Vistry Group Plc · LSE:VTY
Vistry — Bovis Homes Group — Investor Day (October 2012)
20 slides from Vistry's investor day presentation, Oct 24, 2012
Slide 1: Agenda and objectives of the presentation
Agenda Analyst and investor presentation 24 October 2012 Strategy and progress David Ritchie, Chief Executive A year of progress A business transformation Demand and supply Kevin Wilkins, Marketing Director to high quality returns Future delivery from land David Ritchie, Chief Executive Moving to hi
Slide 2: Successful strategy execution
Bovis Homes pre downturn Bovis Homes now Pre downturn land bank Current land bank North North 16% 11% Midlands 15% Midlands 20% South South 64% 74% Frame 5 Frame 6 Successful strategy execution Strategy progress Five year pre tax profit (£m) 2008 2012 A view of the future • Consistent strategy since
Slide 3: Recap on 2009 announced growth strategy
Recap on 2009 announced growth strategy The 2009 land map • Use strong cash rich position to invest assertively in residential land market • Definite focus on the South of England but avoiding • Invest in land above replenishment level to increase number of active outlets secondary areas • Invest in
Slide 4: Rationale: Focus on population centres and stronger priced areas
Rationale: Focus on population centres Rationale: Focus on stronger priced areas North East North West 110 • 65% of households in Yorkshire UK England (exc Central London) 105 with at least one resident are 35% 100 House price index located within Bovis Homes search area 95 Cheshire East Midlands 12
Slide 5: Quality locations and access to prime Southern land
Quality locations Access to prime Southern land • Semi rural/village locations are a good fit for • Reduced competition in land market between the core Bovis Homes Portfolio product range 2009 and 2012 has provided rare period of • Relaxation of planning guidance provides significant opportunity to
Slide 6: Prime rural locations and return of traditional homes
Prime rural locations Return of traditional homes Pre growth strategy land bank Pre growth strategy product mix • 76% of plots acquired since Q3 2009 are • 74% of private plots acquired are greenfield traditional homes 17% • Two thirds of the brownfield plots • Traditional homes increased to 51% of
Slide 7: Demand and supply
Content Demand and supply • Macro-market conditions • Supply side initiatives • Demand side initiatives • Overview Kevin Wilkins Group Marketing Director www.bovishomesgroup.co.uk Frame 25 Frame 26 Household formation - demographic changes Household formation - demographic changes Annual household g
Slide 8: Home ownership aspiration and house price trend
Home ownership aspiration Land strategy House price trend All adults All adults Has home ownership in 2 years in 10 years Under 25 25-34 Nationwide Halifax 260 aspiration diminished 90 in 10 years? 80 240 220 70 200 January 2000=100, 60 180 50 160 % of adults 40 140 120 30 100 20 80 Jan Jan Jan Jan
Slide 9: Mortgage and transaction levels - stability
Moving 3-month (000,) Median deposit (£000) 0 100 200 300 400 500 0 10 20 30 40 Jan 2000 1990 Jun 2000 Nov 2000 Apr 2001 1992 Sep 2001 Feb 2002 1994 Jul 2002 Dec 2002 Mar 2003 May2009 1996 Median deposit (£000) Oct 2003 10 20 30 Aug 2009 Mar 2004 1998 Aug 2004 2008 Jan 2005 Jun 2005 2000 Median depo
Slide 10: Land price index and macro-trend summary
Land price index Macro-trend summary Land price index (RHS) • Household formation continues to exceed provision 150 • Home ownership aspiration remains strong 140 • House pricing has been stabile over the last 3+ years 130 Land price index 120 • Mortgage market slowly rebuilding 110 • Land pricing f
Slide 11: Supply and demand government initiatives
Supply - Government initiatives Demand initiatives Government demand initiatives Dimension Scheme Summary - Bovis Homes FirstBuy (Programme & dates) Funding Get Britain Building (2) - Applies mainly to stalled sites - • 1 (March 2013) = 10,000 units loans/equity based focus for smaller / cash constr
Slide 12: Market share by size and summary
Market share by size Summary Developer size (annual volume) • Macro-dynamics - stable environment in which to grow 1-10 11-100 101- 500 500+ • Polarising towards major builders 120 (greater share of stable market) • Land - lower pricing holding through combination of stable 8% 6% house prices and lo
Slide 13: Land acquisitions - 2012 to date
Land acquisitions - 2012 to date Consented land acquired Cuddington Land Gross Gross Sites Units Revenue ASP cost profit margin ROCE no. no. £m £’000 £m £m % % Consented acquired 15 2,164 494.1 228.3 144.0 128.3 26% 25% Oundle Rugby Conditional contracts 5 558 117.7 210.9 31.5 30.1 26% 22% Biddenham
Slide 14: Why invest in strategic land?
Why invest in strategic land? Strategic land process • Provides discounts to prevailing • Strategic land directors and town planners in each region market value • Identified search areas for strategic land assets • Margin enhancing reflective of • Ongoing review of local plan processes to pinpoint o
Slide 15: Strategic land case studies
Case study 1: Bishops Stortford Case study 2: Winnersh • 325 acres consortium controlled for 2,200 homes • 28 acres consortium controlled for - 33% for Bovis Homes 433 homes - 50% for Bovis Homes • Site identified 25 years ago to meet housing • Long standing allocated site development need • 4 years
Slide 16: Moving to higher quality return
Land delivery summary • High value consented land supply with Moving to higher quality return over 50% now on post downturn land • Quality of plots moving towards southern traditional homes • Strong pipeline of consented land Jonathan Hill deals in place Group Finance Director • Increased visibility
Slide 17: Compound positive profit effect and capital employed
Compound positive profit effect Building future land bank potential Housing gross margin (%) Land bank gross margin potential • The housing gross margin has • The Group has increased the future 25 25 increased strongly, driven by: profit potential in the land bank as a 22.6% 21.4% - Negotiated reduc
Slide 18: Bovis Homes future investment case
Bovis Homes future investment case Larger traditional homes a greater part of private mix Private product mix Aiming to deliver material improvements in shareholder returns • The Group has assertively traded through a high number 100 Enhanced robust profits from: of apartments in 2010 and • More tra
Slide 19: Potential land bank utilisation and capital turn
Potential land bank utilisation Increasing capital turn potential 100 4% Post downturn at cost • The Group has acquired c9,000 plots over the last 3 years 16% Pre downturn at cost • Assuming that this rate of land acquisition is sustained, the Group would be 80 39% Written down expected to deliver a
Slide 20: Disclaimer - important notice
Disclaimer - important notice Certain statements in this presentation are forward looking statements Forward looking statements involve evaluating a number of risks, uncertainties or assumptions that could cause actual results to differ materially from those expressed or implied by those statements