Final Results for the year ended 30 June 2023

BARRATT DEVELOPMENTS PLC

Annual Results Announcement for the year ended 30 June 2023

Strong performance, well positioned for an uncertain trading backdrop in FY24

Commenting on the full year results David Thomas, Chief Executive of Barratt Developments PLC said:

“We have delivered a strong operational performance in a challenging operating environment. Customers continue to face cost of living and mortgage affordability challenges, and new developments are increasingly constrained by an ineffective planning system. Today’s results reflect the hard work and dedication of our teams and the decisive actions we have taken as a business to respond to market conditions.

Whilst we expect that the backdrop will continue to be difficult over the coming months, we are a resilient business with a strong balance sheet and an experienced management team. We remain committed to building the communities that our customers want to live in – delivering high-quality, sustainable homes at competitive prices to help address the country’s housing crisis and drive long term, sustainable growth for our business.”

£m unless otherwise stated1,2	Year ended 30 June 2023	Year ended 30 June 2022	Change
Total completions (homes)3	17,206	17,908	(3.9%)
Revenue	5,321.4	5,267.9	1.0%
Alternative performance measures:4
Adjusted gross profit	1,130.4	1,308.1	(13.6%)
Adjusted profit before tax	884.3	1,054.8	(16.2%)
Adjusted gross margin	21.2%	24.8%	(360 bps)
Adjusted operating margin	16.2%	20.0%	(380 bps)
Adjusted basic earnings per share (pence)	67.3	83.0	(18.9%)
Statutory basis:
Gross profit	974.9	899.9	8.3%
Profit before tax	705.1	642.3	9.8%
Gross margin	18.3%	17.1%	120 bps
Operating margin	13.3%	12.3%	100 bps
Basic earnings per share (pence)	53.2	50.6	5.1%
ROCE	22.2%	30.0%	(780 bps)
Net cash	1,069.4	1,138.6	(69.2)
Total ordinary dividend per share (pence)	33.7	36.9	(8.7%)
Tangible net asset value per share (pence)	467	447	4.5%

Highlights

• Strong operational performance delivering 17,206³ (FY22: 17,908) total home completions, a decline of 3.9% year on year reflecting the market slowdown experienced from September 2022.
• Industry leadership in build quality, customer service and sustainability maintained through:
  • 19^th consecutive year of achieving more NHBC Pride in the Job Awards than any other housebuilder;
  • 14^th consecutive year of receiving the maximum HBF 5 Star customer satisfaction rating; and
  • Awarded membership of CDP’s Climate Change A List for Leadership, one of fewer than 300 companies globally.
• Adjusted gross profit of £1,130.4m (FY22: £1,308.1m) and adjusted gross margin at 21.2% (FY22: 24.8%), 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.
• Adjusted profit before tax of £884.3m (FY22: £1,054.8m) in line with market expectations⁵.
• Adjusted items relating to costs associated with legacy properties of £179.2m (FY22: £412.5m), which resulted in reported profit before tax of £705.1m (FY22: £642.3m).
• Strong balance sheet with net cash at 30 June 2023 of £1,069.4m (30 June 2022: £1,138.6m), after dividend payments of £360m and completion of £200m share buyback.
• ROCE declines to 22.2% (FY22: 30.0%) reflecting the decline in profitability in the year.
• Final ordinary dividend per share of 23.5p (FY22: 25.7p) which, together with the interim dividend of 10.2p (FY22: 11.2p), results in total ordinary dividend for the financial year of 33.7p (FY22: 36.9p).
• In line with our stated dividend policy, ordinary dividend cover will be 1.75 times for FY24. Given current market uncertainty, the Board has decided to retain surplus capital to maintain the resilience of the Group’s balance sheet.
• The focus for FY24 will be driving revenue through targeted use of incentives, sales to the private rental and social housing sectors, whilst continuing to manage build activity and controlling the cost base. This will be supported by a highly selective approach to land buying whilst continuing to lead the industry on sustainability.

Current trading

Whilst there remains a clear need for increased housebuilding in the UK, short-term demand has been impacted by mortgage affordability challenges.

We entered FY24 with a solid forward sales position and as at 27 August 2023 we were 49%6 forward sold with respect to private wholly owned home completions for FY24 (28 August 2022 for FY23: 62%⁷).

The net private reservation rate per active outlet per average week from 1 July 2023 through to 27 August 2023 was 0.42, (FY23: 0.60), including a contribution of 0.02 (FY23: 0.05) from the private rental sector and additional sales to registered providers of social housing.

As outlined in our trading update of 13 July, based on current market conditions, we are targeting total home completions of between 13,250 and 14,250 in FY24.

1. Refer to Glossary for definition of key financial metrics.
2. Unless otherwise stated, all numbers quoted exclude JVs.
3. Including JVs in which the Group has an interest.
4. In addition to the Group using a variety of statutory performance measures, it also measures performance using alternative performance measures (APMs). Definitions of APMs and reconciliations to the equivalent statutory measures are detailed in the Glossary and Definitions. Net cash definition in Note 18.
5. Bloomberg consensus adjusted profit before tax was £882.0m at 5 September 2023.
6. Our forward sold position with respect to FY24 private home completions is based on the mid-point of wholly owned completions guidance at 13,100 (13,750 total completions less 650 JVs) and assumes c. 24% affordable home completion mix in FY24, broadly in line with FY23.
7. Our forward sold position with respect to FY23 is based on actual wholly owned private completions for the year (12,456 homes).

Note on forward looking statements:

Certain statements in this announcement may be forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Accordingly undue reliance should not be placed on forward looking statements. Unless otherwise required by applicable law, regulation or accounting standards, the Group does not undertake to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.

There will be a results meeting at the Chartered Accountants' Hall, 1 Moorgate Place, London, EC2R 6EA at 9.00am today.

A conference call and webcast will accompany the meeting starting at 9.00am. Details to register for the conference call are included below. We would advise calling in to the conference call at 8.45am to ensure you are registered ahead of the start of the meeting.

Please register using the link below for the conference call, you will receive an email with joining instructions and dialling in details:

https://brunswickgroup.zoom.us/webinar/register/WN_eNoWBK4iQJqHHoV8-pOPFA

The presentation along with Q&A will also be webcast live. Please register and access the webcast using the following link:

https://broadcaster-audience.mediaplatform.com/#/event/64ccee7b284de27bde92ca24

An archived version of the webcast will also be available on our website later this afternoon and further copies of this announcement can be downloaded from the Barratt Developments PLC corporate website at www.barrattdevelopments.co.uk or by request from the Company Secretary's office at: Barratt Developments PLC, Barratt House, Cartwright Way, Forest Business Park, Bardon Hill, Coalville, Leicestershire, LE67 1UF.

For further information, please contact:
Analyst / investor enquiries
Mike Scott, Chief Financial Officer	07881 327 748
John Messenger, Group Investor Relations Director	07867 201 763
Media enquiries
Tim Collins, Group Corporate Affairs Director	020 7299 4874
Brunswick
Jonathan Glass / Rosie Oddy	020 7404 5959

The Group's next scheduled announcement of financial information is the AGM trading update on 18 October 2023.

Barratt Developments PLC LEI: 2138006R85VEOF5YNK2

Chair’s statement

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 impact on climate change makes it imperative that we continually scrutinise and challenge the ways in which we operate, as well as the environmental 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.

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.

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.

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.

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.

Shareholder returns

The Board declared an interim dividend for FY23 of 10.2 pence per share (FY22: interim dividend 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 in 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

5 September 2023

Chief Executive’s review

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 our 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.

• 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 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 30 September 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.

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%).

Forward order book	27 August 2023		28 August 2022		Variance %
	£m	Homes	£m	Homes	£m	Homes
Private	1,527.6	4,440	2,421.5	6,467	(36.9%)	(31.3%)
Affordable	752.0	4,691	1,079.6	6,658	(30.3%)	(29.5%)
Wholly owned	2,279.6	9,131	3,501.1	13,125	(34.9%)	(30.4%)
JVs	157.7	477	307.8	933	(48.8%)	(48.9%)
Total	2,437.3	9,608	3,808.9	14,058	(36.0%)	(31.7%)

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.

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 & 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.

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.

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.

Competitions 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 on 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, foodbanks 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 31 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.

Net private reservation rate	H1	H2	FY
FY23	0.44	0.65	0.55
FY22	0.79	0.84	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 8 active JV sales outlets (FY22: 7). 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 9 JV outlets (30 June 2022: 9).

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 an 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.

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)	FY23	FY22	Change
Private	12,456	13,327	(6.5%)
Of which: PRS	258	36	616.7%
Affordable	3,922	3,835	2.3%
Wholly owned	16,378	17,162	(4.6%)
JV	828	746	11.0%
Total (including JVs)	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 relative to the limited, and apartment dominated, completions in FY22.

Affordable ASP increased by 4.9% to £167.2k (FY22: £159.4k), reflecting site mix and 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.

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 £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.