Berkeley Group Holdings Plc · LSE:BKG
Berkeley — The Berkeley Group Holdings — FY2015 Earnings Presentation
31 slides from Berkeley's earnings presentation, Jun 17, 2015
Slide 1: Preliminary Results Presentation, Year ended 30th April 2015
The Berkeley Group Holdings plc Preliminary Results Presentation Year ended 30th April 2015 17th June 2015
Slide 2: Format of Presentation
Preliminary Results Presentation Format of Presentation Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Managing Director Questions
Slide 3: Tony Pidgley CBE, Chairman
Tony Pidgley CBE Chairman Berkeley StEdward StJames | StGeorge StWilliam
Slide 4: Richard Stearn, Finance Director
Richard Stearn Finance Director
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 - Financing - Land holdings
Slide 6: Summary of Performance
Finance Review Summary of Performance Year ended 30 Apr 2015 30 Apr 2014 Change (£) Change (%) Profit before tax £539.7m £380.0m +159.7m +42.0% EPS - Basic 313.0p 221.8p +91.2p +41.1% EPS - Diluted 276.9p 188.4p +88.5p +47.0% Adjusted * Profit before tax £454.6m £380.0m +74.6m +19.6% EPS – Basic 263
Slide 7: Summary of Financial Position
Finance Review Summary of Financial Position April 2015 April 2014 Change (£) Change (%) Balance Sheet Shareholders’ funds £1,637.9m £1,441.3m +£196.6m +13.6% Closing net cash (£430.9m) (£129.2m) -£301.7m Capital Employed £1,207.0m £1,312.1m -£105.1m -8.0% Net asset value per share 1,199p 1,066p +13
Slide 8: Homes Completed and ASP - Group
Finance Review Homes Completed and ASP - Group Plots 3,565 3,712 3,742 3,355 2,059 2,294 1,927 1,785 1,983 1,506 1,448 1,372 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY 2011/12 2012/13 2013/14 2014/15 Berkeley Group Average Selling Price £649k £539k £575k £523k £423k £376k £354k £350k £300k £335k £254k £280
Slide 9: Homes Completed and ASP – Joint Ventures
Finance Review Homes Completed and ASP – Joint Ventures Plots 230 188 203 66 FY FY FY FY 2011/12 2012/13 2013/14 2014/15 St Edward Average Selling Price £1,235k £1,229k £170k £277k FY FY FY FY 2011/12 2012/13 2013/14 2014/15 St Edward
Slide 10: Income Statement
Finance Review Income Statement Year ended Apr 2015 Apr 2014 Change Change £m £m £m % Operations * Revenue 2,020.2 1,620.6 +399.6 +24.7% Gross profit 631.7 31.3% 508.9 31.4% +122.8 +24.1% Operating expenses (192.7) 9.5% (134.1) 8.3% -58.6 -43.7% Operating profit 439.0 21.7% 374.8 23.1% +64.2 +17.1%
Slide 11: Abridged Cash Flow
Finance Review Abridged Cash Flow Year ended April 2015 April 2014 £m £m Adjusted profit before tax 454.6 380.0 Profit on sale of ground rents 85.1 - Increase in inventory (172.9) (414.5) Increase in customer deposits 179.2 315.6 Other working capital movements 108.9 21.0 Net reduction/(investment)
Slide 12: Abridged Balance Sheet
Finance Review Abridged Balance Sheet April 2015 Movements April 2014 £m £m £m Non current assets - Intangible assets 17.2 - 17.2 - Investment in JVs 50.1 (11.3) 61.4 - Rental fund 12.2 (6.0) 18.2 - Deferred tax assets 72.7 11.6 61.1 - Property, plant and equipment 23.5 1.5 22.0 Total non current as
Slide 13: Inventories
Finance Review Inventories April 2015 Movements April 2014 £m £m £m Land not under development 342.0 (150.4) 492.4 Work in progress: Land cost 798.6 12.5 786.1 1,140.6 (137.9) 1,278.5 Work in progress: Build cost 1,481.6 301.3 1,180.3 Completed units 31.9 9.5 22.4 Inventories 2,654.1 172.9 2,481.2
Slide 14: Creditors
Finance Review Creditors April 2015 Movements April 2014 £m £m £m Trade creditors and accruals 509.5 94.0 415.5 Provision for liabilities 75.1 18.0 57.1 Deposits and on account receipts 920.9 179.2 741.7 Land creditors 205.1 (4.9) 210.0 Current tax liability 57.8 (25.9) 83.7 Total creditors 1,768.4
Slide 15: Financing
Finance Review Financing Revolving Credit Facility Amount: £575 million Maturity: March 2020 (with optional extensions to March 2022) Interest: Margin halved Utilisation and Non-Utilisation Fees: Market rates St Edward Facility £60 million facility was cancelled in December 2014
Slide 16: Land Holdings (now including pipeline)
Finance Review Land Holdings (now including pipeline) April 2015 Variance April 2014 Owned 34,215 6,210 28,005 Contracted 3,258 (4,700) 7,958 Plots 37,473 1,510 35,963 Sales value £17.1bn £2.0bn £15.1bn Average selling price £456k £37k £419k Average plot cost £58k (£5k) £63k Land cost % 12.7% (2.4%)
Slide 17: Rob Perrins, Managing Director
Rob Perrins Managing Director
Slide 18: Strategic Review: Introduction
Strategic Review Introduction - Performance highlights - Long term strategic plan - The Berkeley Difference - The Market - Land and build investment - Joint ventures - Outlook - Guidance - Conclusion
Slide 19: Performance Highlights
Strategic Review Performance Highlights Highlights Adjusted PBT up 19.6% to £454.6 million Profit of £85.1 million from sale of ground rents Dividends paid of 180 pence Net cash of £430.9 million and ungeared throughout the year Cash due on forward sales up 30.1% to £3.0 billion 16.8% growth in gros
Slide 20: Long Term Strategic Plan
Strategic Review Long Term Strategic Plan Milestone Committed Outstanding Total £/share £’m £/share £’m £/share £’m By 30th September 2015 4.34 582 - - 4.34 582 By 30th September 2018 - - 4.33 591 4.33 591 By 30th September 2021 - - 4.33 591 4.33 591 4.34 582 8.66 1,182 13.00 1,764 Amendments to the
Slide 21: The Berkeley Difference
Strategic Review The Berkeley Difference Objectives Model Protect value in the balance sheet 1. To be commercially Control release of schemes to build successful Match operational risk with market conditions Add value to the land holdings 2. To be sustainable, for the Invest at the right point in th
Slide 22: The Market
Strategic Review The Market Sales Sales rates have returned to normal levels after an exceptional 2013/14 A number of successful sales launches Investors comprise 50% of sales, and non-UK buyers 40% of sales Underpinning the result London is a World City There is a shortfall of good quality new hous
Slide 23: Land and Build Investment - Inventories
Strategic Review Land and Build Investment - Inventories Inventories £2,654m £2,481m £2,067m £1,852m £1,613m £1,254m £1,115m 30 Apr 09 30 Apr 10 30 Apr 11 30 Apr 12 30 Apr 13 30 Apr 14 30 Apr 15 Land not under development WIP - land WIP - build Completed stock
Slide 24: Land and Build Investment – Delivery
Strategic Review Land and Build Investment – Delivery London South Total Delivery of Developments: In construction 38 19 57 Not yet in construction 11 6 17 Total developments 49 25 74 Of those not yet in construction Resolution to grant 6 1 7 Detailed consent, not yet implementable (vacant possessio
Slide 25: Land and Build Investment – Sites in London
Strategic Review Land and Build Investment – Sites in London
Slide 26: Land and Build Investment – Sites in the South of England
Strategic Review Land and Build Investment – Sites in the South of England
Slide 27: Joint Ventures: St Edward
Strategic Review Joint Ventures St Edward Joint venture with Prudential Three schemes in construction (Stanmore, 375 Kensington High Street and 190 Strand) Other sites in the land bank include Green Park in Reading, acquired this year with planning, and Westminster
Slide 28: Joint Ventures: St William
Strategic Review Joint Ventures St William Joint venture with National Grid 2 schemes in Land Holdings (Battersea Gardens and Rickmansworth) Resolution to grant planning secured post year end for over 800 homes at Battersea
Slide 29: Outlook
Strategic Review Outlook Positive Signs Risks Strong underlying demand in best locations Eurozone and World events undermining confidence Limited supply in best locations Tax changes Homes are affordable when customers have equity Currency fluctuations deterring overseas buyers Government stimulus –
Slide 30: Guidance
Strategic Review Guidance Performance Guidance 90p per share declared for Sept 2015 Current intention to pay regular equal Dividend dividends to meet September 2018 Will complete first milestone payment of milestone 434p on schedule Land Holdings Estimated gross margin over £5 billion Long term norm
Slide 31: Questions
Questions Tony Pidgley CBE Chairman Rob Perrins Managing Director Richard Stearn Finance Director
The Berkeley Group Holdings — FY2015 Earnings Presentation on 6ix