Slide 1: Half Year Results Presentation
Designed for living. Built for life. Cairn Homes plc Half Year Results Presentation 04 September 2018 www.cairnhomes.com
Slide 2: Half Year Results Presentation 2018
Half Year Results Presentation 2018 Michael Tim Declan Stanley Kenny Murray Chief Executive Group Finance Head of Investor Officer Director Relations & Co-Founder 2 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 3: Highlights, Financial, Operations, Land Bank, Outlook, Appendix
Glenheron, Greystones 1. 2. 3. 4. 5. 6. Highlights Financial Operations Land Bank Outlook Appendix 3 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 4: Half Year Results – Financial Highlights
Half Year Results – Financial Highlights ASP's Unit Sales Revenue Houses Apartments Overall H1 2018 293 €326k €599k €393k €130.2m H1 2017 94 €280k - €280k €41.2m 3 September 2018 399 €324k €603k €393k €157m 3 September 2018 – Forward Sales 517 €323k €609k €428k €221m Gross Profit: €26.1m Operating P
Slide 5: Half Year Results – Operational Highlights
Half Year Results – Operational Highlights Significant Scale Achieved Quality Homes and Exceptional Broadening Buyer Pool Locations Driving Sales Demand Active on 13 developments which Selling off 9 developments. Sale of Six Hanover Quay for €101m (incl. will deliver in excess of 3,750 new VAT). Dem
Slide 6: Macroeconomic Drivers for Cairn
Macroeconomic Drivers for Cairn Strong macroeconomic fundamentals Population Employment & Wage Inflation Annual Housing Demand Employment + 392k since 2012 + 1.3% (+ 64,500) in the year to April Estimate 36,000 – 53,000 2018 (3x EU average) Wage inflation + 2.5% in 2018 Supply Shortfall in New Homes
Slide 7: Financial
Marianella 1. 2. 3. 4. 5. 6. Highlights Financial Operations Landbank Outlook Appendix 7 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 8: Income Statement for the six month period ended 30 June 2018 (Unaudited)
30 June 2018 Interim Results Income Statement for the six month period ended 30 June 2018 (Unaudited) For the Six Months Ended 30 June 2018 For the Six Months Ended 30 June 2017 Commentary (Unaudited) (Unaudited) Before Exceptional Total Before Exceptional Total • Revenue of €130.2m Exceptional Item
Slide 9: Balance Sheet at 30 June 2018
30 June 2018 Interim Results (contd.) Balance Sheet at 30 June 2018 Unaudited Audited Commentary 30 June 2018 31 December 2017 €m €m • Total assets of €1,022m (2017: PP&E and intangibles 2.3 2.2 €1,005m). Restricted cash 17.0 17.0 • Total equity of €730m (2017: Non-current assets 19.3 19.2 €722m). •
Slide 10: Cash Flow Statement for the six month period ended 30 June 2018 (Unaudited)
30 June 2018 Interim Results (contd.) Cash Flow Statement for the six month period ended 30 June 2018 (Unaudited) Unaudited Unaudited Commentary Six Months Ended Six Months Ended 30 June 2018 30 June 2017 €m €m • EBITDA of €18.8m (2016: €2.8m). EBITDA 18.8 2.8 • €39.1m increase in inventories Increa
Slide 11: Bank Debt Refinance and Private Placement
Bank Debt Refinance and Private Placement €277.5m Bank Syndicate €72.5m Private Placement Amount: €277.5 million Amount: €72.5 million Term: €72.5 million Type: Loan Notes RCF: €200 million Maturity: July 2024 – July 2026 Maturity: December 2022 • Previous €200 million corporate facility with AIB an
Slide 12: Financial Outlook
Financial Outlook Closed Unit Sales Gross Margin % Gross Margin Progression 800 20.00% • Strong gross margin progression delivered to date as the business has scaled. 700 19.50% • Unit sales have grown from 105 units in 2016 to 800+ units 600 in 2018. In the same period, gross margin has increased 1
Slide 13: Operations
Student Accommodation, Blackhall Place 1. 2. 3. 4. 5. 6. Highlights Financial Operations Land Bank Outlook Appendix 13 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 14: 2018 Sales Analysis
2018 Sales Analysis H1 Sales Analysis Completed Sales to 3 September 2018 Type Units ASP Type Units Housing 221 €326,000 Housing 300 Apartments 72 €599,000 Apartments 99 Total 293 €393,000 Total 399 Forward Sales to 3 September 2018: Type Units ASP Revenue Housing 327 €323,000 €105m Apartments (incl
Slide 15: Strong Sales Rates
Strong Sales Rates • Average 2018 weekly sales rate of 2.8 units per active sales outlet as at 3 September 2018 (compared to 2.4 units per active sales outlet per week in FY 2017). • Our larger sales outlets continue to witness significant, realisable levels of demand: Average Weekly Units Sold / Sa
Slide 16: Continued Volume Growth
Continued Volume Growth Unit Sales Closings Unit Sales Closings 1,600 1,400 - 1,500 1,300 – 1,400 1,400 1,200 1,075 - 1,125 1,000 c. 800+ 800 600 418 400 200 0 2017 2018 2019 2020 2021 Houses Apartments Range 16 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 17: Characteristics of Housing, Apartments and PBSA
Characteristics of Housing, Apartments and PBSA Key Metrics and Characteristics Housing Apartments PBSA Total Land Bank Capital Allocation 52% 42% 6% 100% Total Units 10,600 3,400 500 14,500 Average Cost per Unit €38k €96k €99k €54k Average Selling Price (estimated) (ex. VAT) (no HPI) €302k €533k €6
Slide 18: Illustrative Cash Generation 2018 – 2021
Illustrative Cash Generation 2018 – 2021 Business transitioning to significant cash generation Dividend Policy €’m • Cairn generating distributable profits. 875 • The Board intends to initiate a regular annual dividend from FY 2019 profits. This dividend will be declared and paid in 700 early 2020.
Slide 19: House Price Inflation and Build Cost Inflation
House Price Inflation and Build Cost Inflation House Price Inflation (HPI) Build Cost Inflation (BCI) HPI has averaged 5.6% across our housing and A key factor in Cairn’s business model apartment developments in the last 12 months: ensuring that we can continue to price our homes competitively is ho
Slide 20: How Cairn Manages Build Cost Inflation
How Cairn Manages Build Cost Inflation Our Model • Cairn is a “Developer Contractor” - our business model is based on the use • Top 15 subcontractors paid €140m in the last 12 months, compared to of subcontractors across an average of c. 15 trades on starter home €23m in first full year of construct
Slide 21: Land Bank
Churchfields, Ashbourne 1. 2. 3. 4. 5. 6. Highlights Financial Operations Land Bank Outlook Appendix 21 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 22: Capital Allocation
Capital Allocation Timing of Land Bank Acquisition Targeted Capital Allocation Focused on the GDA 450 16,000 400 14,000 350 12,000 300 10,000 250 8,000 200 • 95% capital allocation 6,000 • 90% of units 150 • 100% of active developments 4,000 100 50 2,000 - 0 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H
Slide 23: Composition of c. 14,500 Units
Composition of c. 14,500 Units Unit Type Planning Status Buyer Profile 3% 3% 3% 22% 10% 33% 48% 24% 15% 17% 73% 24% 25% Full Planning Permission FTB (from €275k – €375k) SDZ (effective FPP) Trade Up / Mover (from €375k – €550k) In Planning (SHD process) Premium (from €550k) Residentially Zoned Socia
Slide 24: Irish Planning Environment
Irish Planning Environment Strong Track Record Planning Processes • 51 successful grants of Strategic Housing Development Strategic Development Zone (SDZ) planning since IPO: 100% (SHD) Process Process success rate delivering 4,251 units. One step planning process Eight week fast track planning proc
Slide 25: Housing Map
Housing Map Well located housing sites (c. 10,600 units) with excellent public transport links and no planning risk Active Units SCALE 1. Parkside, Malahide Road 295 10 km 2. Churchfields, Ashbourne, Co. Meath 397 3. Elsmore, Naas, Co. Kildare 500 4. Shackleton Park, Lucan 700 5. Glenheron, Greyston
Slide 26: High Density Apartments & PBSA Map
High Density Apartments & PBSA Map Prime Apartment and PBSA sites (c. 3,600 units) in and near Dublin City 8 SCALE Active Units 1 km 1 Marianella, Rathgar, Dublin 6W 208 2 Hanover Quay, Dublin 2 120 3 Donnybrook Gardens, Dublin 4 86 4 Shackleton Park, Lucan 60 5 2 5 Blackhall Place, Dublin 7 (PBSA)
Slide 27: Outlook
Elsmore, Naas 1. 2. 3. 4. 5. 6. Highlights Financial Operations Landbank Outlook Appendix 27 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 28: Outlook
Outlook Cairn is reaching maturity and Irish economic and housing is now well positioned to market conditions remain very benefit from the opportunities positive in the Irish residential market Increasing medium term target to deliver revenue of c. €550m from c. 1,400 to 1,500 units annually from 20
Slide 29: Appendix
Churchfields, Ashbourne 1. 2. 3. 4. 5. 6. Highlights Financial Operations Landbank Outlook Appendix Sites 29 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 30: Housing Developments – Status Updates
Housing Developments – Status Updates # Development Total Units Update Housing – Active & Selling 1 Parkside, Malahide Road 395 Phase 1 and 2 (307 units) built and sold. Phase 3 (88 units) under construction, Phase 4 (205 high density units) in design phase. 2 Churchfields, Ashbourne 397 Phase 1 (17
Slide 31: High Density Apartments – Status Updates
High Density Apartments – Status Updates # Development Total Units Update Apartments – Active & Selling 1 Marianella, Rathgar, Dublin 6W 208 Phase 1 (208 units) nearing construction completion. Sales ongoing and units in Block C now closing also. Construction due to finish in Q4 2018. Completed deve
Slide 32: Other
Shackleton Park, Lucan 1. 2. 3. 4. 5. 6. Highlights Financial Operations Landbank Outlook Appendix Other 32 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 33: The First Time Buyer Decision Tree – To Rent or Buy?
Owning versus Renting The First Time Buyer Decision Tree – To Rent or Buy? 2014 Sep-17 Mar-18 Sep-18 Assumptions • 2014: Couple, both working, earning €40,000 Salary €80,000 €83,983 €86,082 €86,082 each. Annual After-tax Income €60,138 €63,874 €65,317 €65,317 • First time buyers, purchased a three b
Slide 34: Key Drivers Boosting Affordability
Key Drivers Boosting Affordability Wage Inflation Outstripping Consumer Price Index Strengthening Irish Labour Market 3.0% Employment (‘000) Unemployment (%) Peak 15.9% + 391,800 2.5% 2,300 18.00% 2.0% 2,200 2,100 13.00% 1.5% 1.0% 2,000 8.00% 1,900 0.5% 1,800 3.00% 0.0% 1,700 -0.5% 1,600 -2.00% -1.0
Slide 35: National Residential Price Recovery vs Rental Price Recovery
National Residential Price Recovery vs Rental Price Recovery Private Rents 27% Above Peak, Dublin House Prices Still 22% Below Peak Av. House Price €’k National Rental Index Commentary 500 180 • Dublin average house price €355,652 Rents +27% 450 160 as at July 2018, 22% below €453,638 400 140 peak i
Slide 36: Strong Mortgage Drawdown and Approval Trends
The Mortgage Market Strong Mortgage Drawdown and Approval Trends Value of Mortgage Drawdowns No. Loans Value of Mortgage Approvals No. Loans Drawdowns €’m Approvals €’m – Value of Loans – Value of Loans Value +24.2% Value +15.5% 1,200 12,000 1,600 14,000 1,400 12,000 1,000 10,000 1,200 10,000 800 8,
Slide 37: Mortgage Approved Borrowers Cannot Find Houses
Mortgage Market Trends Mortgage Approved Borrowers Cannot Find Houses Mortgage Approval to Drawdown Conversion Table Commentary 45,000 • The number of individual mortgage approved loans converting to mortgage drawdown loans continued to deteriorate in the year to June 40,000 Year to June 2018 – 81%
Slide 38: Supply Less Than One Third of Medium Term Demand Level
Supply Still Lagging Demand Supply Less Than One Third of Medium Term Demand Level Units # Commentary Undersupply – 102,472 new homes 160,000 140,000 • The Central Statistics Office (CSO) have replaced the Department of 120,000 Housing in analysing new home completions through the New Dwelling Compl
Slide 39: Government Response to Supply Challenges
Government Response to Supply Challenges Local Infrastructure Housing Project Ireland 2040 Activation Fund (LIHAF) Apartment Design Guidelines & Help To Buy Urban Development and Building Heights – Guidelines for Planning Authorities 39 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 40: A Selection of our Developments
A Selection of our Developments 40 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 41: The Cairn Team
The Cairn Team 41 © Cairn Homes plc 2018. www.cairnhomes.com 04 September 2018
Slide 42: Disclaimer
Disclaimer This presentation document This document has been prepared in good faith, but the Certain information contained herein constitutes “forward- (hereinafter “this document”) has information contained in it has not been subject to a looking statements”, which can be identified by the use of b