Berkeley Group Holdings plc · LSE:BKG
Berkeley — The Berkeley Group Holdings — H1 2019/20 Earnings Presentation
31 slides from Berkeley's earnings presentation, December 2019
Slide 1: Interim Results Presentation
The Berkeley Group Holdings plc Interim Results Presentation Six months ended 31 st October 2019
Slide 2: Format of Presentation
Interim Results Presentation Format of Presentation Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Grand Union, Northfields
Slide 3: Tony Pidgley CBE, Chairman
Tony Pidgley CBE Chairman Berkeley | StEdward | St George | StJames | StWilliam | StJoseph oy Berkeley
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 - Inventories - Creditors - Financing - Land Holdings
Slide 6: Summary of Performance
Finance Review Summary of Performance Six months ended 31 October 2019 31 October 2018 Change £ Change % Profit before tax £276.7m £401.2m -£124.5m -31.0% EPS – Basic 176.4p 246.0p -69.6p -28.3% EPS – Diluted 170.4p 240.0p -69.6p -29.0% Operating margin 27.5% 24.3% Pre-Tax Return on Equity * 18.4% 3
Slide 7: Summary of Financial Position
Finance Review Summary of Financial Position As at As at Change £ Change % 31 October 2019 30 April 2019 Balance Sheet Shareholders’ funds £3,046.8m £2,963.3m +£83.5m +2.8% Closing net cash (£1,060.6m) (£975.0m) -£85.6m Capital employed £1,986.2m £1,988.3m -£2.1m -0.1% Net asset value per share 2,42
Slide 8: Future Potential Share Dilution
Finance Review Future Potential Share Dilution Vesting Date No. (million) Shares in issue at 1 May 2019 excl. Treasury/EBT shares 128.6 Share buy-backs (3.3) 2011 LTIP vesting – tranche 4 September 2019 0.4 Shares in issue at 1 Nov 2019 excl. Treasury/EBT shares 125.6 2011 LTIP vestings * September
Slide 9: Homes Completed and ASP - Group
Finance Review Homes Completed and ASP - Group Homes 3,776 3,802 3,678 3,698 2,091 2,058 2,190 2,027 1,685 1,744 1,488 1,671 1,389 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 2015/16 2016/17 (restated) 2017/18 (restated) 2018/19 2019/20 Average Selling Price £713k £721k £731k £725k £740k £757k £748k £630
Slide 10: Homes Completed and ASP – Joint Ventures (St Edward & St William)
Finance Review Homes Completed and ASP – Joint Ventures (St Edward & St William) Homes 372 240 258 261 191 208 204 212 162 164 78 67 57 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 2015/16 2016/17 (restated) 2017/18 (restated) 2018/19 2019/20 St Edward St Edward St Edward St Edward & St William Average Se
Slide 11: Income Statement
Finance Review Income Statement Six months ended 31 October 2019 31 October 2018 Change Change £m £m £m % Revenue 930.9 1,653.4 -722.5 -43.7% Gross profit 336.3 36.1% 482.8 29.2% -146.5 -30.3% Operating expenses (79.9) 8.6% (80.7) 4.9% +0.8 +1.0% Operating profit 256.4 27.5% 402.1 24.3% -145.7 -36.2
Slide 12: Abridged Cash Flow
Finance Review Abridged Cash Flow Six months ended 31 October 2019 31 October 2018 £m £m Profit before tax 276.7 401.2 (Increase) / decrease in inventory (158.9) 185.1 Increase/ (decrease) in customer deposits 54.4 (90.6) Other working capital movements 7.2 31.5 Net (increase) / reduction in working
Slide 13: Abridged Balance Sheet
Finance Review Abridged Balance Sheet As at 31 October 2019 Movements As at 30 April 2019 £m £m £m Non-current assets - Intangible assets 17.2 - 17.2 - Investment in joint ventures 247.9 -126.8 374.7 - Deferred tax assets 55.9 +10.1 45.8 - Right-of-use assets 5.5 +5.5 - - Property, plant and equipme
Slide 14: Inventories
Finance Review Inventories As at As at 31 October 2019 Movements 30 April 2019 £m £m £m Land not under development 219.8 -175.4 395.2 Work in progress: Land cost 953.5 +146.8 806.7 1,173.3 -28.6 1,201.9 Work in progress: Build cost 1,931.9 +153.9 1,778.0 Completed units 168.4 +33.6 134.8 Total inven
Slide 15: Creditors
Finance Review Creditors As at As at 31 October 2019 Movements 30 April 2019 £m £m £m Trade creditors and accruals 780.0 -36.8 816.8 Provision for liabilities 105.2 +26.1 79.1 Deposits and on account receipts 740.5 +54.4 686.1 Land creditors 125.9 +33.3 92.6 Lease liability 6.0 +6.0 - Total liabilit
Slide 16: Financing
Finance Review Financing Banking Facilities Amount: £750 million Term: £300 million RCF: £450 million Maturity: November 2023 Margin, utilisation and commitment fees: Market rates
Slide 17: Land Holdings
Finance Review Land Holdings As at As at 31 October 2019 Variance 30 April 2019 Owned 43,329 +1,690 41,639 Contracted 13,793 +477 13,316 Plots 57,122 +2,167 54,955 Sales value £23.1bn +£0.5bn £22.6bn Average selling price (ASP)* £469k -£3k £472k Average plot cost £47k -£4k £51k Land cost % 11.6% -0.
Slide 18: Rob Perrins, Chief Executive
Rob Perrins Chief Executive Berkeley | StEdward | St George | StJames | StWilliam | StJoseph Oi Berkeley
Slide 19: Strategic Review Introduction
Strategic Review Introduction 1. Good start to £3.3 billion six-year pre-tax profit target • £277 million PBT delivered for six months to 31 October 2019 – down 31% on last year, as anticipated, and in line with full-year consensus • £158 million invested in inventory • Pre-tax profit returned to no
Slide 20: Long-Term Regeneration Sites in Land Holdings
Strategic Review Long-Term Regeneration Sites in Land Holdings Berkeley is delivering 25 of the largest regeneration schemes in London and the South East
Slide 21: Sales Performance and Market
Strategic Review Sales Performance and Market Sales Performance 2 new regeneration sites launched in London in the period: Grand Union in Brent and Kings Road Park in Fulham (St William) A further 4 new developments launched in the South East and 1 in London in the period Increased launch acti
Slide 22: Land and Planning
Strategic Review Land and Planning Land and Planning 2 new long-term developments added to the land holdings, comprising more than 3,000 new homes Continued focus on bringing through the pipeline of new regeneration developments Three new planning consents obtained in the period (St William’s
Slide 23: Build
Strategic Review Build Build Build cost inflation is steady at 4% per annum Working with supply chain to assess risks around availability of labour and potential cost implications of the Brexit scenarios, to the extent possible Over 11,000 people working across Berkeley’s 72 developments in pr
Slide 24: Land and Build Investment - Delivery
Strategic Review Land and Build Investment - Delivery London Out of London Total Delivery of Developments: In construction 35 76% 37 72% 72 78% Not yet in construction – owned sites 2 4% 8 16% 10 6% Not yet in construction – contracted sites 9 20% 6 12% 15 16% Total developments 46 100% 51 100% 97 1
Slide 25: Land and Build Investment Sites in London
Land and Build Investment Sites in London
Slide 26: Land and Build Investment Sites outside of London
Land and Build Investment Sites outside of London
Slide 27: Joint Ventures: St Edward
Strategic Review Joint Ventures St Edward Joint venture with M&G Six developments in the land holdings (5,300 homes) Schemes: Green Park Village, Reading Kensington Row & Royal Warwick Square 9 Millbank, Westminster Hartland Village, Fleet Highcroft, Wallingford Syon Lane, Brentford
Slide 28: Joint Ventures: St William
Strategic Review Joint Ventures St William Joint venture with National Grid Sixteen developments in the land holdings (9,600 homes) Schemes: Prince of Wales Drive, Battersea Poplar Elmswater, Rickmansworth Hemel Hempstead Fairwood Place, Borehamwood Ascot Cottonworks, Highbury Be
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 2019 12.34 1,690.4 - - 12.34 1,690.4 By 31 March 2020 1.00 140.1 - - 1.00 140.1 Returns - announced 13.34 1,830.5 - - 13.34 1,830.5 By 30 September 2020 - - 1.0
Slide 30: Outlook
Strategic Review Outlook Outlook Plan to deliver £3.3 billion of pre-tax profit in the six years ending 30 April 2025, with any one year in a range of £500 - £700 million Good start made with £276.7 million delivered for the first half of 2019/20 PBT Guidance Long-term pre-tax ROE estimated at
Slide 31: Questions
Questions Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Latchmere House, Richmond Chase
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