Barratt Developments signs £400m debt facility, lays off 1,200

UK housing group, Barratt Development said that it had strengthened its financial structure with a new £400mln (EUR 502mln) debt facility in a trading update on Thursday. However, the company also announced that it is to lay off around 1,200 in a cost cutting bid to cope with the current market conditions.

Mark Clare, group chief executive said, 'In terms of housing volumes, margins and debt, we have delivered a satisfactory performance in an intensely difficult market. By enhancing our sales capability, reducing our costs, and agreeing a new financial package, we have now substantially improved our competitive position and are better placed to deal with what will be a very challenging period ahead.'

As a result the board decided that no final dividend for 2007-8 will be paid. The total dividend paid for the year ended 30 June 2008 will therefore be 12.23 pence per share, being the interim dividend paid in May.

Although the company said it had delivered in excess of £33mln of cost savings from the integration of Wilson Bowden during the period, it has introduced a cost reduction programme. The company expects to target a total of £40mln of annualised cost savings in 2008-09, with £20mln achieved in 2007-08. It will achieve this by closing two divisions, merging a further eight divisions into four and by reducing costs across the organisation with the anticipated loss of approximately 1,200 jobs throughout 2008-09.