Slide 1: Roger Lewis, Chairman
The Berkeley Group plc y ROGER LEWIS CHAIRMAN
Slide 2: Format of Presentation
Format of Presentation • Introduction Roger Lewis • Review of Results Rob Perrins • Managing Director’s Review Tony Pidgley • Questions
Slide 3: Financial Highlights
Financial Highlights Year to 30 April 2004 2004 2003 Increase Pre tax profits £230.2m £221.2m 4.1% Earnings per share 130.7p 116.0p 12.7% Net assets £1,145.0m £1,056.2m 8.4% Net asset value per share 946p 829p 14.1% Dividend £26.6m £24.9m 6.8% Dividends per share 22.3p 19.2p 16.1%
Slide 4: Rob Perrins, Finance Director
ROB PERRINS FINANCE DIRECTOR
Slide 5: Review of Results
Review of Results • Profit & loss account • Cash flow • Balance sheet • Sales analysis • Land holdings
Slide 6: Abridged Group Profit and Loss Account
Abridged Group Profit and Loss Account 12 Months to 12 Months to Apr 2004 Apr 2003 Change £m £m £m % Turnover (excluding JVs) 1,272.4 1,150.8 121.6 +10.6 Operating profit 213.3 16.8% 215.7 18.7% (2.4) -1.1 Joint ventures 21.9 16.5 5.4 +32.7 Net interest - Group (1.5) (8.0) 6.5 +81.1 - JVs (3.5) (3.0
Slide 7: Shares in Issue
Shares in Issue 2003/04 2002/03 Shares at 1 May 128,214,472 134,963,049 Shares purchased (1,250,000) (-) Shares issued 560,762 9,859 Shares at 31 October 127,525,234 134,972,908 Shares purchased (5,743,318) (6,786,559) Shares issued 280,393 28,123 Shares at 30 April 122,062,309 * 128,214,472 * Weigh
Slide 8: Profit Distribution and ROCE
Profit Distribution and ROCE • Tax rate of 29.5% down from 30.1% • Dividends per share up 16.1% to 22.3p • Dividend covered 6.1 times (2003: 6.2 times) • Return on Capital Employed was 21.4% for the year (2003: 19.3%)
Slide 9: Analysis by Activity
Analysis by Activity Turnover Operating Profit 12 Months to 12 Months to 12 Months to 12 Months to Apr 2004 Apr 2003 Apr 2004 Apr 2003 £m £m £m £m Residential - Group 1,130.1 1,130.1 199.1 17.6% 212.0 18.8% - JV’s 121.0 91.5 19.8 16.4% 14.2 15.5% 1,251.1 1,221.6 218.9 226.2 89.6% 97.7% 93.1% 97.4% C
Slide 10: Profit Reconciliation
Profit Reconciliation £m £m 2003 Full Year Profit before tax 221.2 Group Residential: - housebuilding (11.7) - land (1.2) Commercial 10.5 (2.4) Joint ventures Residential: - housebuilding 17.5 - land (12.0) Commercial (0.2) 5.3 Interest 6.1 2004 Full Year Profit before tax 230.2
Slide 11: Trading Account Profile - Percentages of Turnover
Trading Account Profile - Percentages of Turnover 12 Months to 12 Months to Apr 2004 Apr 2003 % % Turnover 100.0 100.0 Land (18.3) (21.5) Build (52.8) (46.1) Sales & marketing (4.8) (5.0) Gross margin 24.1 27.4 Operating expenses (7.3) (8.6) Operating profit 16.8 18.8 Joint ventures 1.7 1.4 Interest
Slide 12: Abridged Group Cash Flow
Abridged Group Cash Flow 12 Months to 12 Months to Apr 2004 Apr 2003 £m £m Operating profit 213.3 215.7 Non cash items 2.2 3.9 215.5 219.6 Tax and dividends (78.1) (68.7) Net interest (1.7) (7.2) 135.7 143.7 Movement in working capital 220.4 (15.2) Capex and financial investment (27.8) 13.7 Acquisit
Slide 13: Cash Due on Forward Sales
Cash Due on Forward Sales At 30 Apr At 30 Apr 2004 2003 £m £m Debtors taken to sales and due on completion 156.4 229.0 Due on units not yet taken to sales - Exchanged contracts 604.0 600.8 - Reserved units 184.9 91.1 Total cash due 945.3 920.9
Slide 14: Abridged Group Balance Sheet
Abridged Group Balance Sheet At 30 April At 30 April 2004 2003 £m £m Fixed assets and investments 84.6 77.4 Stocks 1,066.3 1,151.1 Debtors 172.2 247.5 Investments - 62.0 Creditors < 1 year (313.7) (316.5) Creditors > 1 year (9.6) (22.3) Capital employed 999.8 1,199.2 Net cash/(debt) 145.2 (143.0) Ne
Slide 15: Stocks
Stocks At 30 April At 30 April 2004 2003 £m £m Land not under development 182.7 135.2 Work in progress: Land cost 403.9 488.5 Build cost 398.3 444.8 Completed units 75.0 71.5 Part exchanges 6.4 11.1 1,066.3 1,151.1
Slide 16: Geographical Analysis of Residential Units Sold
Geographical Analysis of Residential Units Sold 12 Months to 12 Months to April 2004 Apr 2003 No. % No. % London 1,870 49 1,321 37 South East 959 25 1,160 33 North West and Yorkshire 648 17 328 9 Midlands, West England and Wales 328 9 735 21 3,805 100 3,544 100 Joint ventures 1,034 637
Slide 17: Geographical Analysis of Residential Turnover
Geographical Analysis of Residential Turnover 12 Months to 12 Months to Apr 2004 Apr 2003 £m % ASP £m % ASP £’k £’k London 632.0 56 321 521.6 46 381 South East 279.8 25 281 373.9 33 323 N.W. and Yorkshire 134.4 12 202 87.0 8 259 Midlands, W. England and Wales 84.0 7 235 147.6 13 200 1,130.2 100 283
Slide 18: Land Bank
Land Bank At 30 Apr At 30 Apr 2004 2003 Owned 21,449 19,459 Contracted 4,315 3,358 Agreed 890 3,033 Plots 26,654 25,850 Sales value £6,789m £7,044m Average selling price £255k £272k Average plot cost £34k £40k Land cost % 13.5% 14.5% Gross margin £1,926m £2,005m GM% 28.4% 28.5% Includes joint ventur
Slide 19: Group Land Holdings by Division
Group Land Holdings by Division At 30 Apr At 30 Apr 2004 2003 No. No. Berkeley Homes (Capital) 6,106 6,361 Berkeley Homes (Home Counties) 4,962 4,216 St George 6,800 6,638 Crosby Homes 5,124 4,815 Berkeley First 692 700 St John 554 - St James Group 2,416 3,120 26,654 25,850
Slide 20: 15 Largest London Sites Released to Market
15 Largest London Sites Released to Market Total Complete Exchanged Resv’d Available Not Released Imperial Wharf 1,685 422 72 15 35 1,141 Woolwich Arsenal 1,233 375 136 18 30 674 St George Wharf 920 457 109 4 6 344 Chelsea Bridge Wharf 772 347 100 5 17 303 Deptford 756 506 78 1 20 151 Grosvenor Dock
Slide 21: 15 Largest Non-London Sites Released to Market
15 Largest Non-London Sites Released to Market Total Complete Exchanged Resv’d Available Not Released Redbank, Manchester 1,263 - 225 58 156 824 Clarence Dock, Leeds 882 176 169 63 4 470 Gunwharf Resid’l, Portsmouth 874 307 40 - 13 414 Unipart, Oxford 535 313 101 12 8 101 Knowle Village, Hampshire 5
Slide 22: Roger Lewis, Chairman
The Berkeley Group plc y ROGER LEWIS CHAIRMAN
Slide 23: Strategic Review
STRATEGIC REVIEW • External Background • Current Status of Berkeley • Alternative Strategic Options Considered • The Selected Option
Slide 24: External Background
EXTERNAL BACKGROUND • The state of the economy • Return to a more normal housing market • Highly competitive land market • Uncertain planning regime • Build cost pressures
Slide 25: Current Status of Berkeley
CURRENT STATUS OF BERKELEY • Completed transition into specialised Urban Regenerator • Business now simplified. Further scope remains • Cash in hand: £145 million • Profitable cash generation, supported by strong forward sales • Strong very well purchased land bank • First rate management teams with
Slide 26: Alternative Strategic Options Considered
ALTERNATIVE STRATEGIC OPTIONS CONSIDERED • Continue to grow business and profits • Dispose of business or individual divisions • Demerger • Return cash to shareholders and remain focused on urban regeneration
Slide 27: The Selected Option
THE SELECTED OPTION • Not to pursue volume • Establish a smaller differentiated core business • Operate safely within management competence • To develop a smaller number of carefully selected sites • To become a simple business but with the expertise to undertake the most complicated schemes • To re
Slide 28: Tony Pidgley, Managing Director
TONY PIDGLEY MANAGING DIRECTOR
Slide 29: Managing Director's Review (1)
Managing Director’s Review (1) The Last Year: • Sales • Land Holdings • Management Structure • Crosby • Gunwharf • Joint ventures • Cash generation
Slide 30: Managing Director's Review (2)
Managing Director’s Review (2) The Future: • Even more focus • Consolidating the scale of Berkeley • Concentration on small number of large projects • Maximising the return to shareholders • Sustainable
Slide 31: Questions
Questions Roger Lewis Chairman Tony Pidgley Managing Director Rob Perrins Finance Director