Berkeley Group Holdings plc · LSE:BKG

Berkeley — The Berkeley Group Holdings — H1 2017/18 Earnings Presentation

31 slides from Berkeley's earnings presentation, Oct 31, 2017

  1. Slide 1: Half Year Results Presentation

    The Berkeley Group Holdings plc Half Year Results Presentation Six months ended 31st October 2017

  2. Slide 2: Format of Presentation

    Interim Results Presentation Format of Presentation Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Fulham Reach

  3. Slide 3: Tony Pidgley CBE, Chairman

    B Berkeley foxy Group Tony Pidgley CBE Chairman Berkley | StEdward StGeorge | StJames StWillam | StJoseph me

  4. Slide 4: Richard Stearn, Finance Director

    Richard Stearn Finance Director

  5. Slide 5: Finance Review Introduction

    Finance Review Introduction - Summary of performance - Summary of financial position - Future potential share dilution - Homes completed and Average selling price - Income statement - Abridged cash flow - Abridged balance sheet - Inventories - Creditors - Financing - Land holdings

  6. Slide 6: Summary of Performance

    Finance Review Summary of Performance Six months ended 31 Oct 2017 31 Oct 2016 Change (£) Change (%) Profit before tax £533.3m £392.7m +£140.6m +35.8% EPS – Basic 316.6p 225.7p +90.9p +40.3% EPS – Diluted 308.2p 209.6p +98.6p +47.0% Operating Margin 31.8% 27.7% +4.1% Return on equity * 46.9% 41.5% *

  7. Slide 7: Summary of Financial Position

    Finance Review Summary of Financial Position Oct 2017 April 2017 Change (£) Change (%) Balance Sheet Shareholders’ funds £2,408.6m £2,136.9m +£271.7m +12.7% Closing net cash (£632.8m) (£285.5m) -£347.3m Capital Employed £1,775.8m £1,851.4m -£75.6m -4.1% Net asset value per share 1,785p 1,556p +229p

  8. Slide 8: Future Potential Share Dilution

    Finance Review Future Potential Share Dilution Vesting No. (million) Approved by shareholders Date Shares in issue at 1 May 2017 excl. Treasury/EBT shares 137.3 Share buy-backs (2.7) September 2011 February 2016 2011 LTIP vesting – tranche 2 September 2017 0.4 Shares in issue at 1 Nov 2017 excl. Tre

  9. Slide 9: Homes Completed and ASP - Group

    Finance Review Homes Completed and ASP - Group Berkeley Group - Plots 3,742 3,776 3,905 3,355 2,294 2,091 2,117 1,983 2,076 1,685 1,829 1,448 1,372 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 2013/14 2014/15 2015/16 2016/17 2017/18 Berkeley Group - Average Selling Price £697k £719k £649k £655k £675k £539

  10. Slide 10: Homes Completed and ASP – Joint Ventures

    Finance Review Homes Completed and ASP – Joint Ventures St Edward - Units 240 251 230 203 190 144 162 155 132 71 86 78 61 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 2013/14 2014/15 2015/16 2016/17 2017/18 St Edward - Average Selling Price £1,464k £1,484k £1,520k £1,380k £1,329k £1,321k £1,235k £1,139k £

  11. Slide 11: Income Statement

    Finance Review Income Statement Six months ended Oct 2017 Oct 2016 Change Change £m £m £m % Revenue 1,607.7 1,413.4 +194.3 +13.8% Gross profit 590.4 36.7% 503.6 35.6% +86.8 +17.2% Operating expenses (79.6) 5.0% (112.2) 7.9% +32.6 -29.1% Operating profit 510.8 31.8% 391.4 27.7% +119.4 +30.5% Net fina

  12. Slide 12: Abridged Cash Flow

    Finance Review Abridged Cash Flow Six months ended October 2017 October 2016 £m £m Profit before tax 533.3 392.7 Decrease / (increase) in inventory 271.5 (90.1) Decrease in customer deposits (91.9) (69.0) Other working capital movements (72.2) 40.3 Net reduction / (investment) in working capital 107

  13. Slide 13: Abridged Balance Sheet

    Finance Review Abridged Balance Sheet October 2017 Movements April 2017 £m £m £m Non-current assets - Intangible assets 17.2 - 17.2 - Investment in JVs 165.1 +30.1 135.0 - Deferred tax assets 52.1 -7.3 59.4 - Property, plant and equipment 25.7 +2.9 22.8 Total non-current assets 260.1 +25.7 234.4 Inv

  14. Slide 14: Inventories

    Finance Review Inventories October 2017 Movements April 2017 £m £m £m Land not under development 397.3 -16.8 414.1 Work in progress: Land cost 765.4 -153.6 919.0 1,162.7 -170.4 1,333.1 Work in progress: Build cost 1,945.1 -117.6 2,062.7 Completed units 104.1 +16.5 87.6 Inventories 3,211.9 -271.5 3,4

  15. Slide 15: Creditors

    Finance Review Creditors October 2017 Movements April 2017 £m £m £m Trade creditors and accruals 681.2 -79.4 760.6 Provision for liabilities 93.2 -6.7 99.9 Deposits and on account receipts 883.0 -91.9 974.9 Land creditors 117.0 -25.9 142.9 Current tax liability 107.5 -10.1 117.6 Total liabilities be

  16. Slide 16: Financing

    Finance Review Financing Banking Facilities Amount: £750 million Term: £300 million (drawn at 31 October 2017) RCF: £450 million (undrawn at 31 October 2017) Maturity: November 2022 (with one remaining optional extension to November 2023) Margin, utilisation and commitment fees: Market rates

  17. Slide 17: Land Holdings

    Finance Review Land Holdings October 2017 Variance April 2017 Owned 32,916 -855 33,771 Contracted 12,895 +315 12,580 Plots 45,811 -540 46,351 Sales value £21.3bn -£0.5bn £21.8bn Average selling price (ASP)* £515k -£5k £520k Average plot cost £61k -£1k £62k Land cost % 13.2% - 13.2% Gross margin £6.0

  18. Slide 18: Rob Perrins, Chief Executive

    B Berkeley foxy Group Rob Perrins Chief Executive Berkley | StEdward StGeorge | StJames StWillam | StJoseph me

  19. Slide 19: Strategic Review Introduction

    Strategic Review Introduction - Performance highlights - Macro back-drop and market fundamentals - The Market - Land and Build Investment - Joint ventures - Long term strategic plan - Guidance

  20. Slide 20: Performance Highlights

    Strategic Review Performance Highlights Highlights  Pre-tax profit up 36% to £533 million  Net assets of £2.4 billion and net cash of £633 million  £347 million of cash generated in the period after shareholder returns of £163 million  Cash due on forward sales of £2.45 billion  Future gross ma

  21. Slide 21: Macro back-drop and market fundamentals

    Strategic Review Macro back-drop and market fundamentals Global Political and Economic Instability UK Political Backdrop  Unstable political environment and uncertain economic outlook  Uncertainty impacts confidence and sentiment which is essential to a thriving housing market and leads to lower i

  22. Slide 22: The Market

    Strategic Review The Market Sales  Three new development launches in the period have gone well (White City, Eldridge Park in Wokingham and St William’s Elmswater in Rickmansworth)  Annualised run rate for private reservations up more than 20% on last year and 10% below 2015/16, in line with busine

  23. Slide 23: Land and Build Investment - Inventories

    Strategic Review Land and Build Investment - Inventories Inventories £4,000m £3,483m £3,500m £3,256m £3,212m £3,000m £2,654m £2,481m £2,500m £2,067m £1,852m £2,000m £1,614m £1,500m £1,254m £1,115m £1,000m £500m - 30 Apr 09 30 Apr 10 30 Apr 11 30 Apr 12 30 Apr 13 30 Apr 14 30 Apr 15 30 Apr 16 30 Apr

  24. Slide 24: Land and Build Investment – Delivery

    Strategic Review Land and Build Investment – Delivery London South Total Delivery of Developments: In construction 42 75% 18 50% 60 65% Not yet in construction 14 25% 18 50% 32 35% Total developments 56 100% 36 100% 92 100% Proportion with planning (by sites) 80% 75% 78% Number of plots 37,547 82% 8

  25. Slide 25: Land and build investment: Sites in London

    Land and build investment Sites in London {57 Berkeley Group Berkeley | StEdward StGeorge StJames LONDON UNDER CONSTRUCTION © 190 Strand © 250 City Road, Cty of London © 375 Kensington High Street Kensington Row 8 Royal Warwick Square © Abell & Cleland, Westminster © Battersea Reach Beaufort Park, H

  26. Slide 26: Sites in the South of England

    Strategic Review Land and Build Investment – Sites in the South of England

  27. Slide 27: Joint Ventures: St Edward

    Strategic Review Joint Ventures St Edward  Joint venture with Prudential  Six developments in the land holdings (2,019 units) Developments:  190 Strand  Green Park, Reading (opposite)  Kensington High Street, Kensington Row & Royal Warwick Square  Stanmore Place  Millbank  Wallingford, Oxfor

  28. Slide 28: Joint Ventures: St William

    Strategic Review Joint Ventures St William  Joint venture with National Grid  Twelve developments in the land holdings (6,494 plots) Developments:  Prince of Wales Drive, Battersea (opposite)  Elmswater, Rickmansworth  Fairwood Place, Borehamwood  Ascot  Fulham  Highbury  Hemel Hempstead 

  29. Slide 29: Long Term Strategic Plan

    Strategic Review Long Term Strategic Plan Milestone Paid or announced Outstanding Total £/share £’m £/share £’m £/share £’m To 30 September 2017 8.34 1,132.6 - - 8.34 1,132.6 By 31 March 2018 1.00 139.2 - - 1.00 139.2 Returns - announced 9.34 1,271.8 - - 9.34 1,271.8 By 30 September 2018 - - 1.00 13

  30. Slide 30: Guidance

    Strategic Review Guidance Performance Guidance  £8.34 per share returned to date  Remaining £7.00 per share converted to absolute value and to be made through mix of dividends and share buy-backs  £1.00 per share (£139.2m) announced to be returned Shareholder Returns by 31 March 2018  £47.5 mill

  31. Slide 31: Questions

    Questions Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions One Tower Bridge

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