Slide 1: Preliminary Results Presentation, Year ended 31 December 2016
Designed for Living. Designed for Living. Built for Life. Built for Life. CAIRNHOMES.COM WWW.CAIRNHOMES.COM Cairn Homes plc Cairn Homes Preliminary plc Results Presentation Equity Year endedPresentation 31 December 2016 09 March 2017 January 2017 1 © CAIRN HOMES PLC 2016. WWW.CAIRNHOMES.COM
Slide 2: Disclaimer
Disclaimer This presentation document (hereinafter “this document”) has been prepared by Cairn Homes Plc (“Cairn Homes” or the “Company”). This document has been prepared in good faith, but the information contained in it has not been subject to a verification exercise. No representation or warranty
Slide 3: Agenda
Agenda 1. Key Highlights 2. Operations 3. Financials 4. FTBs & Affordability 5. Outlook 6. Appendix 3 © CAIRN HOMES PLC 2016. WWW.CAIRNHOMES.COM
Slide 4: Key highlights
Key highlights • Total revenues of €40.9 million, up from €3.7 million in 2015; - 105 completed sales Financial • Gross profit of €7.1 million and a gross profit margin of 17.3%; - H2 2016 gross profit margin of 17.7% increased from H1 of 16.5% • Operating Profit (before exceptional items) of €3.6 m
Slide 5: Agenda
Agenda 1. Key Highlights 2. Operations 3. Financials 4. FTBs & Affordability 5. Outlook 6. Appendix 5 © CAIRN HOMES PLC 2016. WWW.CAIRNHOMES.COM
Slide 6: Core sites – geographic overview and transport connectivity
Core sites – geographic overview and transport connectivity Active Sites – Green (2,800 units) Ashbourne Swords 354 homes Remaining Sites – Red (9,400 units) Parkside 433 homes Maynooth Butterly Regional 597 homes Griffith Ave Adamstown Hanover Quay 1,195 homes 122 homes Marianella 234 homes Clonbur
Slide 7: Land bank analysis
Land bank analysis Composition of 12,100 unit land bank The pathway to 1,200+ unit delivery by 2019 13% 10% 25% 1400 1,200+ units 1200 1000 850 units 20% 800 Range: 375 600 – 400 units 400 57% 105 units 200 75% 0 2016 2017 2018 2019 4% 91% of land bank in Dublin and GDA 10% 34% 35% 26% 64% Dublin –
Slide 8: Scaling our business
Scaling our business Measureable increase in construction and sales activity 8 © CAIRN HOMES PLC 2016. WWW.CAIRNHOMES.COM
Slide 9: The Cairn team and supporting subcontractors
The Cairn team and supporting subcontractors Scaling our business Supporting our subcontractor base • Assembled a talented, high calibre and dedicated team to deliver • 285 subcontractors and suppliers are employed across our 7 active on future growth plans sites • Supporting 1,000 construction jobs
Slide 10: Construction costs
Construction costs House Building Cost Index Annual Construction Industry Labour Cost Inflation 1.25% 9.00% 7.00% 5 year average – 2.54% pa 1.00% 5.00% 0.72% 3.00% 0.75% 1.00% -1.00% 0.50% 5 year average – 0.63% pa 0.17% -3.00% -5.00% 0.25% -7.00% -9.00% 0.00% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Slide 11: Sales performance
Sales performance Strong monthly sales trajectory evident Weekly Sales Cumulative Sales 90 400 • The graph reflects cumulative sales from: 80 350 - Parkside (launched September 2015); Impact of Marianella launch 70 - Albany (launched May 2016); 300 - Churchfields (launched October 2016); 60 250 - Ma
Slide 12: Construction life cycle of a Cairn home
Construction life cycle of a Cairn home • Efficient operating model delivers new homes in under 20 working weeks on average from laying foundations to customer snag: = 19 weeks = 17 weeks Note – excludes time required to complete site works and prelims which vary Total Construction Timeline from sit
Slide 13: The Cairn brand
The Cairn brand At the heart of our business • Further strengthening of brand positioning through: - The high quality of our overall product – the core pillar of our brand proposition; - Creation of sustainable, vibrant communities, centred around smart design and high quality landscaped environment
Slide 14: Active sites
Active sites Marianella, Rathgar – 234 units Hanover Quay, Dublin 2 – 122 units On taking possession in late February 2016 March 2016 March 2017 – construction on schedule in preparation for formal sales March 2017 – basement concrete pour underway 2017 launch in April off Block A show units 64% 14
Slide 15: Parkside, Malahide Road and Churchfields, Ashbourne
Parkside, Malahide Road – 504 units Churchfields, Ashbourne (GDA) – 354 units May 2015 March 2017 March 2017 2017 64% Update: Phase 1 complete, Phase 2 construction (212 units including NAMA JV lands) Update: Phase 1 construction continuing which will deliver a total of 168 new homes underway 15 © C
Slide 16: Glenheron, Greystones and Shackleton, Adamstown
Glenheron, Greystones (GDA) – 480 units Shackleton, Adamstown – 1,095 units Glenheron, Phase 1 2017 64% Update: Construction of Phase 1 (50 units) underway. Final grant of planning for Update: Planning permission received for initial 267 units in a development which Phase 2 (192 units) is due immine
Slide 17: Upcoming Sites
Upcoming Sites Naas Town Centre, Kildare (GDA) – 450 units Maynooth, Kildare (GDA) – 597 units New Link Road Lyeen River Park Cycle link to Main St Main St Dublin City Centre 2017 Maynooth University Campus Adamstown Train Station 64% Update: Full planning permission in place for our lands off the S
Slide 18: Future Sites
Future Sites Cherrywood, Dublin (SDZ) – 315 units Clonburris, Dublin – 3,000 units Dublin City Centre 2017 Adamstown Train Station 64% Update: Infrastructure works underway (spine road and public park) in advance of Update: 692 Ac (280 Ha) SDZ presently under review by SDCC focussing on lower densit
Slide 19: Agenda
Agenda 1. Key Highlights 2. Operations 3. Financials 4. FTBs & Affordability 5. Outlook 6. Appendix 19 © CAIRN HOMES PLC 2016. WWW.CAIRNHOMES.COM
Slide 20: Financial results: Income Statement
Financial results: Income Statement Income statement for 12 months ended 31 December 2016 Commentary Revenue of €40.9m predominantly from the sale of 105 For year ended 31-Dec-16 For period ended 31-Dec-15 houses (€31.0m), €4.5m from the sale of completed Before Except Before Except Project Clear
Slide 21: Financial results: Balance Sheet
Financial results: Balance Sheet Balance sheet as at 31 December 2016 Commentary 31-Dec-16 31-Dec-15 (all numbers in €'000) €'000 €'000 Inventories represents all owned sites, WIP spend to date and development land collateral (t/f from loan assets in PP&E & Intangibles 1,379 260 Restricted Cash 27
Slide 22: Financial results: Cash Flow Statement
Financial results: Cash Flow Statement Cash Flow Statement for 12 months ended 31 December 2016 Commentary Year ended Period ended Increase in inventories represents further 2016 (all numbers in €'000) 31-Dec-16 31-Dec-15 acquisitions (Hanover Quay, Maynooth, Cherrywood, EBITDA 2,466 (3,772) Delga
Slide 23: Agenda
Agenda 1. Key Highlights 2. Operations 3. Financials 4. FTBs & Affordability 5. Outlook 6. Appendix 23 © CAIRN HOMES PLC 2016. WWW.CAIRNHOMES.COM
Slide 24: Supply side measures delivering mortgage-backed FTBs
Supply side measures delivering mortgage-backed FTBs • The loosening of the CBI mortgage rules (now 90% LTV unlimited) and the launch of the Help to Buy income tax rebate scheme (capped at €20,000) have materially reduced FTB deposit requirements: €80,000 62% €70,000 €60,000 63% €50,000 66% €40,000
Slide 25: Home ownership is more affordable than renting
Home ownership is more affordable than renting Under-supply driving rental growth Under-supply of housing has resulted in significant growth in rental prices with over 51% growth nationally since 2012 Rents in Dublin are now 14% above 2008 peak, up 15% YoY to December 2016 and up almost 65% from
Slide 26: Other affordability drivers
Other affordability drivers • Upward trend in earnings growth • Unemployment down to 6.6% in February 2016 2200 (‘000) 16.0% Peak – 15.2% +213,000 14.0% 2100 12.0% YoY earnings growth (%) 2000 10.0% 1900 8.0% 1800 6.0% 1700 4.0% 2013 2014 2015 2016f 2017f 2018F Employment Unemployment Rate • Mortgag
Slide 27: Agenda
Agenda 1. Key Highlights 2. Operations 3. Financials 4. FTBs & Affordability 5. Outlook 6. Appendix 27 © CAIRN HOMES PLC 2016. WWW.CAIRNHOMES.COM
Slide 28: Outlook
Outlook Overall economic, regulatory and political environment continues to improve in Ireland Pent up demand for good quality homes in attractive locations Mortgage market conditions continuing to improve Scalable business model – ability to immediately respond to market demand Active on
Slide 29: Agenda
Agenda 1. Key Highlights 2. Operations 3. Financials 4. FTBs & Affordability 5. Outlook 6. Appendix 29 © CAIRN HOMES PLC 2016. WWW.CAIRNHOMES.COM
Slide 30: Overview of CBI rule changes and Help to Buy
Overview of CBI rule changes and Help to Buy Loosening of CBI mortgage rules Launch of Help to Buy tax rebate scheme • The CBI published it’s review of its macro-prudential • The government launched the FTB Help to Buy (“HTB”) income mortgage rules in November 2016 - the modest loosening tax rebate
Slide 31: Greater Dublin Area – the engine of the Irish economy
Greater Dublin Area – the engine of the Irish economy Population growth of 5.5% (to 1.91m) between 2011 and 2016 (national average 3.7%) – projected to grow by a further 15% (293k) by 2031 With average household formation of 2.49 people, 40% of total Irish population the growing population will requ
Slide 32: Dublin residential price recovery v's rental price recovery
Dublin residential price recovery v’s rental price recovery Av. House Price € Av. Rental Price € 6% above Supply 2007 peak Shortfall 32% below 2007 peak Source: CSO, Daft.ie Note: Average rental price for Dublin is calculated as the average price quoted for each of the six listed Dublin districts in
Slide 33: Demand continues to significantly exceed supply
Demand continues to significantly exceed supply Completions are significantly below medium term demand in Dublin and the Rest of Ireland. While the Dublin market recovery more pronounced, 2016 output was still significantly behind medium term housing demand levels Rest of Ireland Dublin 2016 com
Slide 34: A sustainable house-building economy
A sustainable house-building economy….. Housing Completions v Economy As outlined in the tables below, the Irish housebuilding sector built and sold an average of 23,871 units per annum in the pre-Celtic Tiger 20 year period to 1995. To put this into context, the Irish economy is now over 3 times la