Mj Gleeson Plc · LSE:GLE
Mj Gleeson — FY2016 Earnings Presentation
24 slides from Mj Gleeson's earnings presentation, Sep 26, 2016
Slide 1: MJ Gleeson plc
MJ Gleeson plc 26 September 2016 1
Slide 2: Onwards and Upwards
Onwards and Upwards Strong financial performance 1,000 units p.a. in sight – but it’s a way-point Regional growth continues – we’re buying land, at the right price Resources and capacity in place for further growth No Brexit impact – it’s business as usual MJ Gleeson plc – results for the
Slide 3: Financial Review
Financial Review Stefan Allanson Chief Financial Officer MJ Gleeson plc – results for the period ended 30 June 2016 3
Slide 4: Strong financial delivery
Strong financial delivery Revenue up 20.8% to £142.1m (2015: £117.6m) PBT up 63.0% to £28.2m (2015: £17.3m) Cash balance up 46.8% at 30 June 2016 to £23.2m (30 June 2015: £15.8m) Normalised basic earnings per share up 24.6% at 42.6p (2015: 34.2p) Total dividend up 45% to 14.5 pence per sha
Slide 5: Business As Usual
Business As Usual Operating Profit (£m) Operating Cash Flow (£m) + 35.0 (excluding group overheads) 15.0 13.9 30.0 19.5 10.0 8.1 25.0 17.4 5.6 20.0 Gleeson 5.0 Homes 15.0 - Gleeson 9.4 Strategic 2013 2014 2015 2016 10.0 10.2 Land (5.0) 5.0 4.0 8.1 (6.1) 0.3 3.7 4.8 (10.0) - 3.5 2012 2013 2014 2015 2
Slide 6: Income statement
Income statement Jun-16 Jun-15 Change Notes £m £m Revenue Homes 113.6 96.1 +18.2% Underlying +22.3%. Land sales: 2016 nil, 2015 £3.1m Strategic Land 28.4 21.5 +32.1% 142.1 117.6 +20.8% Homes 19.5 17.4 +12.1% Underlying +32.7%. Land sales: 2016 nil, 2015 £2.7m. Strategic Land 10.2 8.1 +25.9% Group ov
Slide 7: Balance sheet
Balance sheet 30 June 30 June 2016 2015 £m £m Homes Land 37.3 31.1 WIP 48.6 45.5 Strategic Land Land 13.2 16.7 WIP 15.1 14.9 Total inventories 114.2 108.2 Other assets 43.2 44.6 Other liabilities (27.7) (32.1) Cash & cash equivalents 23.2 15.8 Net assets 152.9 136.5 MJ Gleeson plc – results for the
Slide 8: Cash flow
Cash flow Jun 16 Jun 15 £m £m Profit Before Tax from continuing operations 28.2 17.3 Depreciation, loss from discontinued operations and other operating items 0.9 0.6 Working capital: (11.6) (14.3) Exceptional investment provision - 4.9 Cash generated in operating activities 17.5 8.4 Tax (3.2) (0.1)
Slide 9: Dividend
Dividend Final dividend recommended of 10.0 pence per share (2015: 7.3 pence per share) Giving a total dividend for the year of 14.5 pence per share, up 45% on previous year (2015: 10.0 pence per share) Dividend policy remains progressive; final dividend to represent roughly 2/3 of total MJ Gl
Slide 10: Business Review
Business Review Jolyon Harrison Chief Executive Officer MJ Gleeson plc – results for the period ended 30 June 2016 10
Slide 11: Business model
Business model Gleeson Homes Gleeson Working in challenging Homes communities to provide new homes for sale to people on low incomes Gleeson Strategic Land Key Gleeson Homes Land promotion, Strategic Land enhancing the value of land by securing Strategic residential planning Land consents MJ Gleeson
Slide 12: Reminder of the Homes model
Reminder of the Homes model Sustainable Strong drivers for business model increasing UK housing stock No part exchange; No buy to let Government home ownership stimulation Limited competition Community Regeneration credentials Significant and Acceptable to motivated target Planners audience Low cost
Slide 13: Homes: strong demand & output
Homes: strong demand & output Unit sales up 20.4% to 904 Unit completions (2015: 751) 1000 904 900 ASP increased 1.6% to £125,700 800 751 (2015: £123,750) 700 600 Sales outlets increased to 48 at June 561 2016 (June 2015: 43) 500 FY H1 406 400 400 321 Close to medium-term target 1,000 300 27
Slide 14: Homes: margins still growing
Homes: margins still growing Gross margin Gross profit up 28.7% to £35.4m 33.0% 31.1% (2015: £27.5m) 27.8% 29.8% 29.6% 28.0% Gross margin up 150 basis points to 23.0% 31.1% (2015: 29.6%) 20.4% 18.0% 2012 2013 2014 2015 2016 Operating profit up 32.7% to £19.5m Operating margin (2015: £14.7m) 20
Slide 15: Homes: costs stable, margins rising
Homes: costs stable, margins rising Land cost of sales continued to fall . . . . margins continued to rise . . . acquisition cost stable 2016 average land acquisition cost £400 per plot higher due to one large site acquired at higher average per plot cost MJ Gleeson plc – results for the period ende
Slide 16: Homes: land pipeline still growing
Homes: land pipeline still growing Land pipeline 10,000 9,284 9,000 9,284 plots at 30 June 2016 8,000 7,496 (June 2015: 7,496) 7,000 4,927 Number of plots Awaiting 117 sites at 30 June 2016 (June 6,000 3,816 completion 5,065 2015: 97) 5,000 3,452 1,815 4,000 10.3 years sales, at 2016 sales 1,2
Slide 17: Demand & affordability remains strong
Demand & affordability remains strong Demand and affordability strong: Good mortgage availability 23,000 mortgage products currently available (7,000 more than last year) Owning cheaper than renting £67 per week to buy average Gleeson home*, £74 per week typical council house rent Entry level 2
Slide 18: Strategy for continued growth
Strategy for continued growth Regional office opened in Liverpool 6 regional offices at June 2016 (June 2014: 3 offices) Land being acquired adjacent to existing footprint N Midlands, Cumbria, East Yorks. Management team strengthened Divisional FD Land team strengthened Leadership de
Slide 19: Structure to support growth
Structure to support growth Homes management team CEO & Homes MD – Jolyon Harrison of 9 directors with depth and breadth of experience HEAD OFFICE LAND – Steve Gamble TECHNICAL – Tony Lee COMMERCIAL – Arron Passarelli BUILD – Geoff Pykett SALES AND OPERATIONS – Sarah Marsden Regional Director – Regi
Slide 20: Strategic Land overview
Strategic Land overview 7 land sales completed (2015: 5 land sales) Operating profit up 25.9% to £10.2m (2015: £8.1m) 5 new sites secured during period 30 June 2016 portfolio of 68 sites comprising 3,843 acres (30 June 2015: 3,936 acres) Expect stronger 2H than 1H this financial year MJ Gl
Slide 21: Planning status of current portfolio
Planning status of current portfolio Strategic Land sites: an excellent portfolio No. Sites Acres Plots Planning consented * 14 250 2,079 Planning submitted 15 883 3,570 Allocated sites 12 1,061 6,475 Not allocated 27 1,649 8,987 Total 68 3,843 21,111 * Including 4 resolutions to grant MJ Gleeson pl
Slide 22: Current land market
Current land market Prime “A” Guildford, Twickenham, Surrey , inner M25 Hot interest from all major house builders Prime “B” Shaftesbury, Farnham, Witney, Tunbridge Wells, Haywards Heath Strategic Very hot interest from builders building less than 2,500 units a year. Major house builders will bid bu
Slide 23: Summary and outlook
Summary and outlook Demand remains strong for both low cost homes and greenfield land Prepared for growth beyond 1,000 units p.a. Confidence in the future lead to uplift in dividend Confident of continued profitable growth this year and beyond MJ Gleeson plc – results for the period ended 30
Slide 24: MJ Gleeson plc
gleeson MJ Gleeson plc