Final Results for the year ended 30 June 2012

Immediate release

Barratt Developments PLC Annual Results Announcement for the year ended 30 June 2012

Pre-tax profits up 159% and net debt almost halved.

Well positioned for future growth in stable housing market.

12 September 2012

Barratt Developments PLC (the “Company”) is today issuing its final results for the Company and its subsidiaries (the “Group”) for the year ended 30 June 2012.

Mark Clare, Group Chief Executive, commented:

“The year has seen a rapidly improving performance across the Group which shows that our strategy is delivering, with profits up 159% and an almost halving of our net debt. In the current financial year we expect to make further good progress, with more than half of completions forecast to be delivered from our more recently acquired higher margin land.”

Highlights

• Group revenues up by 14.1% for the full year to £2,323.4m, with completions¹ of 12,637 units (2011: 11,078)
• Average selling prices¹ increased to £180,500 (2011: £178,300) with private average selling prices¹ increasing by 1.5% to £201,800 (2011: £198,900)
• Group operating profit before exceptional items for the full year up by 41.6% to £191.1m (2011:

£135.0m)²

• Operating margin³ increased to 9.5% in the second half and to 8.2% for the full year, up from 6.6% in the prior full year
• Full year profit before tax and exceptional items increased by 159.3% to £110.7m (2011: £42.7m)
• Net debt at 30 June 2012 almost halved to £167.7m
• Net tangible asset value per share £2.13 (2011: £2.11)⁴
• In the last nine weeks, average net private reservations per week per active site¹ are in line with same period last year at 0.50 (2011: 0.50)
• Private forward sales¹ up 15.3% to £609.6m as at 9 September 2012
• There will be no dividend for the year to 30 June 2012 but the Board expects to recommend to shareholders a final dividend in respect of the year to 30 June 2013

¹ Excluding joint ventures

² Profit from operations was £191.1m (2011: £135.0m) before operating exceptional items of £nil (2011: £7.7m)

³ Operating margin is profit from operations before operating exceptional costs divided by Group revenue

⁴ Net tangible asset value per share calculated as net assets, less intangible assets and goodwill, divided by number of allotted and issued ordinary shares

Certain statements in this document 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.

There will be an analyst and investor meeting at 8:30am today at UBS, Ground Floor Conference Centre, 1 Finsbury Avenue, London, EC2M 2PP. The presentation will be broadcast live on the Barratt Developments corporate website, www.barrattdevelopments.co.uk, from 8:30am today. A playback facility will be available shortly after the presentation has finished.

The Annual Results Announcement and the presentation slides will be available on the Barratt Developments corporate website, www.barrattdevelopments.co.uk, from 8:30am today.

Further copies of this announcement can be obtained from the Company Secretary‟s office at: Barratt

Developments PLC, Barratt House, Cartwright Leicestershire, LE67 1UF.	Way, Forest Business Park, Bardon Hill, Coalville,
For further information please contact:
Barratt Developments PLC David Thomas, Group Finance Director	020 7299 4896
Analyst/investor enquiries Susie Bell, Head of Investor Relations	020 7299 4880
Media enquiries Patrick Law, Group Corporate Affairs Director	020 7299 4892
Maitland Liz Morley / James Devas	020 7379 5151

Chairman’s statement

This has been a year of rapid progress and we have again delivered on our key objectives of increasing profitability and reducing overall indebtedness. Profit before tax and exceptional items increased by 159.3% to £110.7m and net debt reduced by nearly 50% to £167.7m. This has been achieved against a challenging backdrop of economic and consumer uncertainty, coupled with continuing restrictions on the availability of adequate mortgage finance, particularly with higher loan to value („LTV‟) products.

The market

The UK housing market has remained broadly stable, although there were regional variations in demand and pricing. Whilst the country‟s housing needs continue to grow, the number of new homes being built will only see a sustainable increase with a step change in mortgage lending.

Some progress was made during the year in terms of the availability of finance for our customers, with higher LTV in the new build sector seeing a gradual improvement. The launch in July 2011 of the Government- backed FirstBuy shared equity scheme has helped to stimulate improved demand from first-time buyers. The launch, in March 2012, of the Government-backed NewBuy mortgage indemnity scheme should ensure that this progress continues by effectively increasing to 95% the LTV available to buyers of new homes.

Our performance

During the year we made significant financial and operational improvements across every aspect of our business. We have further increased our capability and our efficiency. We are financially stronger and the quality of our land bank has improved. The objectives of rebuilding profitability and reducing overall indebtedness, independent of further market improvement, are progressing well.

Ensuring that we achieve the best price for the homes that we build remains a priority and is dependent on getting the location, product mix, design, branding, quality, marketing of our homes and customer service absolutely right. We have continued to invest in all of these areas and our industry leadership in the way our sites are managed and the customer ratings we achieve have been externally acknowledged. For the third consecutive year the Group has been awarded Home Builder Federation („HBF‟) 5-Star status. This is the highest achievable level in terms of customer satisfaction and recommendation. In addition, under the National House-Building Council („NHBC‟) „Pride in the Job‟ scheme our site managers have won more quality awards than any other housebuilder for the eighth consecutive year.

Our new house types are even more in tune with customer preference and our sales teams are supported by an enhanced online sales and marketing capability. We remain committed to the principles of getting it right first time, enhancing the customer experience and reducing the cost of doing business.

Investing in land for higher returns

The primary driver of the Group‟s profit growth was the increased proportion of completions from newer, higher margin land. During the period 4,381 completions (35%) were on newer, higher margin land and in 2012/13 we expect this to increase to just over 50% of completions. The land we have bought since re- entering the land market in 2009 currently meets or exceeds the minimum hurdle rates set on acquisition – namely, a 20% gross margin and a 25% return on capital based on operating profit.

Dividend policy

No dividend will be paid in respect of the 2011/12 financial year. However, the Board recognises the importance of both capital growth and dividend income to our existing and potential shareholders, and is committed to re-introducing the payment of dividends. Assuming a continuing stable housing market, the Board expects to recommence dividend payments, with a conservative dividend cover, by proposing a final dividend in respect of the financial year to 30 June 2013, payable in the final quarter of 2013. The Board intends to adopt a progressive dividend policy as profitability grows, with the aim, over time, of achieving a

target dividend cover of around three times.

In addition, we remain committed to operating with an appropriate land bank and continuing to reduce overall indebtedness.

The Board

In April 2012, Richard Akers joined us as a Non-Executive Director. He has broad business experience and a deep knowledge of the property market from a commercial and retail perspective, complementing the existing skills of the Board.

In July 2012, Clive Fenton resigned as a Director of the Company and we appointed Steven Boyes to a new role of Chief Operating Officer responsible for housebuilding operations. Steven, who joined the Board in 2001, is one of the most experienced housebuilding executives in the UK.

In July 2012, we also announced that Bob Davies, after eight years of service, will step down as a Non- Executive Director at the Annual General Meeting („AGM‟) in November this year. Subject to their election and re-election at the AGM, Mark Rolfe will take over as Senior Independent Director and Richard Akers will take over as Chairman of the Remuneration Committee. I would like to thank Bob for the outstanding contribution that he has made to the Group during a period of immense change.

Our employees

The rapid progress we have made this year, in a market that remains challenging, is a great credit to the management of the Group and its employees. There is a wealth of experience within the leadership team, ably supported by our employees across the country. On behalf of the Board I would like to thank them for their commitment and outstanding contribution to the Group‟s performance.

The future

Inevitably there is ongoing economic uncertainty in the UK market and as such we do not expect to see significant growth in customer demand over the next year. However, the strategy we are pursuing is capable of delivering significantly enhanced returns without an improvement in market conditions.

We operate throughout Great Britain and across a broad spectrum of the market. We are able to deliver a wide range of housing projects from traditional housing to complex high-rise apartment buildings, such as those we build in London. We believe that this capability, coupled with our focus on improving the efficiency of everything we do and having the best people to deal with an increasingly complex regulatory and planning environment, offer us a significant competitive advantage.

Bob Lawson

Chairman

Group Chief Executive’s review

With a rapidly improving performance across the Group we have made substantial progress in achieving our objectives of rebuilding profitability and reducing overall indebtedness.

In the year, we have achieved a 14.1% increase in revenues, a 1.6% increase in operating margins before operating exceptional costs, a 159.3% increase in pre-exceptional pre-tax profits and we have almost halved our net debt. Despite continued uncertainty surrounding the wider UK market and constrained levels of mortgage finance, we expect to make further good progress in 2012/13 with more than half of our completions forecast to be delivered from recently acquired higher margin land.

Performance

Group revenues for the year were up 14.1% to £2,323.4m (2011: £2,035.4m), with completions (excluding joint ventures) up 14.1% to 12,637 units. We have enjoyed more stable trading conditions throughout the year and were able to deliver a strong start to our second half following a small improvement in mortgage lending.

We have seen higher sales rates as an increasing proportion of completions are being delivered from our more recently acquired sites. As at 30 June 2012, we had a substantially strengthened forward sales position, with private forward sales (excluding joint ventures) up 35.5% to £366.9m (2011: £270.8m).

Profit from operations before operating exceptional items increased by 41.6% from £135.0m to £191.1m, with a significant improvement in operating margin before operating exceptional items to 8.2% (2011: 6.6%) for the full year and to 9.5% (2011: 7.9%) in the second half. Profit before tax and exceptional items increased by 159.3% to £110.7m (2011: £42.7m).

In the year we reported exceptional items of £10.7m, relating to the acquisition of a partner‟s 50% interest in a residential development, consequently profit before tax after exceptional items was £100.0m (2011: loss

£11.5m).

Our improved operational efficiency, continued tight control over the timing of land expenditure and working capital commitments, and receipts from land sales enabled us to reduce net debt to £167.7m as at 30 June 2012 (2011: £322.6m).

Our objectives

Our strategic objectives remain clear – to rebuild profitability and reduce overall indebtedness – and we have made considerable progress in both of these areas during the year.

We have set out three priorities to enable us to rebuild profitability:

• optimise selling prices;
• improve operational efficiency; and
• deliver targeted land buying.

Optimise selling prices

We have embedded disciplines within the organisation to ensure we continue to focus on securing the best price for every sale - thereby maximising value rather than just driving volumes.

Average selling prices increased to £180,500 (2011: £178,300), with private average selling prices increasing by 1.5% to £201,800 (2011: £198,900), driven by a small positive change in mix. Overall, underlying prices have remained broadly stable, with continued variations by region. There is, in particular, a greater robustness in pricing in London and the South East.

During the year we had higher sales rates across the Group with average net private reservations per active site per week increasing to 0.52 (2011: 0.44). Sales rates have been more consistent during the year reflecting a greater stability in market conditions than we have seen for some time. We saw a particularly strong start to the 2012 spring selling season and took advantage of this to deliver additional completions from our older, lower margin land.

Our sales strategy is focused on offering our customers the highest quality products and service. For the third year running we have achieved the HBF‟s 5-Star status, meaning that more than 90% of our customers were satisfied with the service they received. Our site managers have won more NHBC „Pride in the Job‟ awards than any other housebuilder for the eighth year running.

Both the Barratt and David Wilson house ranges have been redesigned and updated following customer research to be even more attractive to potential buyers. We now have the new house types on 125 of our developments.

We continue to focus on our predominantly web-based marketing strategy with our Barratt Homes and David Wilson Homes websites receiving on average around 160,000 visits per week. Our online presence has been substantially enhanced through the launch of our new look websites, which give consumers significantly more information about individual properties and the locality, as well as additional services such as mortgage calculators and school finders.

Improve operational efficiency

Driving operational efficiency has remained a significant focus for the Group. We continue to retain a firm control on costs, in particular capitalising on our scale and technical resources to maximise efficiency.

Our supply contracts for materials continue to be reviewed and renegotiated as appropriate, and we purchase an increasingly significant proportion of our materials centrally.

We continue to review our supply chain to create efficiencies by introducing new suppliers and altering build specifications where appropriate. Standard house-type costs are benchmarked across the Group continuously to ensure the lowest cost is achieved whilst maintaining the quality of our homes.

Going forward, it is likely that some pressure will continue to be felt as raw material prices rise due to underlying commodity price increases. However, we will seek to mitigate this by continuing to drive further efficiency savings and reductions in operating costs across the business.

The Group promotes and shares best practice in the build process across all divisions and, to date, significant cost savings have been identified through this work. Cost savings have also been identified by agreeing changes to processes and introducing new technologies which improve our efficiency. The benefits of these savings will continue to be realised in the next few years.

Targeted land buying

Our aim is to optimise the value and cash generation from our existing land holdings, whilst bringing more recently acquired higher margin land into production as quickly as possible.

We have a disciplined and targeted land buying strategy that has clearly defined risk-related hurdle rates. During the year, we agreed terms on £578.1m of land purchases, totaling 12,085 plots. We have maintained our discipline of not chasing prices up and have continued to adopt an acquisition strategy that is not unduly concentrated on any specific geographic area. We have continued to see prices for land firming in the South East as other housebuilders target this area.

Total cash expenditure on land in the year was £397.4m (2011: £261.0m).

We favour deferred terms, with the objective of matching our revenue and costs as closely as possible to maximise returns. Land creditors as at 30 June 2012 were £726.1m (2011: £700.7m).

Land creditors due within the next 12 months total £368.1m (2011: £349.1m), with £358.0m (2011: £351.6m) due thereafter, and in overall terms these equate to 35% of our owned land bank. In the period to 30 June 2013, we expect land creditors to remain fairly constant as a proportion of the land bank, dependent upon the satisfaction of contractual conditions, for example, the grant of planning permission.

We are making good progress in moving our land bank from older to newer land, with impaired plots falling to 6,666 as at 30 June 2012 (2011: 10,292), representing 12% (2011: 17%) of the total owned and conditional land bank by plots. We expect impaired plots to reduce to around 4,500 by 30 June 2013. During the year we sold parcels of impaired land, where it made economic sense to do so, incurring an operating loss. We will continue to review potential land sales on a limited number of sites where we consider that a sale would realise a greater net present value than development of the site.

In the year, more than a third of completions were from more recently acquired land and we continue to expect this proportion to increase to just above 50% in 2012/13 and around two-thirds in 2013/14. This newer land continues to perform in line with, or above, the minimum hurdle rates set on acquisition, namely a 20% gross margin and a 25% return on capital based on operating profit.

We have detailed planning consents for 96% of expected completions for 2012/13, and outline consent on a further 2%.

We have targeted a shorter land bank to improve capital efficiency and, as at 30 June 2012, the Group‟s owned land bank totalled 43,897 plots (2011: 47,917) with an additional 10,312 plots (2011: 12,166 plots) under conditional contracts, giving a total of 54,209 plots (2011: 60,083 plots). This equates to approximately 4.3 years (2011: 4.8 years) of owned and controlled land based on 2011/12 completion volumes. Over the next couple of years, we expect to maintain our owned and unconditional land bank, when seen relative to prior year completion volumes, at around three-and-a-half years‟ supply, and the conditional land bank at around one year‟s supply. The land bank owned by Group joint ventures is 1,120 plots (2011: 1,625 plots).

In addition, we have c. 10,500 (2011: c. 11,400) acres of strategic land which are regularly reassessed until the necessary planning consents are obtained. This land is carried at the lower of cost and net realisable value, minimising our exposure to risk. In the year 701 plots were transferred from strategic land to our operational land bank. Strategic land is expected to produce an increasing proportion of our operational land in future years.

Reducing overall indebtedness

Our second key objective is reducing overall indebtedness.

At 30 June 2012 net debt had fallen to £167.7m, down from £322.6m at the same point in the previous year. The better than expected performance on reducing net debt was the result of a number of factors, including strong control of working capital, higher completion numbers, timing of land acquisitions, a lower investment per site and realising cash from other assets.

We were able to take advantage of stronger market conditions during the second half of the year to increase sales on impaired sites which generated additional cash. We also sold three sites acquired before 2008, which had subsequently been impaired, for total cash proceeds of £15.2m and a net operating loss charged to normal trading of £4.6m. We will continue to target additional sales to generate cash from impaired sites where we consider such a sale will realise a greater net present value than the development of it.

One of the key factors driving down debt has been the focus on smaller sites of, on average, 110 plots predominantly for houses rather than flats. The new sites have greater potential for standardised product and lower infrastructure expenditure, which result in a significantly lower average investment per site.

Sizing our business and target funding structure

We have reviewed the size and structure of our business taking account of current market conditions, including mortgage availability. We are confident that our current operational structure is 'fit for purpose' and that it is realistic, over time, to move to around 450 active sites (2012: average of 387 sites), which would result in around 15,000 completions including those from our joint ventures („JVs‟) (2012: 12,857).

In light of these plans for the business and our ongoing focus to reduce overall indebtedness, it is our intention that by 2015 we will achieve a target funding structure with no net debt at the financial year end date. Accordingly, our shareholders and land vendors (in the form of land creditors) will fund our land bank and long-term work in progress whereas our lending syndicate will fund our annual working capital requirements.

Government policy

The Government sees the acceleration of housebuilding as an important economic objective. The Government‟s housing strategy, published in autumn 2011, contained a number of initiatives, including proposals to improve the availability of mortgage finance via a mortgage indemnity scheme, to reform the planning regime and to release further public sector land.

The NewBuy mortgage indemnity scheme was subsequently introduced in March 2012 and has the potential to significantly improve the loan to value offered in the new build sector. However, whilst initial customer interest has been promising, we will not be able to assess the scheme‟s full potential until the autumn selling season. The mortgage interest rates associated with the product will also be an important factor in determining its impact.

During the year, FirstBuy, the Government-backed shared equity scheme, was an important tool and we completed 1,573 sales under the scheme. Our success in utilising the product meant that our initial allocation of £24.9m was increased by £13.8m during the year.

Shared equity remained an important selling tool given the continuing constraints on mortgage finance availability. During the year, 20.5% (2011: 22.0%) of total completions were supported by shared equity and, of this, around two-thirds used Government-backed schemes.

Although planning reform was introduced via the National Planning Policy Framework, it is unlikely that this will have a material short-term effect on the Group. We continue to move to a more „localist‟ approach in the way in which we seek to secure planning, with new procedures for earlier and fuller consultation with local residents. In the year, our scheme at Pickering Park in Yorkshire was the winner of the National Housebuilder Best Community Initiative Award.

The release of public land remains an important part of the Government‟s strategy to increase housing supply. This land is particularly attractive where it is brought to the market with the potential for „build now pay later‟ terms. Since 2009 we have secured more than 9,000 plots across 33 sites with a gross development value („GDV‟) of £1.7 billion either using the Developer Panel approach or via the OJEU.

In September 2012 the Government announced further measures to stimulate housebuilding, including additional FirstBuy funding, initiatives targeting the private rental market, reforms to planning and a reduction in the public funding requirement on mothballed developments.

The mortgage market

The availability and affordability of mortgages is a key catalyst for underlying housing demand. The level of mortgage approvals has reduced dramatically from the peak seen in 2007, however we have seen a stabilisation of mortgage lending over the past couple of years.

The mortgage market for new build housing continues to be dominated by a limited number of lenders. There have been some changes in their respective market shares during the year, primarily driven by the return of building societies and the changes in lending criteria from certain mortgage providers. Some lenders still provide a lower LTV on new build houses when compared with second-hand properties - there was typically a LTV of 90% on second-hand houses and 85% on new build houses. However, the majority of mortgage providers are now moving to a position of equality between the second-hand and new build markets. For example, Lloyds/Halifax increased their LTV to 90% on certain new build houses in early 2012 and such moves should continue to have a positive impact on mortgage availability for our customers.

The Government continues to stimulate the lending market and has launched the indemnity scheme NewBuy, which has underpinned the return of 95% mortgages in the new build sector. This is likely to be an important support for the mortgage market at higher levels of LTV, and provides the sector with an important advantage against the much larger, second-hand market.

Partnership and joint venture opportunities

During the year we have made progress in securing land through partnerships and JVs.

Barratt Partnerships, our specialist partnership team, working with our divisions, secured 1,676 units on five sites during the year through public sector partnerships with a GDV of c. £425m.

We have continued to bid for sites through the three area-based Development Partner Panels („DPPs‟) that were established in 2010 by the Homes and Communities Agency. In the year we have been successful on three bids, and we are actively involved in six ongoing bids.

We believe the Government‟s intention to increase the release of public land to build up to 100,000 new homes is a positive step. We have a proven track record of working with public sector partners and we are well positioned to capitalise on this initiative.

We continue to explore JV opportunities which allow us either to access projects that may not otherwise be available, or to reduce the investment required and improve the return on capital employed through construction management or marketing fees.

In prior years, we established a portfolio of JVs in London and the South East. Our JV partners include London & Quadrant („L&Q‟), one of the country‟s largest Housing Associations and the Wates Group, one of the UK‟s largest building and construction companies.

We have added to this portfolio with two more JVs:

• In March 2012, we signed a conditional contract to purchase a two-acre edge of the City site at Aldgate Place, London. The purchase of the site, which is being acquired in a 50:50 JV between the Group and British Land, is conditional on securing a revised planning consent for a residential-led mixed-use development.
• In July 2012, in partnership with L&Q, we acquired an 8.5 acre site at Fulham Wharf, London. The site, which is on the north bank of the Thames, has a GDV of £420m with planning permission for 463 riverside apartments and a new supermarket.

In the year, our JVs delivered 220 (2011: 93) completions and we anticipate that completions will increase further as our new JVs commence.

Commercial developments

Commercial development revenue was £36.6m (2011: £49.2m). This included revenue from the design and build of a foodstore in Warrington. The project was completed in April 2012. Operating profit from the commercial development business during the year was £1.5m (2011: £0.8m).

We were also successful during the year in completing an agreement for the redevelopment of part of Wokingham town centre. The redevelopment will be delivered in partnership with our housebuilding operations and is one of a number of schemes where our commercial and housebuild businesses are working together to deliver enhanced returns for the Group.

Quality, service and design

In 2010 and 2011 we updated both the Barratt and David Wilson Homes house ranges with internal layouts designed around modern living. The new designs continue to be well received by consumers and we continue to roll out both new ranges. Our commitment to delivering the highest quality product and excellent customer service has been confirmed by our customers both through our internal survey where 98% (2011: 98%) of customers would „Recommend us to a Friend‟ and our achievement of HBF 5-Star status for a third successive year. Our high quality housing products have assisted our ongoing drive to improve profitability, through achieving optimum selling prices and improving operational efficiency.

Health, safety and the environment

The safety of our employees, contractors, customers and the wider community is fundamental to the way in which we operate. During the period, our Injury Incidence Rate („IIR‟) was 511 (2011: 539) per 100,000 persons employed, which is a 5% decrease year-on-year. We remain committed to enhancing health and safety and have an Executive Health and Safety Committee, which reports to the Board, to drive further improvement.

We aim to secure a position as the lowest cost provider complying with the Code for Sustainable Homes (the

„Code‟). During the year we built 3,820 homes to Code Level 3 or above, of which 868 complied with Code Level 4. We are establishing improved and lower cost methods which allow us to continue to reduce the cost of compliance.

We are also progressing our development at Hanham Hall, the UK‟s first large-scale zero carbon housing development. We have completed the external renovation of the original listed Hanham Hall building and we are now well advanced with the full development of the site.

Outlook

The Group has made significant progress in both rebuilding profitability and reducing indebtedness during the year just ended. Despite continued uncertainty surrounding the outlook for the wider UK market and constrained levels of mortgage finance, the industry has enjoyed a period of relative stability.

Since 1 July 2012, our sales performance has been in line with normal seasonal trends. In the last nine weeks, net private reservations per active site per week have averaged 0.50 (2011: 0.50) and our private forward order book (excluding JVs) currently stands at £609.6m (2011: £528.7m).

Our strategy is capable of delivering significantly enhanced returns without any improvement in market conditions, and in the current financial year we expect to make further good progress, with over half of completions forecast to be delivered from our more recently acquired higher margin land.

Mark Clare

Group Chief Executive

Finance review

Performance metrics were as follows:

• Revenue was £2,323.4m (2011: £2,035.4m).
• Completions, excluding joint ventures, increased by 14.1% to 12,637 (2011: 11,078).
• Profit from operations before operating exceptional items increased by 41.6% to £191.1m (2011:

£135.0m).

• Profit from operations was £191.1m (2011: £127.3m).
• Operating margin before operating exceptional items was 8.2% (2011: 6.6%).
• Profit before tax was £100.0m (2011: loss of £11.5m).
• Adjusted basic earnings per share before exceptional items was 8.1p (2011: 2.7p).
• Basic earnings per share was 7.0p (2011: loss of 1.4p).

Segmental analysis

The Group‟s operations comprise two segments; housebuilding and commercial developments. These segments reflect the different product offerings and market risks facing the business.

The table below shows the respective contributions for these segments to the Group for the year:

	Housebuilding £m	Commercial development £m	Total £m
Revenue	2,286.8	36.6	2,323.4
Profit from operations	189.6	1.5	191.1

An analysis of the operational performance of these segments is provided within the Business review.

Exceptional items

The Group incurred exceptional items before tax in the year of £10.7m (2011: £54.2m). This comprised operating exceptional items of £nil (2011: £7.7m), exceptional costs arising from the acquisition of our partner‟s share in a former joint venture of £10.7m (2011: £nil) and exceptional finance costs of £nil (2011:

£46.5m).

Operating exceptional items

1. Restructuring costs

In the prior year, the Group adjusted its operations to suit the prevailing trading conditions, resulting in £7.7m of reorganisation and restructuring costs.

Impairment of land and work in progress

The Group has completed a site-by-site impairment review using valuations incorporating forecast sales rates and average selling prices that reflect both current and anticipated trading conditions. The impairment reviews include low single-digit house price and build cost inflation assumptions in future periods.

Since the overall gross margin achieved across the Group‟s developments were primarily in line with those incorporated into prior period impairment reviews no further exceptional impairment was required at 30 June 2012, although there were gross impairment reversals and charges of £31.5m (2011: £65.0m) due to variations in market conditions across housebuilding sites. Changes arising from normal trading, such as planning status, resulted in a net inventory impairment charge of £6.6m (2011: £5.4m) included within profit from operations.

During the year ended 30 June 2012, we have experienced variation in house price movements by region and should the actual house price movements for the current financial year differ from that expected in the impairment review then further impairments or reversals in impairments of the carrying value of our land bank may be required.

We recognise that the Group is not immune to future pricing trends in the wider housing market and we will continue to review the trading environment and our impairment assumptions during the year to 30 June 2013.