Vistry Group Plc · LSE:VTY
Vistry — Bovis Homes — Investor Day (May 2018)
62 slides from Vistry's investor day presentation, May 24, 2018
Slide 1: Capital Markets Day
Bovis Homes Capital Markets Day Wootton Park and Chicheley Hall 24 May 2018 www.bovishomesgroup.co.uk
Slide 2: Partnership Housing
Partnership Housing Keith Carnegie Executive Director, Central Services Phoenix Collection: The Apple www.bovishomesgroup.co.uk
Slide 3: Team and structure
Team and structure Keith Carnegie Strategic Land Richard Holland Robin Hambrook West Division East Division
Slide 4: Progress with affordable housing
Progress with affordable housing ‘First phase handed over today • Earlier exchange of contracts of our lovely new properties at - Reducing risk the Fire College site in Moreton - Improved cash management in Marsh. Site looks great and handovers all ran smoothly! - Stronger negotiating position Big t
Slide 5: Overview of our Partnerships Housing business
Overview of our Partnerships Housing business rr y No.24 e The Ch Phoenix rry The Cmhheouse • S106 ‘affordable’ delivery 2 bedroo e ble hom 2 Bedroom - Repeat and early business – Afforda cup’d driving cash into the business Bathroom - Understanding of local needs; cup’d 1 Bedroom w speak the local
Slide 6: S106 "affordable" land bank
S106 “affordable” land bank • c.27% of owned land bank • 20 - 25% of strategic land bank • S106 ‘partnership’ delivery - working with our Registered Partners - Early involvement to help the planning process - Understanding of local political priorities - Speak the local language and have contacts we
Slide 7: Future of "Affordable Housing"
Future of “Affordable Housing” • NPPF review – no more viability challenges • Labour Party Green Paper – risks associated; HOUS no more viability challenges THE M ING FOR A Labo A NY ur P arty G • Funding of Registered Providers and reen P aper need for them to be diversified businesses • Registered
Slide 8: Letwin review and quality and Brexit and HTB
Letwin review and quality and Brexit and HTB • Absorption rates • Political pressure – need for a mature business model • Consumer pressure – Help quality and millennials’ housing need to Buy • Uncertain economic outlook • Uncertain political outlook • Uncertain Help to Buy future • Need for alterna
Slide 9: Overview of our Partnerships Housing business
Overview of our Partnerships Housing business le No.25 p The Ap Phoenix • Strategic relationships with Registered Providers e ple The Apho le hom use 3 bedroom • Synergy with strategic land delivery b Afforda • Absorption rates – routes to market Bedroom 3 Bedroom 1 Bathroom • Alternative services –
Slide 10: Heylo relationship
Heylo relationship Home Reach Full ownership Help to Buy (Help to Buy 50%) Sales incentives (c.5%) Sales incentives (c.5%) Bulk discount (c.5%) Help to Buy Grant subsidy (c.15%) (20%) Heylo receipts (c.30%) Customer purchase (100%) Customer purchase Customer (80%) purchase (c.50%) (No incentives req
Slide 11: JV's in discussion
JV’s in discussion • Strategic relationships with Registered Providers are coming together -- On entry into option agreement -- On exercise of option -- On delivery of units (options)
Slide 12: East Division
East Division James Watson Division Managing Director Winchester Village, Winchester www.bovishomesgroup.co.uk
Slide 13: East Division structure
East Division structure Regional offices Northern Home Counties Milton Keynes Bishop's Stortford South East Southern Counties New Ash Green Basingstoke Kings Hill
Slide 14: East Division structure
East Division structure Regional offices Active developments Pipeline developments Milton Keynes Strategic sites Bishop's Stortford New Ash Green Basingstoke Kings Hill
Slide 15: East Division structure
East Division structure • New office locations for all three regions - NHC - Milton Keynes - completed - Southern Counties - Basingstoke - completed - South East – Kings Hill - June 2018 • Modern open plan offices - Resulted in improved morale and increase in productivity • 2018 - all regions delive
Slide 16: People – our most important asset
People – our most important asset • Staff engagement - Peakon surveys – regular employee feedback - High level of employee engagement • ‘Hands on’ leadership - Far greater hands on approach across all aspects of the operations - Weekly ICQ visits to review all elements on site, including quality of
Slide 17: People – our most important asset
People – our most important asset • Recruitment - Focused on recruiting the best people across all areas - Priority on construction, with attractive remuneration package in place to attract the best people - Seeing benefit - improved quality, better cost control, timeliness of delivery • Training -
Slide 18: Delivery of quality homes
Delivery of quality homes • Delivery of build on time and to the right standard - High quality construction staff - Reduction in RI scores - reduced from 0.35 in 2017 to 0.26 in 2018 to date - Occupation strategy driving build routes for both current and future years - ICQ visits undertaken by Board
Slide 19: Customer service
Customer service • Turnaround in Customer Service • Division trending at well above 80% HBF score - Southern Counties region - 5 star - Northern Homes Counties region - 4 star - South East region - 3 star • On going improvements to our Customer Service
Slide 20: East Division land bank
East Division land bank • Owned land bank - Fantastic position to deliver 2019 and 2020 plans - Current owned holding of 7,864 plots - 4 year supply - High quality strategic land holdings - Allowed division to focus on key areas for our open market land searches • 2019 land requirement - 95% of unit
Slide 21: Wellingborough
Wellingborough • Wellingborough key strategic asset for the group - Reduce exposure in single location and overall investment - Take off balance sheet - Talks advanced to divest asset into a JV - Land sales remain a key strategy for the Group and JV partners to return capital back into the project -
Slide 22: East Division priorities
East Division priorities • Quality and service • Land bank management • Conversion of strategic assets • Targeted strengthening of teams • Leadership training and development
Slide 23: West Division
West Division Earl Sibley Group Finance Director Mildenhall, Sherborne www.bovishomesgroup.co.uk
Slide 24: West Division structure
West Division structure Mercia Stafford Regional offices Coleshill West Midlands Bishops Cleeve Western South West Exeter
Slide 25: West Division structure
West Division structure Stafford Regional offices Coleshill Active developments Pipeline developments Bishops Cleeve Strategic sites • 2018 - all regions delivering c.550 homes which is seen as steady state business Exeter
Slide 26: Customer Service
Customer Service • Group currently trending as solid 4-star HBF home builder • Customer Experience Director - embedding the customer first ethos • Vast majority of employees received customer service training • Faster response times from our Customer Service teams • Investment in Customer Relationsh
Slide 27: Customer Service
Customer Service • Division trending at well above 80% HBF score - Western region - 5 star - South West region - 5 star - West Midlands region - 4 star - Mercia region - 3 star
Slide 28: Land buying
Land buying • Land bank evenly spread across our 7 regions • Over 96% of land secured for 2019 • Group has strong strategic land bank (20,776 plots across 52 sites) • Group is seeking to buy or convert from its strategic land bank, c.15-20 new sites this year • Increasing the land resource across th
Slide 29: West Division land bank
West Division land bank • Owned land bank - Current owned holding of 9,115 plots - 4.5 year supply - Expect to enter a JV at Sherford in 2018 • 2019 requirements - Seeking to acquire or convert around 10 -12 sites this year (3 achieved year to date) - 96% of units secured for 2019 delivery - 88% det
Slide 30: Balance sheet optimisation
Balance sheet optimisation • Specific achievements 2017 - West - 3 owned office sales - Disposal of 3 land holdings - incl. Gloucester and Filton - Smaller land holdings reviewed and sold - WIP improvements including stock and PX reduction • 2018 targets - West - 3 land disposals including out of op
Slide 31: Sherford
Sherford • 5,000 unit development to the east of Plymouth • Acquired site in 2010 as part of 3 way consortium agreement • Early phases under construction being occupied • In advance discussion to divest asset into JV to share c.1,400 plots • Heads of terms drafted • Sale into JV will allow: - recove
Slide 32: Margin improvement progress
Margin improvement progress • Price optimisation - All sites dealing margins reviewed to deliver most optimal value - Strong pricing achieved over the first 20 weeks of trading • Build specification - Build specification reviewed to deliver homes at most optimal cost - Cost savings identified which
Slide 33: West Division priorities
West Division priorities • Customer Service - To be a solid 4 star home builder • Operating margin improvements - Drive efficiency savings to increase margin beyond budget • Cash generation - Focus on efficiency in working capital and less reliability on part exchange • New land - To purchase 10 -12
Slide 34: The Phoenix Collection
The Phoenix Collection Dan Oliver Technical Director, West Midlands region www.bovishomesgroup.co.uk
Slide 35: The Phoenix Collection
The Phoenix Collection Bovis Homes
Slide 36: Presentation overview
Presentation overview • What is the phoenix collection? • New house types • Why change? • Detailed look at 3 house types • Consultation • Planning delivery • Customer, sales and build feed back • Phoenix moving forward • The Good the Bad and the Ugly • Delivery programme • BIM and Revit
Slide 37: Phoenix collection
Phoenix collection • 28 market leading house types for both • Incorporates a construction private and affordable homes specification review • 3 different elevational styles • Integrated with COINS and BIM • Investment in Revit 3D software implementation • Time, material and labour efficient designs
Slide 38: Why are we doing it?
Why are we doing it?
Slide 39: Added customer value
Build efficiencies, buildability, removed complex construction detailing, Improve decrease need for special order items, reduce materials required on site, standardise materials, reduce H+S issues, design out working at efficiency £ height issues, design out adaptive scaffold, design out double heig
Slide 40: Consultation
Consultation • Customer feedback • Supplier and contractor feedback • Sales presentations • Build feedback • ELT Presentations • MD presentation • Regional presentations and feedback • CEO feedback
Slide 41: Consultation
Consultation
Slide 42: Customer and sales feedback
Customer and sales feedback Review with sales managers highlighted the following; • Kitchens with family areas • USB sockets • Tumble dryer space • Utility rooms with side door • Dressing tables • Soft close toilet seats • Storage on each floor • No more magnolia • Breakfast bars and island units •
Slide 43: Build and commercial efficiencies
Build and commercial efficiencies Review with site managers to confirm costly or time consuming common detailing and specification items within the Portfolio range; • Double height bays • Plinths; brick specials and foundations • Tile hanging, cladding etc • Stick on chimneys • Adaptive scaffold • R
Slide 44: The Good, The Bad and The Ugly
LEE GOOD, THE BAD AND THE UGLY
Slide 45: The Bad
THE BAD LEE GOOD AND THE UGLY ‘ nn BL —/8- z lil) iil
Slide 46: The Good and The Ugly
THE GOOD AND FHE UGLY iowa | ’ _ eset = =
Slide 47: BIM
Build efficiencies, buildability, removed complex construction detailing, decrease need for special order items, reduce materials required on site, standardise materials, reduce H+S issues, design out working at height issues, design out adaptive scaffold, design out double height bays, remove fake
Slide 48: Phoenix Design DNA
Phoenix Design DNA Proportion Arrival Movement Light Quality Future proof
Slide 49: The Phoenix Collection
2 bedroom homes NSS M42 ft2 m2 4 bedroom homes NSS M42 ft2 m2 The Phoenix Collection Room in roof Hemlock Flat over garage - - 724 67.3 Willow townhouse 4 4 1417 131.6 Sycamore Wheelchair bungalow 4 M43 886 82.3 Juniper Detached 4 4 1218 113.2 Hawthorn Terrace - - 681 63.3 Chestnut Detached 4 4 1350
Slide 50: No.7 The Spruce - 3 bedroom - 1,082 ft
Bath’m No.7 The Spruce - 3 bedroom - 1,082 ft 2 First floor Ground floor metres Kitchen 3.20 x 3.14 1 Dining/family area 3.14 x 2.32 Sitting room 5.52 x 3.31 18 cup’d Utility h Sitting room Kitchen First floor Bedroom 1 3.33 x 3.12 10 Cl’ks The Spruce Bedroom 2 3.60 x 3.18 11 Dining area Bedroom 3 3
Slide 51: No.25 The Apple (affordable) - 3 bedroom
cup’d No.25 The Apple (affordable) - 2 bedroom - 1,012 ft2 Bedroom 2 cup’d The Apple First floor 3 bedroom house Ground floor Kitchen/dining room 4 h ovn Sitting room 5 Kitchen/ dining room Bedroom 1 Bedroom 3 First floor Bedroom 1 4 Bedroom 2 4 Cl’ks cup’d Bedroom 3 4 Bathroom cup’d cup’d The Apple
Slide 52: No.3 The Hawthorn - 2 bedroom - 681 ft
No.3 The Hawthorn - 2 bedroom - 681 ft2 Phoenix Portfolio
Slide 53: No.3 The Hawthorn - 2 bedroom - 681 ft The Amberley
cup’d No.3 The Hawthorn - 2 bedroom - 681 ft2 Bedroom 2 Bedroom 2 The Amberley The Hawthorn 2 bedroom house 2 bedroom Phoenix house Portfolio First floor First floor Ground floor Kitchen Ground floor metres feet/inches Ground floor area Sitting room/dining Bedroom 1 Kitchen/dining room 4.06 x 3.88 1
Slide 54: No.16 The Maple - 4 bedroom - 1,715 ft
En suite Bedroom 3 w No.16 The Maple - 4 bedroom - 1,715 ft 2 cyl Bedroom 4 Bedroom 2 First floor Ground floor metres feet/inches Kitchen 3.60 x 3.49 11’ 9” x 11’ 5” h Family/dining area 7.45 x 3.22 24’ 5” x 10’ 7” Sitting room 4.50 x 3.49 14’ 9” x 11’ 5” The Maple Kitchen First floor ovn Bedroom 1
Slide 55: No.31 The Oak - 5 bedroom - 2,486 ft
w w En suite Bath’m No.31 The Oak - 5 bedroom - 2,486 ft 2 cyl cup’d Bedroom 1 Bedroom 3 Ground floor metres feet/inches Kitchen 5.10 x 3.30 16’ 8” x 10’ 10” Family/dining area 4.98 x 4.50 16’ 4” x 14’ 9” First floor Sitting room 5.70 x 4.06 18’ 8” x 13’ 3” Dining room 4.06 x 3.14 13’ 3” x 10’ 3” St
Slide 56: House type overview - 2 and 3 bedroom
House type overview - 2 and 3 bedroom The Holly The Cypress
Slide 57: House type overview - 4 bedroom
House type overview - 4 bedroom The Willow The Chestnut
Slide 58: House type overview - 5 bedroom
House type overview - 5 bedroom The Yew The Lime
Slide 59: Planning delivery
Planning delivery • Plot substitution • Whole phase • Affordable • Non material S96a / minor amendment – S73 • Full application
Slide 60: Phoenix moving forward
Phoenix moving forward • Project teams to monitor build • Customer feed back on each house type • Virtual reality around home, development and kitchen choices • Significant investment in new systems - BIM and Revit
Slide 61: Delivery programme
Delivery programme • First show home Nov 2018 – foundations in and brick work under way! • All new sites to be purchased with the Phoenix collection • 2019 a third of our private homes will be Phoenix house types • 2020 the majority of our homes will be Phoenix house types • Confident that new range
Slide 62: Q&A Capital Markets Day
Q&A Capital Markets Day 24 May 2018 www.bovishomesgroup.co.uk