Cairn Homes Plc · LSE:CRN
Cairn Homes — H1 2022 Earnings Presentation
38 slides from Cairn Homes's earnings presentation, Sep 8, 2022
Slide 1: Cairn Homes plc 2022 Interim Results Presentation
Cairn Homes plc 2022 Interim Results Presentation
Slide 2: Table of Contents
2022 Interim Results Presentation – 8 September 2022 Table of Contents Page Michael Stanley H1 2022 Highlights & 1 Review 2 Chief Executive Officer H1 2022 Financial Results & 2 Guidance 13 Shane Doherty Chief Financial Officer 3 Leading Sustainably 23 4 Outlook 25 Declan Murray Head of Investor Rel
Slide 3: H1 2022 Highlights & Review
01 H1 2022 Highlights & Review Harpur Lane, Leixlip
Slide 4: H1 2022 Key Highlights – KPIs
H1 2022 Key Highlights – KPIs Strongest Ever H1 Sales Revenue and On Target for Performance Operating Profit Current Year Guidance 547 €240.3m (+84%) 1,500 Closed sales (36% of FY22 guidance) Revenue from core activities Closed new home sales 1,988 €36.2m (+209%) Current closed and forward sales wit
Slide 5: Competitive Average Starter Home Sales Prices
Competitive Average Starter Home Sales Prices H1 2022 Average Selling Prices* ASPs €'k Sales Units Revenue Starter Homes Trade Up/Down Apartments Overall H1 2022 547 330 509 472 439 €240.3m H1 2021 403 327 458 301 324 €130.4m Movement +36% +1% +11% +57% +35% +€109.9m Cairn developments Realisable de
Slide 6: Macroeconomic Backdrop
Macroeconomic Backdrop In the context of the current considerable cost of living increases and unpredictable energy markets, the fundamentals of the Irish economy as one of the best performing in Europe are expected to provide some resilience to the housing market: Ireland’s Economic Performance Und
Slide 7: Population and Employment Growth Underpinning Demand
Population and Employment Growth Underpinning Demand Fastest Population Growth in EU27 Record Employment Growth* +362,000 or 7.6% +476,000 or 22.9% 5.2m 3.0% 2.6m 12.0% 5.1m 2.5% 2.4m 8.0% 5.0m 2.0% 2.2m 4.0% 4.9m 1.5% 2.0m 0.0% 4.8m 1.0% 1.8m -4.0% 4.7m 0.5% 4.6m 0.0% 1.6m -8.0% 2016 2017 2018 2019
Slide 8: Playing a Leading Role in Providing Housing Solutions Across All Tenures
Playing a Leading Role in Providing Housing Solutions Across All Tenures Our Growth Trajectory Industry Annual Rolling New Home Commencements* New Home Completions New Homes 1,750 30,000 26,000 1,500 22,000 1,500 1,250 18,000 Dec to Jul -8.2% 14,000 Mar to Jul -19.8% 1,000 1,120 10,000 May… May… Mar
Slide 9: Demand For Our Product Strong Across All Buyer Profiles
Demand For Our Product Strong Across All Buyer Profiles 2022 Growth in our Closed and Forward Order Book Buyer Profile of Sales 1,988 / €760m+ New Homes €’m 2,000 800 750 20% 35% 1,750 700 Institutional Private: FTB / Starter 650 1,500 600 1,018 / €395m 1,250 550 500 1,000 20% 25% 450 400 750 Privat
Slide 10: We Get Planning – We Build Straight Away
We Get Planning – We Build Straight Away Fast Track Planning Has Supported Our Growth Applications Units Successful SHD and SDZ planning grants 25 7,900 90% Commenced 23 7,100 Of our guided unit volumes to 2024 have Full Planning Permission 27 development sites are currently forecasted to deliver ou
Slide 11: Driving Delivery Efficiencies in an Inflationary Environment
Driving Delivery Efficiencies in an Inflationary Environment Increasing Productivity & Efficiencies Strategic initiatives in managing build cost inflation: 01 Product development: advancing OSM (off-site manufacturing), MMC (modern methods of construction) and design with supply chain partners 02 As
Slide 12: Case Study – Innovation and Productivity
Case Study – Innovation and Productivity Library of Homes • An important element of our delivery strategy • Front elevation changes and tweaks to specification continues to be standardisation and finishes depending on price points are the only differentiating factor • We have a Library of Homes whic
Slide 13: Clonburris – An Ambitious New Suburb for 25,000 Residents in Dublin
Clonburris – An Ambitious New Suburb for 25,000 Residents in Dublin 25,000 9,000 10,000 13km Residents to be Mixed tenure Jobs in commercial From Dublin City housed homes and retail Centre Social Amenities • 8 new schools • 10 creches • 90 hectares of parks • 12.5km of walkways and cycleways • 3.3km
Slide 14: H1 2022 Financial Results & Guidance
02 H1 2022 Financial Results & Guidance Phase 3, Citywest
Slide 15: H1 2022 Financial Performance
H1 2022 Financial Performance June 2022 Unaudited June 2021 Unaudited Movement €m €m Revenue 240.4 130.6 +84% Cost of sales (188.7) (106.4) +77% Gross profit 51.7 24.2 +114% Gross margin % 21.5% 18.5% +300bps Opex (15.5) (12.5) +24% EBIT 36.2 11.7 +209% EBIT margin % 15.1% 8.9% +620bps PBT 31.8 7.6
Slide 16: Ongoing WIP Investment Driving Forward Sales Pipeline
Ongoing WIP Investment Driving Forward Sales Pipeline Closed & Forward Sales Pipeline (as at 7 September 2022) Units Revenue H1 2022 – closed sales 547 €240m H2 2022 – forward sales 929 €346m 2023 – forward sales 512 €175m Total closed and forward sales pipeline 1,988 €761m 1.5x Cover of €346m WIP i
Slide 17: Balance Sheet as at 30 June 2022
Balance Sheet as at 30 June 2022 30 June 2022 31 December 2021 Change Unaudited Audited €m €m Land held for development 667.5 671.7 Construction work in progress 346.0 268.3 €77.7m Other receivables 42.2 29.9 Other assets and liabilities (101.7) (81.6) Net assets (excluding net debt) 954.0 888.3 Net
Slide 18: Syndicate Refinance – Maintaining Total Debt Facilities at €350m
Syndicate Refinance – Maintaining Total Debt Facilities at €350m Sustainability Linked Facility • €277.5 million syndicate refinance completed after period end in July 2022 • Maturity in June 2027 • Sustainability linked facility where targets are linked directly to key elements of our sustainabilit
Slide 19: Driving Delivery Efficiencies – Supply Chain Collaboration
Driving Delivery Efficiencies – Supply Chain Collaboration • Over 90% of forecast c. €450m spend procured for 2022 and c. 60% procured on active sites for 2023 • Many of the commodity prices peaked in H1, notwithstanding energy price volatility • Leveraging our scale with c. €1.4bn procurement in th
Slide 20: The Energy Efficiency of a Cairn A2 Rated New Home
The Energy Efficiency of a Cairn A2 Rated New Home Significant energy cost savings with an A2 rated home €985 less expensive today, increasing to €1,451 in October 2022 • Our new homes have a minimum A2 BER (Building Energy Rating) and are nZEB €3,500 compliant (Nearly Zero Energy Buildings) €3,000
Slide 21: First Home Shared Equity Scheme Launched – Impactful Initiative for FTBs
First Home Shared Equity Scheme Launched – Impactful Initiative for FTBs 2021 2022 Help to Buy First Home & Help to Buy Cairn average starter home price (incl. VAT) €375,000 €375,000 Help to Buy (lower of €30k or 10%) €30,000 €30,000 Including cost of living challenges, Deposit from own funds €7,500
Slide 22: Reaffirming Increased March 2022 Full Year Guidance
Reaffirming Increased March 2022 Full Year Guidance FY 2022 Revenue & In excess of €600m Sales Volumes 1,500 sales completions Gross Margin 21.5% Operating Profit & €100m Margin c. 16.5% from core operating activities Shareholder Minimum €115m (with €95m committed to date) Returns ROE 11% 21
Slide 23: Continued Growth to 2024
Continued Growth to 2024 Three Years to 2024 Sales Volumes 5,000 to 5,500 ROE 11% in 2022 growing to 15% in 2024 Operating Cashflow * €500m after investment in WIP for future growth The positive trajectory of our business will sustain and we will continue to lead the market in the delivery of much n
Slide 24: Leading Sustainably
03 Leading Sustainably Whitethorn, Naas
Slide 25: Progress in Implementing our Sustainability Strategy
Progress in Implementing our Sustainability Strategy Tracking our 2022 Sustainability Commitments • Published our inaugural Sustainability Report in April 2022 • SBTi Scope 1, 2 and 3 committed in January 2022 • New sites with biodiversity improvements measured in line with international best practi
Slide 26: Outlook
04 Outlook Mariavilla, Maynooth
Slide 27: 2022 and Medium-Term Outlook
2022 and Medium-Term Outlook Economy Market 15% ROE strong fundamentals expected to demand for new homes driven provide some resilience to the by demographics and strong housing market employment in 2024 1,500 €100m €115m 5,000 – 5,500 completions 21.5% operating profit new home sales completions in
Slide 28: Appendices
05 Appendices
Slide 29: 2022 Sustainability Progress
2022 Sustainability Progress People Homes Places Engagement • All of our new developments are subject to Biodiversity Assessments and a • Marked improvement in both eNPS score commitment to protecting biodiversity - and response rates underpinning strong targets aligned to best practice are included
Slide 30: Demand Drivers
Demand Drivers Strong momentum entering expected tougher economic period High level of monthly household savings 14.0% €1,800 12.0% 10.0% €1,300 +€28.1bn €m Household Deposits growth in household (6m rolling average) YoY% 8.0% €800 deposits since March 2020 6.0% 4.0% €300 2.0% 0.0% 2010 2011 2012 20
Slide 31: New Homes Supply Indicators
New Homes Supply Indicators GDA housing planning grants still falling (12m rolling) Dublin housing completions still challenged (12m rolling) 40 7,000 35 6,000 30 5,000 # of completions 25 # of units ('000) 4,000 20 3,000 15 10 2,000 5 1,000 0 0 All Apartments Multi Development Units Dublin Scheme H
Slide 32: New Homes Supply Indicators (contd.)
New Homes Supply Indicators (contd.) Completions Commencements – down 18.4% between March and July 2022 Rolling 12m Total Rolling 12m Total (incl. one-off) 34,846 30,000 35,000 28,450 24,916 25,000 30,000 20,000 25,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 0 - Jun-18 Jun-19 Jun-20 Jun-21 Ju
Slide 33: 2022 Census Indicates Higher Population Than Forecast
2022 Census Indicates Higher Population Than Forecast Strong population growth Average 1.3% annual population growth since 2015 • Population of 5.12m as at April 2022, the highest since 1851, an 5.20 5.12 increase of 7.6% since Census 2016 5.10 5.01 • The ESRI forecast population growth to 5.6m by 2
Slide 34: Mortgage Market
Mortgage Market Mortgage drawdowns Mortgage approvals Rolling 12m Rolling 12m Total 12,000 55,000 10,000 45,000 # of approvals 8,000 €'000 35,000 6,000 25,000 4,000 2,000 15,000 Dec-18 Dec-19 Dec-20 Dec-21 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Aug-18 Aug-19 Aug-20 Aug
Slide 35: The Energy Efficiency of a Cairn A2 Rated New Home – Assumptions
The Energy Efficiency of a Cairn A2 Rated New Home – Assumptions Energy cost calculations based on: Sources: • prevailing energy rates (VAT inclusive) at the end of August • Electric Ireland smart meter Home Electric+ plan and Home 2022 and recent price rise effective from 1 October 2022 Dual+ plan
Slide 36: Cairn Development Brands
Cairn Development Brands 35
Slide 37: Disclaimer
Disclaimer This presentation document (hereinafter “this document”) has been Certain information contained herein constitutes “forward-looking prepared by Cairn Homes plc (“Cairn” or the “Company”). statements”, which can be identified by the use of terms such as “may”, “will”, “should”, “expect”, “
Slide 38: 7 Grand Canal, Grand Canal Street Lower, Dublin 2,
7 Grand Canal, Grand Canal Street Lower, Dublin 2, D02 KW81 01 696 4600 www.cairnhomes.com