 and 45001. We have reviewed
the processes which site management are required to
undertake and have received considerable feedback from site
teams. Where possible, we have either enhanced the practical
use of apps or amended forms.
We are focused on having an effective process for near miss
reporting. It is essential in our view to consider incidents that
may not have caused injury or damage but had the potential to
do so. This helps us to ensure that mitigations are in place to try
and prevent these incidents from occurring again and from
becoming an injury or causing damage.
Health and Safety Climate survey
The Health and Safety Climate survey was undertaken during
the year with over 1,600 surveys completed and over 8,000
individual comments captured. Our health and safety culture
in particular was considered to be very strong, with positive
comments regarding health and safety leadership and the
strength of poster campaigns on site. Areas for improvement
included simplifying the format and presentation of our SHE
procedures and control forms, and ensuring that all members
of the workforce pay enough attention to health and safety
matters. Additional actions arising from the survey included
reviewing our pre-start processes to ensure health and safety
continues to be embedded from commencement and that we
continue to learn from incidents through an effective
communications process. Specific Regional action plans are
also being developed and progress is being tracked through
the SHE Operations Committee.
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Safety, Health and Environment Committee Report continued
Integration of Oregon and Gladman
Having consistent Health and Safety Standards across all of our
Group Companies is very important. We have therefore worked
with both the Oregon and Gladman teams on their Health and
Safety integration which was completed for both organisations
in FY23. Both organisations have now implemented SHE
training requirements which are consistent with the rest of
Group; they are capturing incident and near miss information
using the incident app and are also being audited through the
annual Divisional audit programme. They also both took part
in the recent Safety Climate Survey.
Health and Safety training
We continue to develop our e-learning packages to support our
existing training provision. The number of slips and trips has
been a primary contributing factor to the IIR and a number of
these have involved employees in sales roles. We have therefore,
this year, launched a Sales e-learning module to ensure new
sales team colleagues are familiar with our controls and that
the sales environment is safe for colleagues and customers.
The majority of slip incidents continue to be in construction. In
co-ordination with other housebuilders, we are introducing a
campaign on prevention of slip/trip injuries given that there has
been an industry-wide trend in an increase in these types of
incidents and therefore a common goal to improve.
Induction is a key control, and it is a mandatory requirement for
individuals to complete the induction process and for a record
to be maintained on our platform. Based on feedback from our
site teams, we launched a new two-stage site induction process,
requiring site workers to review a video highlighting our
expectations of them and what they should expect from us.
Competency cards are increasingly using smart technology,
verifiable against the scheme database. Accessibility to the
assessment at the end of the induction has been increased
through the use of sub-titles and translations for those whose
primary language is not English.
A full programme of Board visits and site visits by individual
Board Directors has recommenced, with two sites visited by the
full Board. The aim is for each Director to visit at least one site
a year.
It is also important to us that we are engaging with our high risk
contractors. Ongoing work with groundworkers includes SHE
seminars in each division every six months, and we have now
extended this to include our scaffolding contractors.
Occupational health and wellbeing
The Group continues to promote occupational and mental health
for all employees and others working on our sites. With support
from the Group HR team, employees were given access to a
variety of webinars, e-learning modules and newsletters, all of
which contained guidance on staying healthy both physically and
mentally. Further details of our health and wellbeing initiatives
are given on page 38.
Environmental protection
We have a management system in place that is compliant with
environmental standards. Prior to commencing on site, we
undertake an assessment of the local environment and put
plans in place to prevent contamination of any adjacent watercourses.
These plans and controls are reviewed monthly and action is
taken where enhancements or maintenance of the controls are
required. We are also committed to further minimise the risks
to the environment and so a key focus area will be to enhance
our policies and procedures, in particular our surface water
management plans, whilst continuing to ensure that they are
effective and are closely monitored by our Operational teams.
This report forms part of the Corporate Governance Report
and is signed on behalf of the SHE Committee by:
Chris Weston
Chair of the SHE Committee
5 September 2023
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Remuneration Report
Annual Statement from the Chair of the Remuneration Committee
Our approach to
remuneration
Katie Bickerstaffe
Chair of the Remuneration Committee
Focus in the reporting year
∙ Deferred bonus alignment with best practice
and shareholder expectations.
∙ Review of Remuneration Policy.
∙ Remuneration outcomes for FY23.
∙ Remuneration targets for FY24.
Priorities for FY24
∙ Monitor Executive Directors’ and Senior Management’s
performance against targets.
∙ Keep metrics used for short- and long-term incentives
under review.
∙ Induct new Group HR Director to the workings of
the Committee.
Committee membership and attendance
There were four meetings held during the year ended 30 June 2023.
The table below shows the attendance of each Director whilst
a member of the committee.
Attended
Did not attend
Meetings attended
Committee members
Katie Bickerstaffe
John Allan
Caroline Silver1
Jasi Halai2
Jock Lennox
Chris Weston
Nina Bibby3
Sharon White4
1 Caroline Silver was appointed to the Board and the Committee on 1 June 2023.
2 Jasi Halai was appointed to the Board and the Committee on 1 January 2023.
3 Nina Bibby did not offer herself for re-election and stepped down at the AGM
in October 2022.
4 Sharon White was unable to attend the June 2023 Committee meeting due to
a prior commitment. Prior to the meeting, Sharon provided her views on the
meeting agenda which were shared with the other Board members during
the meeting. Following the meeting Sharon was briefed on the business of
the meeting and any decisions taken.
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Remuneration Report continued
Annual Statement from the Chair of the Remuneration Committee continued
Statement from the Chair of the Committee
I am pleased to present my report to you as Chair of
the Committee.
When considering the FY24 remuneration outcomes for the
Executive Directors and in considering the targets for FY24,
the Committee took into account, amongst other factors, the
performance of the Group in FY23 and the market conditions in
which the Group has operated (as explained in the Chief Executive’s
Statement on page 23, and the Marketplace section on pages 20
and 21).
Remuneration Policy
Our existing remuneration policy was approved for a period of
three years at our 2020 AGM and expires this year. As such, we will
be presenting a slightly revised policy to shareholders for approval
at our 2023 AGM. During the year, the Committee undertook an
in-depth review of the current policy considering a number of
factors including the expected economic environment over the
next policy period, our strategy, and our experience with the
current policy. Following discussions, the Committee believes that
overall the policy remains broadly fit for purpose. It is therefore
proposing that the only significant change to the policy, as
previously communicated, will be with regards to bonus deferral
for Executive Directors and Senior Management.
Currently, under the rules of the existing DBP, any bonus earned in
excess of 100% of salary is deferred into shares. To bring the policy
in line with shareholder expectations and best practice we will,
from the date of the 2023 AGM, defer a fixed percentage of any
bonus earned. Accordingly, for FY24, we have agreed that
one-third of any bonus earned will be deferred into shares. This is
in line with current arrangements under which an individual who is
able to earn a bonus equivalent to 150% of salary defers one-third
of their bonus at maximum. Our proposal therefore ensures that
the same proportion of the annual bonus continues to be deferred
when maximum opportunity is achieved, but also ensures that
one-third of any bonus earned will be deferred for achievement
below maximum. The rules of a new DBP which will be used
to implement this new approach to deferral will be presented
to shareholders at the 2023 AGM for approval.
Other minor amendments have been made to the policy to provide
further clarity in respect of potential performance metrics used
within the annual bonus and to ensure that the policy remains in
line with best practice.
We believe that with these changes, the Remuneration Policy is fit
for purpose and aligns the interests of our Executive Directors with
those of our shareholders and with our business strategy. It also
continues to drive appropriate behaviours for the long-term
success of the Company. Details of these changes can be found
on page 142.
FY23 performance and reward
The business has continued to deliver a strong operational and a
good financial performance throughout the year. In particular, we
achieved 17,206 total home completions (FY22: 17,908), despite the
challenges posed by the increase in interest and mortgage rates
and the continuing significant cost of living pressures faced by our
customers. The Board is extremely grateful for the hard work and
dedication of our teams and partners over the past year, despite
these challenges. The outcome for the FY23 annual bonus scheme
was 40.1% of maximum, with no bonus earned in respect of the
adjusted PBT performance target. The 2020 LTPP award will vest
at 19.6%. Further details can be found on page 161.
The Committee carefully considered the incentive outcomes within
the context of the underlying performance of the business, and
ultimately decided that the outcomes were reflective of business
performance. As a result, the Committee has not used any
discretion to determine these outcomes and it has not adjusted any
of the performance targets during the year.
2022 LTPP
As highlighted in last year’s report, the Committee was mindful
of the view of shareholders and proxy voting agencies that
remuneration committees should seek to reduce the number of
shares granted under a long-term performance award, where the
Company’s share price has fallen substantially since the previous
grant, to avoid potential windfall gains for Executive Directors. As
such, at the time of grant of the 2022 LTPP, the Committee agreed
to apply a reduction of 15% to the normal level of the award to avoid
windfall gains given the decline in the Company’s share price since
the previous grant in October 2021.
Pensions
With effect from 1 January 2023 the cash supplements in lieu of
pension paid to David Thomas and Steven Boyes were reduced
from 25% of base salary to a level equivalent to the wider
workforce (currently 10% of base salary), in line with our
previous commitments and the guidance from the IA. Mike Scott’s
cash supplement was set at 10% of base salary from the date
of his appointment.
FY24 remuneration
Cost of living support
We remain conscious that the cost of living continues to be high
and is impacting our employees. In January 2023, we decided to
pay a further £1,000 salary supplement, in equal monthly
instalments to each of our employees below our senior leadership
team (95% of our employees) for the six months to 30 June 2023.
With effect from 1 July 2023, we ceased the salary supplement but
applied a 4% inflationary increase for all employees below Board
level, with a tiered additional increase, up to 6%, for those who
received the salary supplement, meaning that on average a 5.3%
salary increase was awarded to the wider workforce.
FY24 salary
Having regard to the changes implemented for employees as set
out above, and to the benchmarking data provided by PwC, the
Committee decided to increase Executive Directors’ salaries by
4%, which is lower than the average increase of 5.3% awarded to
the wider workforce. The Committee believes that this increase
is justified given the continued strength of our operational and
financial performance, the ongoing competitive landscape we
face across the sector, and to ensure alignment between the
Executive Directors and the wider workforce. The Committee
further believes that this level of increase is appropriate given
the current economic circumstances in which we are operating.
Furthermore, the Committee is comfortable that salary levels
remain in line with peers.
During the year, a committee of the Board comprising the
Chair and the Executive Directors reviewed the Non-Executive
Directors’ fees and concluded that an increase of 4% should
also apply to the Non-Executive Directors’ base fee, and to their
fees as members and chairs of the relevant committees. An
increase of 4% was also applied to Caroline Silver’s fee as Chair
to reflect that she took over as Chair earlier than anticipated
and to ensure that her fee remained in line with that of John
Allan’s. These increases are in line with those made to the base
salaries of the Executive Directors and below that applied to the
base salaries of the wider workforce.
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FY24 annual bonus and 2023 LTPP
The performance measures for the FY24 annual bonus scheme
are set out on page 156 together with the rationale for selecting
them. The key change is the introduction of a Diversity & Inclusion
target to reflect our business focus in this area. This target replaces
the Trading Outlets measure. The Committee is of the view that the
actual targets for the annual bonus are commercially sensitive and
will therefore disclose these with performance against them, in
the FY24 Remuneration Report, in line with market practice.
The 2023 LTPP will be awarded to all eligible participants,
including the Executive Directors, later this year. Under our
Remuneration Policy, the Committee can make awards of up to
200% of salary to Executive Directors. The Committee continues
to believe that TSR, Absolute Adjusted EPS, Underlying ROCE and
GHG Emissions Reduction remain the most appropriate measures
to align the Group’s performance with strategy and the interests
of stakeholders. Due to the continued uncertainty in market
conditions at the time of approving this Remuneration Report, the
Committee has not been able to finalise the financial targets for its
incentive schemes. We anticipate that the financial targets will be
agreed by no later than the end of November 2023. The details of
the non-financial targets for the 2023 LTPP can be found on page 157
and the strategic KPIs for each can be found on pages 16 to 17.
The rules of the LTPP are due to expire in November 2023 having
been in place for a period of ten years. A new set of rules will
therefore be presented for shareholder approval at the 2023 AGM.
Shareholder engagement
I wrote to our 20 largest institutional investors and the proxy voting
agencies in May 2023 to gain feedback on the proposed changes to
the Remuneration Policy, the remuneration outcomes for FY23 and
our proposals for FY24. We received feedback from shareholders
representing 10.3% of our issued share capital.
The key topic of discussion was the introduction of the Diversity
and Inclusion targets, whereby shareholders recommended that
we ensure that these targets are measurable and aligned to the
Group’s strategy in this area. The Committee confirms that this
feedback has been taken into account when setting the specific
Diversity and Inclusion targets and in determining how performance
will be assessed. All shareholders who responded were very
supportive of the FY23 outcomes, the FY24 remuneration proposals
and the changes proposed to the Policy.
Employees and remuneration
Our 2022 Gender Pay Gap report was published in December 2022,
along with our first Ethnicity Pay Gap report which we chose to
publish voluntarily as part of our commitment to becoming a more
diverse and inclusive business. Details of the reports, where to
find them on our website and our work on improving diversity and
reducing these pay gaps can be found on pages 37 to 39.
We continue to seek the views of our Workforce Forum on our
approach to pay for employees and Executive Directors during the
year. Further details on the Workforce Forum and the matters it
discussed during the year can be found on page 55. We continue
to make an annual award of Barratt shares to employees below
Senior Management to recognise their dedication, commitment
and loyalty. Further details can be found on page 37.
Reporting
Our Remuneration Report for the year ended 30 June 2023
comprises three parts: this Annual Statement, our full
Remuneration Policy, and the Annual Report on remuneration.
Details of how we have applied the relevant requirements of the
Code can be found throughout this Remuneration Report.
Conclusion
Throughout the year, the Remuneration Policy operated as
intended in terms of Company performance and quantum,
and in line with the Code.
The Committee believes that the decisions it has taken in respect
of FY23 pay outcomes and its proposed approach to remuneration
for FY24 are in the best interests of its shareholders, align with the
Group’s strategy, reflect the wider business and economic
environment and are fair, reasonable and appropriate. I therefore
hope that you will support the updated Remuneration Policy and
the Annual Report on Remuneration, which will be proposed at the
AGM in October 2023. On behalf of the Committee and the Board,
I would like to thank you for your continued support of our
remuneration framework.
Katie Bickerstaffe
Chair of the Remuneration Committee
5 September 2023
Our remuneration strategy
It is the motivation and engagement of our employees which
makes our business operationally and financially strong. It is
therefore imperative that our remuneration strategy appropriately
rewards our employees for their performance against the Group’s
key performance indicators, whilst delivering sustainable
shareholder value. Our Remuneration Policy therefore aims to:
∙ promote the long-term sustainable success of the Company
and be fully aligned with the performance and strategic objectives
of the Group to enhance shareholder value;
∙ attract, retain, motivate and competitively reward Executive
Directors and Senior Management with the requisite experience,
skills and ability to support the achievement of the Group’s key
strategic objectives in any financial year;
∙ take account of pay and employment conditions of employees
across the Group whilst reflecting the interests and expectations
of shareholders and other stakeholders;
∙ reward the delivery of profit and the achievement of the return on
capital employed target, whilst ensuring that Executive Directors
and Senior Management adopt a level of risk which is in line with
the risk profile of the business as approved by the Board;
∙ ensure that there is no reward for failure and that termination
payments (if any) are limited to those that the Executive Director
(or member of Senior Management) is legally entitled to; and
∙ ensure that in exercising its discretion, the Committee robustly
applies the aims above.
In developing its Remuneration Policy, the Committee has regard to:
∙ the Group’s purpose and strategic priorities, and ensuring that
targets support the achievement of these;
∙ the performance, roles and responsibilities of each Executive
Director and members of Senior Management;
∙ arrangements that apply across the wider workforce, including
average base salary increases and pension contributions;
∙ information and surveys from internal and independent sources;
and
∙ the economic environment and underlying financial
performance of the Group.
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Remuneration Report continued
Remuneration overview
The overview below outlines the remuneration outcomes for Executive Directors for FY23, together with the minimum, on-target
and maximum (with and without share price growth) opportunities for FY24, the FY23 targets set for variable remuneration and our
performance against them, and the alignment of our FY23 incentive performance measures with strategy. Full details can be found
in the Annual Report on remuneration on pages 155 to 168. Details of Executive Directors’ shareholding requirements and whether
they have been met are given in Table 16 on page 164.
Executive Directors’ Remuneration Policy scenarios for FY24, and FY23 single figure outcomes
£
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
949
4,708
53%
3,873
43%
2,411
35%
26%
1,756
32%
27%
1,950
35%
26%
771
3,804
53%
3,130
43%
2,897
53%
2,383
43%
1,418
32%
27%
1,483
35%
26%
583
32%
27%
928
500
0
100%
39%
24%
20%
100%
40%
25%
20%
100%
39%
24%
20%
Minimum
Chief Executive
On-target Maximum Maximum
plus 50%
share price
growth
Single figure
FY23
Minimum
Chief Operating Officer and
Deputy Chief Executive
On-target Maximum Maximum
plus 50%
share price
growth
Single figure
FY23
Minimum
Chief Financial Officer
On-target Maximum Maximum
plus 50%
share price
growth
Single figure
FY23
Fixed pay
Annual bonus
LTIP
Notes:
Minimum pay is fixed pay only (i.e. salary + benefits + pension).
On-target pay includes fixed pay, 50% of the maximum bonus (equal to 75% of salary) and 50% vesting of the LTPP awards (with grant levels of 200% of salary).
Maximum pay includes fixed pay and assumes 100% vesting of both the annual bonus and the LTPP awards.
Maximum pay plus 50% share price growth is the same as maximum pay for fixed pay and annual bonus but assumes a 50% increase in the share price over
the performance period for the LTPP.
All amounts have been rounded to the nearest £1,000. Salary levels (which are the base on which other elements of the package are calculated) are based on
salaries as at 1 July 2023. The value of taxable benefits is the cost of providing those benefits in the year ended 30 June 2023. The Executive Directors are also
permitted to participate in HMRC tax advantaged all-employee share plans, on the same terms as other eligible employees, but they have been excluded from
the above graph for simplicity. The LTPP awards allow participants to receive dividend equivalents but these are excluded from the scenario chart, other than
for the single figure bar.
The CFO’s replacement LTPP awards that are due to vest in October 2023 are included as LTPP in the FY23 remuneration. Dividend equivalents have been
included for the LTPP single figure bar.
FY23 performance pay outcomes
Annual bonus outcome
Further details are set out on pages 160 and 161 in the Annual Report on Remuneration.
Target
Profit before tax and
adjusted items
Capital employed
Quality and service (with
health and safety underpin)
Threshold
£1,015m
Target
£1,090m
Maximum
£1,165m
Actual £884m
£1,815m
£1,815m
£1,715m
Actual £1,733m
(i) Number of divisions achieving minimum 94% SHE monitoring
inspections gate on a rolling 12 months’ performance basis, (ii)
For 75% of this element, divisions achieving minimum 90% for
the HBF 8-week National New Homes Customer Satisfaction
survey; and (iii) for the remaining 25% of this element, number
of divisions achieving minimum 82% for NHBC 9-month
Customer Satisfaction Survey.
Divisions achieving 90% 8 week score: 23
Divisions achieving 82% 9 month score 16
Weighting
Outcome achieved
82.5%
15%
0%
13.6%
22.5%
16.5%
Reduction of total waste
generated (waste intensity)
4.87 tonnes
4.82 tonnes
4.77 tonnes
Actual 4.31 tonnes per 100m2 legally completed build area
Trading outlet openings
98 openings
103 openings
108 openings
15%
15%
15%
15%
Actual 130 openings
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LTPP vesting outcome
Further details, including the share price used to calculate the estimated value, any value of share price increases and the value
of dividend equivalents, are set out in Table 12 on page 162 of the Annual Report on Remuneration.
David Thomas
Steven Boyes
Mike Scott
Shares
awarded
Number
282,004
223,183
67,681
Percentage of award vesting
EPS
0%
0%
0%
ROCE
13%
13%
13%
TSR
6.6%
6.6%
6.6%
Total
19.6%
19.6%
19.6%
Shares
vesting
Number
55,272
43,743
13,265
Estimated
value
£000
299
237
69
Alignment of FY23 incentive performance measures with strategy
Strategic priorities
Customer first
Great places
Leading construction
Investing in our people
Anticipate our customers’
evolving needs by
continuously improving the
homes and places we build.
Secure good value land
and planning consents
where people aspire to live.
Deliver highest quality
homes, focus on excellence,
embrace MMC.
Attract and retain the
best people, invest in
their development.
Annual
bonus
How our incentive structures are aligned to delivering the strategic priorities
∙ Customer service
∙ Adjusted PBT
∙ Adjusted PBT
∙ Adjusted PBT
∙ Sustainability
∙ Capital Employed
∙ Capital Employed
∙ Sustainability
∙ Sustainability
∙ Customer service
∙ Customer service
∙ Sustainability
∙ Diversity & inclusion
LTPP
∙ Sustainability
∙ ROCE
∙ ROCE
∙ Sustainability
∙ Adjusted EPS
∙ TSR
∙ Sustainability
∙ Adjusted EPS
∙ Sustainability
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Remuneration Report continued
Directors’ Remuneration Policy
The Company’s current Directors’ Remuneration Policy (the “2020 Policy”), was approved by shareholders at the 2020 AGM.
A new Remuneration Policy will therefore be presented for approval by shareholders at the AGM in October 2023 (the “2023
Policy”). We consulted with our major shareholders and the main institutional voting agencies on the proposed minor changes to
our Remuneration Policy and its proposed implementation for FY24. If approved by shareholders, the 2023 Policy will take effect
from the date of the 2023 AGM and remain in force for three years unless changes are required.
The full version of the 2020 Policy can be found on pages 127 to 130 of the 2020 Annual Report and Accounts, which is available on
our website at www.barrattdevelopments.co.uk/investors. A description of how the Company implemented the 2020 Policy in FY23
can be found on pages 159 to 163.
Changes to Remuneration Policy
The Committee is only proposing minor changes to the Remuneration Policy, with all other aspects remaining unchanged.
The minor amendments are to reflect best practice and governance requirements only. The table below summarises these changes.
Area of policy
Changes to 2023 Remuneration Policy from the 2020 Remuneration Policy
Annual bonus
Underlying policy is unchanged, however minor drafting changes have been made to provide further clarity
in respect of potential performance metrics.
DBP
Under the 2020 Policy, bonuses up to 100% of base salary are paid in cash with any bonus earned in excess
of this (up to a maximum of 50% of base salary) deferred into shares under the DBP. To bring the policy in
line with shareholder expectations and best practice it is proposed that, with effect from FY24, a fixed
portion of at least one-third of any bonus earned by Executive Directors will instead be deferred into shares
for a period of three years.
Shareholding
requirements
Underlying policy is unchanged, however minor wording changes have been made to bring this policy in line
with best practice.
Policy table
The proposed 2023 Policy is set out below. Details of how the proposed 2023 Policy will be applied for FY24 are set out on
pages 156 to 158.
Purpose and link to
Company’s strategy
Base salary
How operated in practice
Maximum opportunity
Description of
performance metrics
To help promote the
long-term success of the
Company.
Normally reviewed annually and fixed for
12 months with any increases usually
effective from 1 July.
To reward individuals
based on the scope of
the role.
The Committee considers:
∙ individual responsibilities, skills,
experience and performance;
To attract and retain high
calibre Executive Directors
to deliver the
Group’s strategy.
To provide a competitive
salary relative to
comparable companies
in terms of size
and complexity.
∙ the level of pay increases awarded
across the Group (with the exception
of promotions);
∙ the size and responsibility of the role;
∙ economic and market conditions; and
∙ the performance of the Group.
The Committee, when setting salaries,
takes into account salary levels for
similar positions in the housebuilding
sector and within companies of a similar
size to the Group.
The Committee has the discretion to vary
salaries in the event there are changes
to any of the above within the 12-month
period for which salaries have been fixed.
Salaries are paid monthly in arrears.
There is no prescribed maximum
annual increase.
N/A
The Committee is guided by the
general increase for the broader
UK employee population but on
occasions may need to recognise
changes in the role and/or duties
of a Director; movement in
comparator salaries; and salary
progression for newly appointed
Directors.
The Committee retains the right
to approve a higher increase in
exceptional cases, such as major
changes to the Executive
Director’s role/duties; new
recruits; or internal promotions to
the position of Executive Director
whose salary was set lower than
the market level for such a role
and a higher increase is justified
as the individual becomes more
established in the role. In these
circumstances a full explanation
of the increases awarded will be
provided in the Annual Report
on Remuneration.
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Purpose and link to Company’s
strategy
Benefits (taxable)
To help promote the
long-term success of
the Company.
How operated in practice
Maximum opportunity
Description of
performance metrics
Benefits normally include:
∙ company car;
There is no formal maximum.
Benefits are provided based
on market rates.
N/A
To attract and retain high
calibre Executive Directors.
∙ private medical insurance;
∙ some telephone costs; and
To remain competitive
in the marketplace.
∙ contributions towards obtaining
independent financial, tax and
legal advice.
Other benefits offered to the wider
workforce will also be offered to
Executive Directors on the same basis.
The Committee does have the discretion
to offer other benefits it deems
appropriate to secure the appointment
of a new Executive Director or retain an
Executive Director (including relocation
benefits) and to ensure that the benefits
package for existing Executive Directors
remains competitive in the UK market.
Pension
To help promote the
long-term success of
the Company.
In accordance with legislation, Executive
Directors are enrolled into a
workplace pension.
To attract and retain
high-calibre Executive
Directors.
If Executive Directors choose to opt out
of the workplace pension they can elect
to either:
To remain competitive
in the marketplace.
∙ participate in the Company’s money
purchase pension plan; or
∙ receive a salary supplement.
Executive Directors are also eligible to
receive an insured lump sum of up to five
times pensionable salary on death in
service.
Steven Boyes remains a deferred member
of the defined benefit section of the
Group’s pension scheme, which closed to
new entrants in 2001 and future accrual
of defined benefits for current members
ceased to be offered on 30 June 2009. The
scheme was bought out by an insurer
during FY21.
N/A
Defined contribution scheme or
salary supplement not exceeding
the Company’s contribution rate
available to the majority of the
wider workforce, currently 10%
of base salary.
Legacy: Steven Boyes participated
in the defined benefit scheme:
1/60 accrual rate and a retirement
age of 65.
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Directors’ Remuneration Policy continued
Policy table continued
Purpose and link to
Company’s strategy
How operated in practice
Maximum opportunity
Description of performance metrics
The potential annual
maximum bonus is 150%
of base salary.
The level of bonus
payable at threshold is
set annually but
will not exceed 20% of
potential maximum
bonus (30% of salary).
50% of the potential
maximum bonus (75%
of salary) is payable
for achievement of
on-target performance.
Annual bonus
To motivate and
reward Executive
Directors for the
achievement of
demanding financial
and non-financial
objectives and
key strategic
measures over the
financial year.
Variable
remuneration allows
the Group to manage
its cost base by
giving it the
flexibility to react
to changes in the
market and any
unforeseen events.
The Committee has absolute discretion as
to whether or not to award a bonus and as
to the level of bonus to be awarded up to
the prescribed maximum.
The Committee annually sets financial
and non-financial performance targets
by taking account of the Company’s goals
and budget for the relevant financial year.
Group and individual performance against
these targets is measured at the end of
the financial year and the level of bonus
payable is calculated at that point. This
also takes into account the underlying
financial and operational performance of
the business relative to the sector (as
noted in the column to the right).
Up to two-thirds of any bonus earned is
paid in cash and at least one-third of any
bonus earned is deferred into shares under
the DBP for a period of three years.
The Committee retains the discretion to
decide whether or not to pay an annual
bonus to an Executive Director who has
handed in their notice and to determine,
in respect of any employee who is a “good
leaver”, whether any annual bonus earned
should be paid in cash and not deferred
into shares.
Where the Committee believes that
performance does not warrant the level of
bonus determined, it may use its discretion
to reduce the award (possibly to nil) as it
deems appropriate.
No Executive Director has any contractual
right to receive a bonus.
Annual bonus is not pensionable.
The performance targets set are
stretching whilst having regard to
the nature and risk profile of the
Company, its strategy and the
interests of its shareholders.
When setting bonus targets,
the Committee considers the effect of
corporate performance on ESG risks
and sustainability issues generally
to ensure that remuneration
structures do not inadvertently
motivate irresponsible behaviour.
The focus of the performance targets
is to deliver profit growth and to
ensure that the Company has an
adequate land bank acquired within
the constraints of its Balance Sheet
commitments.
Performance measures may include,
but are not limited to:
∙ financial items (e.g. profit before
tax, margin growth, net debt/land
creditors; and land commitment),
with a weighting greater than
or equal to 50%; and
∙ non-financial items (e.g. quality
and service, health and safety,
diversity and inclusion objectives;
and personal objectives).
The Committee has the discretion to:
∙ choose appropriate measures for
each award;
∙ vary the elements of each of these
items, including targets, and the
weightings of each component
on an annual basis; and
∙ ensure that they remain aligned
to the strategy of the business and
to market conditions.
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Purpose and link to
Company’s strategy
DBP
At least one-third of
any annual bonus
earned is deferred
into shares and held
in this plan for a
period of three years
and is normally
subject to a continued
employment
condition.
The aim is to
encourage long-term
focus and to
further align
interests with those
of shareholders and
discourage excessive
risk taking.
LTPP
To motivate and
reward Executive
Directors and Senior
Management for the
delivery of the
long-term
performance of the
Group.
To facilitate share
ownership by
Executive Directors
to align their
interests with those
of our shareholders.
How operated in practice
Maximum opportunity
Description of performance metrics
No performance conditions apply to
the vesting of awards other than a
continued employment condition.
Deferred shares are normally granted in
the form of a conditional award (but may
also be granted as nil or nominal cost
options or forfeitable awards in
accordance with the rules of the DBP).
Deferred shares will normally accrue
dividend equivalents in cash or shares,
which may be on a reinvestment basis,
and which are subject to the same terms,
including vesting date, as the deferred
share award.
Malus and clawback can be applied
in certain circumstances to both the
cash and deferred element of the bonus.
For full details see pages 148 and 149.
At least one-third of any
bonus paid is deferred
into an award over
shares under the DBP,
unless the Committee
determines otherwise
in the case of a “good
leaver”.
The Committee retains
the discretion to adjust
the proportion of bonus
deferred in exceptional
circumstances.
In accordance with the
rules of the LTPP, the
Committee has the
discretion to grant an
award up to 200% of
base salary to each of
the Executive Directors
in respect of any
financial year of the
Company.
LTPP awards:
∙ are normally granted annually in the
form of conditional awards or nil-cost
options at no cost to the Executive
Director (but may also be granted as
nominal cost options or forfeitable
awards in accordance with the rules
of the LTPP);
∙ are at the discretion of the Committee,
taking into account individual
performance and the overall
performance of the Group;
∙ are subject to the achievement of
stretching performance conditions
measured over three financial years
with a subsequent two-year post-vesting
holding period. Awards may therefore
only be realised on conclusion of the
five-year combined period; and
∙ may, at the discretion of the Committee,
accrue dividend equivalents in cash or
shares, which may be on a reinvestment
basis, and which are subject to the same
terms, including vesting date and
holding period, as the LTPP award.
Any accrued dividend equivalent will
be pro-rated, depending on the level
of award vesting.
Malus and clawback can be applied in
certain circumstances to the LTPP award.
For full details see pages 148 and 149.
Any LTPP awards are subject to
performance conditions, which are
stretching and aligned with the
Group’s strategy and the interests
of shareholders.
Financial performance conditions
will have a weighting of at least 50%.
The performance conditions are
set on the basis that they:
∙ are realistic and attainable;
∙ are for the long-term benefit
of the Group; and
∙ do not encourage inappropriate
business risks.
The Committee has the discretion
to determine the weighting of each
performance condition on the grant
of an LTPP award.
No more than 25% of an award will
vest at threshold performance (0%
will vest below the threshold level)
increasing pro-rata to 100% vesting
for maximum performance.
Overall, the Committee must be
satisfied that the underlying financial
and non-financial performance of the
Group over the performance period
warrants the level of vesting
as determined by applying the
above targets.
If the Committee is not of this view,
then it is empowered to reduce the
level of vesting (potentially to nil).
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Remuneration Report continued
Directors’ Remuneration Policy continued
Policy table continued
Purpose and link to
Company’s strategy
How operated in practice
Maximum opportunity
Sharesave
To promote long-
term share
ownership amongst
all employees of
the Group in a
tax-efficient way.
To link employee
benefits to the
performance of
the Group.
To aid retention
of employees.
Under the standard terms, employees
must have completed the requisite length
of service as at the invitation date to be
eligible to participate in the Sharesave.
Save up to the maximum monthly
amount as specified by legislation
or HMRC and as approved by the
Committee and the Board.
The Committee reserves the right to
amend contribution levels to reflect
changes made by HMRC or the
Government from time to time.
Employees can elect to save between a
minimum of £5 and the maximum monthly
savings limit as approved by the
Committee and the Board within the limits
prescribed by legislation and HMRC,
for a period of three or five years.
Subject to the rules of the Sharesave, at
the end of the savings period the employee
has six months in which to exercise
their option.
Shareholding requirements
Description of
performance metrics
Continued
employment for
the duration of the
scheme and “good”
and “bad” leaver
provisions in line
with the rules of
the Sharesave.
N/A
N/A
To further align the
interests of
Executive Directors
to those
of shareholders.
Executive Directors are required to build
and retain a shareholding equivalent to
200% of base salary in the Company’s
shares within five years of the
shareholding requirement coming into
force or the Executive Director being
appointed to the Board, whichever is the
later. The share price used for the
purposes of determining the value of the
shares is that prevailing on 30 June of the
given year.
The Committee reserves the right to
amend the percentage holding required by
the Chief Executive and the other Executive
Directors depending on market conditions
and best practice guidance.
Executive Directors are also subject to a
post-cessation shareholding requirement
of 200% of their salary or their actual level
of shareholding at cessation of
employment if lower (based on their salary
and the share price at the date of cessation
of employment). The Committee has
implemented suitable measures to ensure
continued enforcement of the shareholding
requirement during the post-cessation
shareholding period. The Committee
retains the discretion to waive the post-
cessation shareholding requirement in
exceptional circumstances.
Details of the Executive Directors’
shareholdings can be found in Table 16
on page 164.
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Purpose and link to
Company’s strategy
How operated in practice
Maximum opportunity
Description of
performance metrics
Non-Executive Directors’ fees (including the Chair)
To attract and
retain high quality
and experienced
Non-Executive
Directors (including
the Chair).
The remuneration of the Non-Executive
Directors is set by the Board on the
recommendation of a committee
comprising the Chair and the
Executive Directors.
The Board sets the remuneration of
the Chair.
Non-Executive Director fees must
remain within the aggregate limit
approved by shareholders from time
to time.
N/A
The current aggregate limit
is £1,000,000.
The Chair and the Non-Executive
Directors’ fees are reviewed annually and
are normally set by reference to the level
of fees paid to the Chairs and Non-
Executive Directors serving on boards of
similarly sized, UK-listed companies,
taking into account the size, responsibility
and time commitment required of the role.
The Chair’s and Non-Executive Directors’
fees are paid in cash, monthly in arrears.
Neither the Chair nor the Non-Executive
Directors participate in any performance-
related schemes (e.g. annual bonus or
incentive schemes) nor do they receive any
pension or private medical insurance or
taxable benefits other than the potential to
receive gifts at the end of a long-standing
term of appointment.
Expenses incurred by the Chair and the
Non-Executive Directors in the
performance of their duties for the
Company (including taxable travel and
accommodation benefits in connection
with travelling to a permanent workplace)
may be reimbursed or paid for directly by
the Company, as appropriate.
Additional fees are payable to the Chairs of
the Audit, the Remuneration and the SHE
Committees, the Senior Independent
Director, the Designated NED for
Workforce Engagement and for
membership of Board Committees.
Additional fees may be paid where, in
exceptional circumstances, the normal
time commitment is significantly exceeded.
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Remuneration Report continued
Directors’ Remuneration Policy continued
Performance conditions and target setting
The Committee annually reviews the performance measures
and targets taking into consideration a number of factors
including the performance of the Group throughout the previous
financial year, internal and external forecasts and consensus
figures for the performance period and the Group’s strategy.
The annual bonus scheme is measured against key financial
(Adjusted PBT and Capital Employed) and non-financial metrics
(quality and service, health and safety, and diversity and
inclusion). Both the financial and non-financial measures are
aligned to our strategy, and allow individuals to focus on the key
factors that will help drive short and long-term operational and
financial success of the business.
The LTPP is assessed against measures that, focus on delivering
attractive cash returns to our shareholders, align the Group’s
performance with strategy and the interests of stakeholders and
encourage efficiency throughout the business.
Value delivered to shareholders is recognised through relative
TSR, which is measured against both the 50+/50- FTSE group and
a housebuilder index. This ensures that strong returns are delivered
against an appropriate size group of companies and an index of
our peers. Adjusted EPS and underlying ROCE ensure that we are
efficiently and effectively managing the business, whilst aligning
the Executive Directors with the interests of shareholders. GHG
emissions reduction targets ensure we remain on track to achieve
our published sustainability commitments.
Targets are set within the context of both internal and external
forecasts and are designed to be appropriate within the context
of the Group’s strategic objectives and historical and expected
performance levels. The performance targets are designed to
be sufficiently stretching in order to ensure that maximum
payout is only achieved for delivering exceptional performance.
Guidelines on responsible investment disclosure
In line with the IA’s Guidelines on Responsible Investment
Disclosure, the Committee is satisfied that the incentive structure
and targets for Executive Directors do not raise any ESG risks
by inadvertently motivating irresponsible or reckless behaviour.
The Committee considers that no element of the remuneration
package will encourage inappropriate risk taking within
the Company.
Committee discretion
The areas of the Policy over which the Committee has discretion
are included in the policy table set out on pages 142 to 147.
However, we have summarised the key discretions below:
∙ amendment of salary or the award of higher increases in
exceptional circumstances;
∙ variation of benefits offered to secure new appointments or
retain existing Executive Directors;
∙ whether or not to make a bonus award and whether payment
should be made to anyone who has handed in their notice
to leave the business;
∙ what performance conditions should be attached to annual
bonus and LTPP awards and the weighting of each to be applied;
∙ determining the timing of awards and/or payments, including
grant, vesting or release dates;
∙ determining the quantum of awards and/or payments
(within the limits set out in the policy table on pages 142 to 147);
∙ determining the application of dividend equivalents, whether
they should be issued in shares, including on a re-investment
basis, or cash and retaining the ability to adjust the amount paid;
∙ determining the extent of vesting based on the assessment of
performance or such other factors as it considers appropriate;
∙ the settlement of any share awards in cash in exceptional
circumstances;
∙ making the appropriate adjustments required in certain
circumstances (e.g. change of control, rights issues,
corporate restructuring events, and special dividends);
∙ determining “good leaver” status for incentive plan purposes
and applying the appropriate treatment, including the timing
of any vesting;
∙ determining the extent to which malus and/or clawback
should apply to any award;
∙ determining the level of post-cessation shareholding the
Executive Directors need to hold; and
∙ determining the exceptional circumstances under which the
post-cessation shareholding requirements can be waived.
If an event occurs which results in the annual bonus plan or
LTPP performance conditions and/or targets being deemed no
longer appropriate (e.g. a material acquisition, divestment or
wider market or economic circumstances that the Committee
deem relevant), then the Committee will have the ability to
adjust appropriately the measures and/or targets, and/or to
alter the weighting of the measures. The Committee also has
the discretion to increase or decrease any annual bonus or
LTPP awards (potentially reducing them to nil) in the event that
the formulaic outcome is not reflective of overall Company
performance or aligned with the underlying financial and/or
non-financial performance of the Group, or where
environmental incidents, health and safety incidents or other
wider economic or market circumstances warrant an adjustment
to the final outcome in order to determine a reasonable and
appropriate result. The Committee also retains discretion to
adjust LTPP vesting outcomes to avoid windfall gains in the
event the share price has fallen materially before a given award
is made. Any exercise of discretion will be fully explained
in the corresponding year’s Remuneration Report.
Malus and clawback
Malus and clawback is applicable to any annual bonus paid
or deferred for a period of three years beginning on the date of
the award and to any share awards granted under the LTPP for
a period of five years beginning on the date of the award.
In the case of malus, the Committee may, at any time prior to the
payment of any bonus or any deferred or LTPP shares becoming
vested shares, decide to reduce the amount of bonus to be paid
and/or reduce the number of deferred or LTPP shares (including
to nil) on such basis as it considers to be fair, reasonable and
proportionate where, in the opinion of the Committee, there
are exceptional circumstances.
In the case of clawback, the Committee may decide that the
individual to whom the payment was made and/or deferred
and/or LTPP shares were granted shall be subject to clawback,
on such basis as it considers to be fair, reasonable and
proportionate, if in relation to the bonus paid and/or the
deferred or LTPP shares that have vested, in the opinion of
the Committee there are exceptional circumstances.
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Exceptional circumstances include (without limitation):
a.
b.
c.
a material misstatement in the published results of
the Company or Group or any member of the Group;
an error in assessing any applicable performance
conditions or the amount of bonus to be paid and/or the
number of deferred or LTPP shares subject to an award;
the assessment of any applicable performance conditions
and/or the amount of bonus to be paid and/or the number
of deferred or LTPP shares subject to an award being based
on inaccurate or misleading information;
d.
serious misconduct on the part of an individual(s);
e.
f.
a breach by the individual of any restrictive, confidentiality, or
non-disparagement covenants or other similar undertakings,
whether contained in the individual’s employment contract
and/or settlement agreement and/or any other agreement
between the individual and any member of the Group;
where, as a result of an appropriate review of accountability,
the Committee determines that an individual(s) has caused
wholly or in part a material financial loss for the Group as
a result of:
−
−
reckless, negligent or wilful actions or omissions; or
inappropriate values or behaviour;
g.
material breach of health and safety or
environmental regulations;
h.
material failure of risk management;
i.
j.
a member of the Group is censured by a regulatory body
or suffers, in the Committee’s opinion, a significant
detrimental impact on its reputation, provided that the
Committee determines that, following an appropriate review
of accountability, an individual(s) was responsible for, or had
management oversight over, the actions, omissions or
behaviour that gave rise to that censure or detrimental
impact; or
the Company or entities representing a material proportion of
the Group become insolvent or otherwise suffer a corporate
failure so that ordinary shares in the Company cease to have
material value, provided that the Committee determines,
following an appropriate review of accountability, that an
individual(s) should be held responsible (in whole or in part)
for that insolvency or failure.
Where clawback is to be applied, the Committee may
determine that:
∙ any bonus will be retrospectively recalculated and, if bonus
monies have been paid, the relevant individual(s) will be
required to reimburse the Company for an amount up to the
total amount of the original net bonus paid less any bonus
that the Committee determines would have been paid
regardless of the event in question;
∙ that the number of deferred or LTPP shares be
retrospectively recalculated. If the deferred or LTPP shares
have been granted, the number of shares awarded will be
reduced accordingly. If the deferred or LTPP shares have
vested and shares have been issued or transferred to the
individual(s), they will be required to repay the value of the
relevant number of shares based on the Company’s closing
share price as at the date the shares were issued; and
∙ malus will be applied to an alternative unvested award to
satisfy a clawback event on a vested/released award.
Recruitment of Executive Directors
The Committee’s approach to recruitment remuneration is
to pay no more than is necessary to attract candidates of the
appropriate calibre and experience needed for the role. The
remuneration package for any new recruit will take into account
the skills and experience of the individual, the market rate for a
candidate of that experience and the importance of securing the
relevant individual. Internal pay relativities and the terms and
conditions of employment of the new and existing Executive
Directors will be considered to ensure fairness between them.
The Committee will determine the remuneration for any new
Executive Directors in accordance with the Remuneration Policy
then in force and will take into consideration each of the
following elements:
Salary and benefits – the Committee will take into account
market data for the scope of the job, the remuneration for the
relevant role, the salaries of and benefits provided to existing
Executive Directors, the new Executive Director’s experience,
location and current base salary and benefits package. In the
event an Executive Director is recruited at below market levels,
their base salary may be re-aligned over a period of time (e.g.
two to three years) subject to their performance in the role. The
Committee may also agree to cover relocation costs if it
deems it appropriate.
Pension – Executive Directors will be auto-enrolled from the
date of recruitment unless they opt out. If an Executive Director
chooses to opt out they may elect to receive a pension
supplement in cash. The Committee has discretion to determine
the level of pension supplement to be awarded to the Executive
Director, up to a maximum which is equivalent to the percentage
normally offered to the wider workforce. Alternatively, the
Executive Director may choose to join the defined contribution
money purchase pension plan provided they meet all of the
eligibility criteria. The Executive Director also has the option to
receive some of their pension entitlement in cash and have the
remainder contributed to the defined contribution money
purchase pension plan, provided this does not, in aggregate,
exceed the agreed percentage.
Annual bonus and LTPP – new Executive Directors may be able
to participate in the annual bonus scheme and the LTPP on
terms to be considered by the Committee on a case by case
basis. Any award made to a new Executive Director will usually
be on the same terms as set out in the policy table on pages 144
and 145. The level of the award will be no greater than that made to
existing Executive Directors (150% of salary for the annual
bonus and 200% of salary for the LTPP) and will be pro-rated
based on the number of weeks remaining outstanding of the
relevant performance period.
Buyout of existing entitlements – the Committee may also
consider buying out existing entitlements that an individual
would forfeit on leaving their current employer, again this would
be reviewed on a case by case basis. In determining any
potential awards to be granted to a new recruit, the Committee
will consider the relative levels of certainty and balance of fixed
to variable compensation in the forfeited package in totality,
including salary, benefits and other components. The Committee
would however in all cases seek validation of the value of any
potential entitlement that is being forfeited and take into
account the proportion of any performance period remaining
of the award, the type of award (i.e. cash or shares) and the
performance achieved (or likely to be achieved). Replacement
share awards, if any, will seek to reflect (to the extent possible)
the value, degree of conditionality and form of award of the
entitlement forgone.
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Remuneration Report continued
Directors’ Remuneration Policy continued
Recruitment of Executive Directors continued
In structuring any buyouts, existing arrangements will be used
where possible, however, the Company may also make use of
the flexibility provided by the UKLA Listing Rules to make
awards without prior shareholder approval. Buyouts may
therefore fall outside normal policy maximum levels.
Where an individual is recruited internally to the position
of Executive Director, the Company will seek to honour any
pre-existing contractual commitments, taking into account
the remuneration of the existing Executive Directors.
Executive Directors’ service contracts
Details of the Executive Directors’ service contracts are
included in Table 1 below and their remuneration for FY23
is shown in Table 7 on page 159. The Company’s policy is for
Table 1 – Executive Directors’ service contracts
all Executive Directors’ (including new appointments) service
contracts to be for a rolling 12-month period, which can be
terminated by 12 months’ notice given by either the Company or
by the Executive Director at any time. The service contract
normally entitles an Executive Director to the provision of a
company car, annual medical screening, permanent health
insurance, private medical insurance, some telephone costs,
contributions to the cost of obtaining independent financial
and tax advice and payment of legal fees on cessation of
employment. The Committee regularly reviews contractual
terms for Executive Directors to ensure that they continue
to reflect best practice.
All Executive Directors’ appointments and subsequent
reappointments are subject to election and annual re-election
by shareholders at the Company’s AGM.
Executive Director
David Thomas
Steven Boyes
Mike Scott
Service contract date
16 January 2013
21 February 2013
28 June 2021
Date of appointment
21 July 2009
1 July 2001
6 December 2021
Notice period
12 months
12 months
12 months
The service contracts for Executive Directors are available for inspection by any person at the Company’s registered office during
normal office hours and on the Company’s website: www.barrattdevelopments.co.uk/investors.
Executive Directors’ policy on payment on loss of office
There are no specific provisions for compensation on early
termination (except for payment in lieu of holidays accrued but
untaken) or loss of office due to a change of ownership of the
Company. The Committee reserves the right to make additional
payments where such payments are made in good faith: (a) in
discharge of an existing legal obligation (or by way of damages
for breach of such an obligation); or (b) by way of settlement
or compromise of any claim arising in connection with the
termination of an Executive Director’s office or employment. The
Committee may also provide a contribution towards reasonable
legal costs and the provision of outplacement services.
The Committee will apply mitigation against any contractual
obligations as it deems fair and reasonable and will seek
legal advice on the Company’s liability to pay compensation.
The Committee may also seek to reduce the level of any
compensation payable and will take into account, amongst other
factors, the individual’s and the Group’s performance;
the Director’s obligation to mitigate their own loss; and the
Director’s length of service when calculating termination
payments. The Committee reserves the right to phase any such
payments if it deems that it is appropriate to do so. Any amount
that the Committee decides to pay an Executive Director will be
based on the main elements of executive remuneration namely,
base salary, annual bonus and LTPP (subject to the Committee’s
discretion), benefits and pension. Regarding salary, benefits
and pension, there will be no compensation in the event of
termination by the Company due to gross misconduct. In other
circumstances, Executive Directors may be entitled to receive
notice pay or payment in lieu of notice. The Committee also
takes into account the rules of the annual bonus and LTPP
schemes when determining any payments for loss of office
as follows:
Annual bonus – in accordance with the provisions contained
within the service contracts, Executive Directors are not usually
entitled to any bonus payments (other than in circumstances
where they are deemed by the Committee as a “good leaver”,
which includes, but is not limited to, redundancy, retirement, ill
health, disability, death or any other circumstances which the
Committee may decide), unless they remain employed and are
not under notice as at the payment date. The default position
will be that such payment will be pro-rated depending on the
proportion of the bonus period worked by the relevant individual
unless the Committee decides otherwise. Any bonus payment to
the leaving Executive Director will normally be paid entirely in
cash. The Committee retains the ultimate discretion to make
bonus payments and determine the basis on which they are
made and their value, taking into account the individual
circumstances of the departure, the treatment of other
incentive awards and the performance of the individual.
Deferred bonus – if the Executive Director is deemed to be a
“good leaver” (as defined above), their deferred share awards
will vest on the normal vesting dates unless the Committee, in
its discretion, determines that they will vest on an earlier date
(other than in the case of death when deferred share awards
will vest immediately, unless the Committee, in its discretion,
determines that they will vest on the normal vesting dates).
In all other cases, the award of deferred shares will lapse
immediately on the date that the Executive Director’s employment
with the Company ends and there is no entitlement to any
compensation for the loss of shares. In the case of vested
nil-cost options, any leaver, other than an employee who has
been summarily dismissed) may exercise their option within
12 months of their cessation date.
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LTPP – under the rules of the LTPP, unless the Executive Director
is deemed by the Committee to be a “good leaver” (as defined on
page 150) any unvested LTPP awards held by them will lapse on
cessation of their employment. For “good leavers”, the Committee
would normally pro-rate the number of awards for time,
measuring performance over the original performance period
and vesting shares at the end of the vesting period. The Committee
has discretion to test performance at an earlier date, shorten
the vesting period and/or disapply time pro-rating. Any exercise
of discretion would be explained in full to shareholders in the
following year’s Remuneration Report. Following the vesting of
each award, the normal post-vesting holding period will apply,
unless the Committee determines otherwise.
Corporate events
In the event of a change of control of the Company,
the Committee may determine that:
∙ annual bonus awards for the year during which the change of
control occurred may either continue to be determined on the
basis of the whole year or may be pro-rated to the date of the
change of control;
∙ unvested deferred bonus awards will vest on the change of
control, unless the Committee agrees with the acquiring
company that they will be exchanged or replaced with
equivalent awards over shares in another company,
continuing to their normal vesting date; and
∙ unvested LTPP awards will vest on the date of the change
of control, subject to time pro-rating (unless the Committee
considers it appropriate to disapply time pro-rating) and
the Committee’s assessment of the extent to which the
performance conditions have been achieved on such basis as
it may determine, unless the Committee agrees with the
acquiring company that they will be exchanged or replaced
with equivalent awards over shares in another company,
continuing to their normal vesting date and subject to the
same or equivalent performance conditions.
In the event of a demerger, distribution (other than an ordinary
dividend) or other transaction which would affect the current or
future value of any award, the Committee may allow awards to
vest on the same basis as for a change of control described
above. Alternatively, an adjustment may be made to the number
of shares if considered appropriate.
Differences between Executive Directors’ and
employees’ remuneration
The following differences exist between the Company’s Policy
for Executive Directors’ remuneration as set out in the Policy
table on pages 142 to 147 and its approach to the payment of
employees generally:
∙ a lower level of maximum annual bonus opportunity may
apply to employees other than the Executive Directors. All
employees, including Executive Directors, are subject to
similar performance targets; however, the weightings against
the various targets may vary;
∙ for the Executive Directors and some members of Senior
Management, up to two-thirds of any bonus earned is paid
in cash and the remainder is deferred into shares under
the DBP for a period of three years;
∙ Executive Directors and some members of Senior
Management may opt to receive a cash supplement in lieu
of pension. The cash supplement or employer’s contribution
rate for all Executive Directors will be at the maximum rate
of employer’s contribution for the wider workforce, currently 10%;
∙ Executive Directors are able to participate in the LTPP. A number
of select employees at Senior Management level may also be
invited to participate in the LTPP at the Committee’s discretion,
with grants based on a combination of performance share
awards and restricted share awards; and
∙ in July 2023, and over the previous five financial years,
employees below Senior Management have been awarded
a smaller number of shares under an employee long-term
incentive plan. This award was not available to Senior
Management or Executive Directors.
In general, these differences arise from the development of
remuneration arrangements that are market competitive for the
various categories of individuals. They also reflect the greater
emphasis placed on performance-related pay for
Executive Directors.
Performance scenario charts
Performance scenario charts setting out policy minimum,
on-target, maximum and maximum plus 50% share price
growth for FY24, are shown on page 140, along with the single
figure outcome for FY23. The figures are split by the different
elements of pay.
Non-Executive directorships
Subject to Board approval, Executive Directors are permitted
to accept one Non-Executive directorship outside the Company
and retain any fees received from such a position. Board
approval will not be given for any Non-Executive position where
such appointment would lead to a material conflict of interest or
would have an effect on the Director’s ability to perform their
duties to the Company.
Chair and Non-Executive Directors’ letters
of appointment
The Chair and each of the Non-Executive Directors are
appointed for an initial three-year term under terms set out in a
letter of appointment. Their appointments can be terminated by
the Board without compensation for loss of office subject to the
notice periods in their respective letters of appointment. The
notice periods, applicable from either party, are three months
for the Chair and one month for each of the Non-Executive
Directors. The Chair and each of the Non-Executive Directors
usually serve a second three-year term subject to performance
review and can serve a further term of three years subject to
rigorous review by the Chair and the Nomination Committee.
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Remuneration Report continued
Directors’ Remuneration Policy continued
Chair and Non-Executive Directors’ letters of appointment continued
Details of the letters of appointment for the Chair and Non-Executive Directors being proposed for election or re-election at the
forthcoming Annual General Meeting are set out in Table 2 below. Their letters of appointment are available for inspection by any
person at the Company’s registered office during normal office hours and are available on the Company’s website:
www.barrattdevelopments.co.uk/investors.
Table 2 – Non-Executive Directors’ letters of appointment
Non-Executive Director
Katie Bickerstaffe
Jasi Halai
Jock Lennox
Caroline Silver
Chris Weston
Date elected/
re-elected at AGM
17 October 2022
N/A
17 October 2022
N/A
17 October 2022
Date first appointed
to the Board
Date last reappointed
to the Board
Unexpired term at
30 June 2023
1 March 2021
1 January 2023
1 July 2016
1 June 2023
1 March 2021
N/A
N/A
1 July 2022
N/A
N/A
8 months
30 months
24 months
35 months
8 months
Gifts to Directors on leaving employment
The Committee reserves the discretion to approve gifts to long-serving Directors who are retiring or who are “good leavers” e.g.
those leaving office for any reason other than dismissal or misconduct. The value of the gift for any one Director shall be limited to
a maximum of £5,000 (excluding any tax or VAT liability). Where a tax or VAT liability is incurred on such a gift, the Committee has
the discretion to bear the cost of such liability on behalf of the Director in addition to the maximum limit.
Legacy arrangements
The Committee reserves the right to make any remuneration payments and/or payments for loss of office (and to exercise any
discretions available to it in connection with such payments) notwithstanding that they are not in line with the 2023 Policy set out
above where the terms of the payment were agreed (i) before the date the Company’s first remuneration policy came into effect; (ii)
before the 2023 Policy came into effect, provided that the terms of the payment were consistent with the remuneration policy in
force at the time they were agreed; or (iii) at a time when the relevant individual was not a Director and, in the opinion of the
Committee, the payment was not in consideration for the individual becoming or having been a Director of the Company. For these
purposes “payments” includes the Committee satisfying awards of variable remuneration and, in relation to an award over shares,
the terms of the payment are “agreed” at the time the award is granted.
Process for determining the Remuneration Policy
The process used to formulate the remuneration policy was as follows:
Stage 1
Remuneration consultant benchmarks best practice to help the Committee determine areas of focus.
Stage 2
Remuneration consultant and management provide detailed insight into the areas of focus to determine how the policy might
be amended and implemented annually over its life.
Stage 3
Committee discusses and approves the proposed policy, taking into account the remuneration of the wider workforce.
Stage 4
Chair of the Committee consults with shareholders and main investor representative bodies to obtain their views.
Stage 5
Feedback from the consultation is considered by the Committee and a final updated policy is approved.
Stage 6
Final policy is disclosed in the Annual Report and Accounts and presented to shareholders for approval at the AGM.
As part of this process, the Committee considers the budgeted salary increases and other remuneration arrangements
and employment conditions for all employees when determining remuneration for the Executive Directors.
It is expected that future salary increases for the Executive Directors will be no more than that given to the wider workforce, except
in exceptional circumstances, such as where a recently appointed Executive Director’s salary is increased to reflect their growth in
the role over time or where significant additional responsibilities are added to the role.
As a key principle, management provides the Committee with visibility of the potential impact of proposed changes to the Executive
Directors’ Remuneration Policy on the wider employee population.
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How the Committee has addressed the requirements of the Code in determining Directors’ Remuneration Policy
and practices
Code requirement
Clarity – remuneration arrangements should be transparent
and promote effective engagement with shareholders and
the workforce.
Simplicity – remuneration structures should avoid complexity
and their rationale and operation should be easy to understand.
Variable remuneration for any year is set out clearly in the prior
year’s Annual Report, together with performance targets (unless
they are deemed to be commercially sensitive). Outcomes are
aligned with strategic objectives through the use of appropriate
performance targets, which align them with shareholder
interests and the Group’s strategy and provide for the long-term
success of the Company, in the interest of the workforce and
other stakeholders.
The Company operates a UK market standard approach to
remuneration which is familiar to stakeholders. Performance
targets are readily understandable and published as part of the
year-end results.
Risk – remuneration arrangements should ensure reputational
and other risks from excessive rewards, and behavioural risks
that can arise from target-based incentive plans, are identified
and mitigated.
The Committee has discretion to ensure that variable pay
outcomes are in line with Company and individual performance.
Share awards are subject to post vesting holding periods, and
malus and clawback as set out on pages 148 and 149.
Predictability – the range of possible values of rewards to
individual Directors and any other limits or discretions should
be identified and explained at the time of approving the policy.
Proportionality – the link between individual awards, the
delivery of strategy and the long-term performance of the
company should be clear. Outcomes should not reward
poor performance.
Alignment with culture – incentive schemes should drive
behaviours consistent with company purpose, values
and strategy.
Minimum, on-target and maximum outcomes for Directors are
shown annually in this report (see page 140). Limits and
discretions for each type of reward are explained in the policy
table which can be found on pages 142 to 147.
The Company’s incentive plans reward the successful
implementation of strategy through the alignment of
performance targets with strategic KPIs. The performance
underpin which applies to both the annual bonus and LTPP
outcomes ensures that poor performance is not rewarded. The
Committee also has discretion to override formulaic outcomes.
Our remuneration strategy ensures that performance targets do
not encourage inappropriate behaviours. The targets that are
selected help align the interests of the workforce with those of
the Company’s purpose and strategy as illustrated on page 141.
Statement of consideration of pay and employment conditions elsewhere across the Group
The level for all employees’ salaries is determined with reference to the rate of inflation, salaries for similar positions throughout
the industry and general themes and trends in respect of remunerating employees. In determining the Policy for Executive
Directors’ remuneration, and in determining the annual increase in base salary, the Committee takes into consideration the pay
and employment conditions of all employees across the Group. While the Company did not explicitly consult with employees when
drawing up the Policy, during the year, the Workforce Forum discussed remuneration strategy, including executive reward strategy,
and was asked for feedback for management.
The Company also operates a Sharesave scheme and makes conditional awards of shares to all employees. This enables all
employees to become shareholders in the Company, and to comment on the Group’s Policy in the same way as all of our
other shareholders.
To build the Committee’s understanding of reward arrangements applicable to the wider workforce, it is provided with data on
the remuneration structure for senior management levels below the Executive Directors, as well as corresponding comparison
benchmarking information for each role. In addition, the Group provides a number of ways in which employees can ask questions
and give feedback on such matters should they so wish. This includes the Employee Communications mailbox, personal
development reviews, the Workforce Forum, a dedicated Workforce Forum email address and an email address for employees
to directly contact the Designated Non-Executive Director for Workforce Engagement. Details of engagement with the workforce,
including on executive remuneration are provided in the Stakeholder engagement section of the Strategic Report on page 55. The
Committee reviews this feedback, which provides further context in relation to pay and conditions throughout the organisation.
These valuable insights were considered when the Committee developed the 2023 Policy.
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Remuneration Report continued
Directors’ Remuneration Policy continued
Statement of consideration of shareholder views
Each year we update our major shareholders on the Committee’s
application of the Policy and our performance in advance of the
publication of our Annual Report and Accounts. The Committee
takes into account shareholder feedback received from this
exercise and any additional feedback received during any
meetings from time to time, as part of the Company’s annual
review of the Policy. In addition, the Committee will seek to
engage directly with major shareholders and their representative
bodies should any material changes be proposed to the Policy.
In May 2023, we consulted with our major shareholders and
the main institutional voting agencies over the proposed minor
changes to the Policy, and no areas of concern were raised. Details
of the votes cast for and against the resolution to approve last year’s
Remuneration Report can be found in Table 22 on page 168.
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Annual Report on Remuneration
In this section, we provide an overview of the Committee and its advisers, as well as how the proposed Policy will be applied
in FY24 and how the current Policy has been implemented throughout FY23, together with the resulting payments to Directors.
The Annual Report on Remuneration will be subject to an advisory vote at the 2023 AGM.
Membership and attendance at Committee meetings
Membership of the Committee comprises all of the Non-Executive Directors, and attendance at each of its scheduled meetings during
the year is set out on page 137. The Committee is chaired by Katie Bickerstaffe. The Executive Directors are not members of the
Committee and no Director or senior manager is present at the Committee’s meetings when their own remuneration is being considered.
Advisers to the Remuneration Committee
In carrying out its principal responsibilities, the Committee has the authority to obtain the advice of external independent remuneration
consultants and is solely responsible for their appointment, retention and termination. In line with best practice, the Committee
assesses annually whether the appointment remains appropriate or if it should be put out to tender. The last such tender took place
in 2017, resulting in PwC being appointed as the advisers to the Committee with effect from 1 January 2018. PwC is a signatory to
the Remuneration Consultants Group’s Code of Conduct. As part of the annual review and reappointment process, the Committee
satisfied itself that PwC remained objective and independent during the year.
In addition to remuneration advice, PwC also provides taxation, consultancy, corporate finance and internal audit services to the
Group. PwC is also currently the independent adviser to the Sustainability Committee and advises our Business Safety Unit. PwC
has no current connections with the Company (save as described in this section) nor with any individual Directors.
During the year, the Committee has taken advice from PwC on best practice in executive remuneration and benchmarking. The Chair
of the Committee also sought advice from PwC, independent of management, on various matters to be discussed at committee
meetings particularly regarding the review of Policy. The fees payable to PwC are based on an annual fixed fee for a specified
service with anything outside this scope being charged on a time and disbursement basis. PwC’s fees for services provided to
the Committee during the year under review were £189,567 (FY22: £130,200).
The Committee also receives input into its decision making from the Chief Executive, the Company Secretary, and the Group HR
Director, none of whom were present at any time when their own remuneration was being considered.
Role and main activities undertaken by the Committee during the financial year
The Committee’s role is to determine and agree the Policy for Executive Directors and Senior Management whilst taking into
account the remuneration of the wider workforce. It follows an annual work programme which was fully completed during the year.
The Committee’s responsibilities, as delegated by the Board, are formally set out in its written Terms of Reference, which are
available from our website at www.barrattdevelopments.co.uk/investors/corporate-governance. Details of the annual evaluation
of the Committee’s performance can be found on page 123 and key activities undertaken in the year are set out in the table below:
Priorities
Work carried out and outcomes
Executive Directors’
remuneration
With assistance from its remuneration consultants, the Committee reviewed the Policy approved by
Shareholders at the 2020 AGM, discussed and agreed a number of proposed changes (see page 142).
Considered salaries of Executive Directors and Senior Management for FY24 in the context of the
remuneration of the wider workforce. The outcome of this review is set out on page 156.
Considered and agreed amendments to the structure of the bonus scheme for FY24; considered the
structure of the 2023 LTPP and determined it remained appropriate (see pages 156 to 158 for
further details).
Discussed future performance measures and targets for both the annual bonus and LTPP plans
and agreed to introduce a Diversity & Inclusion measure for the FY24 annual bonus.
Discussed and approved publication of the 2022 Gender and Ethnicity pay gap reports.
Considered whether the Group’s current remuneration structures remained appropriate and support
the future strategy of the business, including the potential introduction of a restricted share plan, which
was agreed for Senior Management below Board level.
Governance
Undertook benchmarking for the new Chair’s fees, prior to her appointment. The Committee revisited
the new Chair’s fee in June 2023 and agreed an increase (see page 158) to reflect the acceleration of
her succession to the position of Chair.
Considered severance agreements in relation to a member of senior management.
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Remuneration Report continued
Annual Report on Remuneration continued
Statement of implementation of the Remuneration Policy for FY24
Executive Directors’ remuneration for FY24 will be based on the Remuneration Policy to be proposed at the October 2023 AGM,
subject to approval by shareholders. This is set out on pages 142 to 154.
Base salary
The Committee reviewed the salaries of the Executive Directors in June 2023, taking into account their individual performance during the year,
the annual salary review for other employees in the Group where average salary increases were at 5.3%, and the multiplier effect of an increase
in base salary on the Directors’ package as a whole. The Committee also took into account the performance of the Company and ensured that
after any increase the salaries would remain within the range for similar sized companies and the housebuilding sector. Accordingly, the
Committee believed that it was justified in awarding a salary increase of 4% for each of the Executive Directors, which is below the average
salary increase awarded to the wider workforce. The Executive Directors’ salaries with effect from 1 July 2023 will therefore be:
Table 3 – Executive Directors’ salaries
Executive Director
David Thomas
Steven Boyes
Mike Scott
Salary with effect
from 1 July 2023
£000
Salary with effect
from 1 July 2022
£000
836
674
514
803
648
494
Pension
Each of the Executive Directors will continue to receive a pension contribution (or cash supplement) which is in line with the wider
workforce, currently 10% of base salary.
Annual bonus
Executive Directors and Senior Management will participate in the Group’s annual bonus scheme in accordance with the Policy.
The Committee has agreed to include a new Diversity & Inclusion measure for FY24. Diversity & Inclusion is a key strategic priority
for the business. The Committee and the Board recognise the need for the business to reflect the communities within which
it operates. Whilst steps have been taken to improve diversity & inclusion within the Company, the Committee believes that further
focus is required to drive this agenda forward. A key area that can help us to do this, is to ensure that we are attracting, and
recruiting from, a diverse range of candidates.
The Committee is of the view that the individual annual bonus performance targets are commercially sensitive. Therefore,
in line with market practice, these will be disclosed, with performance against them, in next year’s Remuneration Report.
The performance measures, their reasons for selection and the maximum bonus payment against each of them expressed
as a percentage of salary for FY24 will be:
Table 4 – FY24 annual bonus performance measures
Weighting
(% of salary
maximum)
82.5
15.0
22.5
Financial
Performance measures
Definition
Reason for selecting
Profit after all finance costs/income and the Group’s
share of the profits from its joint ventures, excluding
adjusted items.
Rewards outperformance against
stretching targets and is a key
measure of our performance.
Average net assets calculated by a three point average
excluding goodwill and intangibles, tax, net cash/(debt),
retirement benefit assets/obligations, derivative
financial instruments, land, land creditors, trade
payables and legacy property provisions.
Ensures efficient use of
available capital.
A three stage assessment is applied:
(i) A Division must achieve a minimum SHE monitoring
inspections gate on a rolling 12 months’ performance basis,
to be considered for the customer service element;
(ii) To earn any bonus for this element, the Division must
achieve a minimum score for the HBF 8-week National
New Homes Customer Satisfaction survey; and
(iii) If the minimum score for the 8 weeks survey is achieved,
the Division will be considered for a further proportion of
this element if they achieve the minimum score for the
NHBC 9-month Customer Satisfaction survey.
Ensures a focus on quality and
service to our customers without
compromising the health and safety
of our employees, customers,
suppliers, sub-contractors and
members of the public.
Adjusted profit
before tax
Capital employed
Non-financial
performance measures
Quality and service
(with a health &
safety underpin)
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Diversity and
inclusion
To change our attraction and recruitment process
to ensure that we have more diverse pools of talent
to recruit from which results in enhanced diversity
being recruited into the business.
Reduction of waste
Reduction of site waste (tonnes of waste for every 100m2
of legally completed build area).
Total bonus achievable as a % of salary
To focus individuals on ensuring that,
as part of any recruitment process,
they identify a shortlist of candidates
which will help further improve
diversity within the business.
Focus individuals on reducing
the amount of construction waste
intensity, which is a key element of
our overall carbon reduction and
sustainability strategy.
15.0
15.0
150.0 1
1 One-third of any bonus earned will be deferred into shares and held in the DBP. Dividend equivalents will accrue against any shares deferred into the DBP.
The Committee will continue to have an overriding discretion in respect of any bonus payment in accordance with its Policy.
In addition, any bonus awarded for FY24 will be subject to the malus and clawback provisions set out in detail on pages 148 and 149.
LTPP
The Committee intends to grant an LTPP award to Executive Directors later this year (“2023 LTPP”). Under the Remuneration Policy
and the rules of the LTPP, the award can be up to 200% of base salary. The Committee remains mindful of the need to avoid windfall
gains for Executive Directors, as evidenced by its decision to reduce the quantum of the 2022 LTPP award grant. There has been little
movement in the share price since October 2022 and therefore the Committee is minded to grant an award of up to 200% of base
salary. The Committee will however monitor the share price up until the day before the grant to determine the final quantum of the
2023 LTPP. In addition, the Committee recognises that the 2023 LTPP award should be subject to performance targets which are
stretching and challenging whilst aligned with the short and long-term performance of the Group and its strategy, as well as the
interests of shareholders. During the financial year, the Committee agreed the performance conditions and their respective weightings
for the 2023 LTPP. These are set out in the table below. Having discussed potential target ranges for each of the financial performance
conditions, the Committee agreed that, due to the continuing uncertain market conditions at the time of approving the Remuneration
report, it would be prudent to defer the finalisation of the financial targets until later in the year. The Committee anticipates that this
will be by no later than December 2023. The non-financial targets are set out in the table below. Full details for the targets for each
performance condition will be announced at the time of granting the 2023 LTPP, and in next year’s Remuneration Report.
Table 5 – 2023 LTPP performance measures
Performance condition and definition
Reason selected
Weighting
(of total award)
15%
Below
Threshold (0%
Vesting)
Below
median
Threshold
(25% Vesting)
Maximum
(100% Vesting)
Median
Upper
Quartile
To ensure that the
comparator group remains
current and relevant whilst
factoring in the continued
movement in the
Company’s market
capitalisation.
TSR against the FTSE:
The Company’s TSR over the Performance
Period must be at least at the median of a
ranking of the Total Shareholder Return of
each of the members ranking 50 above and
50 below the Company in the FTSE Index at
the start of the Performance Period (1 July
2023 to 30 June 2026) based on market
capitalisation as at the day before the start
of the Performance Period.
TSR against a housebuilder index1:
The Company’s TSR over the Performance
Period must be at least the Index average
of the Housebuilder Index over the
same period.
Absolute Adjusted EPS for the financial
year ending 20262:
Calculated by dividing the adjusted profit
after tax for the year attributable to
ordinary shareholders by the weighted
average number of ordinary shares in issue
during FY26, excluding those held by the
Employee Benefit Trust which are treated
as cancelled.
To ensure rewards are
linked to outperformance
of our peers.
15% Below Index
average of
peer group
Index
average of
peer group
Index
average
+8% per
annum
To ensure efficient and
effective management
of our business and align
interests with those of
shareholders.
15%
TBC
TBC
TBC
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Remuneration Report continued
Annual Report on Remuneration continued
Statement of implementation of the Remuneration Policy for FY24 continued
LTPP continued
Table 5 – 2023 LTPP performance measures continued
Performance condition and definition
Reason selected
To ensure efficient and
effective management
of our business and align
interests with those
of shareholders.
Underlying ROCE for the financial year
ending 20262:
Calculated as earnings before
amortisation, interest, tax, operating
charges relating to the defined benefit
pension scheme and adjusted items,
divided by average net assets adjusted for
goodwill, intangibles and land payables,
tax, cash, loans and borrowings, retirement
benefit assets/obligations, derivative financial
instruments and legacy property provisions.
GHG emissions reduction3:
Reduction of our absolute scope 1 and 2
(operational) GHG emissions by 29% by
2025 (from 2018 levels) and to net zero
by 2040.
To ensure we focus on
reducing our emissions by
meeting our science-based
target of a 29% reduction
in absolute scope 1 and 2
greenhouse gas emissions.
Weighting
(of total award)
Below
Threshold (0%
Vesting)
Threshold
(25% Vesting)
Maximum
(100% Vesting)
40%
TBC
TBC
TBC
15%
29%
reduction
33%
reduction
38%
reduction
1 The housebuilder index will comprise: Bellway, Berkeley Homes, Crest Nicholson, Persimmon, Redrow, Taylor Wimpey and Vistry Group.
2 Targets will be based on current corporation tax rates.
3 Further information on scope 1 and 2 GHG emissions can be found in the Strategic Report, pages 97 and 98.
For the TSR, EPS and Underlying ROCE performance targets, vesting will be on a straight-line basis between threshold and
maximum. For the GHG performance target, vesting will be on a straight-line basis between 29% and 33% reduction, and on a
straight-line basis between 33% and 38% reduction. In addition, all LTPP awards are subject to a two-year post-vesting holding
period and an overriding Committee discretion, as set out in the Policy table on page 146. The Committee retains discretion to
adjust the number of shares vesting from the 2023 LTPP award to mitigate against any potential windfall gains. The 2023 LTPP
will also be subject to the malus and clawback provisions summarised on pages 148 and 149.
Non-Executive Directors’ fees
During the year, a committee of the Board comprising the Chair and the Executive Directors reviewed Non-Executive Directors’
fees and concluded that an increase of 4% should apply to all fees paid to the Non-Executive Directors. This increase is in line with
the salary increase awarded to the Executive Directors and lower than the salary increase awarded to the wider workforce.
Caroline Silver became Chair on 30 June 2023 on a fee of £350,000, broadly in line with that paid to John Allan at that time, and also
received a 4% increase from 1 July 2023 to reflect her taking on the role as Chair earlier than previously anticipated. The annual
fees payable to the Chair and Non-Executive Directors with effect from 1 July 2023 will therefore be:
Table 6 – Non-Executive Directors’ fees
Role
Chair1
Non-Executive Director base fee
Committee membership (per committee)
Chair of Audit Committee
Chair of Remuneration Committee
Chair of Safety, Health and Environmental Committee
Senior Independent Director
Designated NED for Workforce Engagement2
Fee as at
1 July 2023
£000
Fee as at
1 July 2022
£000
364
70
3
18
18
18
18
0
353
67
3
17
17
17
17
10
1 The Chair’s fee as at 1 July 2022 is that of John Allan, and as at 1 July 2023 is Caroline Silver’s.
2 Sharon White received £10,000 in respect of her work as Designated Non-Executive Director up until 30 June 2023 when she stepped down from the Board.
Caroline Silver took over this role on 1 July 2023 and will not receive any additional fees for this position.
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Directors’ remuneration outcomes for the year ended 30 June 2023
Single figure of remuneration
The total remuneration for each of the Directors who served during the financial year ended 30 June 2023 is set out in Tables 7
and 8. The salary for all Directors is the amount received in the year.
Table 7 – Executive Directors’ single figure of remuneration (audited)
Base
Salary
£000
Benefits
(taxable)2
£000
Annual
bonus 3
£000
LTPP
£000
Sharesave 6
£000
Pension
benefits
£000
Replacement
Award 7
£000
Total8
remuneration
£000
Total8
fixed
remuneration
£000
Total8
variable
remuneration
£000
2022/23
2021/22 2022/23
2021/22 2022/23
2021/22 2022/23 4
2021/22 5 2022/23
2021/22 2022/23
2021/22 2022/23
2021/22 2022/23
2021/22 2022/23
2021/22 2022/23
2021/22
David
Thomas
Steven
Boyes
Mike Scott1
6
5
803
780
29
28
483 1,151 300 578 —
141
195 — — 1,756 2,738
973 1,003
783 1,735
648
494
629
277
31
9
390
297
928 237 458 —
113
157 — — 1,418 2,208
402
69
53 — — 49
28 — 160
928
929
791
561
817
314
627 1,391
366
615
Total
1,945 1,686
68 1,170 2,481 606 1,089 — 11 303
380 — 160 4,102 5,875 2,325 2,134 1,776 3,741
30
18
77
1 Mike Scott was appointed a Director on 6 December 2021, and his remuneration for 2021/22 therefore reflects only a partial year.
2 Benefits (taxable) include the provision of a company car or car allowance, private medical insurance, some telephone costs and contributions towards
obtaining independent financial and tax advice, and are provided based on market rates.
3 Annual bonus for 2021/22 includes amounts deferred for David Thomas and Steven Boyes (see Table 10 on page 161).
4 Performance conditions for the LTPP were tested after 30 June 2023. 19.6% of the award granted to each of the Executive Directors is due to vest in
October 2023 (see Tables 11 and 12 on pages 161 and 162 for further details). The market price of the shares has been calculated based on an average
market value over the three months to 30 June 2023 £4.71 per share). None of the value of the award is attributable to share price growth.
5 In accordance with regulatory requirements, the values in this column have been re-calculated using a share price of £3.56 per share being the market
value of the shares on the vesting date, 24 October 2022, as opposed to the market price of £4.94 per share calculated based on an average market value
over the three months to 30 June 2022 disclosed in last year’s Remuneration Report.
6 The Sharesave shares granted in 2016 for David Thomas and 2018 for Steven Boyes, which matured on 1 July 2021, were subject to a continued
employment condition and completion of a savings contract. There are no performance conditions for Sharesave shares. The value is calculated using the
difference between the exercise price and the mid-market closing price of a share on the date of maturity. The relevant prices were £4.82 and £6.792 for
David Thomas’ options, and £4.49 and £7.112 for Steven Boyes’ options.
7 Details of Mike Scott’s Replacement Awards were shown on page 120 of the 2022 Annual Report. The value shown in the Replacement Award column
relates to the Deferred Bonus shares which vested in December 2022. The value of the replacement LTPP awards vested in October 2022 and vesting
in October 2023 are included in the relevant LTPP columns.
8 The total remuneration figures in the last three columns of the above table may not add up to the sum of the component parts, due to rounding.
Table 8 – Non-Executive Directors’ single figure of remuneration (audited)
John Allan1
Caroline Silver2
Nina Bibby2
Katie Bickerstaffe
Jasi Halai2
Jock Lennox
Chris Weston
Sharon White
Total
Fees
£000
Benefits (taxable)
£000
Total
£000
2022/23
2021/22
2022/23 3
2021/22 4
2022/23
2021/22
405
7
22
93
40
110
93
86
856
343
—
75
92
—
109
92
85
796
1
—
4
—
—
—
—
—
5
2
—
—
—
—
—
—
—
2
406
7
26
93
40
110
93
86
861
345
—
75
92
—
109
92
85
798
1 John Allan’s Fees include £52,470 paid in lieu of notice after he stepped down from the Board with effect from 30 June 2023.
2 Caroline Silver and Jasi Halai were appointed to the Board with effect from 1 June and 1 January 2023 respectively, and Nina Bibby stepped down on
17 October 2022. Their fees therefore reflect a partial year.
3 Benefits (taxable) for 2022/23 for John Allan include £1,068 expenses incurred in attending the Company’s main corporate office and for Nina Bibby relate
to gifts, including tax payable on them, presented to her on leaving the business.
4 Benefits (taxable) for 2021/22 include expenses incurred in attending the Company’s main corporate office of £1,648 for John Allan.
Barratt Developments PLC Annual Report and Accounts 2023
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Remuneration Report continued
Annual Report on Remuneration continued
Directors’ remuneration outcomes for the year ended 30 June 2023 continued
Annual bonus
For FY23, the business was focused on managing costs, with a strong emphasis on building sustainably whilst maintaining high customer
service levels. The bonus measures were set accordingly. Financial targets were set taking into consideration internal and external
consensus forecasts. Further information on how we measure progress against the waste reduction target is set out on page 17.
As in previous years, Executive Directors had the potential to earn an annual bonus of up to 150% of base salary based on the attainment of
Group performance targets which are linked directly to the Group’s strategy, part of which is deferred into shares (see page 161). The Group
performance targets and performance against them for FY23 are set out in Table 9 below. The Committee considers that the outcome
reflects a fair, reasonable and appropriate level of reward, and the overall performance of the Group during FY23, and therefore no discretion
was exercised in relation to the bonus outcomes. It is also aligned to the bonus outcomes for the wider workforce below Senior Management.
Potential bonus
weighting %
of salary
Actual
performance
achievement
Bonus
achieved %
of salary
Bonus
outcome %
of maximum
16.5%
41.25%
82.5%
7.5%
15%
22.5%
£884m
0%
0%
£1,733m
13.6%
9.1%
16.5%
11.0%
SHE gate:
29/29 divisions
8-week score:
23/29 divisions
9-month score:
16/29 divisions
Table 9 – Annual bonus (audited)
Bonus target
Strategic objective
Targets
Adjusted profit
before tax1
To support profitability.
Threshold: £1,015m
Capital
employed1
To incentivise improvement
of capital management.
Quality
and Service
(with health and
safety underpin)
To ensure a focus on
quality and service to
our customers without
compromising the health
and safety of our employees
and other stakeholders.
Target: £1,090m
Maximum: £1,165m
Minimum and
Target: £1,815m
Maximum: £1,715m
A three stage assessment
is applied:
(i) A Division must achieve SHE
audit monitoring inspections
gate on a rolling 12 months’
performance basis of 94%, to
be considered for the customer
service element;
(ii) To earn 75% of this bonus
element, the Division must achieve
90% or higher “recommend” score
for the HBF 8-week National New
Homes Customer Satisfaction
survey; and
(iii) To earn the remaining 25% of
this bonus element, the division
must achieve 82% or higher score
for the NHBC 9-month Customer
Satisfaction survey.
Construction
Waste Reduction
To reduce construction waste
intensity compared with
FY22. (Measured in tonnes
of waste for every 100m2 of
legally completed build area).
Threshold: 4.87 tonnes
Target: 4.82 tonnes
Maximum: 4.77 tonnes
Trading outlets
Total outcome
To open the optimum number
of trading outlets to ensure
growth and delivery of our
business plan.
Threshold: 98
Target: 103
Maximum: 108
1 See definitions in Table 4 on page 156.
3%
4.31 tonnes
15.0%
10.0%
7.5%
15%
3%
130 outlets
15.0%
10.0%
7.5%
15%
60.1%
40.1%
160
Barratt Developments PLC Annual Report and Accounts 2023 S
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Executive Directors’ deferred bonus
For FY23 there was no bonus earned in excess of 100% of salary there will be no deferral into shares. See Table 10 below for details
of the FY23 bonus earned. When any bonus is earned in excess of 100% of salary, the number of shares that will be awarded will be
calculated based on the average closing share price for the first five dealing days following the date on which the Group publishes
its annual results, and will be announced via the Regulatory Information Service when the shares are awarded. Deferred shares
are held for a period of three years from the date they are awarded, subject normally to continued employment.
Table 10 – Executive Directors’ deferred bonus (audited)
FY23 deferred bonus
FY22 deferred bonus
Salary
payable
%
60.1
60.1
60.1
Annual
bonus
£000
% of salary
paid in cash
%
Bonus paid
in cash
£000
483
390
297
60.1
60.1
60.1
483
390
297
% of salary
deferred
into shares
%
Bonus
deferred
into shares
£000
% of salary
deferred
into shares
%
Bonus
deferred
into shares
£000
0
0
0
0
0
0
47.5
47.5
0 2
371
299
0
Number of
shares 1
88,632
71,495
0
David Thomas
Steven Boyes
Mike Scott
1 The number of conditional shares awarded during the year was calculated at a share price of £4.1802, being the average of the mid-market closing prices
of the shares for the first five dealing days following the date of the final FY22 results announcement for the Company.
2 For the FY22 bonus, Mike Scott was appointed a Director of the Company part way through the year. Mike’s percentage bonus outcome was 147.5%.
This was applied to his annual base salary for FY22 and pro-rated to the number of calendar days he was employed in the year. The value of his bonus
outcome did not exceed 100% of his annual base salary and therefore none of his bonus was deferred into shares.
Long-Term Performance Plans
Vesting of 2020 LTPP (included in FY23 single figure of remuneration)
The 2020 LTPP award was based on a three-year performance period to 30 June 2023 and will vest in October 2023. The award
is subject to three performance conditions, 20% EPS, 40% ROCE and 40% TSR (half of which is measured against a 50+/50- FTSE
comparator group and the other half against a housebuilder index). The resulting vesting levels are as follows:
Table 11 – Vesting of 2020 LTPP (audited)
Metric
EPS (20%)
Performance condition
EPS growth for the financial year ended
30 June 2023.
Underlying ROCE (40%) To increase underlying ROCE for the financial
year ended 30 June 2023.
Threshold
(25% vesting)
Maximum
(100% vesting)
76p
19%
Actual
56.3p1
Portion of
award vesting
0%
19.3%
13.0%
TSR (FTSE) (20%)
TSR against the 50 companies above and
below the Company in the FTSE index
measured over three financial years with
a three-month average at the start and end
of the performance period.
Median
ranking of
47.0
(TSR of
24.1%)
TSR (Housebuilder)2
(20%)
TSR of at least the Index average of a
housebuilder Index measured over three
financial years with a three-month average at
the start and end of the performance period.
Unweighted
Index
average
(TSR of 7.8%)
Total level of award
vesting
88p
22%
Upper
quartile
ranking
of 24.0
(TSR of
49.6%)
Rank of 55.5
(TSR of
10.6%)
Unweighted
Index
average
+ 8% p.a.
(TSR of
33.7%)
Between
Threshold
and
Maximum
(TSR of
10.6%)
0%
6.6%
19.6%
1 The basic EPS of 53.2 pence has been re-based using the same rate of corporation tax and number of shares as was used in setting the 2020 LTPP targets.
The re-based basic EPS used for the purpose of determining vesting, which is directly comparable to the 2020 targets, is 56.3 pence.
2 The Housebuilder Index comprises: Bellway, Berkeley Homes, Countryside Partnerships, Crest Nicholson, Persimmon, Redrow, Taylor Wimpey
and Vistry Group. On 11 November 2022, Countryside Partnerships was acquired by Vistry Group. At the time, both companies were members of the
Housebuilder Index Comparator Group. The TSR performance for Countryside Partnerships has therefore been calculated based on the performance
of Countryside Partnerships up to the date of the merger and then by tracking Vistry Group’s performance thereafter.
The Committee considered the underlying financial performance of the Group and was satisfied that given the continued strong
performance in the Group’s financial results, the level of vesting was justified. There was no share price appreciation, and no
discretion was exercised in relation to the share price. The Committee believes that the vesting level achieved is fair, reasonable
and appropriate. No Committee discretion was exercised in relation to the LTPP vesting outcome. The 2020 LTPP has accrued
dividend equivalents in accordance with the rules of the scheme. The amount of dividend equivalent to be paid, in cash, on vesting
will be pro-rated in line with the number of shares that vest. The gross number of shares to be released to each of the Executive
Directors and the gross value of the dividend equivalents are as follows:
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Remuneration Report continued
Annual Report on Remuneration continued
Directors’ remuneration outcomes for the year ended 30 June 2023 continued
Long-Term Performance Plans continued
Table 12 – 2020 LTPP vesting outcomes (audited)
Executive Director
David Thomas
Steven Boyes
Mike Scott3
Number of
shares at grant
282,004
223,183
67,681
Number
of shares
to lapse
226,732
179,440
54,416
Total number
of shares
to vest1
Estimated
value of
vested shares2
£000
55,272
43,743
13,265
260
206
62
Value of
dividend
equivalents
earned on
vested shares2
£000
39
31
7
Total
estimated
value2
£000
3004
237
69
1 The relevant number of shares will be released to each participant as soon as is practicable following the vesting date. The awards are subject to
a two-year post-vesting holding period commencing 1 July 2023.
2 The estimated values of the vested shares and the dividend equivalents are based on the average share price during the three months to 30 June 2023
(£4.71 per share). There was no share price appreciation from the date the shares were awarded.
3 The shares granted to Mike Scott were replacement awards, further details of which can be found on page 120 of the FY22 Annual Report and Accounts.
4 The “Total estimated value” figure for David Thomas does not add up to the sum of the component parts due to rounding.
LTPP granted during the year (2022 LTPP)
During the year, the Committee granted the 2022 LTPP to Executive Directors. The 2022 LTPP, is subject to four performance conditions,
30% TSR (half of which is measured against a 50+/50- FTSE comparator group and the other half against a Housebuilder Index), 15%
Adjusted EPS, 40% Underlying ROCE and 15% reduction of GHG emissions. Further information on how GHG emissions and progress
against this target are measured is given on pages 97 and 98. The levels of vesting against TSR and GHG emissions will be
measured over a three-year period commencing 1 July 2022, and against EPS and ROCE for the financial year ending 30 June 2025.
On completion of the performance period, assuming that shares vest, they will be subject to a further two-year holding period. The
Committee determined to reduce the usual grant size of the awards to avoid windfall gains given the fall in the Company’s share
price since the previous grant in October 2021. The basis of the awards was reduced from 200% to 170% of salary, representing
a reduction of 15% of the usual basis of the awards.
Table 13 – 2022 LTPP (audited)
Executive Director
Type of award
David Thomas
Conditional award
Steven Boyes
Conditional award
Mike Scott
Conditional award
Basis of
award granted
170% of salary
£803,400
170% of salary
£648,062
170% of salary
£494,400
Share price at
date of grant 1
£
Number of
shares over
which award
was granted
4.438
307,746
4.438
248,243
4.438
189,382
Face value
of award
£000
1,366
1,102
840
% of face value
that would vest
at threshold
performance
Vesting
determined by
performance
over
25
25
25
Three
financial
years to
30 June
2025
1 Based on the average of the closing prices, as derived from the London Stock Exchange daily official list, for each of the dealing days in the period
of three months ending on 11 October 2022, being the day before the date of the awards.
The targets applicable to the 2022 LTPP are as set out in Table 15.
Performance to date of 2021 and 2022 LTPP awards
The following tables show the targets set on grant for each of the in-flight LTPP awards together with performance to date.
For the 2021 LTPP the potential level of vesting is based on performance measured over two years to 30 June 2023:
Table 14 – 2021 LTPP award performance against targets
Performance target
TSR FTSE1 (15%)
TSR Housebuilder2
(15%)
EPS (15%)
Underlying ROCE
(40%)
GHG emissions
reduction (15%)
Below threshold
(0% vesting)
Below median
Below unweighted
index average
<79 pence
<19.0%
Threshold
(25% vesting)
Median
Unweighted
index average
79 pence
19.0%
Maximum
(100% vesting)
Upper quartile
Unweighted index
average +8% p.a.
87 pence
22.0%
Performance as
at 30 June 2023
Below median
Below median
56.3 pence
19.3%
<20% reduction
25% reduction
30% reduction
23.7%
Total level of award vesting
162
Level of vesting
had the award vested
as at 30 June 2023
0%
0%
0%
13.0%
2.8%
15.8%
Barratt Developments PLC Annual Report and Accounts 2023 S
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For the 2022 LTPP the potential level of vesting is based on performance measured over one year to 30 June 2023:
Table 15 – 2022 LTPP award performance against targets
Performance target
TSR FTSE1 (15%)
TSR Housebuilder2
(15%)
Adjusted EPS (15%)
Underlying ROCE
(40%)
GHG emissions
reduction (15%)
Below threshold
(0% vesting)
Below median
Threshold
(25% vesting)
Maximum
(100% vesting)
Performance as
at 30 June 2023
Median
Upper quartile Between threshold
Below unweighted
index average
<73 pence
<20.0%
Unweighted
index average
73 pence
20.0%
Unweighted index
average +8% p.a.
81 pence
23.0%
and maximum
Between threshold
and maximum
70.6 pence
19.3%
<25% reduction
30% reduction
35% reduction
23.7%
Total level of award vesting
Level of vesting
had the award vested
as at 30 June 2023
3.8%
14.9%
0%
0%
0%
18.7%
1 The comparator group for TSR FTSE is each of the members ranking 50 above and 50 below the Company in the FTSE Index.
2 The housebuilder Index comprises: Bellway, Berkeley Homes, Countryside Partnerships, Crest Nicholson, Persimmon, Redrow, Taylor Wimpey and Vistry Group.
For the TSR, EPS and Underlying ROCE performance targets, vesting is on a straight-line basis between threshold and maximum.
For the GHG performance target, vesting is on a straight-line basis between 20% and 25% reduction for the 2021 award, between
25% and 30% reduction for both awards, and between 30% and 35% for the 2022 award. The LTPP awards will accrue dividend
equivalents in accordance with the rules of the scheme. The amount of dividend equivalent to be paid, in cash, on vesting will
be pro-rated according to the number of shares that vest.
The Committee has the discretion to adjust the number of shares vesting from each LTPP award if it considers that the vesting
outcome is not sufficiently reflective of the underlying performance of the Company and to mitigate against any potential windfall
gains for the Executive Directors.
Statement of Directors’ shareholdings and share interests
For the financial year ended 30 June 2023, Executive Directors were required to hold shares in the Company equivalent in value
to 200% of salary. The Executive Directors are expected to meet this requirement no later than the fifth anniversary of joining
the Board, with progress being made towards its achievement throughout the period. The share price used for the purposes of
determining the value of the shares is by reference to the higher of the share price paid on acquisition or vesting and the share
price at the close of business on the London Stock Exchange on 30 June or the date of leaving, as applicable. Participants who have
not built up the required level of shareholding by the fifth anniversary of joining the Board, will not be eligible for inclusion in future
share-based incentive schemes. In addition, they will not be allowed to sell any of the net of tax shares released from incentive
schemes until they reach the levels specified, unless exceptional circumstances exist in the opinion of the Committee. The Committee
retains discretion to adjust the length of time in which the required amount of shareholding needs to be accrued in order to adjust
for events out of the Director’s control. The Committee reserves the right to amend the percentage holding required by the Executive
Directors depending on market conditions and best practice guidance. At 30 June 2023, David Thomas and Steven Boyes had met
their shareholding requirements and Mike Scott has until 6 December 2026 to meet his.
Executive Directors are also subject to a two-year post-cessation shareholding requirement. They must hold the lower of their
shareholding requirement (currently 200% of salary) or their actual shareholding on the date of leaving. The Committee has agreed
that to ensure continued enforcement of the post-cessation shareholding requirement, a contractual agreement will be entered
into by the Company and the relevant Executive Director at the point of leaving employment, under which the individual concerned
will agree not to dispose of the shares prior to the completion of the post-cessation shareholding period.
The interests of the Directors serving during the financial year and their connected persons in the ordinary share capital of
the Company at the beginning and end of the year are shown in Table 16.
No notification has been received of any change in the interests shown during the period 30 June 2023 to 5 September 2023 inclusive.
Barratt Developments PLC Annual Report and Accounts 2023
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Remuneration Report continued
Annual Report on Remuneration continued
Statement of Directors’ shareholding and share interests continued
Table 16 – Directors’ interests in shares as at 30 June 2023 (audited)
Other shares held
Options
Shareholding requirements
Interests
subject to
performance
conditions
(LTPP)
Interests not
subject to
performance
conditions
(DBP)
Interests in
Sharesave
options 1
Shareholding
requirement
% salary
Current
shareholding
% salary 3
Shareholding
requirement
met?
814,120
652,413
374,779
140,770
112,758
0
5,373
6,056 2
4,128
200%
200%
200%
707%
486%
44%
Yes
Yes
No
The Chairman and Non-Executive Directors are not awarded incentive
shares and are not subject to a shareholding requirement.
Executive Directors
David Thomas
Steven Boyes
Mike Scott
Non-Executive Directors
John Allan
Caroline Silver
Katie Bickerstaffe
Jasi Halai
Jock Lennox
Chris Weston
Sharon White
Beneficially
owned
1,297,576
700,739
52,050
94,235
—
7,508
—
10,000
—
363
1 All of these options were unvested at 30 June 2023.
2 During the year, Steven Boyes was granted 2,593 Sharesave options, exercisable for six months from 1 July 2026 at an option price of £3.47, representing
a 20% discount on the average share price for the five business days immediately before the invitation to participate in the award (£4.336). The number
of shares granted was based on the option price and the total savings amount forecast at the end of the respective savings periods. The face value of
the options based on the average share price above was £11,243. There are no performance targets associated with this Sharesave option.
3 The share price used for the purposes of determining the value of the shares is £4.14 being the mid-market closing price on 30 June 2023. The value
of DBP shares used is net of income tax and national insurance contributions which the Directors would have to pay on exercise.
All conditional awards and share options are subject to an overriding Committee discretion, in that the Committee must be
satisfied that the underlying financial performance of the Group over the performance period warrants the level of vesting as
determined by applying the relevant targets. If the Committee is not of this view, it has the authority to reduce the level of vesting,
including to nil, as it deems appropriate.
Executive Directors’ pension arrangements
The Company’s pension policy for Executive Directors is that on joining the Group they will be auto-enrolled unless they choose
to opt out. On opting out, the Executive Director may choose to receive a cash supplement (which does not count for incentive
purposes) and/or participate in the Company’s defined contribution money purchase pension plan. Each Executive Director has
opted to receive a cash supplement in lieu of pension. Until 31 December 2022, David Thomas and Steven Boyes received an
amount equal to 25% of base salary in line with market practice at the time of their appointment. This reduced to 10% from
1 January 2023 to be in line with that of the wider workforce. Mike Scott received an amount equal to 10% of base salary
throughout FY23. Only the base salary element of a Director’s remuneration is pensionable.
Details of cash supplements paid to the Executive Directors during the year can be found in Table 7 on page 159.
Defined benefit section (audited)
Steven Boyes is a deferred member of the defined benefit section of the Barratt Group Pension and Life Assurance Scheme
(the Scheme), which was bought out by an insurer during FY21. As a result of the buyout, no employee (including Steven Boyes) has
any current or prospective defined benefit pension or related benefit payable by the Group.
Payments to former Directors (audited)
Jessica White stepped down as a Director and Chief Financial Officer on 30 June 2021 and left the business on 31 July 2021. The
Committee determined that, in line with the Policy and the rules of the relevant plans, Jessica would be treated as a good leaver.
As set out in the FY21 Remuneration Report, Jessica held 91,908 shares under the 2019 LTPP. 54,501 of these shares vested
on 24 October 2022. The awards were valued using a share price of £3.56 per share, being the market price of the shares on
the vesting date. The value of the shares and dividend equivalents (paid in cash) was £194,024 and £29,214 respectively, such
that the total value of the award on the vesting date was £223,238.
No other payments have been made to former Directors during the year.
164
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Payments for loss of office (audited)
John Allan stepped down from the Board with effect from 30 June 2023. He received his Chair fee from 1 July 2022 up to and
including 30 June 2023 and taxable benefits and these amounts are shown in Table 8 on page 159. He received no pension
contributions or variable remuneration. In addition, John was paid £52,470 in lieu of the balance of his three-month contractual
notice period, given that he stepped down earlier than originally anticipated. No other remuneration payments were made by the
Company to John Allan after he ceased to be a Non-Executive Director and Chair of the Board. No discretion has been exercised
by the Committee.
No other payments for loss of office have been made to former Directors during the year.
Chief Executive’s relative pay
Table 17 sets out: (i) the total pay, calculated in line with the single figure methodology; (ii) the annual bonus payout as a percentage
of maximum; and (iii) long-term incentive vesting level for the Chief Executive over a ten-year period.
Table 17 – Chief Executive’s pay
Mark Clare
Ten years to 30 June 2023
David Thomas
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
6,430
7,363
3,155
3,331
2,720
3,727
1,251
3,761
2,738
1,756
100.0
93.2
97.4
97.5
92.2
96.2
0
99.0
98.3
40.1
95.8
100.0
100.0
100.0
76.4
92.8
19.4
80.0
59.3
19.6
Chief Executive’s
total pay (£000)
Bonus outturn
(as a percentage of
maximum opportunity)
LTI vesting
(as a percentage of
maximum award)
TSR performance graph
The graph below, prepared in accordance with the reporting regulations, shows the TSR performance over the last ten years
against the FTSE 100 and against an unweighted index of listed housebuilders. The Board has chosen these comparative indices
as the Group and its major competitors are constituents of one or both of these indices. The TSR has been calculated using a fair
method in accordance with the regulations.
Total Shareholder Return (value of £100 invested on 30 June 2013)
)
£
(
e
u
l
a
V
350
300
250
200
150
100
50
0
266
196
177
June 2013
June 2014
June 2015
June 2016
June 2017
June 2018
June 2019
June 2020
June 2021
June 2022
June 2023
Housebuilder index
FTSE 100
Barratt Developments
Source: Datastream by Refinitiv
Barratt Developments PLC Annual Report and Accounts 2023
165
Non-Executive
Directors3
John Allan
Nina Bibby
Katie Bickerstaffe4
Jasi Halai4
Jock Lennox
Caroline Silver4
Chris Weston4
Sharon White
Average pay of all
employees in Barratt
Developments PLC
Average pay of
all employees in
the Group5
S
Corporate Governance
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Remuneration Report continued
Annual Report on Remuneration continued
Annual percentage change in remuneration of Directors compared to employees
Table 18 shows the percentage change in salary, taxable benefits and annual bonus set out in the relevant single figure of
remuneration tables paid to each Director compared to that of the average pay of all employees of Barratt Developments PLC,
the Group parent company, in respect of the financial years ended 30 June 2020 to 30 June 2023, compared with their prior years.
Table 18 – Percentage change in remuneration
FY23
FY22
FY21
FY20
Salary/
fees
% change
Benefits
% change
Annual
bonus
% change
Salary/
fees
% change
Benefits
% change
Annual
bonus
% change
Salary/
fees
% change 1
Benefits
% change
Annual
bonus
% change
Salary/
fees
% change
Benefits
% change
Annual
bonus
% change
Executive Directors
David Thomas
Steven Boyes
2.9
3.0
3.6
(3.2)
(58.0)
(58.1)
Mike Scott2
78.3
100
(26.1)
3.0
5.0
N/A
3.0
19.0
41.5
N/A
41.6
N/A
43.8
32.8
7.7
(25.0 )
N/A
100.0
0
0
N/A
0
N/A
0
0
2.5
4.4
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2.2
2.2
N/A
2.5
1.6
N/A
N/A
4.1
N/A
N/A
3.2
(10.3 )
11.1
N/A
100.0
100.0
N/A
0
0
N/A
N/A
0
N/A
N/A
0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.3
0.2
N/A
0
0
N/A
N/A
0
N/A
N/A
0
16.0
(12.2 )
N/A
(100.0 )
(100.0 )
N/A
(50.0 )
0
N/A
N/A
0
N/A
N/A
0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
18.1
(70.7)
1.1
N/A
0.9
N/A
1.1
1.2
(50)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(2.6)
(12.1)
(32.6)
(1.1 )
(11.3 )
(3.2 )
7.7
(3.5 )
100.0
4.0
6.4
(100.0 )
7.5
11.5
(39.5)
7.8
(2.1 )
(3.2 )
0.4
2.1
100.0
0.8
(1.5 )
(100.0 )
1 The percentage changes in salary and fees of the Directors for FY21 takes into account a temporary 20% voluntary reduction in base salary in April
and May 2020 covering the period our construction sites were temporarily closed as a consequence of COVID-19.
2 Mike Scott was appointed as an Executive Director effective 6 December 2021, therefore no percentage change in remuneration is displayed for years prior
to FY23, and therefore the change in fees reflects the annualised fees that would have been earned for FY22.
3 The changes in fees of the Non-Executive Directors reflect the introduction of additional fees for committee membership, and increases in fees for
Committee Chairs which took place for FY22, and were set out in detail on page 102 of the FY21 Annual Report and Accounts.
4 Katie Bickerstaffe and Chris Weston were appointed to the Board part way through FY21, and Jasi Halai and Caroline Silver were appointed to the Board
part way through FY23. No percentage change in remuneration is displayed for the years they joined, and the changes in fees reflect the annualised fees
that would have been earned for FY21 and FY23 respectively.
5 Average pay using all employees in the Group is also provided, as a more meaningful figure, as the parent company employs only a very few senior
employees. The figure represents the mean employee pay.
Chief Executive pay ratio
The table below compares the single total figure of remuneration for the Chief Executive with that of the Group employees who are paid
at the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper quartile) of its UK employee population.
Table 19 – Chief Executive pay ratio
FY23
FY22
FY21
FY20
FY19
Method
Option B
Option B
Option B
Option B
Option B
25th percentile
pay ratio
45:1
81:1
115:1
40:1
123:1
Median
pay ratio
32:1
63:1
94:1
32:1
88:1
75th percentile
pay ratio
24:1
38:1
60:1
21:1
59:1
The remuneration figures for the employee at each quartile were determined with reference to the financial year ending 30 June 2023.
166
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Corporate Governance
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Under Option B of The Companies (Miscellaneous Reporting) Regulations 2018, the latest available gender pay gap data (i.e. from
5 April 2023) was used to identify the best equivalent for three Group UK employees whose hourly rates of pay are at the 25th, 50th
and 75th percentiles for the Group. The Committee is comfortable that this approach provides a fair representation of the Chief
Executive to employee pay ratios and is appropriate in comparison to alternative methods, balancing the need for statistical accuracy
with internal operational resource constraints.
A full-time equivalent total pay and benefits figure for the FY23 financial year was then calculated for each of those employees. This
was also sense checked against a sample of employees with hourly pay rates either side of the identified individuals to ensure that
the appropriate representative employee is selected. The pay ratios outlined above were then calculated as the ratio of the Chief
Executive’s single figure to the total pay and benefits of each of these employees.
Each employee’s pay and benefits were calculated using each element of employee remuneration on a full-time basis, consistent
with the Chief Executive. No adjustments (other than the approximate up-rating of pay elements to achieve full-time equivalent rates)
were made, with the exception of annual bonuses where the amount paid during the year for the annual bonus and H2 bonus was
used (i.e. in respect of FY22) as the FY23 employee figures had not yet been determined at the time this report was produced. No
components of pay have been omitted.
The table below sets out the salary and total pay and benefits for the three identified quartile point employees:
Table 20
Salary
Total pay and benefits
25th percentile (P25)
Median (P50)
75th percentile (P75)
£32,739
£38,954
£43,410
£54,158
£63,825
£73,414
The FY23 pay ratios are lower than last year due to a decrease in the Chief Executive’s single figure of remuneration compared to
FY22 combined with an increase in the total pay and benefits for the P25, P50 and P75 employees. The decrease in CEO pay is a result
of a lower vesting outcome of the 2020 LTPP award in comparison to the 2019 LTPP award that vested last year. The CEO annual
bonus payout was also lower in FY23 compared to FY22. The median pay ratio has fluctuated since reporting began. This movement
has primarily been driven by both changes in CEO pay outcomes and the impact of the pandemic on outcomes in recent years.
The Committee considers that the median pay ratio is consistent with the relative roles and responsibilities of the Chief Executive
and the identified employee. Base salaries of all employees, including our Executive Directors, are set with reference to a range
of factors including market practice, experience and performance in role. The Chief Executive’s remuneration package is weighted
towards variable pay (including the annual bonus and LTPP) due to the nature of the role. This also means that the ratio is likely to
fluctuate depending on the outcomes of incentive plans in each year (as illustrated by the ratios to date).
The Committee also recognises that, due to the nature of the Company’s business and the ways in which we employ our staff,
the flexibility permitted within the regulations for identifying and calculating the total pay and benefits for employees, as well
as differences in employment and remuneration models between companies, the ratios reported above may not be comparable
to those reported by other companies.
Relative importance of spend on pay
The following table shows the Group’s actual spend on pay (for all employees) relative to dividends and profit from operations:
Table 21 – Relative importance of spend on pay
Employee costs (including Executive Directors)
Profit from operations1
Dividend Distributions2
Share Buyback3
FY23
£m
527.2
707.4
327.6
201.3
FY22
£m
492.7
646.6
373.8
0
% change
7%
9%
(12)%
N/A
1 Profit from operations has been chosen as a metric to compare against as it shows how spend on pay is linked to the Group’s operating performance.
The figure used is from the Consolidated Income Statement on page 182.
2 For FY22 this includes the interim and final dividends paid in May and November 2022. For FY23, this includes the interim dividend paid in May 2023, and the
proposed final dividend for payment in November 2023, the value of which has been calculated based on the number of shares in issue as at 30 June 2023.
3 There were no share buybacks made during FY22.
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Remuneration Report continued
Annual Report on Remuneration continued
Non-executive directorships
Details of the Group’s policy on non-executive directorships held by Executive Directors is given in the Directors’ Remuneration
Policy table on page 151. Neither Steven Boyes nor Mike Scott held any non-executive directorships with other companies during
the year. David Thomas is a non-executive director of the HBF for which he does not receive a fee. He also participates in a number
of groups connected with the UK construction industry (in particular sustainability), for which no fee is paid.
Statement of shareholding vote at AGM
The latest resolution to approve the Directors’ Remuneration Policy (a binding vote, to remain in place for three years following
its approval by shareholders) and the resolution to approve last year’s Annual Report on Remuneration (an advisory vote) were
proposed to shareholders at the 2020 and 2022 AGMs respectively. The following votes were received:
Table 22 – Shareholder votes on Remuneration
Votes cast in favour
Votes cast against
Total votes cast
Votes withheld
Vote on Remuneration Policy
– 2020 AGM
Vote on Remuneration Report
– 2022 AGM
Number of votes
% votes cast Number of votes
% votes cast
669,565,590
10,994,399
680,559,989
121,686
98.38
1.62
100.00
—
634,326,479
42,480,457
676,806,936
501,737
93.72
6.28
100.00
—
This Remuneration Report was approved by the Board on 5 September 2023 and signed on its behalf by:
Katie Bickerstaffe
Chair of the Remuneration Committee
5 September 2023
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Other statutory disclosures
Directors’ Report
For the financial year ended 30 June 2023, the Strategic Report is
set out on pages 1 to 52 and the Directors’ Report on pages 74 to
171. The table below sets out the location of information required to
be disclosed in the Directors’ Report, which can be found in
other sections of this Annual Report and Accounts and is
incorporated by reference.
Significant Shareholdings
In accordance with the DTRs, all notifications received by the
Company are published on the Company’s website,
www.barrattdevelopments.co.uk, and via a Regulatory Information
Service. As at 30 June 2023, the persons set out in the table below
had notified the Company, pursuant to DTR 5.1, of their interests in
the voting rights in the Company’s issued share capital:
Page numbers
Notifiable Interests at 30 June 2023
217
Information required
FMR LLC
BlackRock, Inc.
Royal Bank of
Canada
Number of
voting rights 1
64,722,680
56,413,704
30,554,688
% of total
issued share
capital 2
6.52
5.60
3.00
Nature of
holding
Indirect
Indirect
Direct
Information required
Arrangements under which a shareholder has
waived or agreed to waive a dividend and details
of the waiver1
Likely future developments in the business of the
Group
Financial instruments
A description of the Company’s policies on
employment of people with disabilities
A description of the Company’s employee
engagement and involvement practices
Stakeholder engagement
Greenhouse gas emissions
Research and development activities
1 to 70
214 to 216
39
35 to 39 and
55 and 56
54 to 65
97 and 98
46 and 47
1 This item is a requirement of Listing Rule 9.8.4R. All other items are
requirements of Schedule 7 of the Large and Medium-Sized Companies
and Groups Regulations.
Dividends
An interim dividend of 10.2 pence per share was paid on 18 May 2023
to those shareholders on the register on 11 April 2023 (2022:
11.2 pence per share). The Directors recommend payment of a
final dividend of 23.5 pence per share (2022: 25.7 pence per
share) in respect of FY23. The final dividend will be paid, subject
to shareholder approval at the 2023 AGM, on 3 November 2023
to shareholders on the register at close of business on
29 September 2023. Shareholders who wish to elect for the
Dividend Reinvestment Plan should do so by 13 October 2023.
If approved, the total dividend for FY23 will be 33.7 pence per
share (2022: 36.9 pence per share).
Annual General Meeting
The 2023 AGM will be held at the offices of Linklaters LLP, One
Silk Street, London EC2Y 8HQ on Wednesday 18 October 2023 at
12 noon. The notice convening the AGM is set out in a separate
letter to shareholders.
Political donations and expenditure
The Company made no political donations during the year in
accordance with its policy. In keeping with the Company’s
approach in prior years, shareholder approval is being sought at
the 2023 AGM, as a precautionary measure, for donations and/
or expenditure that may be construed as political by the wide
definition of such terms provided under the Act.
1 Represents the number of voting rights last notified to the Company at
30 June 2023 by the respective shareholder in accordance with DTR 5.1.
2 Based on the Total Voting Rights as at the relevant notification dates.
On 4July 2023, Royal Bank of Canada notified us that they no
longer had a notifiable interest in the Company. At 6 September
2023, no further change in these holdings had been notified and
no further notifications had been received. The Total Voting
Rights of the Company, as announced on 31 August 2023, are
974,585,796.
Appointment and removal of Directors
The appointment and removal of Directors is governed by the
Articles, the Act and related legislation. There shall be (unless
otherwise determined by an ordinary resolution) no fewer than
two and no more than 15 Directors appointed to the Board at
any one time. Directors may be appointed by the Company by
ordinary resolution or by the Board. In accordance with the
Code and the Articles, at each AGM, all of the Directors shall
retire from office at the date of the Notice of AGM and may offer
themselves for reappointment by members. Directors may be
removed before the expiration of their term of office by means
set out in the Act and the Articles, including by special resolution.
Powers of the Directors including in relation to the
allotment of shares
Subject to the Articles, the Act and any directions given by
special resolution, the business of the Company is ultimately
managed by the Board who may exercise all the powers of the
Company, whether relating to the management of the business of
the Company or otherwise. In particular, the Board may exercise
all the powers of the Company to borrow money and to mortgage
or charge any of its undertakings, property, assets and uncalled
capital and to issue debentures and other securities and to give
security for any debt, liability or obligation of the Company to
any third party. At the AGM held on 17 October 2022, the
Directors were given authority to allot shares up to an aggregate
nominal value of £34,085,427 (representing approximately
one-third of the nominal value of the Company’s issued share
capital as at 6 September 2022), such authority to remain valid
until the end of the 2023 AGM or, if earlier, until the close of
business on 17 January 2024. A resolution to renew this authority
will be proposed at the 2023 AGM.
Barratt Developments PLC Annual Report and Accounts 2023
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Other statutory disclosures continued
Directors’ indemnities and insurance
Qualifying third-party indemnity provisions are in place for the
Directors, former Directors and the Company Secretary, together
with those who hold or have held these positions as officers of
other Group companies or of associate or affiliated companies
and members of the Executive Committee, to the extent permitted
by law and the Articles, in respect of liabilities incurred in the
course of performing their duties. In addition, the Company
maintains directors’ and officers’ liability insurance for each
Director of the Group and its associated companies.
Capital structure
The Company has a single class of share capital, which is
divided into ordinary shares of 10 pence each. All issued shares
are in registered form and are fully paid. Details of the Company’s
issued share capital and of the movements in the share capital
during the year can be found in note 23 on page 216.
Shareholder voting rights and restrictions on transfer
of shares
All the issued and outstanding ordinary shares of the Company
have equal voting rights with one vote per share. There are no
special control rights attaching to them, save that the Trustees
of the EBT may vote or abstain from voting on shares held in the
EBT in any way they think fit and in doing so may consider both
financial and non-financial interests of the beneficiaries of the
EBT or their dependants. The Company is not aware of any
agreements between holders of securities that may result in
restrictions on the transfer of securities. The rights, including
full details relating to voting of shareholders and any
restrictions on transfer relating to the Company’s ordinary
shares, are set out in the Articles and in the explanatory
notes that accompany the Notice of the 2023 AGM. These
documents are available on the Company’s website at
www.barrattdevelopments.co.uk.
Shareholder authority for purchase of own shares
At the Company’s AGM held on 17 October 2022, shareholders
authorised the Company to buy back up to an aggregate of
102,256,281 ordinary shares of 10 pence each (representing
approximately 10% of the Company’s issued share capital).
This authority is valid until the end of the 2023 AGM (at which a
renewal of that authority will be sought) or, if earlier, until the
close of business on 17 January 2024. Under the authority, there
is a minimum and maximum price to be paid for such shares.
Any shares that are bought back may be held as treasury
shares or, if not so held, will be cancelled immediately upon
completion of the purchase, thereby reducing the Company’s
issued share capital. Following the excellent performance of
the business throughout FY22 and our strong and resilient
balance sheet, the Board approved a return of capital which
is beyond the requirements for investment and growth in the
business of £200m in FY23 through the implementation of a
share buyback programme to reduce the share capital of the
Company. 13,581,002 shares of 10 pence each were purchased
during the year under a similar authority given at the Company’s
AGM on 13 October 2021. 34,404,291 shares of 10 pence each
were purchased during the year under the authority given at
the Company’s AGM on 17 October 2022. All of the purchased
shares have been cancelled.
Articles of Association
The Articles may only be amended by a special resolution of
shareholders. The Articles were last amended at the Company’s
AGM held on 14 October 2020.
Approach to tax and tax governance
For all taxes, it is the Group’s aim to ensure it accurately
calculates and pays the tax that is due at the correct time.
Whilst the Group does seek to minimise its tax liabilities
through legitimate routine tax planning, it does not participate
in aggressive tax planning schemes. The Group also seeks to be
transparent in its dealings with HMRC and has regular dialogue
with its representatives to discuss both developments in the
business and the ongoing tax position. In accordance with UK
legislation, we have published details of our tax strategy, and
this can be found at www.barrattdevelopments.co.uk.
The Chief Financial Officer retains overall responsibility for
oversight of the tax affairs of the Group. Mike Scott, Chief
Financial Officer, is the Senior Accounting Officer throughout
the year ended 30 June 2023. The Senior Accounting Officer
receives regular updates on tax matters. In addition, tax
management and strategy are reviewed at least annually by the
Audit Committee, with no changes proposed for the year ended
30 June 2023.
Change of control
The following significant agreements as at 30 June 2023
contained provisions entitling the counterparties to exercise
termination and/or other rights in the event of a change of
control of the Company:
∙ an RCF agreement containing change of control provisions
which provide that, on a change of control of the Company,
the relevant counterparties may require the Company to
immediately repay all amounts outstanding and would not
be obliged to fund any further drawdown of the facility
(other than rollover loans); and
∙ a note purchase agreement in respect of the Group’s £200m
privately placed notes containing change of control provisions
which provide that, on a change of control of the Company,
the noteholders may require the Company to prepay at par
all outstanding amounts under the notes.
In addition, the Company’s share plans contain provisions
relating to a change of control. Outstanding awards and options
would normally vest and become exercisable on a change of
control subject to the satisfaction of any performance
conditions at that time.
The Company is not aware of any other significant agreements
to which it is a party that take effect, alter or terminate upon a
change of control of the Company.
The Company does not have any agreements with any Director
or employee that would provide compensation for loss of office
or employment resulting from change of control following a
takeover bid.
On behalf of the Board
Tina Bains
Company Secretary
5 September 2023
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Statement of Directors’ Responsibilities
Financial Statements and accounting records
The Directors are responsible for preparing the Annual Report
and Accounts including the Directors’ Remuneration Report
and the Financial Statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
are required to prepare the Group Financial Statements in
accordance with United Kingdom adopted IAS. The Financial
Statements also comply with IFRS as issued by the IASB. The
Directors have also elected to prepare the Parent Company
Financial Statements under United Kingdom adopted IAS.
Under company law, the Directors must not approve the
Financial Statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and the
Group and of the profit or loss of the Company and the Group for
that period.
IAS 1 requires that Financial Statements present fairly for each
financial year the relevant entity’s financial position, financial
performance and cash flows. This requires the faithful representation
of the effects of transactions, other events and conditions in
accordance with the definitions and recognition criteria for
assets, liabilities, income and expenses set out in the IASB’s
“Framework for the preparation and presentation of financial
statements”. In virtually all circumstances, a fair presentation
will be achieved by compliance with all applicable IFRS.
Directors are also required to:
∙ properly select and apply accounting policies;
∙ present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
∙ provide additional disclosures when compliance with the
specific requirements in IFRS are insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the entity’s financial position and
financial performance; and
∙ make an assessment of the Company’s and the Group’s
(as the case may be) ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
and the Group’s transactions on an individual and consolidated
basis and disclose with reasonable accuracy at any time the
financial position of the Company and the Group and enable them
to ensure that the Financial Statements comply with the Act.
They are also responsible for safeguarding the assets of the
Company and the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of Financial Statements may
differ from legislation in other jurisdictions.
Fair, balanced and understandable
The Board considers, on the advice of the Audit Committee,
that the Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable, and provides the information
necessary for shareholders to assess the Company and the
Group’s position, performance, business model and strategy.
Disclosure of information to auditor
In accordance with Section 418 of the Act, the Directors confirm
that, so far as they are each aware, there is no relevant audit
information that has not been brought to the attention of the
Company’s auditor. Each Director has taken all reasonable
steps that they ought to have taken in accordance with their duty
as a Director to make themselves aware of any relevant audit
information and to ensure that the Company’s auditor is aware
of that information.
Directors’ Responsibility Statement
The Directors confirm that, to the best of each person’s
knowledge:
a.
the Group Financial Statements in the Annual Report and
Accounts, which have been prepared in accordance with IAS
in conformity with the requirements of the Companies Act
2006, and those of the Parent Company, which have been
prepared in accordance with IAS in conformity with the
requirements of the Companies Act 2006, give a true and
fair view of the assets, liabilities, financial position and profit
or loss of the Company and Group taken as a whole; and
b.
the Annual Report and Accounts includes a fair review of
the development and performance of the business and the
position of the Company and the Group taken as a whole,
together with a description of the principal risks and
uncertainties they face.
The Directors of the Company and their functions are listed
on pages 104 and 105.
By order of the Board.
David Thomas
Chief Executive
5 September 2023
The Directors’ Report from pages 102 to 171 inclusive was
approved by the Board on 5 September 2023 and is signed
on its behalf by
Tina Bains
Company Secretary
Barratt Developments PLC Annual Report and Accounts 2023
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Financial Statements
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Financial Statements
Financial Statements
Contents
Independent Auditor’s Report
Consolidated Income Statement and Statement
of Comprehensive Income
Statement of Changes in Shareholders’ Equity – Group
Statement of Changes in Shareholders’ Equity – Company
Balance Sheets
Cash Flow Statements
Notes to the Financial Statements
Definitions of alternative performance measures
and reconciliation to IFRS (unaudited)
Five year record (unaudited)
Glossary
Integrated reporting approach
Group advisers and Company information
Key to financial icons
Throughout the Financial Statements you will see these
icons used; they represent the following:
Group accounting policies
Critical accounting judgements and key sources
of estimation uncertainty
172
173
182
183
184
185
186
188
235
238
240
243
244
Notes to the Financial Statements
1. Basis of preparation
2. Revenue
3. Profit from operations
4. Adjusted items
5. Key management, employees and retirement benefit obligations
6. Net finance costs
7. Tax
8. Earnings per share
9. Dividends
10. Goodwill and intangible assets
11. Company investments in subsidiary undertakings
12. Investments in jointly controlled entities
13. Jointly controlled operations
14. Property, plant and equipment
15. Leases
16. Inventories
17. Trade and other receivables
18. Net cash
19. Trade and other payables
20. Provisions
21. Contract assets and liabilities
22. Financial instruments
23. Share capital
24. Merger reserve
25. Capital redemption reserve
26. Own shares reserve
27. Share-based payments
28. Non-controlling interests
29. Contingent liabilities
30. Related party transactions
31. Financial risk management
32. Business combinations and Group subsidiary undertakings
188
190
191
192
193
194
194
197
198
198
201
201
204
205
206
207
208
209
211
212
214
214
216
216
216
217
217
221
221
222
223
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Barratt Developments PLC Annual Report and Accounts 2023 S
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Financial Statements
Independent Auditor’s Report
to the members of Barratt Developments PLC
Report on the audit of the financial statements
1. Opinion
In our opinion:
∙ the financial statements of Barratt Developments PLC (the ‘Company’) and its subsidiaries (the ‘Group’) give a true and fair
view of the state of the Group’s and of the Company’s affairs as at 30 June 2023 and of the group’s profit for the year then ended;
∙ the Group financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards;
∙ the Company financial statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
∙ the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements which comprise:
∙ the Consolidated Income Statement and Statement of Comprehensive Income;
∙ the Group and Company Statements of Changes in Shareholders’ Equity;
∙ the Group and Company Balance Sheets;
∙ the Group and Company Cash Flow Statements; and
∙ the related notes 1 to 32.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom adopted
international accounting standards and, as regards the parent company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of
our report.
We are independent of the Group and the Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit
services provided to the Group and Company for the year are disclosed in note 3 to the Financial Statements. We confirm that
we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
∙ Margin recognition; and
∙ Costs associated with legacy properties.
Within this report, key audit matters are identified as follows:
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
Scoping
The materiality that we used for the Group Financial Statements was £45 million which
represents 5.1% of adjusted profit before tax. Adjusted profit before tax is profit before tax and
adjusted items as disclosed in the table following the Consolidated Income Statement and
Statement of Comprehensive Income.
Our scoping focused on the audit work of the two components, being housebuilding and joint
ventures. All audit work was completed directly by the Group audit engagement team.
Significant changes
in our approach
There were no significant changes to our audit approach, and it remains consistent with the
prior year.
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Financial Statements
Independent Auditor’s Report continued
to the members of Barratt Developments PLC
Report on the audit of the financial statements continued
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and Company’s ability to continue to adopt the going concern basis
of accounting included:
∙ understanding the relevant controls relating to the assessment of the appropriateness of the going concern assumption;
∙ assessing the Group’s financing facilities including the nature of the facilities, repayment terms and compliance with
loan covenants;
∙ challenging assumptions used in the going concern model by analysing the current and forecast performance of the Group,
including working capital requirements by assessing management’s assumptions against market data;
∙ assessing the wider macro-economic environment over the going concern period, with respect to increasing interest and
inflation rates and their impact on house price and build cost assumptions, and whether this has been appropriately reflected
in the forecasts;
∙ evaluating management’s sensitivity analysis;
∙ assessing identified potential mitigating actions and the appropriateness of the inclusion of these in the going
concern assessment;
∙ assessing the historical accuracy of forecasts; and
∙ assessing the appropriateness of the going concern disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and Company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
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Financial Statements
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
5.1. Margin recognition
Key audit matter
description
How the scope of our
audit responded to the
key audit matter
Key observations
In FY23, adjusted margin was 21.2% (FY22: 24.8%).
The Group’s valuation and cost allocation framework determines the total profit forecast for each site.
This allows the land and build costs of a development to be allocated to each individual unit, ensuring
the forecast margin per unit is equalised across a development. At each year-end, Group management
considers if an adjustment for house prices and build cost assumptions is required. This cost allocation
framework drives the recognition of costs, and hence profit, as each unit is sold, which is the key
estimate in the Income Statement and is where fraud could potentially occur.
For each development there is estimation uncertainty in:
∙ Estimating the inputs included within a site budget, including future revenues and costs to complete,
in order to determine the level of profit that each unit of the development will deliver;
∙ Determining future house price inflation and build cost inflation;
∙ Appropriately allocating costs such as shared infrastructure relating to a development so that the
gross profit margin (in percentage terms) achieved on each individual unit is equal;
∙ Recognising site contingencies and their impact on margin; and
∙ Recording the variation when a deviation from the initial budget occurs and ensuring such variations
are appropriately recognised to those units impacted by the deviation.
These estimates impact the carrying value of inventory in the balance sheet and therefore the profit
recognised on each unit sold which aggregate to form the overall reported margin which is a key
internal metric for the Group. Accordingly, we consider the recognition of cost per unit and therefore the
appropriate margin to be a key audit matter.
Refer to page 128 (Audit Committee Report) and notes 1 and 3 (financial statement disclosures including
the related critical accounting judgements and key sources of estimation uncertainty).
Our work included the following:
∙ Tested the relevant controls governing inventory costing which include site valuations, land
acquisition feasibilities, expenditure and ongoing margin review;
∙ Visited a sample of sites and verified the work completed to date. On a sample basis, agreed the cost
incurred to source documentation to verify work in progress;
∙ On a sample of sites, made enquiries with management to support their cost to complete estimates
and obtained external supporting evidence regarding costs to complete;
∙ Evaluated key estimates in the margin calculation, such as the current and forecast macro-economic
conditions such as future sales volumes, house prices and construction build costs;
∙ Analysed margins on a site-by-site and divisional basis to identify material movements in the site
margins compared to prior year. We evaluated and assessed the material variances through enquiries
with management and obtaining corroborative evidence;
∙ Used bespoke data analytic techniques to analyse costs to complete. This enabled us to analyse the
cost category composition for each site and comparing to budgeted positions and Group averages. We
performed enquiries and obtained corroborative evidence for exceptions identified;
∙ Analysed the cost per square foot of plots sold at a divisional level for the current year and compared
this to cost per square foot in previous years, to analyse for any unusual trends which required
corroboration from management; and
∙ Made enquiries of management regarding their assessment of the impact of climate change on the
forecast costs to complete and house prices and assessed the reasonableness of their assumptions.
Based on the procedures performed, we concluded that the Group’s cost allocation framework was
reasonable for the intended purpose of recognising appropriate margins on plot completion. We concurred
with the Group’s assessment that, given the current market, no further adjustments for house price and
build cost assumptions are required to underlying site valuations and margins are materially appropriate.
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Financial Statements
Independent Auditor’s Report continued
to the members of Barratt Developments PLC
Report on the audit of the financial statements continued
5. Key audit matters continued
5.2. Costs associated with legacy properties
Key audit matter
description
How the scope
of our audit
responded to the
key audit matter
176
There is ongoing challenge and public scrutiny in relation to fire safety and cladding related issues at legacy
developments. The Group has recognised a number of provisions in relation to changing building regulations and
remediation of structural defects identified. The provisions also include the expected cost to address necessary
fire-safety issues on all buildings of 11 metres and above following the adoption of the UK Government industry
pledge by Barratt in April 2022 and the signing of the Self-Remediation Terms and Contract in March 2023.
As a result of the evolving regulatory environment, including the signing of the Self-Remediation Terms
and Contract, we continue to identify an increased level of risk in relation to the Group’s obligations. We
identified a key audit matter in relation to costs associated with legacy properties as the amount provided
by the Group could be incomplete or not valued accurately for the remediation required.
To date, there is limited actual evidence of the costs of remediation and the accounting for these provisions
involves a number of key assumptions when estimating the future costs, and therefore this is identified as
an area with a potential for fraud.
The key judgements are:
∙ determining which buildings the Group has an obligation to remediate at the balance sheet date;
∙ the cost of the future works;
∙ the duration over which the costs will be incurred; and
∙ the discount and inflation rates applied.
At the end of the financial year the Group holds provisions of £612.3m (2022: £479.5m) in relation to legacy
properties. During the year, the Group incurred a charge of £258.2m (2022: £448.0m) and utilisation of
£32.9m (2022: £20.3m) in relation to remediation costs. The additional provisions made have been
recognised as an adjusted item and excluded from adjusted profit, as explained in note 4.
Fire-safety regulations continue to evolve and the Group’s internal investigations are ongoing in relation to their
legacy buildings, required remediation on a building by building basis and potential liabilities. We identified a risk
around whether the charge for FY23 has been recorded in the appropriate accounting period.
Refer to page 128 (Audit Committee Report) and notes 1, 20 and 29 to the Financial Statements, including
the disclosures relating to this key source of estimation uncertainty.
Our work included the following:
∙ obtained an understanding of controls relevant to the recognition and estimation of costs associated
with legacy properties;
∙ assessed how the value of the provision has been determined and whether a present obligation to rectify
the properties existed at the balance sheet date;
∙ challenged that the increase in estimated costs have been recorded in the appropriate accounting
period by assessing that all reliable information that could reasonably be expected to have been
obtained was reflected in the provision recorded in the prior accounting period and that the charge for
the year is a consequence of new information that became available during FY23;
∙ validated a sample of cost estimates to underlying support such as third-party estimates, quotations
or agreements in order to challenge management’s estimates; and
∙ assessed the associated disclosures, including consideration of costs classified as adjusted items.
Specifically, in relation to the Self-Remediation Terms and Contract, we performed the following:
∙ performed an assessment of the Group’s legal liability through discussions with internal legal counsel
and the Group’s internal building safety unit;
∙ performed an assessment of the application of UK laws in relation to responsibilities of freeholders;
∙ analysed buildings with potential legal liability by considering the Group’s portfolio of buildings against
the commitments made under the Self-Remediation Terms and Contract;
∙ assessed the estimated liability by understanding and challenging management’s assumptions
regarding the costs of remediation per plot, the number of plots to be remediated, the time period for
the work to be completed and the discount factor applied to the overall provision;
∙ challenged the completeness of the provision, including the contingency, by testing the key assumptions
including the number of buildings with potential legal liability and the estimated liability per unit; and
∙ assessed the disclosure included within the financial statements in relation to provisions and contingent
liabilities, including the disclosure of the assumptions and associated sensitivities in relation to the key
sources of estimation uncertainty.
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Financial Statements
Report on the audit of the financial statements continued
5. Key audit matters continued
5.2. Costs associated with legacy properties continued
Key observations
Based on the procedures performed we concluded the provision recorded to be appropriate based on
information available at 30 June 2023, however we observed a high level of estimation uncertainty in
the assumptions applied. Accordingly, we are satisfied with the disclosure of this provision as a key source
of estimation uncertainty within note 1 of the financial statements potentially subject to future change.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
Materiality
£45 million (2022: £50 million)
£40.5 million (2022: £45 million)
Group financial statements
Company financial statements
Basis for determining
materiality
Rationale for the
benchmark applied
Our determined materiality represents 5.1%
(2022: 4.7%) of adjusted profit before tax.
Adjusted profit before tax is profit before tax and
adjusted items as disclosed in the table following
the Consolidated Income Statement and
Statement of Comprehensive Income.
We consider adjusted profit before tax to be an
important benchmark of the performance of the
Group. Whilst not an IFRS measure, adjusted
profit before tax is one of the key metrics for the
Group. It excludes some of the volatility arising
from adjusted items and accordingly we consider
it the appropriate basis.
Our basis for materiality was determined based
upon 3% (2022: 3%) of the Company’s net assets
capped at 90% (2022: 90%) of Group materiality.
Net assets was used as the benchmark because
it provides a stable basis and there are volatile
earnings between periods.
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected
and undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements
Company financial statements
Performance materiality
70% (2022: 70%) of Group materiality
70% (2022: 70%) of Company materiality
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we considered the following factors:
∙ Our risk assessment, including our assessment of the Group’s overall control environment and
that we consider it appropriate to rely on controls over a number of business processes; and
∙ Our past experience of the audit, which has indicated a low number of corrected and uncorrected
misstatements identified in prior periods.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £2.25 million
(2022: £2.5 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the
financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and
assessing the risks of material misstatement at the Group level. The entire Group is audited by one audit engagement team, led by
the Senior Statutory Auditor. Controls are common across the Group and there are two identified components, housebuilding and
joint ventures, which take into consideration all of the Group’s divisions, as well as the head office consolidation.
Each component was set a specific component materiality, considering its relative size and any component-specific risk factors
such as internal control findings and history of error. The component materialities applied were in the range £15.75 million to
£29.93 million (2022: £17.5m to £33.2m). Both components have been subject to a full scope audit
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Financial Statements
Independent Auditor’s Report continued
to the members of Barratt Developments PLC
Report on the audit of the financial statements continued
7. An overview of the scope of our audit continued
7.2. Our consideration of the control environment
We obtained an understanding of the relevant internal controls over key audit matters, relating to margin recognition and legacy
properties. We obtained an understanding of other relevant controls which we would expect in a housebuilder, namely those over
land and work in progress and those over subcontractor and other expenses.
We assessed entity level controls at a Group level relating to the risk assessment process, monitoring of internal controls and
information systems. This resulted in a more granular review of management’s whistleblowing policy, code of ethics, HR and culture
policy and fraud risk assessment.
In the current year, we have tested controls relating to margin recognition, subcontractors, expenditure, land and work in progress.
Based on our work performed we adopted a controls reliance approach to our testing in these areas.
The Group IT landscape contains a number of IT systems, applications and tools used to support business processes and reporting.
We enhanced our understanding of the Group’s IT controls and performed testing of General IT Controls (“GITCs”) of three key
applications that support financial reporting processes, being TM1, COINs and Homebuilder, which included controls surrounding
user access management and change management. Based on our work performed we adopted a controls reliance approach to
GITCs of these applications.
7.3. Our consideration of climate-related risks
As part of our audit we have made enquiries of management to understand the process they have adopted to assess the potential
impact of climate change on the financial statements. As disclosed on page 77 the Group considers climate change to be a
fundamental component of its environmental, social and governance principal risk within the business which in the medium
term particularly impacts the Group’s ability to build homes that are considered fit for purpose as well as potentially incurring
significantly increased costs. In the long term, climate change could cause significant disruption to operations. These risks are
consistent with those identified through our own risk assessment process. Due to its medium to longer term impact, the Group
has assessed the impact of climate change on the viability of the business, as disclosed within the Viability Statement on page 99.
As part of our identification of key audit matters, we therefore assessed there to be an element of risk in relation to climate change
as part of margin recognition. There is a risk that the forecast costs to complete do not include appropriate assumptions relating to
climate change, for example, additional costs to ensure the homes meet customer and investor expectations. In addition to our
procedures outlined in section 5.1 above, we have read the climate change related disclosures within the other information
included in the annual report to consider whether they are materially consistent with the financial statements and our knowledge
obtained during the audit.
8. Other information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Financial Statements
Report on the audit of the financial statements continued
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the Financial Statements, the directors are responsible for assessing the Group’s and the Company’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic
alternative but to do so.
10. Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial
Statements.
A further description of our responsibilities for the audit of the Financial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with
laws and regulations, we considered the following:
∙ the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
∙ the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error;
∙ results of our enquiries of management, internal audit, internal legal counsel, the directors and the Audit Committee about their
own identification and assessment of the risks of irregularities, including those that are specific to the Group’s sector;
∙ any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:
∙ identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
∙ detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
∙ the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
∙ the matters discussed among the audit engagement team and relevant internal specialists, including tax, valuations, fraud and IT
specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud
and identified the greatest potential for fraud in the following areas: margin recognition and costs associated with legacy
properties. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to
the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on provisions of
those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this context included the UK Companies Act, Listing Rules, Building
Safety Regulations and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements
but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included
environmental and health and safety regulations.
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Financial Statements
Independent Auditor’s Report continued
to the members of Barratt Developments PLC
Report on the audit of the financial statements continued
11. Extent to which the audit was considered capable of detecting irregularities, including fraud continued
11.2. Audit response to risks identified
As a result of performing the above, we identified margin recognition and costs associated with legacy properties as key audit matters
related to the potential risk of fraud or non-compliance with laws and regulations. The key audit matters section of our report explains
the matters in more detail and also describes the specific procedures we performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks identified included the following:
∙ reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions
of relevant laws and regulations described as having a direct effect on the Financial Statements;
∙ enquiring of management, the Audit Committee, in-house and external legal counsel concerning actual and potential litigation
and claims;
∙ performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
∙ reading minutes of meetings of those charged with governance, reviewing internal audit reports; and
∙ in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias;
and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
∙ the information given in the strategic report and the directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
∙ the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Company and their environment obtained in the course of
the audit, we have not identified any material misstatements in the strategic report or the directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the group’s compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
∙ the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 99;
∙ the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the
period is appropriate set out on page 99;
∙ the directors’ statement on fair, balanced and understandable set out on page 171;
∙ the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 72;
∙ the section of the annual report that describes the review of effectiveness of risk management and internal control systems
set out on pages 71 and 72; and
∙ the section describing the work of the audit committee set out on page 127.
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Financial Statements
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
∙ we have not received all the information and explanations we require for our audit; or
∙ adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received
from branches not visited by us; or
∙ the Company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration
have not been made or the part of the directors’ remuneration report to be audited is not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the shareholders at the Annual General Meeting held
in 2007 to audit the financial statements for the year ending 30 June 2008 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals and reappointments of the firm is 16 years, covering the years ending
30 June 2008 to 30 June 2023.
15.2. Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with
ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these Financial
Statements form part of the European Single Electronic Format (ESEF) prepared Annual Financial Report filed on the National
Storage Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report
provides no assurance over whether the annual financial report has been prepared using the single electronic format specified in
the ESEF RTS.
Jacqueline Holden FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
5 September 2023
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Financial Statements
Consolidated Income Statement and Statement of Comprehensive Income
Year ended 30 June 2023
Notes
2
3
3
6
6
6
12
7
28
8
8
2023
£m
2022
£m
5,321.4
5,267.9
(4,346.5)
(4,368.0)
974.9
(270.8)
140.0
(136.7)
707.4
23.8
(34.9)
(11.1)
8.8
705.1
(174.8)
530.3
530.3
—
899.9
(256.4)
84.4
(81.3)
646.6
2.5
(30.1)
(27.6)
23.3
642.3
(127.1)
515.2
515.1
0.1
53.2p
52.6p
50.6p
49.8p
Profit before tax
2023
£m
705.1
2022
£m
642.3
Share of post-tax profit
from joint ventures
2022
£m
23.3
2023
£m
8.8
23.7
—
32.5
4.3
181.9
437.5
—
27.6
(2.7)
(25.0)
884.3
1,054.8
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Part-exchange income
Part-exchange expenses
Profit from operations
Finance income
Finance costs
Net finance costs
Share of post-tax profit from joint ventures
Profit before tax
Tax
Profit for the year being total comprehensive income recognised for the year
Profit and total comprehensive income for the year attributable to the owners of
the Company
Profit and total comprehensive income for the year attributable to non-controlling interests
Earnings per share from continuing operations
Basic
Diluted
There was no other comprehensive income in either year.
The notes on pages 188 to 234 form an integral part of these Financial Statements.
Adjusted items:
Reported profit
Cost associated with legacy
properties
Legacy property
recoveries
Adjusted profit
Notes
4
4
Gross profit
Profit from operations
2023
£m
974.9
2022
£m
899.9
2023
£m
707.4
2022
£m
646.6
158.2
433.2
158.2
433.2
(2.7)
(25.0)
(2.7)
(25.0)
1,130.4
1,308.1
862.9
1,054.8
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Financial Statements
Statement of Changes in Shareholders’ Equity
Group
Share
capital
(note 23)
£m
Share
premium
£m
Merger
reserve
(note 24)
£m
Capital
redemption
reserve
(note 25)
£m
Own
shares
(note 26)
£m
Share-
based
payments
(note 27)
£m
Group
retained
earnings
due to
share-
holders
of the
Company
£m
Total
Group
retained
earnings
due to
share-
holders
of the
Company
£m
Non-
controlling
interests
(note 28)
£m
Total
equity
£m
At 1 July 2021
101.8
245.3
1,109.0
—
(4.7)
27.6
3,972.0
3,994.9
1.1
5,452.1
Profit for the year being
total comprehensive income
recognised for the year
ended 30 June 2022
Dividend payments (note 9)
Distributions to non-controlling
interests
Issue of shares
Share-based payments
Purchase of own shares by EBT
Transfers in respect of share options
Tax on share-based payments
—
—
—
0.4
—
—
—
—
—
—
—
8.1
—
—
—
—
—
—
—
—
—
—
—
—
At 30 June 2022
102.2
253.4
1,109.0
Profit for the year being
total comprehensive income
recognised for the year
ended 30 June 2023
Dividend payments (note 9)
Distributions to non-controlling
interests
Issue of share capital
Buyback and cancellation
of shares
Share-based payments
Purchase of own shares by EBT
Transfers in respect of share options
Tax on share-based payments
—
—
—
—
(4.8)
—
—
—
—
—
—
—
0.1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
At 30 June 2023
97.4
253.5
1,109.0
—
—
—
—
—
—
—
—
—
—
—
—
—
4.8
—
—
—
—
4.8
—
—
—
—
—
(28.5)
6.2
—
—
515.1
— (337.0)
515.1
(337.0)
0.1
515.2
— (337.0)
—
—
24.2
—
(20.1)
(2.7)
—
—
—
—
12.0
1.8
—
—
24.2
(28.5)
(1.9)
(0.9)
(0.4)
—
—
—
—
—
(0.4)
8.5
24.2
(28.5)
(1.9)
(0.9)
(27.0)
29.0
4,163.9
4,165.9
0.8
5,631.3
—
—
—
—
— 530.3
— (360.0)
530.3
(360.0)
— 530.3
— (360.0)
—
—
—
—
—
—
(0.3)
—
(0.3)
0.1
—
—
(14.0)
17.8
— (201.3)
—
—
(0.7)
10.2
—
(18.3)
(201.3)
10.2
(14.0)
(1.2)
— (201.3)
10.2
—
(14.0)
—
(1.2)
—
—
(0.1)
1.4
1.3
—
1.3
(23.2)
20.8 4,133.6
4,131.2
0.5 5,596.4
The notes on pages 188 to 234 form an integral part of these Financial Statements.
Barratt Developments PLC Annual Report and Accounts 2023
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Financial Statements
Statement of Changes in Shareholders’ Equity
Company
Share
capital
(note 23)
£m
Share
premium
£m
Merger
reserve
(note 24)
£m
Capital
redemption
reserve
(note 25)
£m
Own
shares
(note 26)
£m
Share-
based
payments
(note 27)
£m
Retained
earnings
£m
Total
retained
earnings
£m
Total
equity
£m
At 1 July 2021
101.8
245.3
1,109.0
Profit for the year being total comprehensive
income recognised for the year ended
30 June 2022
Dividend payments (note 9)
Issue of shares
Share-based payments
Purchase of own shares by EBT
Transfers in respect of share options
Tax on share-based payments
At 30 June 2022
Profit for the year being total comprehensive
income recognised for the year ended
30 June 2023
Dividend payments (note 9)
Issue of share capital
Buyback and cancellation of shares
Share-based payments
Purchase of own share for EBT
Transfers in respect of share options
Tax on share-based payments
At 30 June 2023
—
—
0.4
—
—
—
—
—
—
8.1
—
—
—
—
—
—
—
—
—
—
—
102.2
253.4
1,109.0
—
—
—
(4.8)
—
—
—
—
—
—
0.1
—
—
—
—
—
—
—
—
—
—
—
—
—
97.4
253.5
1,109.0
—
—
—
—
—
—
—
—
—
—
—
—
4.8
—
—
—
—
4.8
(4.7)
25.9
2,046.4
2,067.6
3,523.7
—
—
—
—
(28.5)
6.2
—
500.2
— (337.0)
—
—
—
24.2
—
—
6.4
(20.1)
500.2
(337.0)
—
24.2
(28.5)
(7.5)
500.2
(337.0)
8.5
24.2
(28.5)
(7.5)
—
(1.0)
0.7
(0.3)
(0.3)
(27.0)
29.0
2,216.7
2,218.7
3,683.3
—
—
—
—
—
(14.0)
17.8
—
— 501.9
— (360.0)
—
—
— (201.3)
—
—
(6.7)
10.2
—
(18.3)
501.9
(360.0)
—
(201.3)
10.2
(14.0)
(7.2)
501.9
(360.0)
0.1
(201.3)
10.2
(14.0)
(7.2)
—
0.5
0.5
0.5
(23.2)
20.9
2,151.1 2,148.8 3,613.5
The notes on pages 188 to 234 form an integral part of these Financial Statements.
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Financial Statements
Balance Sheets
At 30 June 2023
Assets
Non-current assets
Other intangible assets
Goodwill
Investments in subsidiary undertakings
Investments in jointly controlled entities
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Trade and other receivables
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Total assets
Liabilities
Non-current liabilities
Loans and borrowings
Trade and other payables
Lease liabilities
Deferred tax liabilities
Provisions
Current liabilities
Loans and borrowings
Trade and other payables
Lease liabilities
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Capital redemption reserve
Total retained earnings
Equity attributable to the owners of the Company
Non-controlling interests
Total equity
Group
2023
£m
Notes
2022
£m
205.4
852.9
—
177.9
41.2
35.6
—
6.5
194.9
852.9
—
129.8
58.1
45.1
—
2.9
1,283.7
1,319.5
5,238.0
182.1
31.1
1,269.1
6,720.3
8,004.0
(200.0)
(188.7)
(33.1)
(53.5)
(477.9)
(953.2)
(3.4)
(1,127.4)
(13.1)
(310.5)
(1,454.4)
(2,407.6)
5,596.4
97.4
253.5
1,109.0
4.8
4,131.2
5,595.9
0.5
5,291.6
237.0
9.9
1,352.7
6,891.2
8,210.7
(200.0)
(240.5)
(26.6)
(45.1)
(359.6)
(871.8)
(17.3)
(1,414.4)
(10.5)
(265.4)
(1,707.6)
(2,579.4)
5,631.3
102.2
253.4
1,109.0
—
4,165.9
5,630.5
0.8
10
10
11
12
14
15
7
17
16
17
18
18
19
15
7
20
18
19
15
20
23
24
25
28
Company
2023
£m
2022
£m
—
—
3,090.1
—
6.1
4.2
2.6
76.1
3,179.1
—
15.9
1.6
1,005.0
1,022.5
4,201.6
(200.0)
—
(2.9)
—
—
(202.9)
—
(383.9)
(1.3)
—
(385.2)
(588.1)
3,613.5
97.4
253.5
1,109.0
4.8
2,148.8
3,613.5
—
—
—
3,092.5
—
6.6
4.2
3.2
76.1
3,182.6
—
13.4
3.1
1,045.4
1,061.9
4,244.5
(200.0)
—
(3.1)
—
—
(203.1)
—
(357.0)
(1.1)
—
(358.1)
(561.2)
3,683.3
102.2
253.4
1,109.0
—
2,218.7
3,683.3
—
5,596.4
5,631.3
3,613.5
3,683.3
The Financial Statements of Barratt Developments PLC
(registered number 00604574) were approved by the
Board and authorised for issue on 5 September 2023.
Signed on behalf of the Board:
Parent Company Income Statement
In accordance with the provisions of Section 408 of the Companies Act 2006,
a separate Income Statement for the Company has not been presented.
The Company’s profit for the year was £501.9m (2022: £500.2m).
David Thomas
Chief Executive
Mike Scott
Chief Financial Officer
The notes on pages 188 to 234 form an integral part of these Financial
Statements.
Barratt Developments PLC Annual Report and Accounts 2023
185
S
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Financial Statements
Cash Flow Statements
Year ended 30 June 2023
Net cash inflow/(outflow) from operating activities (page 187)
Investing activities:
Purchase of property, plant and equipment
Proceeds from the disposal of property, plant and equipment
Consideration, net of cash acquired, paid on acquisition
of subsidiaries
Increase in amounts invested in jointly controlled entities
Repayment of amounts invested in jointly controlled entities
Distributions received from jointly controlled entities
Proceeds from the disposal of other investments
Dividends received from subsidiaries
Interest received
Net cash inflow/(outflow) from investing activities
Financing activities:
Dividends paid to equity holders of the Company
Distribution made to non-controlling interest
Purchase of own shares for the EBT
Buy back and cancellation of shares
Proceeds from issue of share capital
Payment of dividend equivalents
Loans and borrowings repayments
Repayment of lease liabilities
Net cash outflow from financing activities
Net decrease in cash, cash equivalents and bank overdrafts
Cash, cash equivalents and bank overdrafts at the
beginning of the year
Cash, cash equivalents and bank overdrafts at the
end of the year
Group
Company
Notes
14
12
12
12
9
28
15
2023
£m
465.5
(23.1)
0.1
—
(18.1)
40.2
34.8
—
—
21.5
55.4
(360.0)
(0.3)
(14.0)
(201.3)
0.1
(1.2)
—
(13.9)
(590.6)
(69.7)
2022
£m
417.6
(29.9)
1.0
(205.6)
(17.9)
9.9
16.5
1.4
—
2.2
(222.4)
(337.0)
(0.4)
(28.5)
—
8.5
(1.9)
(5.3)
(13.8)
(378.4)
(183.2)
2023
£m
20.0
(2.6)
—
—
—
—
0.1
—
500.0
19.8
517.3
(360.0)
—
(14.0)
(201.3)
0.1
(1.2)
—
(1.3)
(577.7)
(40.4)
2022
£m
(433.1)
(1.4)
—
—
—
—
—
—
517.4
1.6
517.6
(337.0)
—
(28.5)
—
8.5
—
—
(1.1)
(358.1)
(273.6)
1,335.4
1,518.6
1,045.4
1,319.0
18
1,265.7
1,335.4
1,005.0
1,045.4
The notes on pages 188 to 234 form an integral part of these Financial Statements.
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Financial Statements
Reconciliation of profit from operations to cash flow
from operating activities
Notes
Profit from operations
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Impairment/(reversal of impairment) of inventories
Share-based payments expense/(credit)
Imputed interest on long-term payables1
Imputed interest on lease arrangements
Amortisation of facility fees
Total non-cash items
Decrease/(increase) in inventories
Decrease/(increase) in receivables
(Decrease)/increase in payables
Increase in provisions
Total movements in working capital and provisions
Interest paid
Tax paid
Net cash inflow/(outflow) from operating activities
14
15
10
16
27
6
6
6
20
Group
Company
2023
£m
707.4
6.1
—
12.3
10.5
4.7
10.2
(21.4)
(1.2)
(1.9)
19.3
48.9
60.4
(337.6)
163.4
(64.9)
(10.4)
(185.9)
465.5
2022
£m
646.6
6.2
3.2
13.0
4.3
(2.2)
24.2
(14.4)
(0.9)
(4.0)
29.4
(543.4)
20.8
(10.7)
415.1
(118.2)
(10.7)
(129.5)
417.6
2023
£m
8.2
3.1
—
1.3
—
—
(0.3)
—
—
(1.9)
2.2
—
(0.2)
37.5
—
37.3
(27.7)
—
20.0
2022
£m
12.8
3.5
3.8
1.1
—
—
9.0
—
—
(1.9)
15.5
—
5.8
(433.6)
—
(427.8)
(33.6)
—
(433.1)
1 The Balance Sheet movements in land payables include non-cash movements due to imputed interest. Imputed interest is included within non-cash items in
the statements above.
The notes on pages 188 to 234 form an integral part of these Financial Statements.
Barratt Developments PLC Annual Report and Accounts 2023
187
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Financial Statements
Notes to the Financial Statements
Year ended 30 June 2023
1. Basis of preparation
Introduction
The Financial Statements for the Group and Company have been prepared in accordance with UK adopted IAS in conformity with
the requirements of the Companies Act 2006 and in accordance with UK adopted IFRS. The Financial Statements have been
prepared under the historical cost convention as modified by the revaluation of share-based payments.
Group accounting policies
The significant Group accounting policies are included within the relevant notes to the Financial Statements on pages 188 to
234.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements in conformity with UK adopted IFRS requires the use of estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on the Directors’ best knowledge of
the amounts, actual results may ultimately differ from those estimates. The Directors have made no individual critical accounting
judgements that have a significant impact upon the Financial Statements, apart from those involving estimations.
The most significant estimates made by the Directors in these Financial Statements, which are the key sources of estimation
uncertainty that may have a significant risk of causing a material difference to the carrying amounts of assets and liabilities
within the next financial year, are:
• Margin recognition — see note 3; and
• Costs associated with legacy properties — see note 20.
Basis of consolidation
The Group Financial Statements include the results of Barratt Developments PLC (the Company), a public company limited by
shares and incorporated in the United Kingdom, and all of its subsidiary undertakings, made up to 30 June. The Financial Statements
of subsidiary undertakings are consolidated from the date that control passes to the Group, and up to the date control ceases.
Control is achieved when the Group becomes entitled to the variable returns of the subsidiary and becomes exposed to its risks,
and has the power to affect these risks and returns. Acquired entities are accounted for using the acquisition method of accounting.
All transactions with subsidiaries and intercompany profits or losses are eliminated on consolidation.
Going concern
In determining the appropriate basis of preparation of the Financial Statements, the Directors are required to consider whether
the Group and Company can continue to meet their liabilities and other obligations for the foreseeable future.
The Group’s business activities, together with factors that the Directors consider are likely to affect its development, financial
performance and financial position, are set out in the Strategic Report on pages 2 to 100. The material financial and operational
risks and uncertainties that may affect the Group’s performance and their mitigation are outlined on pages 71 to 77, and financial
risks including liquidity, market, credit and capital risks are outlined in note 30 to the Financial Statements.
At 30 June 2023, the Group held cash of £1,269.1m and total loans and borrowings of £203.4m, consisting of £3.4m of overdrafts
repayable on demand and £200.0m Sterling USPP notes maturing in August 2027. These balances, set against pre-paid facility
fees, comprise the Group’s net cash of £1,069.4m, presented in note 18.
Should further funding be required, the Group has a committed £700.0m RCF, subject to compliance with certain financial
covenants, that matures in November 2027, with two further one-year extension periods through to November 2029, if agreed
between the Group and its lenders.
As such, in consideration of its net current assets of £5,265.9m, the Directors are satisfied that the Group has sufficient liquidity
to meet its current liabilities and working capital requirements.
Whilst the underlying fundamentals of the housing market remain attractive, uncertainty in the current market has increased. This
has arisen from the ongoing impact of interest rate rises on mortgage affordability, industry-specific challenges such as further
building safety costs or greenhouse gas emissions legislation along with material cost inflation and supply chain disruption. These,
and other economic disruptions, could result in flat or negative economic growth, reduced buyer confidence, reduced mortgage
availability and affordability, falls in house prices or land values and cost increases associated with raw materials, suppliers,
subcontractors and employees.
The Group’s financial forecasts reflect the outcomes that the Directors consider most likely, based on the information available
at the date of signing of these Financial Statements.
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Financial Statements
1. Basis of preparation continued
Going concern continued
To assess the Group’s resilience to more adverse outcomes, its forecast performance was sensitised to reflect a series of
scenarios based on the Group’s principal risks and the downside prospects for the UK economy and housing market presented
in the latest available external economic forecasts.
This exercise included a reasonable worst-case scenario in which the Group’s principal risks manifest in aggregate to a severe but
plausible level. This assumed that average selling prices fall by 10%, sales volumes fall by 25% and construction costs increase by
3% in addition to the base forecasts, in addition to the implementation of a building safety levy and the acceleration of regulatory
changes to reduce indirect greenhouse gas emissions.
The effects were modelled over the 12 months from the date of signing of these Financial Statements, alongside reasonable
mitigation that the Group would expect to undertake in such circumstances, primarily a reduction in investment in inventories in
line with the fall in expected sales and a 50% reduction in uncommitted land spend. In all scenarios, including the reasonable worst
case, the Group is able to comply with its financial covenants, operate within its current facilities and meet its liabilities as they
fall due.
Furthermore, reverse stress testing was performed to determine the market conditions in which the Group would cease to be able
to operate under its current facilities within 12 months from the date of signing these Financial Statements. Based on past experience
and current economic forecasts, the Directors consider the possibility of this outcome to be remote and have identified mitigation
that would be adopted in such circumstances.
Accordingly, the Directors consider there to be no material uncertainties that may cast significant doubt on the Group’s ability to
continue to operate as a going concern. They have formed a judgement that there is a reasonable expectation that the Group and
Company have adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from
the date of signing of these Financial Statements. For this reason, they continue to adopt the going concern basis in the preparation
of these Financial Statements.
Application of accounting standards
During the year ended 30 June 2023, the Group has applied accounting policies and methods of computation consistent with those
applied in the prior year.
During the year, the Group has adopted the following new and revised standards and interpretations that have had no impact on the
Financial Statements:
∙ Annual improvements 2018 — 2020: Amendments to IFRS 1 permitting a subsidiary as a first time adopter to apply cumulative
translation differences; amendment to IFRS 9 clarifying fees to include when applying the 10% test in assessing derecognition of
financial liabilities; amendment to IFRS 16 to resolve confusion over the treatment of leasehold incentives; and the amendment to
IAS 41 regarding removing the requirement to exclude cash flows for taxation when measuring fair value;
∙ Amendment to IAS 37: Specifying which costs to include in calculating the liability, specifically those costs related to fulfilling a contract;
∙ Amendments to IFRS 3: Updating a reference to the Conceptual Framework for Financial Reporting; and
∙ Amendment to IAS 16: Prohibiting deduction of sales proceeds from the cost of property, plant and equipment.
Impact of standards and interpretations in issue but not yet effective
At the date of approval of these Financial Statements, there were a number of standards, amendments and interpretations that have
been published and are mandatory for the Group’s accounting periods beginning on or after 1 July 2023 and later periods. None of these
are expected to have a material impact on the Group. The Group has not early adopted any standard, amendment or interpretation.
Barratt Developments PLC Annual Report and Accounts 2023
189
S
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Financial Statements
2. Revenue
The Group’s revenue derives principally from the sale of the homes we build.
Revenue from the sale of residential and commercial properties
Revenue is recognised at legal completion in respect of the total proceeds of building and development. Revenue is measured
at the fair value of consideration received or receivable and represents the amounts receivable for the property, net of
discounts and VAT.
Revenue on contracts recognised over time
The Group considers all contracts with commercial customers and registered providers for affordable housing on a contract
by contract basis and determines the appropriate revenue recognition based on the particular terms of that contract. For the
majority of such contracts, there is a single performance obligation for which revenue is recognised at a point in time, when
construction has been completed and control is transferred to the customer. The Group recognises revenue over time in relation
to certain contracts with registered providers only in circumstances in which control of the associated land is transferred to the
customer before or during construction. Revenue is only recognised from the point at which control of the associated land is
transferred, considering the rights to economic benefit as well as legal title. Revenue is recognised because the construction
activity enhances an asset that is controlled by the customer.
Where the outcome of a contract on which revenue is recognised over time can be estimated reliably, revenue is recognised by
reference to the stage of completion of contract activity at the balance sheet date. This is normally measured by surveys of work
performed to date. The Group is satisfied that it is appropriate to measure performance by reference to surveys of work performed
to date, because these surveys identify the extent to which benefits have been transferred to the customer. Variations to, and claims
arising in respect of, such contracts are included in revenue to the extent that they have been agreed with the customer. Where the
outcome of a contract on which revenue is recognised over time cannot be estimated reliably, revenue is recognised to the extent of
contract costs incurred. When it is probable that the total costs on a contract will exceed total contract revenue, the expected loss is
immediately recognised as an expense in the Income Statement.
Other revenue
Revenue from separate contracts related to the development of homes is recognised on completion of the performance
obligation to which it relates and included in other revenue. Revenue from warranties is recognised on a straight-line basis
over the warranty period. Revenue from commercial contract management fees is recognised in the period in which it
becomes receivable and included within other revenue. Revenue from planning promotion agreements is recognised at
the point at which contractual obligations are satisfied.
An analysis of the Group’s continuing revenue is as follows:
Revenue from private residential sales
Revenue from affordable residential sales
Revenue from commercial sales
Revenue from planning promotion agreements
Sundry revenue
Residential completions1
Revenue
2023
number
12,456
3,922
—
—
—
16,378
2022
number
13,327
3,835
—
—
—
17,162
2023
£m
4,578.5
655.8
64.7
20.4
2.0
5,321.4
2022
£m
4,541.3
611.4
87.6
23.3
4.3
5,267.9
1 Residential completions exclude JV completions of 828 homes (2022: 746) in which the Group has an interest.
Included within Group revenue is £192.7m (2022: £75.0m) of revenue from construction contracts on which revenue is recognised
over time by reference to the stage of completion of work on the contracts (note 21). Of this amount, £4.0m (2022: £5.3m) was
included in the contract liability balance at the beginning of the year.
Revenue includes £274.5m (2022: £171.3m) of revenue generated where the sale has been achieved using part-exchange
incentives. Proceeds received on the disposal of part-exchange properties are not included in revenue on the basis that they
are incidental to the main revenue-generating activities of the Group.
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Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
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Financial Statements
3. Profit from operations
Profit from operations includes all of the revenue and costs derived from the Group’s operating businesses. Profit from operations
excludes finance costs, finance income, the Group’s share of profits or losses from JVs and tax.
The Group’s principal activity is housebuilding. None of the other business activities undertaken by the Group, individually or in
aggregate, account for more than 10% of the Group’s revenue, profit or total assets and do not meet the IFRS 8 thresholds for
disclosure. The operating results of these activities are not presented separately to the Board. Therefore, no segmental
information is presented in these Financial Statements.
Margin recognition
In order to determine the profit that the Group is able to recognise on its developments in a specific period, the Group allocates
site-wide development costs between homes built in the current year and in future years. It also has to estimate costs to
complete on such developments and make estimates relating to future sales price margins on those developments and
homes. In making these assessments there is a degree of inherent uncertainty.
The Group’s site valuation process determines the forecast profit margin for each site. The valuation process acts as a method of
allocating land costs and construction work in progress costs of a development to each individual plot and drives the recognition
of costs in the Income Statement as each plot is sold. Any changes in the forecast profit margin of a site from changes in sales
prices or costs to complete are recognised across all homes sold in both the current period and future periods. This ensures that
the forecast site margin achieved on each individual home is equal for all current year completions and future plots across the
development.
Management has performed a sensitivity analysis to assess the impact of a change in estimated future costs or forecast
selling prices for developments on which sales were recognised in the year. A 3% increase in the forecast costs to complete
would increase site-cost allocation in cost of sales in 2023 by £38.5m, resulting in a reduction in gross margin of 70 bps. A 3%
increase in forecast private sales prices would reduce site-cost allocation in cost of sales in 2023 by £44.4m, resulting in an
improvement in gross margin of 80 bps.
Depreciation of right-of-use assets
Right-of-use assets are depreciated in the Income Statement in equal instalments to the earlier of the end of the lease term
or the end of the useful life of the asset.
Part-exchange income and expenses
Income on the sale of a part-exchange property is recognised at legal completion at the fair value of consideration received
or receivable for the property.
Part-exchange properties are recognised in inventories at the lower of cost, being their fair value at acquisition, and their net
realisable value. The amount of any write-down of inventories to net realisable value, or reversal of a previous write-down,
is recognised in the Income Statement in the period in which it occurs.
The carrying amount of a part-exchange property is recognised as an expense in the period in which the related income is recognised.
Maintenance costs are recognised in the Income Statement in the period in which they are incurred.
Profit from operations is stated after charging/(crediting):
Cost of inventories recognised as an expense in cost of sales
Employee costs (including Directors)
Adjusted items:
Costs associated with legacy properties
Amounts associated with legacy properties recovered from third parties
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Notes
5
4
4
14
15
2023
£m
3,907.3
527.2
158.2
(2.7)
6.1
12.3
2022
£m
3,761.9
492.7
433.2
(25.0)
6.2
13.0
Profit from operations is stated after charging the Directors’ emoluments disclosed in the Remuneration Report on pages 137 to
168 and in note 5.
The Group does not recognise income from supplier rebates until it can be calculated reliably and it is certain that it will be received
from suppliers. During the year, £32.8m (2022: £31.5m) of supplier rebate income was included within profit from operations.
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Financial Statements
3. Profit from operations continued
Administrative expenses
Administrative expenses of £270.8m (2022: £256.4m) include sundry income of £16.7m (2022: £21.2m), which principally
comprises management fees receivable from JVs, the sale of freehold reversions, forfeit deposits and ground rent receivable.
Auditor’s remuneration
The remuneration paid to Deloitte LLP, the Group’s principal auditor, is disclosed below:
Fees payable to the Company’s auditor for the audit of the Company and Consolidated Financial Statements
Fees payable to the Company’s auditor for the audit of the Company’s subsidiaries1
Total audit fees
Audit-related assurance services2
Other services3
Total fees for other services
Total fees related to the Company and its subsidiaries
1 A reduced number of subsidiaries are being audited by the Group auditor in the current year.
2 Audit-related assurance services comprise the review of the Interim Report.
2023
£000
852
186
1,038
43
230
273
1,311
2022
£000
680
262
942
37
210
247
1,189
3 Other services comprise assurance services over selected ESG metrics and compliance with the recommendations of the TCFD and review procedures
over selected non-financial disclosures in the Annual Report.
Details of the Group’s policy on the use of the Company’s principal auditor for non-audit services and auditor independence are set
out in the Audit Committee Report on pages 130 to 132. No services were provided under contingent fee arrangements.
In addition to the remuneration paid to the Company’s auditor for services related to the Company and its subsidiaries, the auditor
received the following remuneration from JVs in which the Group participates:
The audit of the Group’s JVs pursuant to legislation1
Total fees related to joint ventures
1 A reduced number of JVs are being audited by the Group auditor in the current year.
4. Adjusted items
Adjusted items
2023
£000
80
80
2022
£000
227
227
In determining whether an item should be presented as an adjustment to IFRS measures, the Group considers items that are material
to the Group in aggregate and have arisen from one-off or unusual circumstances that could not reasonably have been expected to
arise from normal trading. If an item meets these criteria the Board then exercises judgement as to whether the item should be
classified as an allowable adjustment to IFRS. Examples of events that may give rise to the classification of items as adjusted are
charges or credits in respect of legacy properties, the restructuring of existing and newly acquired businesses, and certain
government grants.
The Directors use these adjusted measures, along with IFRS measures, to assess the operational performance of the Group as
detailed in the key performance indicators section of the Strategic Report on pages 16 to 19.
Costs incurred in respect of legacy properties
Amounts in respect of legacy properties recovered from third parties
Adjusted items in cost of sales
Costs incurred in respect of legacy properties by joint ventures
Total adjusted items
2023
£m
158.2
(2.7)
155.5
23.7
179.2
2022
£m
433.2
(25.0)
408.2
4.3
412.5
Cost associated with legacy properties:
The adjusted costs in the year, associated with Group legacy properties, comprise additions to provisions of £262.0m, provision
releases of £44.9m, revaluation of £58.9m and reimbursements recognised directly in the Income Statement of £2.7m. In addition
£23.7m of costs in respect of JV legacy properties were incurred in the year. Further details of provisions movements are provided
in note 20.
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Financial Statements
5. Key management, employees and retirement benefit obligations
Key management and employees
Key management personnel, as defined under IAS 24: ‘Related Party Disclosures’, have been identified as the Board of
Directors, as the controls operated by the Group ensure that all key decisions are reserved for the Board. Detailed disclosures
of individual remuneration, pension entitlements and share options for those Directors who served during the year are given
in the audited sections within the Remuneration Report on pages 159 to 162.
A summary of key management remuneration is as follows:
Salaries and fees (including pension compensation)
Social security costs1
Performance bonus
Benefits
Share-based payments2
Total
1 Excluded from the Executive Directors’ and Non-Executive Directors’ single figure of remuneration tables on page 159.
2 IFRS 2: ‘Share-Based Payments’ (credit)/charge attributable to key management.
Total employee numbers and costs are as follows:
2023
£m
3.1
1.0
1.2
0.1
(0.3)
5.1
2022
£m
2.9
1.1
2.5
0.1
2.6
9.2
Average employee numbers (excluding sub-contractors and
including Directors)
Employee costs (including Directors):
Wages and salaries including bonuses
Redundancy costs
Social security costs
Other pension costs
Share-based payments
Employee costs for the year
Group
Company
2023
Number
2022
Number
2023
Number
2022
Number
7,031
6,564
490
412
Notes
27
Group
2023
£m
443.2
2.0
52.6
19.2
10.2
527.2
2022
£m
402.7
0.7
50.2
14.9
24.2
492.7
Company
2023
£m
47.8
0.4
6.8
2.1
(0.3)
56.8
2022
£m
45.2
0.2
8.3
1.6
9.0
64.3
The majority of the costs of the Company’s employees are charged to other Group companies.
Retirement benefit obligations
The Group operates several defined contribution pension schemes.
Defined contribution schemes
The Group’s contributions to the schemes are charged in the Income Statement in the year in which the scheme members
become entitled to contributions.
The Group operates defined contribution retirement benefit schemes for all qualifying employees, under which it pays contributions
to independently administered funds. Contributions are based upon a fixed percentage of the employee’s pay and once these have
been paid, the Group has no further obligations under these schemes.
Contributions during the year:
Group defined contribution schemes’ Consolidated Income Statement charge
2023
£m
19.2
2022
£m
14.9
At the balance sheet date, there were outstanding contributions of £2.8m (2022: £2.3m), which were paid on or before the due date.
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Financial Statements
6. Net finance costs
Finance costs and income
The Group recognises finance costs and income on bank borrowings, deposits and other borrowings in the Income Statement
in the period to which they relate. Imputed interest on discounted assets, including land purchased on deferred terms and
leased assets, is charged to the Income Statement over the period of settlement or lease period respectively.
Recognised in the Consolidated Income Statement:
Finance income:
Finance income on short-term bank deposits
Other interest receivable
Finance costs:
Interest on loans and borrowings
Imputed interest on long-term payables
Finance charge on leased assets
Amortisation of facility fees
Other interest payable
Net finance costs
2023
£m
(22.0)
(1.8)
(23.8)
9.3
21.4
1.2
1.9
1.1
34.9
11.1
The weighted average interest rates (excluding fees) paid in the year were as follows:
USPP notes
7. Tax
All profits of the Group are subject to UK corporation tax.
Group
Company
2023
%
2.8
2022
%
2.8
2023
%
2.8
2022
£m
(1.9)
(0.6)
(2.5)
9.5
14.4
0.9
4.0
1.3
30.1
27.6
2022
%
2.8
The current year tax charge has been provided for, by the Group, at a standard effective rate, inclusive of RPDT, of 24.5% (2022: 20.0%)
and by the Company at a standard effective rate of 20.5% (2022: 19.0%). The closing deferred tax assets and liabilities have been
provided in these Financial Statements at a rate of 20.5% — 29.0% (2022: 19.0% — 29.0%) on the temporary differences giving rise
to these assets and liabilities.
Tax
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the
Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have
been enacted or substantively enacted at the balance sheet date.
194
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Financial Statements
7. Tax continued
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities
in the Financial Statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax is measured on a non-discounted basis using the tax rates and laws that have then been
enacted or substantively enacted by the balance sheet date, and is charged or credited to the Income Statement, except when it
relates to items charged or credited directly to other comprehensive income or equity, in which case the deferred tax is also dealt
with in other comprehensive income or equity.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries
and interests in JVs, except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and
liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they
relate to taxes levied by the same tax authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Tax recognised in the Income Statement
The tax expense represents the sum of the tax currently payable and deferred tax.
Analysis of the tax charge for the year
Current tax:
UK corporation tax on profits for the year
RPDT for the year
Adjustment in respect of previous years
Deferred tax:
Origination and reversal of temporary differences
Adjustment in respect of previous years
Impact of change in tax rates
Impact of introduction of RPDT
2023
£m
147.2
26.0
(6.7)
166.5
1.8
7.2
(0.7)
—
8.3
2022
£m
122.9
6.3
(8.2)
121.0
2.2
2.6
(1.2)
2.5
6.1
Tax charge for the year
174.8
127.1
Factors affecting the tax charge for the year
The tax rate assessed for the year is higher (2022: lower) than the standard effective rate of corporation tax in the UK of 24.5%
(inclusive of RPDT) (2022: 20.0%). The differences are explained below:
Profit before tax
Profit before tax multiplied by the standard rate of corporation tax of 24.5%
(inclusive of RPDT) (2022: 20.0%)
Effects of:
Other items including non-deductible expenses and non-taxable income
Additional tax relief for land remediation costs
Adjustment in respect of previous years
Impact of change in tax rates
Impact of introduction of RPDT
Tax charge for the year
2023
£m
705.1
172.7
4.5
(2.2)
0.5
(0.7)
—
2022
£m
642.3
128.5
5.0
(2.1)
(5.6)
(1.2)
2.5
174.8
127.1
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Financial Statements
7. Tax continued
Tax recognised in equity
In addition to the amount charged to the Consolidated Income Statement, a net current and deferred tax charge of £1.3m
(2022: £0.9m) was recognised directly in equity.
Deferred tax
All deferred tax relates to the UK and is stated on a net basis as the Group has a legally enforceable right to set off the recognised
amounts and intends to settle on a net basis. The Group recognised a net deferred tax liability with the following movements in the year:
At 1 July 2021
Year ended 30 June 2022:
Income Statement (charge)/credit
Acquired with subsidiary undertaking
Amounts taken directly to equity
At 30 June 2022
Comprising:
Deferred tax assets
Deferred tax liabilities
Year ended 30 June 2023:
Income Statement (charge)/credit
Amounts taken directly to equity
At 30 June 2023
Comprising:
Deferred tax assets
Deferred tax liabilities
Share
options
£m
8.6
(2.1)
—
(2.7)
3.8
3.8
—
(0.9)
(0.1)
2.8
2.8
—
Brands
£m
(25.0)
(4.0)
(2.7)
—
(31.7)
—
(31.7)
0.1
—
(31.6)
—
(31.6)
Group
Accelerated
capital
allowances
£m
0.9
(0.4)
—
—
0.5
0.5
—
(11.5)
—
(11.0)
—
(11.0)
Customer
contracts
£m
—
Other
(net)
£m
6.6
—
(24.7)
—
(24.7)
—
(24.7)
3.4
—
(21.3)
—
(21.3)
0.6
—
—
7.0
5.7
1.3
0.6
—
7.6
7.6
—
Total
£m
(8.9)
(6.1)
(27.4)
(2.7)
(45.1)
10.0
(55.1)
(8.3)
(0.1)
(53.5)
10.5
(64.0)
The deferred tax liability in respect of indefinite life and other brands represents the amount of tax that would become due if the
brands were sold at their book value. There is no intention to sell the indefinite life brands in the foreseeable future and it is not
anticipated that any of the deferred tax liability in respect of the indefinite life brands will reverse in the 12 months following the
balance sheet date. The deferred tax asset in respect of share schemes represents an estimate of the future tax deduction
available on the exercise or vesting of awards under those schemes.
While it is anticipated that an element of the remaining deferred tax assets and liabilities will reverse during the 12 months
following the balance sheet date, at present it is not possible to accurately quantify the value of all of these reversals.
In addition to the deferred tax liability shown above, the Group has not recognised a deferred tax asset of £9.6m (2022: £2.1m) in respect
of capital and other losses amounting to £33.3m (2022: £10.0m) because these are not considered recoverable in the foreseeable future.
196
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Financial Statements
7. Tax continued
Deferred tax continued
The Company recognised a net deferred tax asset with the following movements in the year:
At 1 July 2021
Year ended June 2022:
Income Statement (charge)/credit
Amounts taken directly to equity
At 30 June 2022
Comprising:
Deferred tax assets
Year ended 30 June 2023:
Income Statement (charge)/credit
Amounts taken directly to equity
At 30 June 2023
Comprising:
Deferred tax assets
8. Earnings per share
The earnings per share from continuing operations were as follows:
Basic earnings per share
Diluted earnings per share
Adjusted basic earnings per share
Adjusted diluted earnings per share
Company
Accelerated
capital
allowances
£m
0.8
0.6
—
1.4
1.4
Share
options
£m
3.6
(1.3)
(1.0)
1.3
1.3
(0.4)
(0.5)
—
0.9
0.9
—
0.9
0.9
Other
(net)
£m
0.3
0.2
—
0.5
0.5
0.3
—
0.8
0.8
2023
pence
53.2
52.6
67.3
66.5
Total
£m
4.7
(0.5)
(1.0)
3.2
3.2
(0.6)
—
2.6
2.6
2022
pence
50.6
49.8
83.0
81.7
Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares in issue during the year, excluding those held by the EBT that do not attract
dividend equivalents and which are treated as cancelled.
Diluted earnings per share is calculated by dividing the profit for the year attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares in issue adjusted to assume conversion of all potentially dilutive share options
from the start of the year.
During the year, the Company has bought back and cancelled 47,985,293 of its own shares (2022: nil). The impact of this has been
to increase basic earnings per share by 1.1 pence and diluted earnings per share by 1.2 pence.
Adjusted basic and adjusted diluted earnings per share exclude the impact of adjusted items and any associated net tax amounts.
Profit attributable to ordinary shareholders of the Company (£m)
Adjusted items (£m)
Tax on adjusted items (£m)
Adjusted profit attributable to ordinary shareholders of the Company (£m)
Weighted average number of shares in issue (million)
Weighted average number of shares in EBT (million)
Weighted average number of shares for basic earnings per share (million)
Weighted average number of shares in issue (million)
Adjustment to assume conversion of all potentially dilutive shares (million)
Weighted average number of shares for diluted earnings per share (million)
2023
530.3
179.2
(39.3)
670.2
1,000.1
(3.8)
996.3
1,000.1
8.4
1,008.5
2022
515.1
412.5
(82.5)
845.1
1,021.9
(3.2)
1,018.7
1,021.9
12.4
1,034.3
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Financial Statements
9. Dividends
Amounts recognised as distributions to equity shareholders in the year:
Final dividend for the year ended 30 June 2022 of 25.7p (2021: 21.9p) per share
Interim dividend for the year ended 30 June 2023 of 10.2p (2022: 11.2p) per share
Total dividends distributed to equity shareholders in the year
Proposed final dividend for the year ended 30 June 2023 of 23.5p (2022: 25.7p) per share1
2023
£m
259.8
100.2
360.0
2023
£m
227.9
2022
£m
223.0
114.0
337.0
2022
£m
261.4
1
The cost of the proposed dividend is calculated based upon the number of shares ranking for dividend at the balance sheet date.
The final dividend of 23.5 pence per share was approved by the Board on 5 September 2023 and has not been included as a liability
as at 30 June 2023.
10. Goodwill and intangible assets
Goodwill
Goodwill arising on consolidation (see note 32 for the Group policy on consolidation) represents the excess of the fair value
of the consideration over the fair value of the separately identifiable net assets and liabilities acquired.
Goodwill arising on the acquisition of subsidiary undertakings and businesses is capitalised as an asset but reviewed for
impairment at least annually.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit
from the synergies of the combination at acquisition. Cash-generating units to which goodwill has been allocated are tested
for impairment. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other
assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Any impairment loss is recognised
immediately in the Income Statement and is not subsequently reversed.
Cost
At 1 July
Arising on acquisition during the year
At 30 June
Accumulated impairment losses
At 1 July and 30 June
Carrying amount
At 30 June
Group
2023
£m
877.4
—
877.4
2022
£m
830.4
47.0
877.4
24.5
24.5
852.9
852.9
The Group’s goodwill relating to the acquisition of Wilson Bowden Limited in 2007 has a carrying value of £792.2m and
goodwill relating to the 2019 acquisition of Oregon Timber Frame Limited has a carrying value of £13.7m, both relating to the
housebuilding business.
During the prior year, the Group acquired all of the share capital of Gladman Developments Limited. Goodwill of £47.0m arising on
the acquisition was capitalised and allocated to the Group’s acquired land promotion business. No revision of the acquisition
accounting for Gladman Developments Limited was necessary in the current year.
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Financial Statements
10. Goodwill and intangible assets continued
Other intangible assets
Brands
The Group has capitalised, as intangible assets, brands that have been acquired. Acquired brand values are calculated using
discounted cash flows. Where a brand is considered to have a finite life, it is amortised over its useful life on a straight-line
basis. Where a brand is capitalised with an indefinite life, it is not amortised. The factors that contribute to the durability of
brands capitalised are that there are no material legal, regulatory, contractual, competitive, economic or other factors that
limit the useful life of these intangible assets. Internally generated brands are not capitalised.
The Group carries out an annual impairment review of indefinite life brand as part of the review of the carrying value of
goodwill, by performing a value in use calculation, using a discount factor based upon the Group’s pre-tax weighted average
cost of capital.
Customer contract relationships
The Group has capitalised, as intangible assets, acquired customer contract relationships. Customer contract relationships
are valued at the present value of future cash flows and are amortised on a straight-line basis over ten years. Internally
generated customer contract relationships are not capitalised.
Customer contracts
The Group has capitalised, as intangible assets, acquired customer contracts. Customer contracts are valued at the present
value of future cash flows less contributory asset charges and are amortised on a straight-line basis in line with contract
relationships at the acquisition date.
Brands
2023
£m
118.7
—
—
118.7
8.1
0.6
—
8.7
2022
£m
107.9
10.8
—
118.7
7.9
0.2
—
8.1
110.0
110.6
Group
Customer
contract relationships
2023
£m
2022
£m
—
—
—
—
—
—
—
—
—
1.4
—
(1.4)
—
1.4
—
(1.4)
—
—
Customer
contracts
Total
2023
£m
98.9
—
—
98.9
4.1
9.9
—
14.0
2022
£m
—
98.9
—
98.9
—
4.1
—
4.1
2023
£m
217.6
—
—
217.6
12.2
10.5
—
22.7
2022
£m
109.3
109.7
(1.4)
217.6
9.3
4.3
(1.4)
12.2
84.9
94.8
194.9
205.4
Cost
At 1 July
Acquired in the year
Amounts written off
At 30 June
Amortisation
At 1 July
Amortisation in the year
Amounts written off
At 30 June
Carrying amount
At 30 June
The Group does not amortise the housebuilding brand acquired with Wilson Bowden, being David Wilson Homes, valued at £100.0m,
as the Directors consider that this brand has an indefinite useful economic life due to the Group intending to hold and support the
brand for an indefinite period, and there are no factors that would prevent it from doing so.
During the prior year, in its acquisition of Gladman Developments Limited, the Group acquired brands valued at £10.8m and customer
contracts valued at £98.9m. The customer contracts are amortised on a straight-line basis over the expected life of the contracts; the
brands acquired are amortised on a straight-line basis over a 20-year period.
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Financial Statements
10. Goodwill and intangible assets continued
Impairment of goodwill and indefinite life brand
The Group conducts an annual impairment review of goodwill and its indefinite life brand, David Wilson Homes.
Impairment of goodwill and indefinite life brand
Impairment reviews for goodwill and the Group’s indefinite life brand require an estimation of the value in use of the
cash-generating units to which these assets are allocated. The value in use calculations require an estimate of expected
future cash flows, including the anticipated growth rate of revenue and costs, and require the determination of a suitable
discount rate to calculate the present value of the cash flows. The financial forecasts used reflect the outcomes that
management considers most likely, based on the information available at the date of signing of these Financial Statements.
Goodwill and indefinite life brand allocated to housebuilding
An impairment review was performed at 30 April 2023 by comparing the value in use of the housebuilding business to the carrying
value of its tangible and intangible assets and allocated goodwill.
The value in use was determined by discounting the expected future cash flows of the housebuilding business. The cash flows until 30
June 2025 were determined using the Group’s approved detailed business plan and the cash flows for FY26 to FY28 were based on high
level management projections based upon expected volumes, selling prices and margins, taking into account available land purchases
and work in progress levels. The cash flows for subsequent years were extrapolated in perpetuity using an estimated growth rate of 1%,
based upon the historical long-term growth rate of the UK economy.
The key assumptions for the value in use calculation for the housebuilding business were:
∙ expected changes in selling prices for completed houses and the related impact on operating margin: these are determined on a
site-by-site basis in the Group’s approved business plan dependent upon local market conditions and product type. For subsequent
years, these have been estimated at a Group level based upon past experience and expectations of future changes in the market,
considering external market forecasts;
∙ sales volumes: these are determined on a site-by-site basis in the Group’s approved business plan dependent upon local market
conditions, land availability and planning permissions. For subsequent years, these have been estimated at a Group level based
on past experience and expectations of future changes in the market, taking into account external market forecasts;
∙ expected changes in site costs to complete: these are determined on a site-by-site basis in the Group’s approved business plan
dependent upon the expected costs of completing all aspects of each individual development. For subsequent years, these have
been estimated at a Group level based on past experience and expectations of future changes in the market, taking into account
external market forecasts; and
∙ discount rate: this is a pre-tax rate reflecting the Group’s target capital structure, risks appropriate to the housebuilding
business and current market assessments of the time value of money. A rate of 15.0% (2022: 14.9%) is considered by the
Directors to be the appropriate pre-tax discount rate.
The result of the value in use exercise concluded that the recoverable value of goodwill and intangible assets allocated to the
housebuilding business exceeded its carrying value by £1,176.0m (2022: £1,780.4m) and there has been no impairment.
Goodwill allocated to land promotion
An impairment review was performed at 30 June 2023 by comparing the value in use of the land promotion business to the carrying
value of its tangible and intangible assets and allocated goodwill.
The value in use was determined by discounting the expected future cash flows of the land promotion business. This is the first full
year after the land promotion business was acquired by the Group. The operating cycle for the land promotion business extends over
a longer period than the housebuilding business, with land sales completing at the point in an economic cycle that generates the most
profit. Inventories held at the current date may generate cash inflows in the medium- to long-term and as a result, management’s
forecasts extend up to ten years from the reporting date. It is therefore appropriate to consider projections over a longer period in
the value in use calculation. Cash flows until 30 June 2032 were determined using the business’s approved forecast, dependent upon
expected site permissions and best estimates for targeted site sales, anticipated spend and overhead inflation. Due to the sensitivity
of cash flows of the land promotion business to the economic cycle, the cash flows for years subsequent to 2032 were based on an
average sales receipts from the final five years of the forecast, adjusted for expected increases in cost, extrapolated in perpetuity
using an estimated growth rate of 1%, based upon the historical long-term growth rate of the UK economy. Value in use assessments
going forward will be completed over equivalent periods.
The key assumptions for the value in use calculation were the expected sales values achieved under land promotion agreements, based on
current market values for similar land, costs required to fulfil customer contracts, and the discount rate of 14.3% (2022: 15.0%), being a
pre-tax rate reflecting the risks appropriate to the land promotion business and current market assessments of the time value of money.
The result of the value in use exercise concluded that the recoverable amount of goodwill allocated to the land promotion business
exceeded its carrying value by £13.1m (2022: £9.6m) and there has been no impairment. An increase in the discount rate of 60 bps
would reduce the headroom of the recoverable amount over the carrying value to nil.
200
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
G
Financial Statements
11. Company investments in subsidiary undertakings
Company investments
The Company’s interests in subsidiary undertakings are accounted for at cost less accumulated provision for impairment,
which is reviewed annually.
Where share-based payments are granted to the employees of subsidiary undertakings by the Company, they are treated
as a capital contribution to the subsidiary and the Company’s investment in the subsidiary is increased accordingly.
Cost:
Cost at the beginning of the year
(Decrease)/increase in investment in subsidiaries related to share-based payments
At 30 June
Impairment:
At beginning of the year and at 30 June
Net book value:
At 30 June
Company
2023
£m
3,180.1
(2.4)
3,177.7
2022
£m
3,175.6
4.5
3,180.1
87.6
87.6
3,090.1
3,092.5
Investments in jointly controlled entities
12.
A jointly controlled entity (joint venture or “JV”) is an entity, including unincorporated entities such as partnerships, in which the Group
holds an interest with one or more other parties where a contractual arrangement has established joint control over the entity.
The Group has no associated entities.
Jointly controlled entities
Investments in jointly controlled entities are accounted for using the equity method of accounting.
The Group’s share of the profit or loss of jointly controlled entities increases or decreases the carrying amount of the investment
and long-term interests.
Investments in JVs
At the beginning of the year
Increase in amounts invested in JVs
Repayment of investments in JVs
Dividends received from JVs
Share of post-tax profit for the year from JVs
At 30 June
Group
2023
£m
177.9
18.1
(40.2)
(34.8)
8.8
129.8
2022
£m
163.1
17.9
(9.9)
(16.5)
23.3
177.9
There are no losses in any of the Group’s JVs that have not been recognised by the Group.
During the year, the Company received a distribution of £0.1m from its JV, Rose Shared Equity LLP, which was subsequently
dissolved. At the balance sheet date the Company had no investments in JVs.
Barratt Developments PLC Annual Report and Accounts 2023
201
Percentage
owned
Voting
rights
controlled
Country of
registration
Principal
place of
business
S
G
Financial Statements
Investments in jointly controlled entities continued
12.
At 30 June 2023, the Group had interests in the following JVs:
JV
51 College Road LLP
Alie Street LLP1
Barratt Metropolitan LLP2
Barratt Wates (East Grinstead) Limited
Barratt Wates (East Grinstead No.2)
Limited1
Barratt Wates (Horley) Limited2
Barratt Wates (Lindfield) Limited
Barratt Wates (Worthing) Limited
BDWZest Developments LLP1
BDWZest LLP
Blackhorse Road Properties LLP2
Brooklands Milton Keynes LLP
DWH/Wates (Thame) Limited
Enderby Wharf LLP
Fulham Wharf LLP1
Fulham Wharf One Limited1
Fulham Wharf Two Limited1
Harrow View LLP
Infinity Park Derby LLP
Nine Elms LLP¹
Nine Elms One Limited1
50.0%
50.0%
75.0%
50.0%
50.0%
78.5%
50.0%
50.0%
50.0%
50.0%
51.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
Nine Elms Two Limited1
50.0%
50.0%
England and Wales
Old Sarum Park Properties Limited
Queensland Road LLP1
Ravenscraig Limited²
Ravenscraig Town Centre LLP
Sovereign BDW (Hutton Close) LLP
Sovereign BDW (Newbury) LLP
Wembley Park Properties LLP²
Wichelstowe LLP
ZestBDW LLP
50.0%
50.0%
33.3%
50.0%
50.0%
50.0%
51.0%
50.0%
50.0%
50.0%
50.0%
33.3%
50.0%
50.0%
50.0%
50.0%
50.0%
50.0%
England and Wales
England and Wales
Scotland
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
Principal
activity
Financial
year end
date
Housebuilding
31 March*
Housebuilding
31 March*
Housebuilding
Holding company
Housebuilding
Housebuilding
Housebuilding
Housebuilding
30 June
30 June
30 June
30 June
30 June
30 June
Holding company
31 March*
Holding company
31 March*
Housebuilding
Housebuilding
Housebuilding
Housebuilding
30 June
30 June
30 June
30 June
Housebuilding
31 March*
Dormant
31 March*
Dormant
31 March*
Housebuilding
31 March*
Commercial
development
30 June
Housebuilding
31 March*
Holds assets
on trust
Holds assets
on trust
31 March*
31 March*
Dormant
30 June
Housebuilding
31 March*
Commercial
development
31 December*
Dormant
Dormant
Housebuilding
Housebuilding
30 June
30 June
30 June
30 June
Housebuilding
31 March*
Holding company
31 March*
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
* JV prepares Financial Statements which are non-coterminous with the Group in order to comply with the terms of their JV agreements and to align with
the year ends and requirements of our JV partners.
Judgements applied in determining the classification of joint arrangements
1. The Group’s interests in a number of the entities classified as JVs are held indirectly: Barratt Wates (East Grinstead) No. 2 Limited is a wholly owned
subsidiary of the Group’s JV, Barratt Wates (East Grinstead) Limited, and is therefore, classified as a JV of the Group. BDWZest Developments LLP, Alie
Street LLP, Queensland Road LLP, Fulham Wharf LLP and Nine Elms LLP form a group of limited liability partnerships jointly owned (directly or indirectly)
by BDWZest LLP and ZestBDW LLP, both of which are JVs of the Group. Nine Elms One Limited and Nine Elms Two Limited are wholly owned subsidiaries
of Nine Elms LLP, and Fulham Wharf One Limited and Fulham Wharf Two Limited are wholly owned subsidiaries of Fulham Wharf LLP. All of these entities
are, therefore, classified as JVs of the Group.
2. The Group holds four JV investments (Barratt Wates (Horley) Limited, Barratt Metropolitan LLP, Wembley Park Properties LLP and Blackhorse Road
Properties LLP) not in equal share, and one (Ravenscraig Limited) with more than one other party. However, in each case, the Group has equal voting
rights and control over the activities of the companies with the other parties. In addition, the Group and the other parties to the agreements only have
rights to the net assets of these companies through the terms of the contractual arrangements. These entities are therefore classified as JVs.
202
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
G
Financial Statements
Investments in jointly controlled entities continued
12.
Registered offices
The registered office of all of the entities in the preceding table, with the exception of those listed below, is: Barratt House,
Cartwright Way, Forest Business Park, Bardon Hill, Coalville, Leicestershire LE67 1UF.
Enderby Wharf LLP: Here East, 13 East Bay Lane, 3rd Floor Press Centre, Queen Elizabeth Park, London E15 2GW.
Sovereign BDW (Hutton Close) LLP and Sovereign BDW (Newbury) LLP: Sovereign House, Basing View, Basingstoke RG21 4FA.
Ravenscraig Limited: 15 Atholl Crescent, Edinburgh EH3 8HA.
Summarised financial information relating to these JVs is as follows:
Harrow View
LLP
2023
£m
2022
£m
Blackhorse Road
Developments
LLP
2023
£m
2022
£m
Barratt
Metropolitan
LLP
2023
£m
2022
£m
Fulham Wharf
LLP
2023
£m
2022
£m
Brooklands
Milton Keynes
LLP
2023
£m
2022
£m
Other JVs
Group Total
2023
£m
2022
£m
2023
£m
2022
£m
62.2
71.8
47.8
41.1
104.5
20.4
—
45.4
60.5
57.0
51.9
38.4
326.9
274.1
(53.7)
(58.5)
(33.4)
(29.4)
(91.4)
(17.0)
— (46.0)
(38.8)
(37.5)
(49.0)
(31.9)
(266.3)
(220.3)
—
—
8.5
—
—
—
—
—
13.3
14.4
—
—
—
—
11.7
—
(3.3)
(1.6)
(42.3)
—
9.8
—
—
1.8
—
(0.1)
(42.4)
—
(5.9)
(0.1)
(6.6)
—
—
—
—
—
—
—
(45.6)
(2.7)
(0.7)
(2.8)
(7.5)
(0.8)
21.7
19.5
—
—
0.2
0.1
5.8
—
12.2
45.5
0.1
—
8.5
13.3
14.4
11.7
9.8
1.8
(42.4)
(6.6)
21.7
19.5
0.3
5.8
12.3
45.5
4.2
6.6
7.3
6.0
7.4
1.3
(21.2)
(3.3)
10.9
9.8
0.2
2.9
8.8
23.3
3.6
6.5
18.6
—
—
—
—
—
98.5
109.6
—
—
3.9
—
42.1
109.7
136.6
30.6
40.5
—
—
—
—
—
11.8
15.6
—
8.7
0.8
1.3
34.8
16.5
23.6
118.0
83.7
376.3
436.1
—
9.6
9.7
9.6
9.7
(11.4)
(20.7)
(2.6)
(6.2)
(98.7)
(135.4)
(45.3)
(18.3)
(15.6)
(21.6)
(47.5)
(31.5)
(221.1)
(233.7)
Income
Adjusted expenditure
(Cost)/credit
associated with
legacy properties
Interest payable
Tax
Profit for the year,
being total
comprehensive
income
Group share of
profit for the year
recognised in the
Consolidated Income
Statement
Dividends received
from JVs in the year
Current assets
Non-current assets
Current liabilities
Non-current liabilities
—
—
Net assets of JVs
87.1
88.9
—
1.3
—
35.9
—
11.0
—
1.2
—
—
(14.7)
22.2
—
—
—
2.0
(43.5)
(45.0)
(43.5)
(45.0)
36.6
16.9
121.3
167.1
Cash and cash
equivalents included in
the above net assets
Group share of net
assets recognised
in the Consolidated
Balance Sheet
at 30 June
10.1
26.9
3.5
15.6
12.1
—
29.3
0.2
10.8
11.2
29.6
31.5
95.4
85.4
43.6
44.5
0.7
18.3
8.2
0.9
(7.4)
11.1
—
1.0
18.2
8.1
63.3
83.9
Adjusted expenditure is the total expenditure of the JV less adjusted items as defined in note 4.
A reconciliation of the Group’s share of net assets to the carrying value of investments included in the Balance Sheet is presented below:
Group share of the net assets of its JVs
Group loans to JVs
At 30 June
Group
2023
£m
63.3
66.5
129.8
2022
£m
83.9
94.0
177.9
Barratt Developments PLC Annual Report and Accounts 2023
203
S
G
Financial Statements
Investments in jointly controlled entities continued
12.
The Group has made loans, net of loss allowances, of £66.5m (2022: £94.0m) to its JVs, which are presented within Group investments.
The loss allowances for Group loans to JVs are equal to 12-month expected credit losses unless there has been a significant increase
in credit risk since the date of initial recognition, in which case, the loss allowance is equal to the lifetime expected credit loss.
A significant increase in credit risk is judged to have occurred if a review of available information indicates an increased probability
of default. At 30 June 2023, the loss allowance is immaterial (2022: immaterial).
Included within the Group’s share of net assets of JVs is a proportion of the loans to the JVs (net of fair value adjustments made
in one JV), calculated using the Group’s ownership share, of £63.6m (2022: £90.3m).
During the year, the Group entered into a number of transactions with its JVs in respect of funding and development management
services (with charges made based on the utilisation of these services) in addition to the provision of construction services. Further
details on these transactions are provided in note 30. The Group and Company have a number of contingent liabilities relating to their
JVs. Further details on these are provided in note 29.
The transfer of funds from the Group’s JVs to the Group is determined by the terms of the JV agreements, which specify how available
funds should be applied in repaying loans and capital, and distributing profits to the partners.
13. Jointly controlled operations
Jointly controlled operations
The Group’s share of profits and losses from its investments in jointly controlled operations is accounted for on a direct basis
and is included in the Income Statement. The Group’s share of its investments, assets and liabilities is accounted for on a
directly proportional basis in the Group’s Balance Sheet.
The Group enters into jointly controlled operations as part of its housebuilding and property development activities. The Company
has no jointly controlled operations (2022: none).
The Group has significant interests in the following jointly controlled operation:
Joint operation
Chapel Hill
Share of profits and assets consolidated
Principal place of business
Principal activity
50.0%¹
UK
Housebuilding
1 Subject to achieving forecast profitability, 50% of profits are attributable to the Group. 50% of assets are consolidated excluding land, land creditors and
any part-exchange properties.
The Group’s share of the joint operations’ income and expenses included in the Consolidated Income Statement during the year,
and the assets and liabilities of the joint operations, which are included in the Group Balance Sheet, are shown below:
Group share
Income
Sundry income/(expenses)
Share of profit from joint operations
Share of profits distributed by joint operations
Current assets
Current liabilities
Share of net assets of joint operations
Group
2023
£m
—
(0.3)
(0.3)
—
10.7
(0.7)
10.0
2022
£m
—
0.3
0.3
(4.7)
11.1
(0.8)
10.3
204
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Financial Statements
14. Property, plant and equipment
Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is provided to write off the cost of the assets on a straight-line basis to their residual value over their estimated
useful lives. Residual values and asset lives are reviewed annually.
Freehold properties are depreciated on a straight-line basis over 25 years. Freehold land is not depreciated. Plant is
depreciated on a straight-line basis over its expected useful life, which ranges from one to seven years.
Property under construction is carried at cost less any recognised impairment, and no depreciation is charged until the
building is complete and ready for its intended use.
Cost
At 1 July 2021
Additions
Acquired on acquisition of subsidiary
Disposals
At 30 June 2022
Additions
Disposals
At 30 June 2023
Depreciation
At 1 July 2021
Charge for the year
Disposals
At 30 June 2022
Charge for the year
Disposals
At 30 June 2023
Net book value
At 30 June 2022
At 30 June 2023
Group
Plant and
equipment
£m
Property
£m
5.6
22.7
1.2
(0.4)
29.1
8.4
—
37.5
3.1
0.4
(0.1)
3.4
0.4
—
3.8
25.7
33.7
53.3
7.2
0.1
(6.9)
53.7
14.7
(1.6)
66.8
35.4
5.8
(3.0)
38.2
5.7
(1.5)
42.4
15.5
24.4
Company
Plant and
equipment
£m
Property
£m
0.2
—
—
—
0.2
—
—
0.2
0.2
—
—
0.2
—
—
0.2
—
—
29.5
1.4
—
(4.9)
26.0
2.6
—
28.6
17.0
3.5
(1.1)
19.4
3.1
—
22.5
6.6
6.1
Total
£m
58.9
29.9
1.3
(7.3)
82.8
23.1
(1.6)
104.3
38.5
6.2
(3.1)
41.6
6.1
(1.5)
46.2
41.2
58.1
Total
£m
29.7
1.4
—
(4.9)
26.2
2.6
—
28.8
17.2
3.5
(1.1)
19.6
3.1
—
22.7
6.6
6.1
Property cost includes £nil (2022: £21.2m) in respect of a building under construction.
Authorised future capital expenditure that was contracted but not provided for in these Financial Statements amounted to £3.5m
(2022: £10.9m).
Barratt Developments PLC Annual Report and Accounts 2023
205
S
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Financial Statements
15. Leases
Leases
A right-of-use asset and a lease liability are recognised at the commencement date of a lease. The right-of-use asset is initially
measured at cost comprising the initial amount of the lease liability plus payments made before the lease commenced and any
direct costs less any incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from
the commencement of the lease to the earlier of the end of the lease term or the end of the useful life of the asset. The right-of-use
asset is also reduced for impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments at the commencement date discounted
using the Group’s incremental borrowing rate of between 0% and 7%, and is subsequently measured at amortised cost using
the effective interest method. The lease liability is remeasured when there is a change in the future lease payments, and
a corresponding adjustment is made to the right-of-use asset.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of plant and machinery
with a lease term of 12 months or less, and leases of low value including leases of office equipment. The lease payments
associated with these leases are recognised as an expense on a straight-line basis over the lease term.
The Group and Company lease assets including land and buildings, vehicles, plant and machinery, and office equipment.
Information about leases for which the Group or Company is a lessee is presented below.
Right-of-use assets
Balance at 1 July 2022
Balance at 30 June 2023
Net additions during the year
including remeasurements
Group
Company
Land and
buildings
£m
25.1
28.4
9.7
Other
£m
10.5
16.7
12.1
Total
£m
35.6
45.1
21.8
Land and
buildings
£m
3.1
2.7
0.3
Other
£m
1.1
1.5
1.0
Lease liabilities included in the Balance Sheet
Current
Non-current
Group
Company
2023
£m
13.1
33.1
46.2
2022
£m
10.5
26.6
37.1
2023
£m
1.3
2.9
4.2
Total
£m
4.2
4.2
1.3
2022
£m
1.1
3.1
4.2
A maturity analysis of the contractual undiscounted cash flows associated with these lease liabilities is presented in note 31.
Amounts recognised in the Income Statement
Interest on lease liabilities
Depreciation of right-of-use land and buildings
Depreciation of other right-of-use assets
Expenses relating to short-term and low-value leases
Group
2023
£m
1.2
6.4
5.9
34.5
2022
£m
0.9
7.8
5.2
32.6
The total Group cash outflow for leases in the current year was £48.4m (Company: £1.3m) (2022: £45.9m (Company £1.1m)), of which
£13.9m (Company: £1.3m) (2022: £13.8m (Company: £1.1m)) related to the repayment of lease liabilities recognised in the Balance Sheet.
206
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
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Financial Statements
16.
Inventories
Inventories
Inventories are valued at the lower of cost and net realisable value. Land held for development, including land in the course of
development, is initially recorded at cost. Where, through deferred purchase credit terms, the carrying value differs from the
amount that will ultimately be paid in settling the liability, this difference is charged as a finance cost in the Income Statement
over the period of settlement.
Cost of construction work in progress comprises direct materials, direct labour costs and those overheads that have been
incurred in bringing the inventories to their present location and condition. Overhead costs include, but are not limited to,
roads and other infrastructure costs required for a site and local contributions and physical works contributions required
under planning permissions granted for our developments.
Due to the scale of the Group’s developments, the Group has to allocate site-wide development costs between homes built in the
current year and in future years. It also has to estimate costs to complete on such developments. In making these assessments,
there is a degree of inherent uncertainty. The Group has developed internal controls to assess and review carrying values and the
appropriateness of estimates made. Further information is included in the margin recognition section of note 3.
Work in progress on promotion agreements comprises direct fees and labour costs incurred in investigating, designing,
master planning, obtaining planning permission and ultimately securing sales agreements for land on behalf of landowners.
The satisfaction of promotion agreements is largely dependent upon the grant of planning consent; therefore, management
assesses the likelihood of attaining these consents when assessing their carrying values.
Land held for development
Construction work in progress
Promotion agreements work in progress
Part-exchange properties and other inventories
The Company has no inventories.
Group
2023
£m
3,139.9
1,907.1
97.7
93.3
5,238.0
2022
£m
3,339.9
1,837.8
91.1
22.8
5,291.6
Nature and carrying value of inventories
The Group’s principal activities are housebuilding and commercial development. The majority of the development activity is not
contracted prior to the development commencing. Accordingly, the Group has in its Balance Sheet at 30 June 2023 current assets
that are not covered by a forward sale. The Group’s internal controls are designed to identify any developments where the balance
sheet value of land and work in progress is more than the projected lower of cost or net realisable value. During the year, the Group
has conducted six-monthly reviews of the net realisable value of specific sites identified as at high risk of impairment, based upon
a number of criteria including low site profit margins and sites with no forecast completions. Where the estimated net realisable
value of a site was less than its current carrying value, the Group has impaired the land and work in progress value.
During the year, due to performance variations, changes in assumptions and changes to viability on individual sites, there were
gross impairment charges of £16.7m (2022: £2.0m) and gross impairment reversals of £12.0m (2022: £4.2m), resulting in a net
impairment charge of £4.7m (2022: £2.2m reversal) included within profit from operations.
The key estimates in these reviews are those used to estimate the realisable value of a site, which is determined by forecast sales
rates, expected sales prices and estimated costs to complete.
The Directors consider all inventories to be essentially current in nature, although the Group’s operational cycle is such that a
proportion of inventories will not be realised within 12 months. It is not possible to determine with accuracy when specific inventory
will be realised, as this will be subject to a number of variables such as consumer demand and planning permission delays.
Inventories include £11.0m (2022: £nil) in respect of properties currently occupied under the refugee support scheme.
Barratt Developments PLC Annual Report and Accounts 2023
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Financial Statements
17. Trade and other receivables
Trade and other receivables
Trade and other receivables are financial assets with fixed or determinable payments that are not quoted in an active market.
They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date, which
are classified as non-current assets. Amounts recoverable on certain construction contracts where revenue is recognised over
time are included in trade receivables and stated at cost plus attributable profit less any foreseeable losses. Payments received
on account for these construction contracts are deducted from amounts recoverable on these contracts.
Trade and other receivables are initially recognised at their transaction price, being fair value, and subsequently measured
at amortised cost, being their nominal value less a loss allowance for expected credit losses, which are assessed on the basis
of an average weighting of the risk of default. Any impairment is recognised immediately in the Income Statement.
For this purpose, a default is determined to have occurred if the Group becomes aware of evidence that it will not receive all
contractual cash flows that are due or if payment has not been received within 60 days of the due date. After this time, it is
probable that contractual cash flows will not be fully recovered.
The Group does not hold any collateral over these balances.
Trade receivables are receivables and contract assets arising from the Group’s contracts with customers. The loss allowance
is equal to the lifetime expected credit loss, assessed on an individual basis.
The loss allowances for other receivables and amounts due from subsidiary undertakings are equal to 12-month expected
credit losses unless there has been a significant increase in credit risk since the date of initial recognition, in which case the
loss allowance is equal to the lifetime expected credit loss. A significant increase in credit risk is judged to have occurred if a
review of available information indicates an increased probability of default, or if contractual payments are more than 30 days
past due.
Where amounts due from subsidiary undertakings can be satisfied by the subsidiaries through the recovery of a debt from
fellow subsidiaries with strong capacity to meet that debt, the amount is considered to have low credit risk at the reporting
date and it is therefore assumed that the credit risk has not significantly increased.
Trade and other receivables that are more than two years overdue are deemed to have no reasonable expectation of recovery
and are written off in the Financial Statements, but are still subject to enforcement activity. Subsequent recoveries of amounts
previously written off are credited to the Income Statement.
Non-current assets
Amounts due from subsidiary undertakings
Contract assets
Other receivables
Current assets
Trade receivables
Contract assets
Amounts due from subsidiary undertakings
Other receivables
Prepayments and accrued income
Notes
21
21
Group
2023
£m
—
0.5
2.4
2.9
70.7
20.8
—
74.0
16.6
182.1
2022
£m
—
0.6
5.9
6.5
107.6
12.7
—
97.2
19.5
237.0
Company
2023
£m
76.1
—
—
76.1
—
—
2.9
4.3
8.7
15.9
2022
£m
76.1
—
—
76.1
—
—
3.1
1.7
8.6
13.4
Other receivables include £37.1m (2022: £39.3m) receivable from joint ventures.
208
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Financial Statements
17. Trade and other receivables continued
The carrying values of trade and other receivables are stated after allowance for expected credit losses. The movements in the
loss allowances for the year were as follows:
Loss allowance
Loss allowance at 1 July 2022
Charge for the year
Amounts written off
Recoveries of amounts previously written off
Loss allowance at 30 June 2023
Trade receivables and
contract balances
Lifetime expected
credit losses
(individually assessed)
Other receivables
12-month
expected credit
losses
Notes
Group
£m
Company
£m
Group
£m
Company
£m
22
22
4.9
5.4
(0.3)
(1.9)
8.1
—
—
—
—
—
0.2
0.2
—
(0.1)
0.3
—
—
—
—
—
Movements in loss allowances are principally a result of the derecognition and origination of financial assets in the year. The loss
allowances written off are equal to the gross carrying amounts of the assets written off in the year. The Directors consider that the
carrying amount of trade receivables approximates to their fair value.
The expected credit losses on the Company amounts due from subsidiary undertakings are not material to the Financial
Statements. The subsidiaries are are able to pay their liabilities as they fall due and the probability of default is insignificant.
Further disclosures relating to financial assets are set out in note 22.
18. Net cash
Net cash is defined as cash and cash equivalents, bank overdrafts, interest-bearing borrowings and prepaid fees. Net cash at 30 June
is shown below:
Cash and cash equivalents
Drawn debt
Borrowings:
Sterling US private placement notes
Bank overdrafts
Total borrowings being total drawn debt
Prepaid fees
Net cash
Total borrowings at 30 June are analysed as:
Non-current borrowings
Current borrowings
Total borrowings being total drawn debt
Group
2023
£m
2022
£m
Company
2023
£m
2022
£m
1,269.1
1,352.7
1,005.0
1,045.4
(200.0)
(3.4)
(203.4)
3.7
(200.0)
(17.3)
(217.3)
3.2
1,069.4
1,138.6
(200.0)
(200.0)
—
(200.0)
3.7
808.7
—
(200.0)
3.2
848.6
(200.0)
(3.4)
(203.4)
(200.0)
(17.3)
(217.3)
(200.0)
(200.0)
—
—
(200.0)
(200.0)
Barratt Developments PLC Annual Report and Accounts 2023
209
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Financial Statements
18. Net cash continued
Movement in net cash is analysed as follows:
Net decrease in cash and cash equivalents
(Drawdown)/repayment of borrowings:
Loans and borrowings drawdowns
Loans and borrowings repayments
Other movements in borrowings:
Movement in prepaid fees
Movement in net cash in the year
Opening net cash
Closing net cash
Changes in liabilities arising from financing activities are shown below:
Total
borrowings
£m
Group
Lease
liabilities
£m
(205.3)
5.3
—
(200.0)
—
—
(40.7)
13.8
(10.2)
(37.1)
13.9
(23.0)
Liabilities from financing activities
at 1 July 2021
Financing cash flows
Other movements
Liabilities arising from financing
activities at 30 June 2022
Financing cash flows
Other movements
Liabilities arising from financing
activities at 30 June 2023
Group
Company
2023
£m
(83.6)
(3.4)
17.3
0.5
(69.2)
1,138.6
1,069.4
Total
£m
(246.0)
1.8
(10.2)
(254.4)
27.8
(23.0)
2022
£m
(165.9)
(17.3)
5.3
(0.9)
(178.8)
1,317.4
1,138.6
2023
£m
(40.4)
—
—
0.5
(39.9)
848.6
808.7
Total
borrowings
£m
Company
Lease
liabilities
£m
(200.0)
—
—
(200.0)
—
—
(4.5)
1.1
(0.8)
(4.2)
1.3
(1.3)
2022
£m
(273.6)
—
—
(0.9)
(274.5)
1,123.1
848.6
Total
£m
(204.5)
1.1
(0.8)
(204.2)
1.3
(1.3)
(200.0)
(46.2)
(249.6)
(200.0)
(4.2)
(204.2)
Cash and cash equivalents
Cash and cash equivalents are held at floating interest rates linked to the UK bank rate and money market rates as applicable.
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three
months or less from inception and are subject to an insignificant risk of changes in value.
Cash, cash equivalents and bank overdrafts, as presented in the Cash Flow Statement, are analysed as follows:
Cash and cash equivalents
Bank overdrafts included in loans and borrowings
Cash, cash equivalents and bank overdrafts
Further disclosures relating to financial assets are set out in note 22.
Group
2023
£m
1,269.1
(3.4)
1,265.7
2022
£m
1,352.7
(17.3)
1,335.4
Company
2023
£m
2022
£m
1,005.0
1,045.4
—
—
1,005.0
1,045.4
210
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
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Financial Statements
18. Net cash continued
Borrowings and facilities
Loans and borrowings
Interest-bearing loans and overdrafts are initially recognised at fair value less directly attributable transaction costs and
subsequently measured at amortised cost, being the amount recorded at recognition plus accrued interest applied to the
account less any repayments made.
All debt facilities at 30 June 2023 are unsecured.
The principal features of the Group’s committed debt facilities at 30 June 2023 and 30 June 2022 were as follows:
Committed facilities:
RCF
Fixed rate Sterling USPP notes
Facility
30 June 2023
30 June 2022
Maturity
Amount drawn
£700.0m
£200.0m
—
£200.0m
—
18 November 2027
£200.0m
22 August 2027
The Group also uses various bank overdrafts and uncommitted borrowing facilities that are subject to floating interest rates linked
to SONIA and money market rates as applicable.
Weighted average interest rates are disclosed in note 6.
19. Trade and other payables
Trade and other payables
Trade and other payables are not interest bearing and are initially recorded at fair value. Subsequent measurement is at
amortised cost.
Trade and other payables on extended terms, particularly in respect of land, are recorded at their fair value at the date of
acquisition of the asset to which they relate by discounting at prevailing market interest rates at the date of recognition. The
discount to nominal value, which will be paid in settling the deferred purchase terms liability, is amortised over the period of
the credit term and charged to finance costs using the “effective interest rate” method.
Non-current liabilities
Land payables
Other payables
Current liabilities
Trade payables
Land payables
Contract liabilities
Amounts due to subsidiary undertakings
Accruals
Other tax and social security
Other payables
Group
2023
£m
Notes
185.2
3.5
188.7
310.3
321.5
89.2
—
381.3
17.0
8.1
21
2022
£m
235.4
5.1
240.5
324.0
498.2
124.3
—
428.8
24.8
14.3
1,127.4
1,414.4
Company
2023
£m
—
—
—
1.1
—
—
354.2
28.6
—
—
383.9
2022
£m
—
—
—
4.8
—
—
323.5
28.2
—
0.5
357.0
The carrying amount of trade payables approximates to their fair value.
Accruals include a social security accrual relating to share-based payments (note 27). Other payables classified as non-current
liabilities at 30 June 2023 include amounts accrued for payment of the CITB levy and other sundry accruals.
The Group has £244.4m (2022: £365.2m) of payables secured by legal charges on land and buildings included within inventories
and £nil (2022: £3.1m) supported by promissory notes. Other non-current payables are unsecured and non-interest bearing.
Further disclosures relating to financial liabilities are set out in note 22.
Barratt Developments PLC Annual Report and Accounts 2023
211
S
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Financial Statements
20. Provisions
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it is
probable that the Group will be required to settle that obligation. Provisions are measured at the Directors’ best estimate of
the expenditure required to settle the obligation at the balance sheet date and are discounted to present value where the effect
is material.
At 1 July 2022
Additions to provisions in the year
Sites reclassified to completed developments
Releases
Revaluation
Imputed interest
Utilisation in the year
At 30 June 2023
Current
Non-current
Group
Legacy
properties
— EWS and
associated
review
£m
Legacy
properties
— reinforced
concrete
frames
£m
Costs in relation
to completed
developments
£m
145.5
75.4
22.5
(17.3)
—
—
(50.0)
176.1
434.6
213.4
—
(41.1)
(51.9)
7.5
(26.6)
535.9
44.9
48.6
—
(3.8)
(7.0)
—
(6.3)
76.4
Group
2023
£m
310.5
477.9
788.4
Total
£m
625.0
337.4
22.5
(62.2)
(58.9)
7.5
(82.9)
788.4
2022
£m
265.4
359.6
625.0
The Company had no provisions in either year.
Costs in relation to completed developments
Following the legal completion and handover to customers of all units on a site, the Group may retain obligations which are not
settled for a number of years. These include costs in relation to the adoption of roads or public open space by local authorities,
other contractual obligations to third parties and, in certain cases, the costs of remedial works where defects have been identified.
Whilst a proportion of this cost will not be realised within 12 months, the Group has an obligation to complete the works
immediately should it be requested to do so. The balance in total is therefore considered to be current in nature. All outstanding
issues on completed developments are resolved as soon as is practicable.
Costs associated with legacy properties
External wall systems and associated review
On 13 March 2023, the Group signed the Self-Remediation Terms and Contract, codifying the commitments previously made
under the Building Safety Pledge to undertake or to fund remediation or mitigation works on external wall systems (EWS) on
all buildings of 11 metres or above in England and Wales that it has developed or refurbished in the 30 years preceding the date
of the Building Safety Pledge, and to reimburse the Government’s Building Safety fund wherever they have contributed to such
activities. The Group has provided for the cost of fulfilling this commitment, as well as assisting with remedial work identified
at a limited number of other legacy properties where it has a legal liability to do so, where relevant build issues have been
identified, or it is considered probable that such build issues exist.
The Group is undertaking a review of all of its current and legacy buildings where it has used EWS or cladding solutions and
continues to assess the action required in line with the latest updates to Government guidance, as it applies, to multi-storey
and multi-occupied residential buildings. All our buildings, including those incorporating EWS or cladding solutions, were
signed off by approved inspectors as compliant with the relevant Building Regulations at the time of completion.
212
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Financial Statements
20. Provisions continued
Costs in relation to completed developments continued
Costs associated with legacy properties continued
External wall systems and associated review
Under review:
Buildings above 18 metres
Buildings between 11 and 18 metres
Total buildings
Developments
June 2022
Identified for review
Review confirmed
no remediation,
or remediation completed
June 2023
140
83
223
69
35
30
65
22
(7)
(3)
(10)
(2)
168
110
278
89
This is a complex area requiring significant estimates with respect to the estimates for the number of buildings affected, the
individual remediation requirements of each building and the costs associated with that remediation (see also note 29). During
the year, following the identification of further buildings requiring remediation and the receipt of more detailed cost estimates
on buildings for which a full assessment of the work required has been completed, an additional £213.4m has been provided
for the remediation of external wall systems. For buildings on which a detailed cost assessment has yet to be performed, this
assumes an updated cost per plot of c. £23,000 (2022: c. £21,000), plus an estimate of future cost price inflation over the
expected period until the remediation is completed. The new buildings came into scope during the year because buildings
which held valid EWS1 certificates at 30 June 2022 were found to require remediation, or because of new contact from, or
information supplied by, building owners. All building owners were contacted again following the signing of the Self-
Remediation Terms on 13 March 2023, which led to an increase in contact from building owners during the year. An additional
contingency was also allowed to reflect further buildings being identified as within the scope of the Self-Remediation Terms
and Contract and for unforeseen remediation costs beyond management’s current knowledge. Provisions of £41.1m (2022:
£12.8m) were released in respect of buildings that were found to either require less remediation than expected or for which no
remediation is required.
It has been assumed that the majority of the work will be completed over the next five years. This depends on a number of
factors including timely engagement by building owners and remediation work being completed in line with our estimated
timings. Accordingly, the provision has been discounted to its present value at the reporting date, resulting in a credit to cost of
sales of £51.9m (2022: £nil) due to an increase in the discount rate in the period from 1.9% to 4.7% driven by higher gilt rates
at the year end.
The investigation of the works required at many of the buildings is at an early stage and therefore it is possible that these
estimates will change over time or if government legislation and regulation further evolves. In relation to the Scottish Safer
Buildings Accord, signed on 31 May 2023, the external wall provision is recorded on the basis that the standard of remediation
required in Scotland is consistent with England and Wales. This will be confirmed when the final contract with the Scottish
government is signed.
The estimates are based on key assumptions that will be updated as work and time progresses. The sensitivity of the
provision held at the balance sheet date to the following possible movements in key assumptions is shown below, assuming
that the contingency is not utilised:
Sensitivity
10% increase in estimated cost per plot
10% increase in the number of buildings on which a detailed cost assessment has yet to be performed
100 bps increase in discount rate
Increase/(decrease)
in provisions at
30 June 2023
£m
26.2
21.8
(13.1)
Reinforced concrete frames
As announced in July 2020, we took the decision to pay for required remedial action on the reinforced concrete frame at
the Citiscape development in Croydon and undertook an associated review of 27 other developments designed by the same
engineering firm or its associated companies. This review is substantially complete and remediation work is ongoing. During
the period, a net additional £37.2m was recognised in respect of increases in the estimated remediation costs on certain
properties under this review, including £18.6m incurred on one development on which remediation plans have now been
finalised. The estimates are based on key assumptions that will be updated as work and time progresses.
It is now anticipated that remediation on these buildings will extend beyond one year from the balance sheet date. Accordingly,
the provision has been discounted to its present value using a rate of 4.7%, consistent with the EWS provision.
Barratt Developments PLC Annual Report and Accounts 2023
213
S
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Financial Statements
20. Provisions continued
Costs associated with legacy properties continued
Reinforced concrete frames continued
In addition to this review, structural issues have been separately found at two developments where reinforced concrete frames
were designed for us by a different engineering firm to that employed at Citiscape. The full extent of the remediation work
required is not yet known, however, £7.6m has been provided at the balance sheet date. The buildings affected are still being
assessed and therefore this provision may need to be increased in future periods (see note 29)
Management have made estimates as to the future costs, extent of the remedial works required and the costs of providing
alternative accommodation to any residents affected by the remedial works. The Financial Statements have been prepared
based on currently available information, including known costs and quotations where possible. However, the extent, cost
and timing of remedial work may change as work progresses.
21. Contract assets and liabilities
Contract assets relate to amounts due from customers primarily for construction work completed but not invoiced at the balance
sheet date in relation to contracts where revenue is recognised over time. These amounts are included in trade and other receivables.
The Group has taken advantage of the practical expedient in paragraph 94 of IFRS 15 to immediately expense the incremental costs
of obtaining contracts where the amortisation period of the assets would have been one year or less.
Contract liabilities relate to payments received from the customer on the contract, and/or amounts invoiced to the customer in
advance of the Group performing its obligations on contracts where revenue is recognised either over time or at a point in time.
These amounts are included within trade and other payables.
Significant changes in contract assets and liabilities are as follows:
At 1 July:
Amounts included within trade and other payables
Amounts included within trade and other receivables
Movements in the year:
Performance obligations satisfied in the year
Amounts invoiced in the year
Cash received for performance obligations not yet satisfied
At 30 June
Analysed as:
Amounts included within trade and other payables
Amounts included within trade and other receivables
Contracts on which
revenue is recognised
over time
Contracts on which
revenue is recognised
at a point in time
2023
£m
(4.2)
13.3
9.1
192.7
(190.1)
—
11.7
(9.6)
21.3
2022
£m
(6.6)
0.9
(5.7)
75.0
(60.2)
—
9.1
(4.2)
13.3
2023
£m
(120.1)
—
(120.1)
2022
£m
(130.9)
—
(130.9)
5,128.7
5,192.9
(5,008.6)
(5,062.0)
(79.6)
(79.6)
(79.6)
—
(120.1)
(120.1)
(120.1)
—
Further revenue of £104.3m (2022: £118.8m) is expected to be recognised in future years in respect of contracts on which revenue
is recognised over time, of which 86.8% (2022: 16.9%) is expected to be recognised within 12 months of the balance sheet date.
The Company had no contract assets or liabilities in either year.
22. Financial instruments
Recognition
Financial assets and financial liabilities are recognised on the Balance Sheet in accordance with IFRS 9 when the Group
becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire or it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
The Group derecognises a financial liability only when the Group’s obligations are discharged or cancelled or they expire.
214
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
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Financial Statements
22. Financial instruments continued
Classification and measurement
All non-derivative financial assets are classified in accordance with IFRS 9 as “subsequently measured at amortised cost”.
All non-derivative financial liabilities are classified as “subsequently measured at amortised cost”.
Financial assets and liabilities subsequently measured at amortised cost are initially recognised at fair value determined based on
discounted cash flow analysis using current market rates for similar instruments. They are subsequently measured at amortised
cost using the “effective interest rate” method. Financial assets are also measured after recognition of any impairment, which
is included within administrative expenses in the Income Statement.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
Impairment
A loss allowance is recognised for expected credit losses on financial assets as described in note 17. Any impairment
is recognised immediately in the Income Statement.
Financial assets
The carrying values and fair values of the Group and Company financial assets are as follows:
Group
Fair
value
£m
2023
Carrying
value
£m
Fair
value
£m
Notes
18
1,269.1
1,269.1
1,352.7
Company
2022
Carrying
value
£m
1,352.7
Fair
value
£m
2023
Carrying
value
£m
Fair
value
£m
1,005.0
1,005.0
1,045.4
2022
Carrying
value
£m
1,045.4
Cash and cash equivalents
Measured at amortised cost:
Trade and other receivables¹
Intercompany receivables
17
118.7
—
118.7
—
168.1
—
168.1
—
2.7
79.0
2.7
79.0
—
79.2
—
79.2
Total financial assets
1,387.8
1,387.8
1,520.8
1,520.8
1,086.7
1,086.7
1,124.6
1,124.6
1 Excludes amounts recoverable on contracts, prepayments and accrued income, and tax and social security.
Financial liabilities
The carrying values and fair values of the Group and Company financial liabilities are as follows:
Fair
value
£m
Notes
18
18
19
15
3.4
170.7
1,086.6
—
46.2
Group
2023
Carrying
value
£m
3.4
200.0
1,119.5
—
46.2
Fair
value
£m
17.3
187.6
1,380.4
—
37.1
2022
Carrying
value
£m
17.3
200.0
1,387.9
—
37.1
Measured at amortised cost:
Bank overdrafts
Loans and borrowings
Trade and other payables¹
Intercompany payables
Lease liabilities
Total financial liabilities
1,306.9
1,369.1
1,622.4
1,642.3
Company
2023
Carrying
value
£m
—
200.0
18.1
354.2
4.2
576.5
Fair
value
£m
—
187.6
16.7
323.5
4.2
532.0
2022
Carrying
value
£m
—
200.0
16.7
323.5
4.2
544.4
Fair
value
£m
—
170.7
18.1
354.2
4.2
547.2
1 Excludes deferred income, payments received in excess of amounts recoverable on contracts, tax and social security and other non-financial liabilities.
The fair values of liabilities in the above table have been determined using discounted cash flows based on observable market data
other than quoted prices in active markets for identical liabilities.
Trade and other payables include items secured by legal charges as disclosed in note 19.
Barratt Developments PLC Annual Report and Accounts 2023
215
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Financial Statements
22. Financial instruments continued
Financial instruments gains and losses
The net (gains)/losses recorded in the Consolidated Income Statement, in respect of financial instruments (excluding interest
shown in note 6), were as follows:
Financial assets measured at amortised cost
Trade receivables — loss allowance charge
Recoveries of amounts previously written off
23. Share capital
Equity instruments
Notes
17
17
2023
£m
5.6
(2.0)
2022
£m
1.8
(2.9)
Ordinary share capital is recorded at the proceeds received, net of direct issue costs and is classified as equity.
Ordinary share capital
Allotted and issued ordinary shares
10p each fully paid: 974,584,613 (2022: 1,022,562,819) ordinary shares
Options over the Company’s shares granted during the year
LTPP
Sharesave
DBP
ELTIP
Cancellation/allotment of shares during the year
At 1 July
Buyback and cancellation of shares in the year
Issued to the EBT to satisfy the vesting of awards
Issued to satisfy exercises under Sharesave schemes
At 30 June
2023
£m
97.4
2023
Number
4,028,187
6,637,568
920,887
1,792,966
2022
£m
102.2
2022
Number
2,774,294
4,117,231
674,051
1,080,733
13,379,608
8,646,309
2023
Number
2022
Number
1,022,562,819 1,018,331,741
—
2,386,199
(47,985,293)
—
7,087
1,844,879
974,584,613 1,022,562,819
24. Merger reserve
The merger reserve comprises the non-statutory premium arising on shares issued as consideration for the acquisition of
subsidiaries where merger relief under Section 612 of the Companies Act 2006 applies.
25. Capital redemption reserve
During the year the Company purchased 47,985,293 (2022: none) of its own shares in the market which have been cancelled. The
nominal value of these shares has been transferred to the capital redemption reserve.
As at 1 July
Amounts transferred in respect of own shares purchased and cancelled during the year
At 30 June
2023
£m
—
4.8
4.8
2022
£m
—
—
—
216
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Financial Statements
26. Own shares reserve
The own shares reserve represents the cost of shares in Barratt Developments PLC purchased in the market or issued by the Company
and held by the EBT on behalf of the Company in order to satisfy options and awards that have been granted by the Company.
The EBT has agreed to waive all, or any future right to dividend payments on shares held within the EBT and these shares do not count in
the calculation of the weighted average number of shares used to calculate EPS until such time as they are vested to the relevant employee.
Ordinary shares in the Company held in the EBT (number)
Cost of shares held in the EBT (£m)
Market value of shares held in the EBT at 413.5p (2022: 457.4p) per share (£m)
2023
2022
4,998,602
23.2
20.7
5,320,168
27.0
24.3
During the year, the EBT purchased 2,951,352 shares (2022: 4,989,573) in the market and no shares (2022: 2,386,199) were issued
to the EBT. The EBT disposed of 3,254,817 (2022: 3,355,729) shares which were used to satisfy the vesting of ELTIP, LTPP and DBP
awards. A further 18,101 shares were used in the year in settlement of exercises under Sharesave schemes (2022: none).
27. Share-based payments
The Group issues equity-settled share-based payments to certain employees.
Share-based payments
Equity-settled share-based payments are measured at the fair value of the equity instrument at the date of grant. Fair value is
measured either using Black Scholes or Monte Carlo models depending on the characteristics of the scheme. Valuations have
also been adjusted for any post-vesting holding period with the adjustment calculated using a Finnerty and Chaffe model.
The fair value is expensed in the Income Statement on a straight-line basis over the vesting period, based on the Group’s
estimate of shares that will eventually vest where non-market vesting conditions apply. Non-vesting conditions are taken into
account in the estimate of the fair value of the equity instruments.
Analysis of the Consolidated Income Statement charge:
Equity-settled share-based payments:
LTPP
Sharesave
DBP
ELTIP
2023
£m
(2.2)
3.6
2.7
6.1
10.2
2022
£m
13.0
2.4
2.6
6.2
24.2
As at 30 June 2023, an accrual of £2.7m (2022: £4.0m) was recognised in respect of social security liabilities on share-based payments.
Share-based payments reserve
The share-based payments reserve represents the obligation of the Group in relation to equity-settled share-based payment transactions.
Details of movements in the share-based payments reserve are shown on the Statement of Changes in Shareholders’ Equity.
Barratt Developments PLC Annual Report and Accounts 2023
217
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Financial Statements
27. Share-based payments continued
Outstanding equity-settled share-based payments
At 30 June 2023, the following options were outstanding:
Date of grant
Sharesave
20 April 2018 — 5-year plan
9 April 2019 — 3-year plan
9 April 2019 — 5-year plan
7 April 2020 — 3-year plan
7 April 2020 — 5-year plan
7 April 2021 — 3-year plan
7 April 2021 — 5-year plan
6 April 2022 — 3-year plan
6 April 2022 — 5-year plan
12 April 2023 — 3-year plan
12 April 2023 — 5-year plan
Total Sharesave options
LTPP
30 November 2020 — Executive
18 February 2021 and 21 April 2021 — Executive
14 October 2021 — Executive
14 February 2022 — Executive
14 February 2022 — Executive
12 October 2022 — Executive
30 November 2020 — Senior management
14 October 2021 — Senior management
12 October 2022 — Senior management
Total LTPP awards
DBP
24 September 2021
12 October 2022
Total DBP awards
ELTIP
15 July 2021
15 July 2022
Total ELTIP awards
Total
218
Option price
pence
2023
number
Not exercisable after
449
519
519
456
456
604
604
436
436
347
347
—
—
—
—
—
—
—
—
—
—
—
—
—
—
116,675
1,386
87,380
1,460,790
206,649
598,953
68,971
1,927,638
293,108
5,075,614
1,485,104
11,322,268
1,337,942
45,392
1,049,279
117,716
67,681
1,811,729
1,317,068
1,135,755
2,065,031
8,947,593
637,949
890,457
1,528,406
812,666
1,561,277
2,373,943
— 24,172,210
31 December 2023
1 October 2023
31 December 2024
31 December 2023
31 December 2025
31 December 2024
31 December 2026
31 December 2025
31 December 2027
31 December 2026
31 December 2028
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
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Financial Statements
27. Share-based payments continued
Further information relating to the share-based payment schemes
Sharesave
Under the Sharesave, participants are required to make monthly contributions to an HMRC approved savings contract with a bank
or building society for a period of three or five years. On entering into the savings contract, participants are granted an option to
acquire ordinary shares in the Company at an exercise price determined under the rules of the Sharesave. The Sharesave is open
to all eligible employees as determined by the Board and is not subject to the satisfaction of any performance conditions.
LTPP
The grant of awards under the LTPP is at the discretion of the Remuneration Committee taking into account individual performance
and overall performance of the Group. Vesting under this scheme is dependent upon performance conditions including TSR, EPS
and ROCE. Further details can be found in the Remuneration Report on pages 157 and 158.
DBP
Deferred shares are held in accordance with the DBP as approved by the shareholders at the 2015 AGM. The DBP is currently utilised
to hold shares awarded in respect of any bonus earned in excess of 100% of base salary. Further details can be found on page 161.
ELTIP
The Board approved the 2022 Award in July 2022 and the 2021 Award in July 2021 under the ELTIP. The Awards were made to all
eligible employees employed as at 15 July 2022 and 15 July 2021 respectively. Participants will be entitled to receive shares in the
Company when the 2021 Award vests on 1 July 2023, and participants of the 2022 Award will be entitled to receive shares in the
Company when the Award vests on 1 July 2024. Senior management is not eligible to participate in the ELTIP. The Awards are not
subject to the satisfaction of any performance condition other than that participants remain employed by the Group and have not
resigned before the end of the vesting period.
Number and weighted average exercise price of outstanding share-based payments
The number and weighted average exercise prices of options and awards made under the Group’s share option schemes were as follows:
LTPP
Outstanding at 1 July
Forfeited during the year
Reinstated
Exercised during the year
Granted during the year
Outstanding at 30 June
Exercisable at 30 June
Sharesave
Outstanding at 1 July
Forfeited during the year
Exercised during the year
Granted during the year
Outstanding at 30 June
Exercisable at 30 June
2023
2022
Weighted
average
exercise
price in
pence
—
—
—
—
—
—
—
Number of
award units
7,823,199
(1,161,682)
8,989
(1,751,100)
4,028,187
8,947,593
—
Weighted
average
exercise
price in
pence
—
—
—
—
—
—
—
2023
2022
Weighted
average
exercise
price in
pence
474
532
461
347
398
—
Number of
award units
8,945,381
(4,235,493)
(25,188)
6,637,568
11,322,268
—
Weighted
average
exercise
price in
pence
499
533
451
436
474
—
Number of
award units
8,087,663
(1,277,018)
—
(1,761,740)
2,774,294
7,823,199
—
Number of
award units
8,217,072
(1,544,043)
(1,844,879)
4,117,231
8,945,381
—
Barratt Developments PLC Annual Report and Accounts 2023
219
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G
Financial Statements
27. Share-based payments continued
Number and weighted average exercise price of outstanding share-based payments continued
DBP
Outstanding at 1 July
Forfeited during the year
Exercised during the year
Granted during the year
Outstanding at 30 June
Exercisable at 30 June
ELTIP
Outstanding at 1 July
Forfeited during the year
Exercised during the year
Granted during the year
Outstanding at 30 June
Exercisable at 30 June
2023
2022
Weighted
average
exercise
price in
pence
—
—
—
—
—
—
Number of
award units
1,225,640
(25,123)
(592,998)
920,887
1,528,406
—
Weighted
average
exercise
price in
pence
—
—
—
—
—
—
2023
2022
Weighted
average
exercise
price in
pence
—
—
—
—
—
—
Number of
award units
1,879,686
(387,990)
(910,719)
1,792,966
2,373,943
—
Weighted
average
exercise
price in
pence
—
—
—
—
—
—
Number of
award units
1,168,788
(12,186)
(605,013)
674,051
1,225,640
—
Number of
award units
2,149,584
(361,655)
(988,976)
1,080,733
1,879,686
182
The weighted average share price, at the date of exercise, of share options exercised during the year was 368.8p (2022: 674.4p).
The weighted average life for all schemes outstanding at the end of the year was 2.1 years (2022: 1.9 years).
Fair value of options and awards granted in the year
Weighted average fair value of options granted
Sharesave
LTPP
DBP
ELTIP
Weighted average fair value of options granted
Valuation model
Black Scholes model
Black Scholes and Monte Carlo models1
Black Scholes model
Black Scholes model
2023
pence
132.9
260.7
324.1
399.7
2022
pence
94.7
683.0
681.0
634.0
1 The TSR portion of the award is valued using a Monte Carlo model. Other elements of the award are valued using a Black Scholes model. The valuations
have also been adjusted for any post-vesting holding period with the adjustment calculated using a Finnerty and Chaffe model.
Inputs used to determine fair value of options
The weighted average inputs to the valuation models were as follows:
Average share price
Average exercise price
Expected volatility
Expected life
Risk-free interest rate
Expected dividends
Grants 2023
Grants 2022
ELTIP
Sharesave
LTPP
DBP
ELTIP
Sharesave
LTPP
DBP
471p
—
37.3%
2.0 years
4.14%
467p
347p
37.6%
3.5 years
3.28%
325p
—
44.8%
3.0 years
4.17%
325p
—
38.2%
3.0 years
4.35%
690p
—
37.7%
2.0 years
0.50%
520p
436p
36.6%
3.3 years
1.40%
683p
—
36.2%
3.0 years
0.58%
682p
—
37.7%
3.0 years
0.65%
8.2%
5.9%
—
—
4.2%
8.4%
—
—
Expected volatility was determined by reference to the historical volatility of the Group’s share price over a period consistent with
the expected life of the options. The expected life used in the models has been adjusted, based on the Directors’ best estimate, for
the effects of non-transferability, exercise restrictions and behavioural considerations.
220
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Financial Statements
28. Non-controlling interests
Movement in non-controlling interest share of net assets recognised in the Consolidated Balance Sheet
At 1 July
Distribution of profits to non-controlling partner
Share of profit for the year recognised in the Consolidated Income Statement
At 30 June
Group
2023
£m
0.8
(0.3)
—
0.5
2022
£m
1.1
(0.4)
0.1
0.8
There are no significant restrictions on the ability of the Group to access or use assets and settle liabilities. Detailed arrangements
for each subsidiary are laid out in the relevant shareholder and partnership agreements.
29. Contingent liabilities
Contingent liabilities related to subsidiaries
The Company has guaranteed certain bank borrowings of its subsidiary undertakings.
Certain subsidiary undertakings have commitments for the purchase of trading stock entered into in the normal course of business.
In the normal course of business, the Group has given counter-indemnities in respect of performance bonds and financial guarantees.
Management estimates that the bonds and guarantees amount to £412.7m (2022: £420.7m) and confirms that, at the date of
these Financial Statements, the possibility of cash outflow is considered minimal and no provision is required.
External wall systems and associated review
As disclosed in note 20, on 13 March 2023, the Group signed the Self-Remediation Terms and Contract, codifying the commitments
previously made under the Building Safety Pledge. The Group is currently undertaking a review of all of its current and legacy
buildings where it has used EWS or cladding solutions. Approved inspectors signed off all of our buildings, including the EWS or
cladding used, as compliant with the relevant building regulations at the time of completion.
At 30 June 2023, the Group held provisions of £535.9m (2022: £434.6m) in relation to EWS and associated reviews, based on
management’s best estimate of the cost and timing of remediation of in-scope buildings. It is possible that as remediation work
proceeds, additional remedial works are required which do not relate to EWS or cladding solutions. Such works may not have been
identified from the reviews and physical inspections undertaken to date and may only be identified when detailed remediation work
is in progress. Therefore, the nature, timing and extent of any such costs was unknown at the balance sheet date.
It is also possible that the number of buildings requiring remediation may increase. This could occur because buildings which hold
valid EWS1 certificates are found to require remediation or because investigatory works identify remediation not previously
identified.
In addition, we recognise that the retrospective review of building materials and fire-safety matters continues to evolve. The
Financial Statements have been prepared based on currently available information and regulatory guidance. However, these
estimates may be updated if government legislation and regulation further evolves.
On 31 May 2023 the Group signed the Scottish Safer Buildings Accord, committing to resolve life critical fire safety defects in
multi-occupancy residential domestic or part-domestic buildings, over 11 metres, built by us as a developer in the period of 30 years
to 1 June 2022. This Accord is not legally binding, but we are committed to working in good faith with the Scottish Government to agree
a legal form contract. The Group is already undertaking remedial work at all multi-occupancy buildings over 11 metres in Scotland at
which fire safety defects have been identified and the Group’s EWS provision at 30 June 2023 includes the estimated cost of this work.
These estimates are based on the assumption that the standard of remediation required in Scotland is consistent with that in England
and Wales and therefore depend on the final form of the contract agreed with the Scottish Government.
Reinforced concrete frames
As disclosed in note 20, following the issues identified at Citiscape, the Group is conducting a review of developments designed
by the same engineering firm or its associated companies. The Financial Statements have been prepared based on currently
available information; however, the detailed review is ongoing and the extent and cost of any remedial work may change as this
work progresses.
Separately, during the year structural issues have been found at two developments where reinforced concrete frames were
designed for us by a particular engineering firm. Investigatory work is proceeding to identify the remediation works required and
associated cost. It is possible that further costs or additional buildings are identified as part of this review, the nature, timing and
extent of which were unknown at the balance sheet date.
Barratt Developments PLC Annual Report and Accounts 2023
221
S
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Financial Statements
29. Contingent liabilities continued
Contingent liabilities related to JVs
The Group has given counter-indemnities in respect of performance bonds and financial guarantees to its JVs totalling £9.5m
at 30 June 2023 (2022: £2.2m).
The Group has also given a number of performance guarantees in respect of the obligations of its JVs, requiring the Group to complete
development agreement contractual obligations in the event that the JVs do not perform as required under the terms of the related
contracts. At 30 June 2023, the probability of any loss to the Group resulting from these guarantees is considered to be remote.
Contingent liabilities related to legal claims
Provision is made for the Directors’ best estimates of all known material legal claims and all legal actions in progress. The Group
takes legal advice as to the likelihood of success of claims and actions and no provision is made (other than for legal costs) where
the Directors consider, based on such advice, that claims or actions are unlikely to succeed, or a sufficiently reliable estimate
of the potential obligations cannot be made.
30. Related party transactions
Directors of Barratt Developments PLC and remuneration of key personnel
The Board and certain members of senior management are related parties within the definition of IAS 24 (Revised): ‘Related Party
Disclosures’ and the Board members are related parties within the definition of Chapter 11 of the UK Listing Rules. There is no
difference between transactions with key personnel of the Company and transactions with key personnel of the Group.
Disclosures related to the remuneration of key personnel as defined in IAS 24 are given in note 5.
There have been no related party transactions as defined in Listing Rule 11.1.5R for the year ended 30 June 2023.
Transactions between the Company and its subsidiaries and a former JV
The Company has entered into transactions with its subsidiary undertakings in respect of funding and Group services which include
management accounting and audit, sales and marketing, IT, company secretarial, architects and purchasing. Recharges are made to
the subsidiaries based on their utilisation of these services.
Transactions between the Company and its subsidiaries and former JV during the year:
Charges in respect of management and other services provided to subsidiaries
Net interest paid by the Company on net loans from subsidiaries
Dividends received from subsidiary undertakings
Distribution received from a former JV of the Company1
Balances at 30 June:
Amounts due by the Company to subsidiary undertakings
Amounts due to the Company from subsidiary undertakings
Company
2023
£m
142.7
18.4
500.0
0.1
354.2
79.0
1
The Company’s only JV, Rose Shared Equity LLP, was wound up during the year. Prior to this, it made a final distribution to its members.
The Company and its subsidiaries have entered into counter-indemnities in the normal course of business in respect of
performance bonds.
Transactions between the Group and its JVs
The Group has entered into transactions with its JVs as follows:
Transactions between the Group and its JVs during the year:
Charges in respect of development management and other services provided to JVs
Interest charges in respect of funding provided to JVs
Dividends received from JVs
Balances at 30 June:
Funding loans and interest due from JVs net of impairment
Other amounts due from JVs
Loans and other amounts due to JVs
Group
2023
£m
8.4
1.6
34.8
66.5
37.1
(0.5)
2022
£m
146.5
24.5
517.4
—
323.5
79.2
2022
£m
9.2
0.5
16.5
94.0
39.3
(1.3)
In addition, one of the Group’s subsidiaries, BDW Trading Limited, contracts with a number of the Group’s JVs to provide construction
services. The Group’s contingent liabilities relating to its JVs are disclosed in note 29.
222
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
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Financial Statements
31. Financial risk management
The Group’s approach to risk management and the principal operational risks of the business are detailed on pages 71 to 77. The
Group’s financial assets and financial liabilities are detailed in note 22.
The Group’s operations and financing arrangements expose it to a variety of financial risks, of which the most material are: liquidity risk,
the availability of funding at reasonable margins, credit risk and interest rates. There is a regular, detailed system for the reporting and
forecasting of cash flows from operations to senior management including Executive Directors to ensure that liquidity risks are promptly
identified and appropriate mitigating actions are taken by the Treasury department. These forecasts are further stress-tested at a
Group level on a regular basis to ensure that adequate headroom within facilities and banking covenants is maintained. In addition,
the Group has a risk management programme that seeks to limit the adverse effects of the other risks on its financial performance.
The Board approves treasury policies and certain day-to-day treasury activities have been delegated to a centralised Treasury
Operating Committee, which in turn regularly reports to the Board. The Treasury department implements guidelines that are
established by the Board and the Treasury Operating Committee.
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its liabilities as they fall due. The Group actively maintains a mixture of
long-term and medium-term committed facilities that are designed to ensure that the Group has sufficient available funds for operations.
The Group’s borrowings are typically cyclical throughout the financial year and peak in April to May, and October to November of each
year, due to seasonal trends in income. Accordingly, the Group maintains sufficient facility headroom to cover these requirements.
On a normal operating basis, the Group has a policy of maintaining a minimum headroom of £150.0m. The Group identifies and takes
appropriate actions based on its regular, detailed system for the reporting and forecasting of cash flows from its operations. The
Group’s drawn debt, excluding fees, represented 22.6% (2022: 24.1%) of available committed facilities at 30 June 2023. In addition,
the Group had £1,269.1m (2022: £1,352.7m) of cash and cash equivalents.
The Group was in compliance with its financial covenants at 30 June 2023. The Group’s resilience to its principal risks has been
modelled, together with possible mitigating actions, over a three-year period. At the date of approval of the Financial Statements,
the Group’s internal forecasts indicate that it will be able to operate within its current facilities and remain in compliance with
these covenants for the foreseeable future, being at least 12 months from the date of signing these Financial Statements.
One of the Group’s objectives is to minimise refinancing risk. The Group has a policy that the average maturity of its committed
bank facilities and private placement notes is a minimum of two years with a target of two to three years. At 30 June 2023, the
average maturity of the Group’s committed facilities was 4.4 years (2022: 3.8 years).
The Group maintains certain committed floating rate facilities with banks to ensure sufficient liquidity for its operations. The
undrawn committed facilities available to the Group, in respect of which all conditions precedent had been met, were as follows:
Expiry date
In more than two years but not more than five years
Group
Company
2023
£m
700.0
2022
£m
700.0
2023
£m
700.0
2022
£m
700.0
In addition, the Group had undrawn, uncommitted overdraft facilities available at 30 June 2023 of £37.0m (2022: £37.0m).
The expected undiscounted cash flows of the Group and Company financial liabilities, by remaining contractual maturity at the
balance sheet date were as follows:
Group
2023
Loans and borrowings (including bank overdrafts)¹
Trade and other payables2
Lease liabilities
2022
Loans and borrowings (including bank overdrafts)¹
Trade and other payables2
Lease liabilities
Carrying
amount
£m
Contractual
cash flow
£m
Less than
1 year
£m
Notes
1—2 years
£m
2—5 years
£m
Over 5 years
£m
22
22
22
22
22
22
203.4
224.9
1,119.5
1,140.1
46.2
50.3
1,369.1
1,415.3
217.3
1,387.9
37.1
230.4
1,411.6
39.5
5.5
937.8
13.3
956.6
5.5
1,157.6
11.2
1,642.3
1,681.5
1,174.3
5.5
133.0
11.4
149.9
5.5
146.7
8.7
160.9
213.9
67.4
18.8
300.1
16.6
98.1
15.8
130.5
—
1.9
6.8
8.7
202.8
9.2
3.8
215.8
1 The Group is party to banking agreements that include a legal right of offset, which enables the overdraft balances of £3.4m (2022: £17.3m) to be settled
net with cash balances. These balances have been excluded from contractual cash flows.
2 Excludes deferred income, payments received in excess of amounts recoverable on contracts, tax and social security and other non-financial liabilities.
The Group had no derivative financial instruments at 30 June 2023 or 30 June 2022.
Barratt Developments PLC Annual Report and Accounts 2023
223
S
G
Financial Statements
31. Financial risk management continued
Liquidity risk continued
Company
2023
Loans and borrowings (including bank overdrafts)
Trade and other payables1
Intercompany payables
Lease liabilities
2022
Loans and borrowings (including bank overdrafts)
Trade and other payables¹
Intercompany payables
Lease liabilities
Carrying
amount
£m
Contractual
cash flow
£m
Less than
1 year
£m
Notes
1–2 years
£m
2–5 years
£m
Over 5 years
£m
22
22
22
22
22
22
22
22
200.0
18.1
354.2
4.2
576.5
200.0
16.7
323.5
4.2
544.4
224.9
18.1
354.2
4.3
601.5
230.4
16.7
323.5
4.3
574.9
5.5
18.1
354.2
1.3
379.1
5.5
16.7
323.5
1.1
346.8
5.5
—
—
1.2
6.7
5.5
—
—
1.0
6.5
213.9
—
—
1.8
215.7
16.6
—
—
2.2
18.8
—
—
—
—
—
202.8
—
—
—
202.8
1 Excludes tax and social security and other non-financial liabilities.
The Company had no derivative financial instruments at 30 June 2023 or 30 June 2022.
Market risk (price risk)
Interest rate risk
The Group has both interest-bearing assets and interest-bearing liabilities. Floating rate borrowings expose the Group to cash flow
interest rate risk, and fixed rate borrowings expose the Group to fair value interest rate risk.
The Group has a conservative treasury risk management strategy and the Group’s interest rates are set using fixed rate debt instruments.
Due to the level of the Group’s interest cover ratio, and in accordance with the Group’s policy to hedge a proportion of the forecast
RCF drawings based on the Group’s three-year plan, no interest rate hedges are currently required.
The exposure of the Group’s financial liabilities to interest rate risk is as follows:
Group
2023
Financial liability exposure to interest rate risk
2022
Financial liability exposure to interest rate risk
Floating rate
financial
liabilities
£m
Fixed rate
financial
liabilities
£m
Non-interest
-bearing
financial
liabilities
£m
Total
£m
—
—
200.0
1,169.1
1,369.1
200.0
1,442.3
1,642.3
The Group retained a strong cash position throughout the year and, therefore, the Group did not draw on its RCF during the year
and the use of other facilities was minimal. No interest was paid by the Group on floating rate borrowings in 2023 or 2022.
Sterling USPP notes of £200.0m were issued on 22 August 2017 with a fixed coupon of 2.77% and a ten-year maturity. These fixed
rate notes expose the Group and Company to fair value interest rate risk.
The exposure of the Company’s financial liabilities to interest rate risk is as follows:
Company
2023
Floating rate
financial
liabilities 1
£m
Fixed rate
financial
liabilities
£m
Non-interest
-bearing
financial
liabilities 1
£m
Financial liability exposure to interest rate risk
340.7
200.0
2022
Financial liability exposure to interest rate risk1
310.0
200.0
35.8
34.4
Total
£m
576.5
544.4
1 In the prior year, interest-bearing loans from Group undertakings of £310.0m were disclosed as non-interest-bearing financial liabilities. These have been
reclassified to floating rate financial liabilities.
224
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
G
Financial Statements
31. Financial risk management continued
Market risk (price risk) continued
Interest rate risk continued
The Company’s floating rate financial liabilities comprise interest-bearing loans from other Group undertakings, on which interest
was charged at a rate of 4.0% throughout the year (2022: 4.0%).
Sensitivity analysis
In the year ended 30 June 2023, if UK interest rates had been 1.0% higher (considered to be a reasonably possible change based on
forecast peak Bank of England interest rates) and all other variables were held constant, the Group’s pre-tax profit would increase
by £9.6m, the Group’s post-tax profit would increase by £7.2m and, as such, the Group’s equity would increase by £7.2m.
Credit risk
In the majority of cases, the Group receives cash on legal completion for private sales and receives advance stage payments from registered
providers for affordable housing. The Group has £1,269.1m (2022: £1,352.7m) on deposit or in current accounts with 14 (2022: 14) financial
institutions. Other than this, neither the Group nor the Company has a significant concentration of credit risk, as their exposure is spread
over a large number of counterparties and customers.
The Group manages credit risk through its credit policy. This limits its exposure to financial institutions with high credit ratings,
as set by international credit rating agencies, and determines the maximum permissible exposure to any single counterparty.
The maximum exposure to any counterparty at 30 June 2023 was £181.3m (2022: £190.0m) of cash on deposit with a financial
institution. The carrying amount of financial assets recorded in the Financial Statements, net of any allowance for losses,
represents the Group’s maximum exposure to credit risk.
As at 30 June 2023, the Company was exposed to £79.0m (2022: £79.2m) of credit risk in relation to intercompany loans, which
are considered to be of low credit risk and fully recoverable, as well as financial guarantees, performance bonds and the bank
borrowings of subsidiary undertakings. Further details are provided in notes 29 and 30.
Capital risk management (cash flow risk)
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns
for shareholders and meet its liabilities as they fall due while maintaining an appropriate capital structure.
The Group manages its share capital as equity, as set out in the Statement of Changes in Shareholders’ Equity, and its bank borrowings
(being overdrafts and bank loans) and its private placement notes as other financial liabilities, as set out in note 22. The Group is subject
to the prevailing conditions of the UK economy and the quantum of the Group’s earnings is dependent upon the level of UK house prices.
UK house prices are determined by the UK economy and economic conditions, employment levels, interest rates, consumer confidence,
mortgage availability and competitor pricing. The Group’s approach to the management of the principal operational risks of the business
is detailed on pages 71 and 72.
Other methods by which the Group can manage its short-term and long-term capital structure include: adjusting the level of dividend
payments to shareholders (assuming the Company is paying a dividend); issuing new share capital; arranging debt to meet liability
payments; and selling assets to reduce debt.
32. Business combinations and Group subsidiary undertakings
Consolidation
The Financial Statements of subsidiary undertakings are consolidated from the date when control passes to the Group, as
defined in IFRS 3, using the acquisition method of accounting up to the date control ceases. All of the subsidiaries’ identifiable
assets and liabilities, including contingent liabilities, existing at the date of acquisition are recorded at their fair values. All
changes to those assets and liabilities, and the resulting gains and losses that arise after the Group has gained control of the
subsidiary are included in the Income Statement. All intra-Group transactions and intercompany profits or losses are
eliminated on consolidation.
During the prior year, the Group acquired all of the share capital of Gladman Developments Limited. No revision of the acquisition
accounting for Gladman Developments Limited was necessary in the current year, and no new acquisitions have been made.
The entities listed below, and on the following pages, are subsidiaries of the Company or Group. All are registered in England and
Wales or Scotland, with the exception of SQ Holdings Limited, which is registered in Guernsey. Unless otherwise stated, the results
of these entities are consolidated within these Financial Statements.
Barratt Developments PLC Annual Report and Accounts 2023
225
S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Audit exemption
The following UK subsidiaries will take advantage of the audit exemption set out within Section 479A of the Companies Act 2006 for the
year ended 30 June 2023. The undertakings listed below are 100% owned, either directly or indirectly, by Barratt Developments PLC.
Subsidiary
Acre Developments Limited
Base East Central Rochdale LLP
Base Hattersley LLP
Base Regeneration LLP
Basildon Regeneration (Barratt Wilson Bowden) Limited
BDW (F.R.) Limited
BDW (F.R. Commercial) Limited
BDW North Scotland Limited
Milton Park Homes Limited
Wilson Bowden Limited
Yeovil Developments Limited
Company number
SC091934
OC318544
OC318541
OC318540
05876010
05876012
05876013
SC027535
03787306
02059194
05285388
In accordance with Section 479C of the Companies Act 2006, the Company will guarantee the debts and liabilities of the above UK
subsidiary undertakings. As at 30 June 2023, the total sum of these debts and liabilities is £32.7m.
At 30 June 2023 the Group owned 100% of the ordinary share capital of the following subsidiaries:
Subsidiary
Acre Developments Limited
Advance Housing Limited
Ambrose Builders Limited
Barratt Bristol Limited
Barratt Central Limited
Barratt Chester Limited
Barratt Commercial Limited
Barratt Construction (Southern) Limited
Barratt Corporate Secretarial Services Limited
Barratt Developments (International) Limited
Barratt Dormant (Atlantic Quay) Limited
Barratt Dormant (Blackpool) Limited
Barratt Dormant (Capella) Limited
Barratt Dormant (Cheadle Hulme) Limited
Barratt Dormant (Harlow) Limited
Barratt Dormant (Riverside Exchange Sheffield C2) Limited
Barratt Dormant (Riverside Exchange Sheffield
L/M) Limited
Barratt Dormant (Riverside Quarter) Limited
Barratt Dormant (Riverside Sheffield Building C1) Limited
Barratt Dormant (Rugby) Limited
Barratt Dormant (Southampton) Limited
Barratt Dormant (Thetford) Limited
Barratt Dormant (Tyers Bros. Oakham) Limited
Barratt Dormant (Walton) Limited
Barratt Dormant (WB Construction) Limited
Barratt Dormant (WB Developments) Limited
Barratt Dormant (WB Properties Developments) Limited
Barratt Dormant (WB Properties Northern) Limited
Barratt East Anglia Limited
Barratt East Midlands Limited
Barratt East Scotland Limited
Barratt Eastern Counties Limited
Barratt Edinburgh Limited
Barratt Evolution Limited
Barratt Falkirk Limited
Barratt Leeds Limited
Barratt London Limited
Barratt Manchester Limited
Barratt Newcastle Limited
Barratt North London Limited
226
Registered
office Notes
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
58
1
2
1
2
1
1
1
1
1
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
Subsidiary
Barratt Northampton Limited
Barratt Northern Limited
Barratt Norwich Limited
Barratt Pension Trustee Limited
Barratt Poppleton Limited
Barratt Preston Limited
Barratt Properties Limited
Barratt Scottish Holdings Limited
Barratt South London Limited
Barratt South Wales Limited
Barratt South West Limited
Barratt Southern Counties Limited
Barratt Southern Limited
Barratt Southern Properties Limited
Barratt Special Projects Limited
Barratt St Mary’s Limited
Barratt St Paul’s Limited
Barratt Sutton Coldfield Limited
Barratt Trade And Property Company Limited
Barratt Urban Construction (East London) Limited
Barratt Urban Construction (Northern) Limited
Barratt Urban Construction (Scotland) Limited
Barratt West Midlands Limited
Barratt West Scotland Limited
Barratt Woking Limited
Barratt York Limited
Bart 225 Limited
Basildon Regeneration (Barratt Wilson
Bowden) Limited
BDW (F.R.) Limited
BDW (F.R. Commercial) Limited
BDW North Scotland Limited
BDW Trading Limited
Bradgate Development Services Limited
Broad Oak Homes Limited
C V (Ward) Limited
Cameoplot Limited
CHOQS 429 Limited
Crossbourne Construction Limited
David Wilson Estates Limited
David Wilson Homes (Anglia) Limited
Registered
office Notes
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
2
1
1
2
1
2
1
1
1
1
1
1
51
1
1
1
1
1
1
1
1
1
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Audit exemption continued
Registered
Registered
Subsidiary
David Wilson Homes (East Midlands) Limited
David Wilson Homes (Home Counties) Limited
David Wilson Homes (North Midlands) Limited
David Wilson Homes (Northern) Limited
David Wilson Homes (South Midlands) Limited
David Wilson Homes (Southern) Limited
David Wilson Homes (Western) Limited
David Wilson Homes Land (No 10) Limited
David Wilson Homes Land (No 11) Limited
David Wilson Homes Land (No 13) Limited
David Wilson Homes Land (No 14) Limited
David Wilson Homes Land (No 15) Limited
David Wilson Homes Limited
David Wilson Homes Services Limited
David Wilson Homes Yorkshire Limited
Decorfresh Projects Limited
Dicconson Holdings Limited
E. Barker Limited
E. Geary & Son Limited
English Oak Homes Limited
Francis (Springmeadows) Limited
Frenchay Developments Limited
G.D. Thorner (Construction) Limited
G.D. Thorner (Holdings) Limited
Gladman Developments Limited
Glasgow Trust Limited
Hartswood House Limited
Hawkstone (South West) Limited
Heartland Development Company Limited
Idle Works Limited
J.G.Parker Limited
James Harrison (Contracts) Limited
Janellis (No.2) Limited
Kealoha 11 Limited
Kealoha Limited
Kingsoak Homes Limited
Knightsdale Homes Limited
Lindmere Construction Limited
Marple Development Company Limited
Meridian Press Limited
Milton Park Homes Limited
Mountdale Homes Limited
Norfolk Garden Estates Limited
North West Land Developments Limited
Oregon Contract Management Limited
Oregon Timber Frame Limited
Oregon Timber Frame (England) Limited
Redbourne Builders Limited
Roland Bardsley Homes Limited
Scothomes Limited
Scottish Homes Investment Company, Limited
office Notes
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
51
51
1
1
1
2
2
Subsidiary
Skydream Property Co. Limited
Squires Bridge Homes Limited
Squires Bridge Limited
Swift Properties Limited
The French House Limited
Tomnik Limited
Trencherwood Commercial Limited
Trencherwood Construction Limited
Trencherwood Developments Limited
Trencherwood Estates Limited
Trencherwood Group Services Limited
Trencherwood Homes (Holdings) Limited
Trencherwood Homes (Midlands) Limited
Trencherwood Homes (South Western) Limited
Trencherwood Homes (Southern) Limited
Trencherwood Homes Limited
Trencherwood Housing Developments Limited
Trencherwood Investments Limited
Trencherwood Land Holdings Limited
Trencherwood Land Limited
Trencherwood Retirement Homes Limited
Vizion (Milton Keynes) Limited
VSM (Bentley Priory 1) Limited
VSM (Bentley Priory 2) Limited
VSM (Bentley Priory 3) Limited
VSM (Bentley Priory 4) Limited
VSM (Bentley Priory 5) Limited
VSM (Bentley Priory 6) Limited
Ward Holdings Limited
Ward Homes (London) Limited
Ward Homes (North Thames) Limited
Ward Homes (South Eastern) Limited
Ward Homes Group Limited
Ward Homes Limited
Ward Insurance Services Limited
Wards Construction (Industrial) Limited
Wards Construction (Investments) Limited
Wards Country Houses Limited
Waterton Tennis Centre Limited
WBD (Wokingham) Limited
Westcountry Land (Union Corner) Limited
William Corah & Son Limited
William Corah Joinery Limited
Wilson Bowden (Atlantic Quay Number 2) Limited
Wilson Bowden (Ravenscraig) Limited
Wilson Bowden City Homes Limited
Wilson Bowden Developments Limited
Wilson Bowden Group Services Limited
Wilson Bowden Limited
Yeovil Developments Limited
office Notes
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
29
1
1
1
1
1
1
1
1
1
1
1
A
A
A
A
Barratt Developments PLC Annual Report and Accounts 2023
227
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Audit exemption continued
Subsidiaries of the Group which are management companies limited by guarantee:
Subsidiary
28-33 Imperial Park Management Company Limited
Abbey Gate Residents Management Company Limited
Abbey View Residents Management Company Limited
Abbotts Green (Woolpit) Management Company Limited
Abbotts Meadow (Steventon) Management
Company Limited
Adderbury Fields Management Company Limited
Aldhelm Court Management Company Limited
Amberswood Rise Management Company Limited
Ambler’s Meadow (East Ardsley) Management
Company Limited
Applegarth Manor (Oulton) Management Company Limited
Applegate (Sittingbourne) Management Company Limited
Ashridge Grange (Wokingham) Management
Company Limited
Aylesham (Central) Residents Management Company
Limited
Aylesham Village (Barratt) Residents Management
Company Limited
B5 Central Residents Management Company Limited
Baggeridge Village Management Company Limited
Barley Fields Management Company Limited
Barum Knoll, Barnstaple Management
Company Limited
Beaufort Park (Wotton Bassett) Management Limited
Beavans House Management Company Limited
Beck Lane, Sutton-in-Ashfield (The Hawthorns)
Management Company Limited
Beeston Quarter Apartments (Beeston) Management
Company Limited
Belle Vue (Doncaster) Management Company Limited
Bentley Fields Residents Management Company Limited
Bermondsey Heights Residents Energy Management
Company Limited
Bermondsey Heights Residents Management
Company Limited
Berry Acres (Paignton) Management Company Limited
Bilberry Chase Residents Management Company Limited
Birds Marsh View Chippenham Apartment Resident
Management Company Limited
Bishop Fields (Hereford) Management Company Limited
Bishop Park (Henfield) Management Company Limited
Bishops Green (Wells) Management Company Limited
Bishop’s Hill Residents Management Company Limited
Blackberry Park Residents Management Company Limited
Blackdown Heights (Crimchard) Management
Company Limited
Blackhorse View Energy Centre Management Company
Blackhorse View Residents Management Company
Blackwater Reach (Southminster) Management
Company Limited
Blossomfields Residents Management Company Limited
Bluebell Woods (Wyke) Management Company Limited
Blythe House Management Company Limited
Bodington Manor (Adel) Management Company Limited
Bowds House Management Company Limited
Braid Park (Tiverton) Management Company Limited
Brindsley (Old Mill Farm)Management Company Limited
Brooklands (Milton Keynes) Management Company Limited
Brue Place Residents Management Company Limited
Bruneval Gardens (Wellesley) Management
Company Limited
Brun Lea Heights Resident Management Company Limited
Buckley Gardens (Melksham) Management
Company Limited
Bure Meadows (Aylsham) Management Company Limited
228
Registered
office Notes
A, B
A, B
A, B
A, B
A, B
26
5
57
14
12
5
30
57
10
10
11
10
A, B
A, B
A, B
A, B
A, B
A, B
A, B
11
A, B
49
23
5
10
31
50
1
26
8
6
23
4
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
4
A, B
40
5
13
20
53
30
23
13
31
1
1
52
5
10
39
9
1
40
60
54
32
10
36
59
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
10
A, B
Subsidiary
Burlington Road Residents’ Management
Company Limited
Canal Quarter Resident Management Company Limited
Cane Hill Park (Coulsdon) Management
Company Limited
Cane Hill Park (Gateway) Management Company Limited
Canes Meadow (Brixton) Management Company Limited
Canford Paddock (Poole) Management Company Limited
Carlton Green (Carlton) Management Company Limited
Castle Hill (DWH1) Residents Management
Company Limited
Castlegate & Mowbray Park Management
Company Limited
Cedar Ridge Management Company Limited
Central Area Heat Company Limited
Centurion Meadows (Burley) Management
Company Limited
Centurion Village Management Company Limited
Ceres Rise Residents Management Company Limited
Chalkers Rise (Peacehaven) Management Company Limited
Chapel Gate (Launceston) Management
Company Limited
Charfield Gardens Management Company Limited
Cherry Blossom Meadow (Newbury) Management
Company Limited
City Heights Apartments (Leicester) Management
Company Limited
Clements Gate (Poringland 2) Management
Company Limited
Clipstone Park (Leighton Buzzard) Management
Company Limited
Coat Grove (Martock) Management Company Limited
Colliers Court (Speedwell) Management
Company Limited
Compass Point (Swanage Grammar School)
Management Company Limited
Compass Point (Swanage) Management Company Limited
Constable Gardens (Residents) Management
Company Limited
Corinthian Place Management Company Limited
Cottam Gardens Resident Management
Company Limited
Cringleford Heights Management Company Limited
Croft Gardens (Phase 2) Management Company Limited
Daracombe Gardens Management Company Limited
Darwin Green Management Company Limited
De Cheney Gardens Management Company Limited
De Havilland Place (Hatfield) Limited
De Lacy Fields KM8 Management Company Limited
De Lacy Fields KM12 Management Company Limited
Deddington Grange Management Company Limited
Delamere Park (Nunney) Management Company Limited
Dickens Gate (Staplehurst) Management Company Limited
Dida Gardens (Didcot) Management Company Limited
Donnington Heights (Newbury) Management
Company Limited
Doseley Park Residents Management Company Limited
Drayton Meadows Management Company Limited
Drovers Court (Micklefield) Management Company Limited
Dunmore Road (Abingdon) Management Company Limited
Dunstall Park (Tamworth) Residents Management
Company Limited
Earls Park Management Company Limited
East Ham Market Energy Centre Management Company
East Ham Market Residents Management Company
Eastman Village Energy Centre Management
Company Limited
Registered
office Notes
A, B
1
16
54
53
40
46
9
8
A, B
A, B
A, B
A, B
A, B
A, B
A, B
6
A, B
10
42
54
36
21
10
40
10
12
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
8 A, B
54
A, B
54
A, B
40
13
A, B
A, B
46
A, B
46
14
47
36
A, B
A, B
A, B
A, B
A, B
61
A, B
12
33 A, B
A, B
54
A, B
30
A, B
22
A, B
5
A, B
5
A, B
5
A, B
50
A, B
8
A, B
42
A, B
12
5
23
9
12
20
30
1
1
1
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Audit exemption continued
Subsidiary
Eastman Village Residents Management Company Limited
Ecclesden Park (Angmering) Management
Company Limited
Edwalton (Sharp Hill) Management Company Limited
Eldebury Place (Chertsey) Management Company Limited
Elderwood (Bannerdale) Management Company Limited
Elm Tree Park (Rainworth) Management Company Limited
Elworthy Place (Wiveliscombe) Management
Company Limited
Elysian Fields (Adel) Management Company Limited
Embden Grange (Tavistock) Management Company Limited
Emmet’s Reach (Birkenshaw) Management
Company Limited
Ersham Park (Hailsham) Management Company Limited
Fairfield Croft Management Company Limited
Fairfield (Stony Stratford) Management Company Limited
Fairway Gardens (Rusington) Management
Company Limited
Farrier Place – Canford Paddock Phase 2 (Poole)
Management Company Limited
Ferris House Management Company Limited
Filwood Park Management Company Limited
Finchwood Park Management Company Limited
Folliott’s Manor Residents Management Company Limited
Forest Walk, Whiteley Management Company Limited
Fradley Manor Management Company Limited
Franklin Gardens (Darwin Green) Management
Company Limited
Freemen’s Meadow Residents Management
Company Limited
Garnett Wharf (Otley) Management Company Limited
Gerway Management Limited
Gilden Park (Old Harlow) Residents Management
Company Limited
Gillies Meadow (Basingstoke) Management
Company Limited
Glenvale Park Management Company Limited
Grange Park (Hampsthwaite) Management Company Limited
Great Dunmow Grange Management Company Limited
H2363 Limited
Hallam Park Residents Management Company Limited
Hampton Water Management Company Limited
Hanwood Park Community Partnership Limited
Harbour Place (Bedhampton) Management
Company Limited
Harbourside (East Quay Apartments 13–21 & 31–39)
Management Company Limited
Harclay Park Management Company Limited
Harlow Gateway Limited
Hartley Brook (Netherton) Management Company Limited
Haskins House Management Company Limited
Hawley Gardens Management Company Limited
Hayes Village Energy Centre Management
Company Limited
Hayes Village Resident Management Company Limited
Heather Croft (Pickering) Management Company Limited
Heathwood Park (Lindfield) Management Company Limited
Helme Ridge (Meltham) Management Company Limited
Henbrook Gardens Management Company Limited
Hendon Waterside Energy Centre Management
Company Limited
Hendon Waterside Residents Management
Company Limited
Hengist Field Management Company Limited
Heron House (Wichelstowe) Management
Company Limited
Hesslewood Park Management Company Limited
Registered
office Notes
A, B
1
A, B
18
48
53
9
9
31
10
40
54
10
6
54
28
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
46
A, B
54
13
7
20
48
20
14
A, B
A, B
A, B
A, B
A, B
A, B
A, B
26
A, B
9
40
8
A, B
A, B
A, B
12
A, B
43
10
18
50
23
15
17
35
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
29
A, B
57
A, B
25 A, B
A, B
A, B
36 A, B
A, B
9
1
1
1
9
28
54
20
1
A, B
A, B
A, B
A, B
A, B
A, B
1
A, B
55
1
A, B
A, B
10
A, B
Subsidiary
Hewenden Ridge (Cullingworth) Management
Company Limited
Hidcote House Management Company Limited
High Elms Park (Hullbridge) Management
Company Limited
High Street Quarter Energy Centre Management
Company Limited
High Street Quarter Residents Management
Company Limited
Highgrove Gardens (Romsey) Management
Company Limited
Hillside Gardens (Orchard RW) Residents Management
Company Limited
Hollygate Park (Cotgrave) Management Company Limited
Infinity Park Derby Management Limited
Honeymans Helm (Highworth) Management
Company Limited
Inglewhite Meadows Residents Management
Company Limited
Inkersall Road (Chesterfield) Management
Company Limited
Jenkins House Management Company Limited
Keeper’s Meadow Residents Management
Company Limited
Kennett Heath Management Limited
Kilners Grange (Tongham) Management Company Limited
Kingfisher Meadow (Horsford) Management
Company Limited
Kingfisher Meadows Residents Management
Company Limited
Kingley Gate (Littlehampton) Management
Company Limited
Kingsbourne (Nantwich) Community Management
Company Limited
Kingsbrook Estate Management Company Limited
Kings Chase Residents Management Company Limited
Kingsdown Gate (Swindon) Management Company Limited
Kingsley Meadows (Harrogate) Management
Company Limited
Kings Lodge (Hatfield) Management Company Limited
Kipling Road (Ledbury) Residents Management
Company Limited
Knights Park (Watton) Management Company Limited
Knights Rise (Temple Cloud) Management
Company Limited
Knights View (Landgold) Management Company Limited
KP (Macclesfield) Residents Management
Company Limited
KW (Site B) Management Company Limited
Ladden Garden Village Apartment Blocks BCD
Management Company Limited
Ladden Garden Village Management Company Limited
Lakeside Walk (Hamworthy) Management
Company Limited
Lancaster Gardens Management Company Limited
Lancaster Gardens (Phase 2) Management Company Limited
Landmark Square Wokingham Management Limited
Langham Mews Management Company Limited
Languard View (Dovercourt) Residents Management
Company Limited
Lavender Grange (Stondon) Resident Management
Company Limited
Lavendon Fields (Olney) Residents Management
Company Limited
Lay Wood (Devizes) Management Company Limited
Letcombe Gardens (Grove) Management Company Limited
Linmere (Houghton Regis) Residents Management
Company Limited
Registered
office Notes
A, B
9
39
47
1
1
A, B
A, B
A, B
A, B
46
A, B
40
A, B
16
1
59
8
9
1
23
8
53
14
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
23
A, B
53
A, B
8
A, B
16
25
13
6
25
20
54
30
54
26
12
30
30
35
6
6
12
44
14
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
54
A, B
57
A, B
13
41
15
A, B
A, B
A, B
Barratt Developments PLC Annual Report and Accounts 2023
229
S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Audit exemption continued
Subsidiary
Lock Keeper’s Gate (Low Barugh) Management
Company Limited
Locksbridge Park (Andover) Management Company Limited
Lockwood Fields (Chidswell) Management
Company Limited
Lordswood Gardens Residents Management
Company Limited
Lubbesthorpe R5 Management Company Limited
Lucerne Fields (Ivybridge) Management Company Limited
Luneside Mills Management Company Limited
Lyde View Residents Management Company Limited
Macclesfield Road Management Company Limited
Madgwick Park Management Company Limited
Marham Park Management Company Limited
Market Warsop (Stonebridge Lane) Management
Company Limited
Marlborough Grove Estate Management Company Limited
Marston Park (Marston Moretaine) Management
Company Limited
Martello Lakes (Barratt) Resident Management
Company Limited
Martello Lakes (Hythe) Resident Management
Company Limited
Martingale Chase (Newbury) Management Company Limited
Meadowburne Place (Willingdon) Management
Company Limited
Meadowfields (Boroughbridge) Management
Company Limited
Meadow View Watchfield Management Company Limited
Melton Mowbray (Kirby Lane) Management
Company Limited
Merlin Gate (Newent) Management Company Limited
Mill Brook (Westbury) Management Company Limited
Millbrook Park (Phase 9) Energy Centre Management
Company Limited
Millbrook Park (Phase 9) Residents’ Management
Company Limited
Mill Springs (Whitchurch) Management Company Limited
Minerva (Apartments) Management Company Limited
Monarchs Keep (Bursledon) Management Company Limited
Montague Park No2 (Buckhurst Farm) Management
Company Limited
Monument House Management Company Limited
Moorland Gate (Bishops Lydeard) Management
Company Limited
Mortimer Park (Driffield) Management Company Limited
Mortimer Place (Hatfield Peverel) Residents
Management Company Limited
Morton Meadows (Thornbury) Management
Company Limited
Nant Y Castell (Caldicot) Management Company Limited
Needham’s Grange Residents Management
Company Limited
Needingworth Park Residents Management
Company Limited
Nerrols Grange (Taunton) Management Company Limited
Netherwood (Darfield) Management Company Limited
Newbery Corner Management Company Ltd
New Heritage (Bordon) Management Company Limited
New Mill Quarter (BL) Residents Management
Company Limited
New Mill Quarter Estate Resident Management
Company Limited
230
Registered
office Notes
A, B
10
12
10
A, B
A, B
5
A, B
60
40
8
10
36
46
18
16
16
54
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
8
A, B
11
A, B
8
54
A, B
A, B
9
A, B
13
60
50
59
1
1
34
40
46
12
54
50
9
14
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
50
A, B
33
20
A, B
A, B
56
A, B
13
54
13
46
8
A, B
A, B
A, B
A, B
A, B
8
A, B
Subsidiary
Niveus Walk Management Company Limited
North Abington Management Company Limited
Northfield Park (Patchway) Management
Company Limited
Northstowe Residents Management Company Limited
Northwalls Grange (Taunton) Management Company Limited
Norton Farm Management Company Limited
Notton Wood View (Royston) Management Company Limited
Oak Hill Mews Management Company Limited
Oakfield Village Estate Management Company Limited
Oakfields Residential Management Company Limited
Oakhill Gardens (Swanmore) Management Company Limited
Oaklands (Pontefract) Management Company Limited
Oatley Park Management Company Limited
Okement Park (Okehampton) Management
Company Limited
Olive Park Residents Management Company Limited
Orchard Gate (Kingston Bagpuize) Management
Company Limited
Orchard Green Estate Management Company Limited
Orchard Meadows (Appleton) Management
Company Limited
Oughtibridge Valley (Oughtibridge) Management
Company Limited
Overstone Gate Residents Management Company Limited
Parc Fferm Wen (St Athen) Management
Company Limited
Parish Brook Residents Management Company Limited
Park Farm (Thornbury) Community Interest Company
Patch Meadows (Somerton) Management
Company Limited
Pates House Management Company Limited
Pavilion Square (Phase 2) Management Company Limited
Pavilion Square (Pocklington) Management
Company Limited
Peasedown Meadows Management Company Limited
Pebble Walk (Hayling Island) Management
Company Limited
Pembridge Park (Phase 2) Management Company Limited
Pembroke Park (Cirencester) Management Company
Limited
Pen Bethan (Falmouth) Management Company Limited
Penndrumm (Looe) Management Company Limited
Penning Ridge (Penistone) Management
Company Limited
Pentref Llewelyn (Penllergaer) Management
Company Limited
Perry Court (Faversham) Management Company Limited
Phase 3 Clark Drive LGV Management Company Limited
Phase 3 Clark Drive 2 LGV Management
Company Limited
Phase 6 Apartments LGV Management
Company Limited
Phoenix And Scorseby Park Management
Company Limited
Phoenix Quarter — Apt — Management Company Limited
Phoenix Quarter Estate Management Company Limited
Pinewood Park (Formby) Management Company Limited
Pinn Brook Park (Monkerton) Management
Company Limited
PL2 Plymouth (2016) Limited
Poppy Fields (Cottingham) Management Company Limited
Portman Square West Village Reading Management
Company Limited
Preston Grange Residents Management Company Limited
Registered
office Notes
A, B
7
A, B
41
A, B
32
54
30
20
54
20
16
5
18
9
62
31
17
12
16
45
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
9
A, B
56
33
32
30
30
39
6
6
30
54
26
30
31
40
9
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
10
A, B
54
32
32
A, B
A, B
A, B
32
A, B
6
A, B
49
49
57
40
40
6
12
A, B
A, B
A, B
A, B
A, B
A, B
A, B
3
A, B
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Audit exemption continued
Subsidiary
Priestley House Management Company Limited
Priory Fields (Pontefract) Management
Company Limited
Prospect Rise (Whitby) Management Company Limited
Quarter Jack Park (Wimborne) Management
Company Limited
Raleigh Holt (Barnstaple) Management
Company Limited
Ramsey Park Residents Management Company Limited
Ravenhill Park Management Company Limited
Redhayes Management Company Limited
Redlodge (Suffolk) Management Company Limited
Redwood Heights (Plymouth) Management
Company Limited
Residents Management Company (Beaconside) Limited
Richmond Park (Whitfield) Residents Management
Company Limited
Ridgeway Views Energy Centre Management Company
Ridgeway Views Residents Management Company
River Meadow (Stanford in the Vale) Management
Company Limited
River Whitewater Management Company (Hook) Limited
Riverdown Park (Salisbury) Management
Company Limited
Riverside Grange (Farmbridge) Management Company
Limited
Romans Edge Godmanchester Management
Company Limited
Romans’ Quarter (Bingham) Residential Management
Company Limited
Rose and Lillies Residents Management Company Limited
Rosewood Park Bexhill Residents Management
Company Limited
RV North Petherton Residents Management
Company Limited
Ryebank Gate (Yapton) Management Company Limited
Salters Brook (Cudworth) Management
Company Limited
Sandridge Place (Melksham) Management
Company Limited
Saunderson Gardens Management Co Limited
Sawbridge Park (Sawbridgeworth) Management
Company Limited
Saxon Corner (Emsworth) Management
Company Limited
Saxon Dean (Silsden) Management Company Limited
Saxon Fields (Cullompton) Management Company
Limited
Saxon Fields (Thanington) Management
Company Limited
Saxon Gate (Leonard Stanley) Management
Company Limited
Saxon Gate (Stamford Bridge) Management
Company Limited
Saxon Mills (Hassocks) Management Company Limited
Scotgate Ridge (Honley) Management Company Limited
Shaftmoor Land Residents Management
Company Limited
Silkwood Gate (Wakefield) Management
Company Limited
Spinney Fields Residents Management
Company Limited
Spitfire Green, (Manston) Residents Management
Company Limited
Spring Valley View (Clayton) Management Company Limited
Springfield Place Resident Management Company Limited
St Andrews View (Morley) Management Co. Limited
Registered
office Notes
A, B
A, B
54
10
6
46
A, B
A, B
40
A, B
56
20
40
14
40
57
8
1
1
12
10
54
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
9
A, B
54
A, B
16
A, B
23
8
A, B
A, B
32
A, B
28
54
A, B
A, B
10
A, B
10
16
A, B
A, B
46
A, B
10
40
A, B
A, B
11
A, B
10
A, B
6
A, B
53
54
20
9
5
A, B
A, B
A, B
A, B
A, B
49
A, B
10
4
54
A, B
A, B
A, B
Subsidiary
St James Gardens (Wick) Management Company Limited
St James Management Company Limited
St Johns View Residents Management Company Limited
St Rumbolds Fields Management Company Limited
St. Andrews Place (Morley) Management Co. Limited
St. John’s Walk (Hoylandswaine) Management
Company Limited
St. Mary’s Park (Hartley Wintney) Management
Company Limited
St. Oswald’s View (Methley) Management Company Limited
Stallard House Management Company Limited
Stansted Road (Kingswood Place Elsenham)
Management Company Limited
Stotfold Park Management Company Limited
Summersfield (Papworth) Management Company Limited
Swallows Field (Hemel Hempstead) Management
Company Ltd
Swan Mill (Newbury) Management Company Limited
Swinbrook Park (Carterton) Management Company Limited
Sydney Place (Crewe) Management Company Limited
Talbot and Clockmakers Management Company Limited
Tarka Ridge (Yelland) Management Company Limited
Templar’s Chase (Wetherby) Management Company Limited
The Acorns and Hunters Wood Management
Company Limited
The Belt Open Space Management Co Limited
The Bridleways (Eccleshill) Management Company Limited
The Causeway Park (Petersfield) Management
Company Limited
The Chase (Newbury) Management Company Lmited
The Chocolate Works Management Company Limited
The Courtyard (Darwin Green) Management
Company Limited
The Furlongs (Westergate) Management Company Limited
The Glassworks (Catcliffe) Management Company Limited
The Grange (Lightcliffe) Management Company Limited
The Meads (Frampton Cotterell) Management
Company Limited
The Mounts Residents Management Company Limited
The Old Meadow Management Company Limited
The Orchards (Hildersley) Management Company Limited
The Paddocks (Skelmanthorpe) Management
Company Limited
The Paddocks (Southmoor) Management Company Limited
The Pastures (Knaresborough) Management
Company Limited
The Pavilions Management Company (Southampton) Limited
The Pavilions Resident Management Company Limited
The Poppies (Maidstone) Residents Management
Company Limited
The Spires (Chesterfield) Management Company Limited
The Vineyards Management Company Limited
The Woodlands (Sturry) Management Company Limited
Thornbury Gardens Dinnington Management
Company Limited
Townsend Landing (Henstridge) Management
Company Limited
Tranby Fields Management Company Limited
Treledan (Saltash) Management Company Limited
Trumpington Meadows Residents Management
Company Limited
Trumpington (Phase 8—11) Management Company Limited
Trumpington Vista Management Company Limited
Union Park (Falmouth) Management Company Limited
Upton Gardens Energy Centre Management Company
Upton Gardens Residents Management Company
Registered
office Notes
A, B
A, B
A, B
A, B
A, B
A, B
29
9
57
16
54
54
25
A, B
9
39
18
10
54
22
12
12
57
23
40
9
54
6
54
34
12
37
16
46
10
10
13
5
41
10
10
12
6
46
23
11
26
30
11
10
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
31
A, B
10
31
10
10
16
40
1
1
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
Barratt Developments PLC Annual Report and Accounts 2023
231
S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Audit exemption continued
Subsidiary
Victoria Heights (Alphington) Management Company Limited
Wadsworth Gardens (Cleckheaton) Management
Company Limited
Waite House Management Company Limited
Waldmers Wood Management Company Limited
Walton Gate (Felixstowe) Management Company Limited
Warboys Management Company Limited
Warren Grove (Storrington) Management Company Limited
Waterside (The Quays Barry) Management Company
Number 1 Limited
Waterside (The Quays Barry) Management Company
Number 2 Limited
Waterside (The Quays Barry) Management Company
Number 3 Limited
Waterside Trentham Residents Management
Company Limited
Watkin Road Energy Centre Management Company
Watkin Road Residents Management Company
Wayland Fields Residents Management Company Limited
WBD (Kingsway Management) Limited
Weavers Chase (Golcar) Management Company Limited
Webheath (Redditch) Management Company Limited
Wedgwood Residents Management Company Limited
Wendel View Residents Management Company Limited
Westbridge Park (Auckley) Management Company Limited
Westminster View (Clayton) Management Company Limited
Weston Meadows, Calne Management Company Limited
Whalley Road (Barrow) Management Company Limited
White Lias House Management Company Limited
Whittlesey Lakeside (Cambridge) Management
Company Limited
Wichelstowe Estate Management CIC
Wigmore Park Management Company Limited
Willow Grove (Stopsley) Management Company Limited
Willow Grove (Wixams) Management Company Limited
Willow Lane (Beverley) Management Company Limited
Willow Lane (Beverley) Phase 2 Management
Company Limited
Willowmead (Wiveliscombe) Management Company Limited
Winnington View Management Company Limited
Winnington Village Community Management
Company Limited
Winnycroft Residents Management Company Limited
Withies Bridge Management Company Ltd
Whittingham Residents Management Company Limited
Woodhall Grange Management Company Limited
Woodland Heath Residential Management Company Limited
Wychwood Park (Haywards Heath) Management
Company Limited
Registered
office Notes
A, B
A, B
40
54
1
57
14
38
49
29
A, B
A, B
A, B
A, B
A, B
A, B
29
A, B
29
A, B
36
A, B
1
1
14
1
9
54
5
56
26
10
50
8
23
21
1
10
8
54
6
19
50
26
26
32
30
36
6
14
53
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
A, B
232
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Other subsidiary entities:
Subsidiary
Base East Central Rochdale LLP
Base Hattersley LLP
Base Regeneration LLP
Base Werneth Oldham LLP
BLLQ LLP
BLLQ2 LLP
SQ Holdings Limited
Vizion (MK) Properties LLP
Ash Tree Court Management Co. Ltd
Aspects Management Company Limited
Buckshaw Village Management Company Limited
Famous Five Glenfield Limited
Foxcote Mead Management Company Limited
GWQ Management Limited
Hazelmere Management Company Limited
Interlink Park Management Company Limited
Meridian Business Park Extension Management Company Limited
Newbury Racecourse Management Limited
Nottingham Business Park Management Company Limited
Nottingham Business Park (Orchard Place) Management Company Limited
Optimus Point Management Company Limited
Pye Green Management Company Limited
Riverside Exchange Management Company Limited
Romulus Management Company Limited
Runshaw Management Company Limited
Springfield Village Estate Limited
Stoneyfield Management Limited
WBD Blenheim Management Company Limited
WBD (Riverside Exchange Sheffield B) Limited
WBD Riverside Sheffield Building K Limited
West Village Reading Management Limited
Registered
office
1
1
1
1
1
1
53
1
1
27
8
1
1
24
1
1
1
12
1
1
1
20
1
1
8
16
1
1
1
1
12
Notes
A
A
A
A
A
A
A
A
A, D
A
A
A, C
A
A, C
A, D
A, D
A, C
A, D
A, C
A, C
A, C
A, C
A, C
A, D
A
A, C
A
A, C
A, C
A, C
A, D
Class of
share held
N/A
N/A
N/A
N/A
N/A
N/A
Ordinary
N/A
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary/Preference
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
% of shares
owned
N/A
N/A
N/A
N/A
N/A
N/A
90%
N/A
0%
50%
50%
50%
100%
0%
0%
0%
2%
0%
2%
2%
0%
17%
22%
4%
100%
16%
100%
2%
100%
100%
0%
Barratt Developments PLC Annual Report and Accounts 2023
233
S
G
Financial Statements
32. Business combinations and Group subsidiary undertakings continued
Registered Office
1. Barratt House, Cartwright Way, Forest Business Park, Bardon
37. Watson, Glendevon House, 4 Hawthorn Park, Coal Road,
Hill, Coalville, Leicestershire LE67 1UF
Leeds, West Yorkshire LS14 1PQ
2. Buchanan Gate, Cumbernauld Road, Stepps, Glasgow G33 6FB
3. 111 West Street, Faversham, Kent ME13 7JB
4. Barratt East London, 3rd Floor Press Centre, Here East,
13 East Bay Lane, Stratford, London E15 2GW
5. One Eleven, Edmund Street, Birmingham, West Midlands B3 2HJ
6. Unit 11, Omega Business Park, Omega Business Village,
Thurston Road, Northallerton, North Yorkshire DL6 2NJ
7. Discovery House, Crossley Road, Stockport, Greater
Manchester, England, SK4 5BH
8. RMG House, Essex Road, Hoddesdon, Hertfordshire EN11 0DR
9. Gateway House, 10 Coopers Way, Southend-on-Sea, Essex SS2 5TE
10. Vantage Point, 23 Mark Road, Hemel Hempstead,
Hertfordshire HP2 7DN
11. Weald House, 88 Main Road, Sundridge, Kent, United Kingdom,
38. Cumberland Court, 80 Mount Street, Nottingham,
Nottinghamshire, United Kingdom, NG1 6HH
39. Ashford House, Grenadier Road, Exeter, Devon, EX1 3LH
40. Woodwater House, Pynes Hill, Exeter, Devon EX2 5WR
41. Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, England,
CM20 2BN
42. Norgate House Tealgate, Charnham Park, Hungerford,
Berkshire RG17 0YT
43. Barratt House, Sandy Way, Grange Park, Northampton NN4 5EJ
44. Unit 7, Hockliffe Business Park, Watling Street, Hockliffe,
Leighton Buzzard, Bedfordshire LU7 9NB
45. 377–379 Hoylake Road, Moreton, Wirral, Merseyside CH46 0RW
46. 128 Pyle Street, Granary Court, Newport, Isle of Wight PO30 1JW
47. Woodland Place, Wickford Business Park, Hurricane Way,
TN14 6ER
Wickford SS11 8YB
12. Cygnet House, Cygnet Way, Hungerford, Berkshire RG17 0YL
13. Units 1, 2 & 3 Beech Court, Wokingham Road, Hurst, Reading
48. 154–155 Great Charles Street, Queensway, Birmingham B3 3LP
49. Thamesbourne Lodge, Station Road, Bourne End,
RG10 0RU
Buckinghamshire SL8 5QH
14. Barratt House, 7 Springfield Lyons Approach, Chelmsford,
50. 1 West Point Court, Great Park Road, Bradley Stoke, Bristol
Essex CM2 5EY
BS32 4PY
15. The Maltings, Hyde Hall Farm, Sandon, Hertfordshire SG9 0RU
16. 2 Hills Road, Cambridge, Cambridgeshire CB2 1JP
17. Unit A5 Optimum Business Park, Optimum Road, Swadlincote,
Derbyshire, England, DE11 0WT
18. Fisher House, 84 Fisherton Street, Salisbury SP2 7QY
19. 6 Alpha Court, Monks Cross Drive, York, Yorkshire, YO32 9WN
20. 60 Whitehall Road, Halesowen B63 3JS
21. Unit 1 Forder Way Cygnet Park, Hampton, Peterborough,
United Kingdom, PE7 8GX
22. Wellstones House, Wellstones, Watford, Hertfordshire WD17 2AF
23. Remus 2, 2 Cranbook Way, Solihull Business Park, Solihull,
West Midlands B90 4GT
24. Wallis House, Great West Road, Brentford, Middlesex TW8 9BS
25. Firstport Property Services Limited, Marlborough House,
Wigmore Place, Wigmore Lane, Luton LU2 9EX
26. Chiltern House, 72–74 King Edward Street, Macclesfield,
Cheshire SK10 1AT
27. 100 Avebury Boulevard, Milton Keynes England, MK9 1FH
28. 41a Beach Road, Littlehampton, West Sussex, England, DN17 5JA
29. Oak House, Village Way, Cardiff CF15 7NE
30. Unit 2 Beech Court, Wokingham Road, Hurst, Twyford,
Berkshire RG10 0RQ
31. Vanguard House, Yeoford Way, Marsh Barton, Exeter EX2 8HL
32. Barratt House, 710 Waterside Drive, Aztec West,
Almondsbury, Bristol, BS32 4UD
33. Whittington Hall, Whittington Road, Worcester, WR5 2ZX
34. Building 4, Dares Farm Business Park, Farnham Road,
51. Blairton House, Old Aberdeen Road, Balmedie, Aberdeen,
Scotland, AB23 8SH
52. C/O East Block Group, The Colchester Centre, Hawkins Road,
Colchester, Essex CO 2 8JX
53. Compton House, The Guildway, Old Portsmouth Road,
Guildford, GU3 1LR
54. Queensway House, 11 Queensway, New Milton, Hampshire
BH25 5NR
55. 100 High Street, Whitstable, Kent, CT5 1AT
56. 1a Fortune Close, Riverside Business Park, Northampton NN3 9HT
57. Unit 7, Portal Business Park, Eaton Lane, Tarporley, Cheshire
CW6 9DL
58. Telford House, 3 Mid New Cultins, Edinburgh, Midlothian EH11 4DH
59. Wellington House, Great Park Road, Bradley Stoke, Bristol,
BS32 4PY
60. 72–74 King Edward Street, Macclesfield, Cheshire, SK10 1AT
61. Second Floor Lakeside 300, Broadland Business Park,
Norwich, Norfolk, England, NR7 0WG
62. Unit 1, Great Park Road, Bradley Stoke, Bristol, United Kingdom,
BS32 4PY
Notes
A Owned through another Group company.
B Entity is limited by guarantee and is a temporary member of the Group.
Assets are not held for the benefit of the Group and the entity has no profit
or loss in the year.
C The Group is a minority shareholder but has voting control.
D The Group does not own any shares but has control via directors who are
Ewshot, Farnham, Surrey GU10 5BB
employees of the Group.
35. Ground Floor, Cromwell House, 15 Andover Road, Winchester,
Hampshire SO23 7BT
36. 4 Brindley Road, City Park, Manchester M16 9HQ
234
Barratt Developments PLC Annual Report and Accounts 2023Notes to the Financial Statements continuedYear ended 30 June 2023 S
G
Financial Statements
Definitions of alternative performance measures and reconciliation
to IFRS (unaudited)
The Group uses a number of APMs that are not defined within IFRS. The Directors use these APMs, along with IFRS measures, to
assess the operational performance of the Group as detailed in the key performance indicators section of the Strategic Report on
pages 16 to 19. These APMs may not be directly comparable with similarly titled measures reported by other companies and they
are not intended to be a substitute for, or superior to, IFRS measures. Definitions and reconciliations of the financial APMs used to
IFRS measures, are included below:
Gross margin is defined as gross profit divided by revenue:
Revenue per Consolidated Income Statement (£m)
Gross profit per Consolidated Income Statement (£m)
Gross margin
Adjusted gross margin is defined as adjusted gross profit divided by revenue:
Revenue per Consolidated Income Statement (£m)
Adjusted gross profit per Consolidated Income Statement (£m)
Adjusted gross margin
Operating margin is defined as profit from operations divided by revenue:
Revenue per Consolidated Income Statement (£m)
Profit from operations per Consolidated Income Statement (£m)
Operating margin
Adjusted operating margin is defined as adjusted profit from operations divided by revenue:
Revenue per Consolidated Income Statement (£m)
Adjusted profit from operations per Consolidated Income Statement (£m)
Adjusted operating margin
2023
5,321.4
974.9
18.3%
2023
5,321.4
1,130.4
21.2%
2023
5,321.4
707.4
13.3%
2023
5,321.4
862.9
16.2%
2022
5,267.9
899.9
17.1%
2022
5,267.9
1,308.1
24.8%
2022
5,267.9
646.6
12.3%
2022
5,267.9
1,054.8
20.0%
Adjusted earnings for adjusted basic earnings per share and adjusted diluted earnings per share are calculated by excluding
adjusted items and any associated net tax amounts from profit attributable to ordinary shareholders of the Company:
Profit attributable to ordinary shareholders of the Company
Net cost associated with legacy properties per note 4
Cost associated with JV legacy properties per note 4
Tax impact of adjusted items
Adjusted earnings
2023
£m
530.3
155.5
23.7
(39.3)
670.2
2022
£m
515.1
408.2
4.3
(82.5)
845.1
Barratt Developments PLC Annual Report and Accounts 2023
235
S
G
Financial Statements
Definitions of alternative performance measures and reconciliation
to IFRS (unaudited) continued
Net cash is defined in note 18.
ROCE is calculated as earnings before amortisation, interest, tax and operating adjusting items for the year, divided by average net assets
adjusted for goodwill and intangibles, tax, net cash, derivative financial instruments and provisions in relation to legacy properties.
Profit from operations
Amortisation of intangible assets
Cost associated with legacy properties
Share of post-tax profit from JVs and associates
Adjusted cost related to JV legacy properties
Earnings before amortisation, interest, tax and adjusted items
Group net assets per Consolidated Balance Sheet
Less:
Other intangible assets per Consolidated Balance Sheet
Goodwill per Consolidated Balance Sheet
Current tax (assets)/liabilities
Deferred tax liabilities
Cash and cash equivalents
Loans and borrowings
Provisions in relation to legacy properties
Prepaid fees
Capital employed
Three point average capital employed
2023
£m
707.4
10.5
155.5
8.8
23.7
905.9
30 June
2023
£m
5,596.4
31 December
2022
£m
5,656.6
30 June
2022
£m
5,631.3
31 December
2021
£m
5,589.7
(194.9)
(852.9)
(31.1)
53.5
(1,269.1)
203.4
612.3
(3.7)
4,113.9
4,075.6
(200.1)
(852.9)
(0.1)
44.0
(1,166.5)
202.0
485.3
(4.6)
4,163.7
(205.4)
(852.9)
(9.9)
45.1
(1,352.7)
217.3
479.5
(3.2)
3,949.1
3,625.8
(100.0)
(805.9)
(13.7)
9.9
(1,336.3)
208.7
73.6
(4.1)
2022
£m
646.6
4.3
408.2
23.3
4.3
1,086.7
30 June
2021
£m
5,452.1
(100.0)
(805.9)
1.0
8.9
(1,518.6)
205.3
67.6
(4.1)
3,621.9
3,306.3
2023
905.9
4,075.6
22.2%
2022
1,086.7
3,625.8
30.0%
Earnings before interest, tax, adjusted items and defined benefit scheme charges (from table above) (£m)
Three point average capital employed (from table above) (£m)
ROCE
236
Barratt Developments PLC Annual Report and Accounts 2023 S
G
Financial Statements
Underlying ROCE is calculated as ROCE (above) with net assets also adjusted for land payables:
Capital employed (from ROCE table above)
Adjust for land payables
Capital employed adjusted for land payables
Three point average capital employed adjusted
for land payables
31 December
2022
£m
4,163.7
622.3
4,786.0
30 June
2023
£m
4,113.9
506.7
4,620.6
4,696.4
31 December
2021
£m
3,621.9
682.3
4,304.2
30 June
2022
£m
3,949.1
733.6
4,682.7
4,317.2
Earnings before interest, tax and adjusted items (from table above) (£m)
Three point average capital employed adjusted for land payables (from table above) (£m)
Underlying ROCE
2023
905.9
4,696.4
19.3%
30 June
2021
£m
3,306.3
658.3
3,964.6
2022
1,086.7
4,317.2
25.2%
For the purpose of determining the Executive Directors’ annual bonus (page 140), capital employed is adjusted for land, land
payables, trade payables and, for 2023, inventories currently occupied under the refugee support scheme:
Capital employed (from ROCE table above)
Adjust for land
Adjust for land payables
Adjust for trade payables
Adjust for inventories currently occupied under the
refugee support scheme
Capital employed adjusted for land, land
payables, trade payables and inventories currently
occupied under the refugee support scheme
Three point average capital employed adjusted for land,
land payables, trade payables and inventories
currently occupied under the refugee support scheme
30 June
2023
£m
4,113.9
(3,139.9)
506.7
310.3
31 December
2022
£m
4,163.7
(3,253.7)
622.3
220.4
(11.0)
-
30 June
2022
£m
3,949.1
(3,339.9)
31 December
2021
£m
3,621.9
(3,046.1)
733.6
324.0
-
682.3
238.9
-
30 June
2021
£m
3,306.3
(2,946.3)
658.3
289.6
-
1,780.0
1,752.7
1,666.8
1,497.0
1,307.9
1,733.2
1,490.6
Total indebtedness is defined as net (cash)/debt and land payables:
Net cash (£m)
Land payables (£m)
Total indebtedness
2023
2022
(1,069.4)
(1,138.6)
506.7
(562.7)
733.6
(405.0)
TSR is a measure of the performance of the Group’s share price over a period of three financial years. It combines share price
appreciation and dividends paid to show the total return to the shareholders expressed as a percentage.
Barratt Developments PLC Annual Report and Accounts 2023
237
S
G
Financial Statements
Five year record (unaudited)
Financial five year record
Private wholly owned home completions
Affordable wholly owned home completions
Wholly owned completions (homes)
Joint venture completions (homes)
Total home completions including JVs
Wholly owned completions average selling price (£000)
Note
Revenue (£m)
Gross profit (£m)
Gross profit margin (%)
Adjusted gross profit (£m)
Adjusted gross profit margin (%)
Profit from operations (£m)
Operating profit margin (%)
Adjusted profit from operations (£m)
Adjusted operating margin (%)
Net finance costs (£m)
Share of post-tax income from joint ventures
Profit before tax
Adjusted profit before tax
Basic earnings per share (pence)
Adjusted earnings per share (pence)
Dividend (interim paid and final proposed) (pence)
Special cash payment proposed per share (pence)
Total shareholder return (TSR) over three financial years (%)
Tangible shareholders’ funds (£m)
Tangible net assets per share at year end (pence)
Total shareholders’ funds (£m)
Total net assets per share at year end (pence)
Year-end net (debt)/cash (£m)
Year-end total land payables (£m)
Year-end total net (indebtedness)/surplus (£m)
Average net cash across the financial year (£m)
2019
13,533
3,578
17,111
745
17,856
274.4
4,763.1
1,084.2
22.8%
1,087.4
22.8%
901.1
18.9%
904.3
19.0%
(28.8)
39.2
909.8
920.0
73.2
74.1
29.1
17.3
36.8%
3,953.9
388.8
4,869.0
478.8
765.7
960.7
(195.0)
298.3
2020
9,568
2,466
12,034
570
12,604
280.3
3,419.2
614.3
18.0%
631.4
18.5%
493.4
14.4%
507.3
14.8%
(29.9)
28.3
491.8
505.7
39.4
40.5
—
—
6.1%
3,931.9
386.1
4,840.3
475.3
308.2
791.9
(483.7)
348.3
2021
13,134
3,383
16,517
726
17,243
288.8
4,811.7
1,010.0
21.0%
1,114.7
23.2%
811.1
16.9%
919.0
19.1%
(26.6)
27.7
812.2
919.7
64.9
73.5
29.4
—
59.8%
4,545.1
446.3
5,452.1
535.4
1,317.4
658.3
659.1
821.0
2022
2023
13,327
12,456
3,835
17,162
746
17,908
300.2
5,267.9
899.9
17.1%
1,308.1
24.8%
646.6
12.3%
1,054.8
20.0%
(27.6)
23.3
642.3
1,054.8
50.6
83.0
36.9
—
(4.9%)
4573.0
447.2
5,631.3
550.7
1,138.6
733.6
405.0
957.4
3,922
16,378
828
17,206
319.6
5,321.4
974.9
18.3%
1,130.4
21.2%
707.4
13.3%
862.9
16.2%
(11.1)
8.8
705.1
884.3
53.2
67.3
33.7
—
10.6%
4,548.6
466.7
5,596.4
574.2
1,069.4
506.7
562.7
759.1
Three point average capital employed (£m)
Return on capital employed (ROCE) (%)
3,180.2
29.9%
3,457.6
15.5%
3,414.5
27.8%
3,625.8
30.0%
4,075.6
22.2%
Total land investment (£m)
Proportion of total land investment funded by land creditors (%)
16
3,071.6
31.3%
3,112.3
25.4%
2,946.3
22.3%
3,339.9
22.0%
3,139.9
16.1%
Weighted average shares in issue during the year (m)
Weighted average shares in issue during the year less EBT (m)
Number of ordinary shares in issue at year end (m)
23
1,014.2
1,010.4
1,017.0
1,018.2
1,013.9
1,018.3
1,018.3
1,016.4
1,018.3
1,021.9
1,018.7
1,022.6
1,000.1
996.3
974.6
238
Barratt Developments PLC Annual Report and Accounts 2023 S
G
Financial Statements
Non-financial five year record
SHE audit compliance
Injury Incidence Rate
Average training days per employee (days/employee)
Employee turnover (%)
Employee engagement index (%)
Number of employees at 30 June
Proportion female (%)
Graduates, apprentices and trainees on programmes
Number of senior managers
Proportion female (%)
Number of PLC Directors
Proportion female (%)
Legally completed build area (100m2)
Carbon intensity (tonnes per 100m2 legally completed build area)
Waste intensity (tonnes per 100m2 legally completed build area)
Waste intensity (tonnes per 100m2 house build equivalent area)
Diversion of construction waste from landfill (%)
Electricity on renewable tariffs (%)
Average active sales outlets (inc. JVs)
Customer service (HBF Customer Satisfaction Survey)
NHBC Pride in the Job Awards (number awarded)
2019
96%
297
4.7
16%
84.5%
6,504
31%
470
290
15%
8
38%
17,196
1.78
6.53
6.25
97%
46.0%
379
5 star
84
2020
96%
256
4.1
10%
84.2%
6,655
31%
492
286
14%
8
38%
12,197
1.80
7.70
6.93
96%
68.0%
366
5 star
92
2021
97%
416
3.9
12%
N/A
6,329
31%
426
283
16%
9
44%
16,439
1.78
5.89
6.29
95%
72.0%
343
5 star
93
Owned and unconditional land bank (plots)
66,423
68,393
66,601
Conditional land bank (plots)
Owned and controlled land bank (plots)
JV owned and controlled land bank (plots)
Total owned and controlled land bank including JVs (plots)
Land bank years owned (years)
Land bank years controlled (years)
Land bank total years (owned and controlled) (years)
Average selling price of homes in land bank at year end (£000)
Land approvals (plots)
Land approvals (£m)
Planning consents secured in the year (plots)
Strategic land plots converted to owned and controlled land bank (plots)
Strategic land bank (acres)
Expenditure on physical improvement works benefitting local communities (£m)
School places provided (number)
Home completions from strategically sourced land (homes)
Proportion of home completions from strategically sourced land (%)
Home completions using MMC (homes)
Proportion of home completions using MMC (%)
Proportion of home completions using 2016 and later house type range (%)
Proportion of home completions EPC rated “B” or above (%)
Average DER for completed properties (kgCO2/m2/yr)
Average SAP rating of home completions
13,599
11,931
80,022
80,324
5,207
85,229
3.9
0.8
4.7
275
18,448
859.8
18,280
7,915
11,995
506
3,894
4,374
25.6%
3,609
20.0%
36.4%
99%
16.66
84
5,400
85,724
5.7
1.0
6.7
276
9,441
368.1
14,768
3,137
13,271
477
2,211
2,929
24.3%
2,652
21.0%
60.2%
99%
16.59
84
11,041
77,642
4,661
82,303
4.0
0.7
4.7
289
18,067
876.8
14,280
3,507
13,754
572
3,591
4,172
25.3%
4,393
25.0%
65.3%
99%
16.21
85
Note: additional granularity and more detailed sustainability metrics are available on our website at:
https://www.barrattdevelopments.co.uk/sustainability/performance-data/data
2022
97%
262
3.3
17%
79.4%
6,837
32%
391
328
17%
9
33%
16,402
1.53
4.97
4.83
96%
76.0%
352
5 star
98
67,687
13,239
80,926
4,548
85,474
3.9
0.8
4.7
322
19,089
1,396.1
14,988
1,663
15,537
699
5,346
4,530
26.4%
4,846
27.0%
77.0%
99%
15.89
85
2023
96%*
289*
4.1
15%
84.4%
6,728
31%
483
331
18%
8
38%
15,609
1.60*
4.31*
4.34*
96%*
87.0%
367
5 star
96
59,248
11,142
70,390
4,356
74,746
3.6
0.7
4.3
331
(812)
(14.9)
12,969
777
16,431
726
3,327
3,938
24.0%
5,578
32.0%
71.0%
99%
16.02*
85
Deloitte have provided independent third-party limited assurance in accordance with the International Standard for Assurance Engagements
3000 (ISAE 3000) and Assurance Engagements on Greenhouse Gas Statements (ISAE 3410) issued by the International Auditing and
Assurance Standards Board (IAASB) over selected metrics in the above table identified with an *. For Deloitte’s full unqualified assurance
opinion, which includes details of the selected metrics assured, our full Carbon Reporting Methodology Statement and a full breakdown of
scope 3 GHG emissions, see our website www.barrattdevelopments.co.uk/building-sustainably/our-publications-and-policies/publications.
Barratt Developments PLC Annual Report and Accounts 2023
239
S
G
Financial Statements
Glossary
Glossary
Act
The Companies Act 2006
Active outlet A site with at least one plot for sale
AGM
APM
Annual General Meeting
Alternative performance measure
APPG
All-Party Parliamentary Groups
Articles
The Company’s Articles of Association
ASP
Average selling price
Barratt
Barratt Developments PLC and its
subsidiary undertakings
BEIS
BNG
BRICk
BREEAM
Building
for Life 12
Department for Business, Energy and
Industrial Strategy
Biodiversity Net Gain
Barratt Risk and Internal Control Framework
Building Research Establishment Environmental
Assessment Methodology
This is the industry standard, endorsed by
the government, for well-designed homes and
neighbourhoods that local communities, local
authorities and developers are invited to use
to stimulate conversations about creating
good places to live
Building
regulations
The requirements relating to the erection and
extension of buildings under UK Law
Capital
employed
Average net assets adjusted for goodwill and
intangibles, tax, cash, loans and borrowings,
prepaid fees, provisions in respect of legacy
properties and derivative financial instruments
Confederation of British Industry
Charity that runs the global system for disclosure
of environmental impacts for investors, companies,
cities, states and regions
Chief Executive Officer
Chief Financial Officer
Chartered Institute of Personnel and Development
Code
COINS
Connected
Persons
UK Corporate Governance Code issued in July 2018
(copy available from www.frc.org.uk)
Construction Industry Solutions (software used by
the Group)
As defined in the EU Market Abuse Regulation
COO
Chief Operating Officer
Contribution
margin
Housebuild revenue less land and directly
attributable build and site costs, divided by
housebuild revenue
COVID-19
Coronavirus Disease 2019
CRM
DBP
DTRs
EBT
ELTIP
EMC
EPC
EPS
EQA
ESG
EU
EWS
FCA
FHS
Customer Relationship Management
Deferred Bonus Plan
Disclosure Guidance and Transparency Rules
Barratt Developments Employee Benefit Trust
Employee Long-Term Incentive Plan
Ethnic Minority Communities
Energy Performance Certificate
Earnings per share
External Quality Assessment
Environmental, Social and Governance
European Union
External Wall System
Financial Conduct Authority
Future Homes Standard
Foundation
The Barratt Developments PLC
Charitable Foundation
FRC
FSC
Financial Reporting Council
Forest Stewardship Council
FTSE4Good
Equity index series of companies demonstrating
strong ESG practices
Construction Industry Training Board
Competition and Markets Authority
FY
GDP
Financial year ended 30 June
Gross Domestic Product
CBI
CDP
CEO
CFO
CIPD
CITB
CMA
240
Barratt Developments PLC Annual Report and Accounts 2023 HR
HVO
IA
IAS
IASB
IEA
IFRS
IIA
IIR
IIRC
IPA
IPCC
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