Barratt Developments’ newly published annual results statement for the year to June 2018 shows the rise in accidents on site outstripping growth in the firm’s activity. Unit completions rose at only 1.1% on 2017.
The company said: “We remain fully committed to the highest standards of health and safety on our sites. In the year, our reportable injury incidence rate has increased with 462 reportable incidents per 100,000 employees (2017: 379). We have already undertaken a review into factors that have contributed to this increase and will be working with our management teams to drive improvements in the prevention of injuries.”
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Increased activity levels in terms of new site openings and production volumes, combined with shortages of skilled workers, has contributed to the increase in accidents, Barratt said.
The house builder also provided an update on the status of projects where combustible cladding, similar to that used on the Grenfell Tower, may have been used. It has made a £4m provision for remedial work on one project, thought to be in Croydon.
Barratt said: “The group has undertaken a review of all of its current and legacy buildings where it has used cladding. Approved Inspectors signed off all of our buildings, including the cladding used, as compliant with the relevant Building Regulations during construction and on completion. While we are satisfied that we currently have no liability in respect of cladding, we have made a £4m provision for the work we have undertaken to carry out at one site to remove and replace cladding.”
Barratt posted a good year overall with an increased operating margin of 17.7% and profit before tax up by 9.2% to £835.5m, on a revenue rise of 4.8% to £4.9bn.
The number of completions for the year stands at 17,579 (17,395 to June 2017) and the business has a strong net cash value of £791.3m (£723.7m) on its balance sheet and forward sales of just over £3bn.
Volumes have increased by around 28% over the past five years and latest results show an 11% rise in orders for the coming year.
“Our continued focus on operating efficiencies and margin initiatives is starting to deliver and we have today announced new medium-term operational targets reflecting our confidence in the business going forward. The Group starts the new financial year in a good position with a strong balance sheet, healthy forward sales and robust consumer demand supported by a positive mortgage environment,” said chief executive David Thomas.
Barratt has set a medium-term target of 3-5% volume growth per annum and a minimum return on capital employed rate of 25%.
