Barratt axes 1,200 jobs and takes £85m hit

Barratt Developments will axe 1,200 staff and take an £85m write-down hit in its full-year results.

The troubled housebuilder announced it will close two divisions, saving £40m – most of which will be delivered in 2008/09.

The cost of implementing changes is expected to be about £15m.

In an “intensely” difficult market, Barratt’s total completions in the year to 30 June 2008 rose 8.3% to 18,588 but fell 13.8% on a like-for-like basis.

Average private sales in the section half were down 42.9% on 12 months ago.

Social housing completions rose 33.6% to 3,785, representing 20.4% of total completions for the period.

Barratt said it had agreed a restructuring of covenants with banks and private placement note providers “as an appropriate, prudent response to current market conditions.”

Barratt chief executive Mark Clare 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 positions and are better placed to deal with what will be a very challenging period ahead.”