Berkeley Group Holdings Plc · LSE:BKG
Berkeley — The Berkeley Group Holdings — FY2019 Earnings Presentation
30 slides from Berkeley's earnings presentation, Jun 19, 2019
Slide 1: Full Year Results Presentation, Year ended 30th April 2019
The Berkeley Group Holdings plc Full Year Results Presentation Year ended 30th April 2019 19th June 2019
Slide 2: Preliminary Results Presentation: Format of Presentation
Preliminary Results Presentation Format of Presentation Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Oval Village
Slide 3: Tony Pidgley CBE, Chairman
B Berkeley ae) Group Tony Pidgley CBE Chairman Berkeley StEdward StGeorge StJames StWilliam StJoseph Berkerey | pura Sg eeise | SESS Sve me ass?
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 30 April 2019 30 April 2018 Change £ Change % Year ended (Restated) Profit before tax £775.2m £977.0m -£201.8m -20.7% EPS – Basic 481.1p 587.4p -106.3p -18.1% EPS – Diluted 469.9p 574.3p -104.4p -18.2% Operating margin 26.0% 28.8% Pre-Tax Return on Equity * 27.9
Slide 7: Summary of Financial Position
Finance Review Summary of Financial Position As at As at 30 April 2018 Change £ Change % 30 April 2019 (Restated) Balance Sheet Shareholders’ funds £2,963.3m £2,591.2m +£372.1m +14.4% Closing net cash (£975.0m) (£687.3m) -£287.7m Capital employed £1,988.3m £1,903.9m +£84.4m +4.4% Net asset value per
Slide 8: Future Potential Share Dilution
Finance Review Future Potential Share Dilution Vesting No. (million) No. (million) – Date adjusted ** Shares in issue at 1 May 2018 excl. Treasury/EBT shares 133.7 Share buy-backs (5.6) 2011 LTIP vesting – tranche 3 September 2018 0.5 Shares in issue at 1 May 2019 excl. Treasury/EBT shares 128.6 128
Slide 9: Homes Completed and ASP – Group
Finance Review Homes Completed and ASP – Group Homes 3,776 3,802 3,678 3,698 3,355 2,058 2,190 1,983 2,091 2,027 1,685 1,744 1,671 1,488 1,372 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY 2014/15 2015/16 2016/17 (restated) 2017/18 (restated) 2018/19 Average Selling Price £721k £731k £725k £740k £757
Slide 10: Homes Completed and ASP – Joint Ventures
Finance Review Homes Completed and ASP – Joint Ventures (St Edward and St William) Homes 372 258 261 230 240 191 208 204 162 164 144 86 78 67 57 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 * FY 2014/15 2015/16 2016/17 (restated) 2017/18 (restated) 2018/19 St Edward St Edward St Edward St Edward St Edw
Slide 11: Income Statement
Finance Review Income Statement Year ended 30 April 2019 30 April 2018 Change Change £m £m £m % (Restated) Revenue 2,957.4 2,840.9 +116.5 +4.1% Gross profit 926.2 31.3% 983.5 34.6% -57.3 -5.8% Operating expenses (157.8) 5.3% (166.5) 5.9% +8.7 +5.2% Operating profit 768.4 26.0% 817.0 28.8% -48.6 -5.9
Slide 12: Abridged Cash Flow
Finance Review Abridged Cash Flow Year ended 30 April 2019 30 April 2018 £m £m (Restated) Profit before tax 775.2 977.0 Decrease in inventory 181.9 343.3 Decrease in customer deposits (208.9) (79.9) Other working capital movements 49.0 (134.5) Net reduction in working capital 22.0 128.9 Net investme
Slide 13: Abridged Balance Sheet
Finance Review Abridged Balance Sheet As at As at 30 April 2019 Movements 30 April 2018 £m £m £m (Restated) Non-current assets - Intangible assets 17.2 - 17.2 - Investment in joint ventures 374.7 +62.8 311.9 - Deferred tax assets 45.8 -19.9 65.7 - Property, plant and equipment 42.5 +16.6 25.9 Total
Slide 14: Inventories
Finance Review Inventories As at As at 30 April 2019 Movements 30 April 2018 £m £m £m (Restated) Land not under development 395.2 +57.5 337.7 Work in progress: Land cost 806.7 +69.5 737.2 1,201.9 +127.0 1,074.9 Work in progress: Build cost 1,778.0 -321.3 2,099.3 Completed units 134.8 +12.4 122.4 Tot
Slide 15: Creditors
Finance Review Creditors As at As at 30 April 2019 Movements 30 April 2018 £m £m £m (Restated) Trade creditors and accruals 816.8 +89.6 727.2 Provision for liabilities 79.1 -2.7 81.8 Deposits and on account receipts 686.1 -208.9 895.0 Land creditors 92.6 -12.6 105.2 Current tax liability - -47.3 47.
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 30 April 2019 Variance 30 April 2018 Owned 41,639 +8,718 32,921 Contracted 13,316 -630 13,946 Plots 54,955 +8,088 46,867 Sales value £22.6bn +£1.3bn £21.3bn Average selling price (ASP)* £472k -£35k £507k Average plot cost £51k -£10k £61k Land cost % 12.5% -0.
Slide 18: Rob Perrins, Chief Executive
: Berkeley foxy Group Rob Perrins Chief Executive Berkeley | StEdward $tGeorge StJames StWiliam | StJoseph a
Slide 19: Strategic Review: Introduction
Strategic Review Introduction 1. Out-performance in 2018/19 by 15% 2. Returning to normal returns • 17.5% to 20% operating margin • Pre-tax ROE of 15% while we have surplus cash 3. Underinvested in last three years • Net cash has risen from £0.1 billion to £1.0 billion • £300 million term debt drawn
Slide 20: Sales Performance and Market
Strategic Review Sales Performance and Market Sales Performance Trading conditions and the value of new reservations continues to be stable – with 2018/19 slightly ahead of the previous 12 months Pricing stable, covering build cost increases Sales continue to be split broadly evenly between ow
Slide 21: Land and Planning
Strategic Review Land and Planning Land and Planning 14 new sites added to the land bank, 12 sites are outside of London, comprising some 8,700 new homes Focus on bringing through the pipeline of new regeneration developments Nine new planning consents obtained in the year (including Stephenso
Slide 22: 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 69 developments in pr
Slide 23: Land and Build Investment – Delivery
Strategic Review Land and Build Investment – Delivery London Out of London Total Delivery of Developments: In construction 36 77% 33 63% 69 70% Not yet in construction – owned sites 3 6% 12 23% 15 15% Not yet in construction – contracted sites 8 17% 7 14% 15 15% Total developments 47 100% 52 100% 99
Slide 24: Land and Build Investment: Sites inside of London
Land and Build Investment Sites inside of London
Slide 25: Land and Build Investment: Sites outside of London
Land and Build Investment Sites outside of London
Slide 26: Joint Ventures: St Edward
Strategic Review Joint Ventures St Edward Joint venture with Prudential Six developments in the land holdings (3,700 homes) Schemes: Green Park Village, Reading Kensington Row & Royal Warwick Square 9 Millbank, Westminster Hartland Village, Fleet Wallingford, Oxfordshire Snow Hill Qu
Slide 27: Joint Ventures: St William
Strategic Review Joint Ventures St William Joint venture with National Grid Sixteen developments in the land holdings (9,800 homes) Schemes: Prince of Wales Drive, Battersea Courtyard Gardens, Oxted Elmswater, Rickmansworth The Arches, Watford Fairwood Place, Borehamwood Ascot Cott
Slide 28: 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 2018 10.34 1,411.0 - - 10.34 1,411.0 By 31 March 2019 1.00 139.7 - - 1.00 139.7 By 30 September 2019 1.00 139.7 - - 1.00 139.7 Returns - announced 12.34 1,6
Slide 29: Guidance
Strategic Review Guidance Outlook Guidance for 2019/20 unchanged, with pre-tax profit anticipated to fall by a third, before stabilising at this level Long-term pre-tax ROE estimated at 15% PBT Guidance Currently 18% outperformance against December 2016 plan to deliver £3.0 billion of pre-tax
Slide 30: Questions
Questions The Bridge Theatre, One Tower Bridge Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Kidbrooke Village
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