Crest Nicholson Holdings Plc · LSE:CRST
Crest Nicholson — H1 2019 Earnings Presentation
25 slides from Crest Nicholson's earnings presentation, Jun 11, 2019
Slide 1: Interim Results for 2019
Crest Nicholson Holdings plc Interim Results for 2019 11th June 2019
Slide 2: Agenda
Agenda • Chairman’s introduction Stephen Stone • Strategy & performance summary Chris Tinker • Financial performance Rod Holdsworth • Outlook & Summary Chris Tinker • Q&A Classified as General
Slide 3: Agenda
Agenda Chris Tinker • Chairman’s Introduction • Strategy & performance summary • Financial performance • Outlook & Summary • Q&A
Slide 4: Current Strategic Focus
Current Strategic Focus 1. Priority on • Pause growth • Commitment to pay ordinary dividend of 33p per cashflow and share in FY19* dividends • Focus on shareholder returns 2. Maximising • Generating value from our well acquired land pipeline portfolio • Adapting portfolio to address housing affordab
Slide 5: Half Year Performance Summary
Half Year Performance Summary Revenue £501.9m (HY18: £467.6m) +7% Sales per outlet week 0.78 (HY18: 0.78) Maintained Current and forward sales for FY19 £870.1m (HY18: £848.8m) +3% Total forward sales c/f £625.2m (HY18: £544.4m) +15% Operating profit margin of 14.1% (HY18: 16.8%) -270bps Profit befor
Slide 6: Strategic Momentum
Strategic Momentum What we set out to achieve Encouraging progress to date • Increase operational strength of • Experienced Chief Operating Officer the senior Executive team and Group Commercial Director joined • Pause growth, prioritise cash • £41m reduced net debt/land creditors • Increase partner
Slide 7: Key Sales Metrics
Key Sales Metrics HY 2019 HY 2018 Current and forward sales - FY19 £m 870.1 848.8 +3% Unit completions 1,187 1,305 -9% Outlets (half year equivalents) 58 52 +12% Sales per Outlet Week 0.78 0.78 - Revenue £m 501.9 467.6 +7% Total forward sales £m 625.2 533.6 +17% ASP – Open market £k 413 384 +8% ASP
Slide 8: Broadening our channels to market
Broadening our channels to market HY19 Historic sales profile New sales profile Completions Open market sales: 70% Selected use of Open market sales: <60% 53% Joint Ventures and Affordable homes: 20%-25% Affordable homes: 20%-25% 26% intermediate housing pre- sales to PRS: 5% – 10% Intermediate – 10
Slide 9: Partnership business growing
Partnership business growing Selected Joint Ventures Crest Nicholson Potential RP Partners ➢ 910 dwelling, £230m GDV JV contracted into a Crest/Sovereign Housing Group JV New Strategic Strong Land bank Homes England ➢ 374 unit, £145m GDV JV with Partnerships A2Dominion at Walton Court, Surrey Large
Slide 10: Operational efficiency programme continues
Operational efficiency programme continues Procurement benefits New Group Contents Aurora housing range Specification helping to part off- set build cost inflation OSM Aurora now selling on 2 new New GTA’s reflecting increased outlets quantities and optimised Scale trials of circa 400 plots on 19 fu
Slide 11: Land Pipeline Objectives
Land Pipeline Objectives ➢ Optimise flexible store of land bank value for the future ➢ Use short term portfolio to support current strategy: • Increased proportion of pre- sales • Selected JV’s ➢ Reposition ASP’s of short-term land bank ➢ Grow embedded value and full GM in the medium/long term land
Slide 12: Land pipeline HY19 evolution
Land pipeline HY19 evolution GDV • £11.9bn • £12.3bn +3.4% Plots • 36,344 (1),(2) • 37,575 (2) + 3.4% Short-term land bank: ASP • £328k • £328k 37,575 - 36,344 • 2,175 plots completed or traded • 734 plots added including: ➢ Midlands new plots: 16,837 19,515 +15.9% 290 plots at ASP £299k Strategic L
Slide 13: Embedded Value in the Land Pipeline
Embedded Value in the Land Pipeline HY19 Units 37,575 (1) 37,575 Long-term strategic land • Unallocated but controlled • Long term options exercised and priced at point of acquisition 12,593 • Full GM when converted Strategic Land 19,515 Medium-term pipeline • Consented/allocated/draft allocation or
Slide 14: Agenda
Agenda Rod Holdsworth • Chairman’s Introduction • Performance highlights • Strategy & Progress • Financial performance • Outlook & Summary • Q&A
Slide 15: Income statement
Income statement Income statement (£m, HY 2019 HY 2018* Change % change unless stated) Revenue 501.9 467.6 34.3 7% Cost of sales (401.6) (358.6) (43.0) Gross profit 100.3 109.0 (8.7) -8% % gross profit margin 20.0% 23.3% (330bps) Administrative expenses (29.5) (30.4) 0.9 Operating profit 70.8 78.6 (
Slide 16: Sales profile and pricing
Sales profile and pricing OM Revenue Selling price movement* excluding pre-sales by price band 78.4% 69.2% 23.9% 17.6% ➢ Selling prices holding up 7.6% 4.0% ➢ Growing proportion of sales sub £600k SUB 600K £601K TO £1M £1M+ HY1 FY19 HY2 FY19 * Selling price movements after sales incentives. Classifi
Slide 17: Half year margins under revised strategy
Half year margins under revised strategy Half year gross margin 330bps lower ➢ Average selling price reductions of c.0.7% over last 12 months ➢ Increased proportion of pre-sold units has traded c. 1.5% for increased cash flow and lower risk ➢ Ongoing build cost inflation of 3% to 4% p.a. mitigated b
Slide 18: Balance sheet
Balance sheet 30th April 30th April £m, unless stated 2019 2018* Non-current Assets 116.6 100.5 Inventory 1,183.9 1,215.8 Trade & other receivables/assets 131.5 121.5 Cash and cash equivalents 185.4 101.9 Total Assets 1,617.4 1,539.7 +5% Interest bearing loans and borrowings (253.7) (180.4) Land cre
Slide 19: Cash flow
Cash flow Cash flow (£m, unless stated) HY 2019 HY 2018* Change Operating profit before changes in working capital and provisions 71.2 80.9 -9.7 (Increase)/decrease in trade and other receivables (26.6) 1.2 Decrease/(increase) in inventories 29.3 (128.8) (Decrease)/increase in trade and other payabl
Slide 20: Agenda
Agenda Chris Tinker • Chairman’s Introduction • Strategy & performance summary • Financial performance • Outlook & Summary • Q&A
Slide 21: Outlook: Outlets and ASP's profile
Outlook: Outlets and ASP’s profile Templates ➢ Enter 2nd half 2019 with 58 outlets and will average 60 ➢ London absorbed into the outer London Divisions ➢ ASP Evolution: • FY19: After good HY1 higher ASP sales, HY2 ASP circa 5% below HY1 • FY20: Further 5% reduction anticipated as lower ASP sites pu
Slide 22: Outlook
Outlook • Short term demand outlook remains uncertain due to the ongoing political turbulence • Current and forward sales of £870.1m underpins FY19 revenue, demonstrating merit of new channels to market despite near term reduction in operating profit margin • Stable pricing assumed for HY2 OM sales
Slide 23: Summary
Summary • Encouraging first half trading performance • Have strengthened senior Operational and Financial leadership team • Business operations resilient and operational efficiency programmes making planned progress • Have successfully implemented large parts of the revised strategy and on track to
Slide 24: Agenda
Agenda Chris Tinker • Chairman’s Introduction • Performance highlights • Strategy & Progress • Financial performance • Outlook & Summary • Q&A
Slide 25: Disclaimer
Disclaimer You should note that the financial projections and other statements regarding Crest Nicholson's intentions, beliefs or current expectations referred to in this document are forward looking and do not relate solely to historical or current facts. These statements are provided on a confiden
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