Housebuilder Barratt Developments has revealed it is in the process of furloughing around 85% of its employees in the face of COVID-19
Barratt Developments confirmed it would furlough 85% of its staff, along with a number of other measures in an update this morning (16 April).
In the statement, the company said: “We are in the process of furloughing around 85% of our employees. We will pay furloughed employees their normal pay while they are furloughed until at least the end of May 2020.
“To reflect the ongoing focus on preserving cash within the business, as agreed with the remuneration committee, all executive directors, the wider executive and regional managing director team, the chairman and the non-executive directors have agreed to a voluntary 20% reduction in base salary and fees, effective from April 2020, until such time as the group is able to restart work on site.
“In addition, they have also agreed to waive any salary or fee increase for FY21.”
Further mitigating actions include:
- Suspending all land buying activity
- Ceasing all recruitment activity
- Postponing all non-essential capital expenditure
- Actively managing cash flows whilst ensuring that we are paying our suppliers and subcontractors on time
- Cancelling the interim dividend of 9.8 pence per share (c. £100m), which was due to be paid on 11 May 2020.
Barratt Developments added it would “continue to assess further cost-saving opportunities available to us as the situation develops, whilst balancing the long-term requirements of our business”.
The group said it continues to be financially strong, with a well-capitalised balance sheet and a robust cash and liquidity position.
It added: “Our experienced board remains focused on taking the right actions and planning for the future, so that when appropriate to do so, we can re-start our sales centres, construction sites and offices safely and are well-placed to continue to deliver the high quality homes the country needs.”
