Berkeley Group Holdings Plc · LSE:BKG

Berkeley — The Berkeley Group Holdings — FY2014 Earnings Presentation

32 slides from Berkeley's earnings presentation, Jun 18, 2014

  1. Slide 1: Preliminary Results Presentation, Year Ended 30th April 2014

    THE BERKELEY GROUP HOLDINGS PLC PRELIMINARY RESULTS PRESENTATION YEAR ENDED 30TH APRIL 2014 18th June 2014

  2. Slide 2: Format of presentation

    Format of presentation Chairman Tony Pidgley CBE Finance Director Nick Simpkin Managing Director Rob Perrins Questions

  3. Slide 3: Tony Pidgley CBE, Chairman

    TONY PIDGLEY CBE CHAIRMAN eee tee Berkeley St Edward StJames StGeorge Holdings plc

  4. Slide 4: Dividend

    Dividend Record Payment Amount Amount Date Date (pence) (£’million) First dividend (paid) 22 March 2013 19 April 2013 15 20 Second dividend (paid) 30 August 2013 27 September 2013 59 77 Third dividend (paid) 20 December 2013 17 January 2014 90 118 Fourth dividend (proposed) 22 August 2014 26 Septemb

  5. Slide 5: Nick Simpkin, Finance Director

    NICK SIMPKIN FINANCE DIRECTOR

  6. Slide 6: Review of Results

    Review of Results • Summary of performance • Summary of financial position • Future potential share dilution • Income statement • Homes completed and ASP • Abridged cash flow • Abridged balance sheet − Inventories − Creditors • Land holdings

  7. Slide 7: Summary of Performance

    Summary of Performance Year ended 30 Apr 2014 30 Apr 2013 Change (£) Change (%) Operating Profit £374.8m £280.1m +£94.7m +33.8% Operating Margin 23.1% 20.4% Profit before tax £380.0m £270.7m +£109.3m +40.4% EPS – Basic 221.8p 160.0p +61.8p +38.6% Return on equity 27.5% 22.4%

  8. Slide 8: Summary of financial position

    Summary of financial position April 2014 April 2013 Change (£) Change (%) Shareholders’ funds £1,441.3m £1,322.4m +£118.9m +9.0% Closing net debt/(cash) (£129.2m) (£44.7m) ­£84.5m Capital Employed £1,312.1m £1,277.7m +£34.4m +2.7% Net asset value per share 1,066p 1,009p +57p +5.6% Shares in issue 13

  9. Slide 9: Future Potential Share Dilution

    Future Potential Share Dilution Approved by No. (million) Exercise Price* Vesting Date shareholders Shares in issue 135.3 2009 B LTIP tranche 1 3.0 £6.76 Apr'15** Apr'09 2009 B LTIP tranche 2 3.0 £6.76 Apr'16** Apr'09 2011 LTIP 19.6 £11.36 Sep'21*** Sep'11 160.9 *Div idend adjusted as at 3 0 April 2

  10. Slide 10: Income statement

    Income statement Year ended Apr 2014 Apr 2013 Change Change £m £m £m % Revenue 1,620.6 1,372.6 +248.0 +18.1% Gross profit 508.9 31.4% 403.4 29.4% +105.5 +26.2% Operating expenses (134.1) 8.3% (123.3) 9.0% ­10.8 ­8.8% Operating profit 374.8 23.1% 280.1 20.4% +94.7 +33.8% Net finance costs (6.9) (8.1)

  11. Slide 11: Homes completed and ASP

    Homes completed and ASP Units ASP Units ASP 2013/14 HY02 1,448 £539,000 3,742 £423,000 2013/14 HY01 2,294 £350,000 St Edward Homes 203 £1,235,000 2012/13 HY02 1,785 £376,000 3,712 £354,000 2012/13 HY01 1,927 £335,000 St Edward Homes 66 £277,000 2011/12 HY02 1,506 £254,000 3,565 £280,000 2011/12 HY01

  12. Slide 12: Abridged cash flow

    Abridged cash flow Year ended April 2014 April 2013 £m £m Profit before tax 380.0 270.7 ­ Increase in inventory – land (107.8) (86.4) ­ Increase in inventory – build WIP & stock (306.7) (158.1) ­ Increase in land creditors 29.1 58.1 ­ Other working capital movements 307.5 83.6 Net investment in work

  13. Slide 13: Abridged balance sheet

    Abridged balance sheet April 2014 Movements April 2013 £m £m £m Non current assets ­ Intangible assets 17.2 ­ 17.2 ­ Investment in JVs 61.4 17.3 44.1 ­ Rental fund 18.2 (84.1) 102.3 ­ Deferred tax assets 61.1 4.4 56.7 ­ Property, plant and equipment 22.0 5.7 16.3 Inventories 2,481.2 414.5 2,066.7 De

  14. Slide 14: Inventories

    Inventories April 2014 Movements April 2013 £m £m £m Land not under development 492.4 182.4 310.0 Work in progress: Land cost 786.1 (74.6) 860.7 1,278.5 107.8 1,170.7 Work in progress: Build cost 1,180.3 329.3 851.0 Completed units 22.4 (22.6) 45.0 2,481.2 414.5 2,066.7

  15. Slide 15: Creditors

    Creditors April 2014 Movements April 2013 £m £m £m Trade creditors and accruals 415.5 1.1 414.4 Provision for liabilities 57.1 28.1 29.0 Deposits and on account receipts 741.7 315.6 426.1 Land creditors 210.0 29.1 180.9 Current tax liability 83.7 (18.3) 102.0 Total creditors 1,508.0 355.6 1,152.4 La

  16. Slide 16: Land holdings

    Land holdings April 2014 Variance April 2013 Owned 23,486 (1,569) 25,055 Contracted 520 (109) 629 Plots 24,006 (1,678) 25,684 Sales value £10,062m £355m £9,707m Average selling price £419k £41k £378k Average plot cost £72k £10k £62k Land cost % 17.3% 0.9% 16.4% Gross margin £3,014m £162m £2,852m GM%

  17. Slide 17: Rob Perrins, Managing Director

    ROB PERRINS MANAGING DIRECTOR

  18. Slide 18: Introduction

    Introduction 1. Performance Highlights 2. Long Term Strategic Plan 3. The Berkeley Difference 4. The Market 5. Land and Build Investment 6. Joint Ventures 7. Outlook 8. Guidance 9. Conclusion

  19. Slide 19: 1. Performance Highlights

    1. Performance Highlights Highlights • PBT up 40.4% to £380.0 million • Dividends paid of 149 pence • Net cash of £129.2 million and ungeared throughout the year • 9 sites acquired for £353 million • Increased investment in build inventory by £306 million in year • Cash due on forward sales up 56.5%

  20. Slide 20: 2. Long Term Strategic Plan

    2. Long Term Strategic Plan Milestone Committed Outstanding Total £/share £’m £/share £’m £/share £’m By 30th September 2015 2.54 336 1.80 244 4.34 580 By 30th September 2018 ­ ­ 4.33 586 4.33 586 By 30th September 2021 ___­ ___­ 4.33 586 4.33 586 2.54 336 10.46 1,416 13.00 1,752 Amendments to the s

  21. Slide 21: 3. The Berkeley Difference

    3. The Berkeley Difference Objectives Model • Protect value in the balance sheet 1. To be commercially successful • Control release of schemes to build • Match operational risk with market conditions 2. To be sustainable, for the long­term • Add value to the land holdings • Invest at the right point

  22. Slide 22: 4. The Market

    4. The Market Sales • London is a World City • There is a shortfall of good quality new housing • Interest rates have remained low • Investors comprise 50% of sales • Non­UK buyers comprise 30% of sales Land and Planning • £353 million invested in the period – there are opportunities in the market •

  23. Slide 23: 5. Land and Build Investment: Inventories

    5. Land and Build Investment Inventories Inventories £2,481m £2,067m £1,852m £1,614m £1,254m £1,115m 30 Apr 09 30 Apr 10 30 Apr 11 30 Apr 12 30 Apr 13 30 Apr 14 Land not under development WIP ­ land WIP ­ build Completed stock

  24. Slide 24: 5. Land and Build Investment: Delivery

    5. Land and Build Investment Delivery London South Total Delivery of Developments: In construction No. sites 39 26 65 Not yet in construction No. sites 10 2 12 Total developments No. sites 49 28 77 Of those not yet in construction Intended for re­planning No. sites 1 ­ 1 Resolution to grant No. site

  25. Slide 25: Sites in London

    5. Land and Build Investment Sites in London

  26. Slide 26: Sites in the South of England

    5. Land and Build Investment Sites in the South of England

  27. Slide 27: 5. Land and Build Investment: Land Holdings

    5. Land and Build Investment Land Holdings Average Gross Gross Units Revenue Selling Margin Margin No. £m Price £m % At 30 April 2009 30,044 7,181 £239k 2,014 28.0 At 30 April 2010 28,099 7,220 £257k 2,038 28.2 At 30 April 2011 27,026 8,136 £301k 2,304 28.3 At 30 April 2012 26,021 8,989 £345k 2,580

  28. Slide 28: Land Pipeline

    5. Land and Build Investment Land Pipeline

  29. Slide 29: 6. Joint Ventures

    6. Joint Ventures St Edward • Joint venture with Prudential • Three schemes in construction (Stanmore, 375 Kensington High Street and 190 Strand) • 375 Kensington High Street delivering a year earlier than originally guided

  30. Slide 30: 7. Outlook

    7. Outlook Positive Signs Key Risks • Strong underlying demand in best locations • Eurozone and World events undermining confidence • Limited supply in best locations • Tax changes • Homes are affordable when customers have equity • Currency fluctuations deterring overseas buyers • Government stimul

  31. Slide 31: 8. Guidance

    8. Guidance Performance Guidance 90p per share declared Regular dividends up to September Dividend 254p per share cumulative 2015 Achieved target of £3 billion Land Holdings Maintain at £3 billion estimated gross margin Underlying earnings expected to be in line with market expectations FY 2014/15 ­

  32. Slide 32: Questions

    Questions Tony Pidgley CBE Chairman Rob Perrins Managing Director Nick Simpkin Finance Director

The Berkeley Group Holdings — FY2014 Earnings Presentation on 6ix