Crest Nicholson Holdings Plc · LSE:CRST
Crest Nicholson — FY2022 Earnings Presentation
24 slides from Crest Nicholson's earnings presentation, Jan 17, 2023
Slide 1: Preliminary Results 2022
HIGHLANDS PARK HENLEY-ON-THAMES Crest Nicholson Holdings plc PRELIMINARY RESULTS 2022 17 January 2023
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may include statements that are, or may be deemed to be, ‘forward-looking statements’. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ‘believes’, ‘estimates’
Slide 3: Agenda
AGENDA PETER TRUSCOTT • INTRODUCTION DUNCAN COOPER • FINANCIAL REVIEW PETER TRUSCOTT • MARKET CONTEXT • STRATEGY UPDATE • OUTLOOK Q&A NIGHTINGALE FIELDS 3 PRELIMINARY RESULTS 2022 January 2023 ARBORFIELD
Slide 4: Introduction
INTRODUCTION PETER TRUSCOTT Chief Executive FULLER’S GROVE 4 PRELIMINARY RESULTS 2022 January 2023 WANTAGE
Slide 5: Introduction: Executive Summary
INTRODUCTION EXECUTIVE SUMMARY • Strong financial performance in FY22 − APBT in line with upgraded guidance − Operating margin recovery on track − Improvements in all key financial metrics • Good progress on next phase of strategy − Yorkshire operational − East Anglia ready to go live • Further enha
Slide 6: Financial Review
FINANCIAL REVIEW DUNCAN COOPER Group Finance Director FERNHURST 6 PRELIMINARY RESULTS 2022 January 2023 CAMBERLEY
Slide 7: Income Statement
INCOME STATEMENT MARGIN RECOVERY PLAN ON TRACK £m (unless otherwise stated) FY22 FY21 % Change • Adjusted operating margin up to 15.4% Revenue 913.6 786.6 16.1 Cost of sales 1 (719.3) (619.9) − 15.7% excluding London Chest Hospital Adjusted gross profit 1 194.3 166.7 16.6 − Timing effect from FY21 s
Slide 8: Sales Metrics
SALES METRICS A MORE CHALLENGING SALES ENVIRONMENT FY22 FY21 % Change • FY22 average outlets at 54 Outlets (full year equivalents) 54 59 (8.5) − Expect FY23 outlets to be slightly lower SPOW (open market) 0.60 0.80 (25.0) − Approval delays affecting everyone Home completions (units) 1,2 • A mix of e
Slide 9: Exceptional Items
EXCEPTIONAL ITEMS IMPACT OF SIGNING THE BUILDING SAFETY PLEDGE £m FY22 FY21 • FY22 exceptionals charge of £105.0m Cost of sales − Underlying changes since HY22 Inventory impairment credit - (8.0) − Build cost inflation and revisions to estimates Net combustible materials charge 102.5 28.8 − £10.0m r
Slide 10: Balance Sheet
BALANCE SHEET FURTHER STRENGTHENING OF FINANCIAL POSITION • Net cash at £276.5m (FY21: £252.8m) LAND CREDITOR ROLL OUT BY YEAR (£m) • Net cash and land creditors at £77.8m (FY21: £29.9m) 175 150 • Average net cash at £102.0m (FY21: £78.4m) 125 • New £250.0m RCF agreed 100 − Sustainability-linked − E
Slide 11: Land Portfolio
LAND PORTFOLIO CONTINUING TO ADD HIGH QUALITY SITES AND LOCATIONS • 3,094 plots added to the short-term land portfolio in FY22 Plots 1 36,700 36,985 − 439 plots at Perrybrook, Gloucester GDV (£bn) 12.1 11.8 − 558 plots at Steffen Way, Daventry ASP 1 (£k) 333 326 − First site added in Yorkshire at Me
Slide 12: Summary
SUMMARY • Another year of delivering on guidance − Operating margin progression on track − Further divestment of weaker legacy sites • Forward sales at 13 January 2023 − 2,018 units and £510.8m GDV • Further balance sheet strength − ROCE up to 22.4% (FY21: 17.2%) − £276.5m net cash with RCF extended
Slide 13: Market Context
MARKET CONTEXT PETER TRUSCOTT Chief Executive WESTWOOD PARK 13 PRELIMINARY RESULTS 2022 January 2023 COVENTRY
Slide 14: Market Context: FY23 Macro Outlook
MARKET CONTEXT FY23 MACRO OUTLOOK • Political and economic environment − Domestic stability but global issues persist • Affordability − Mortgage costs have risen − Availability remains good at low LTVs • Operational disruption − Materials and labour shortages − Build cost inflation • Land and planni
Slide 15: Strategy Update
STRATEGY UPDATE PETER TRUSCOTT Chief Executive KINGS MEADOW 15 PRELIMINARY RESULTS 2022 January 2023 MILTON KEYNES
Slide 16: Committed to a Strategy of Growth
COMMITTED TO A STRATEGY OF GROWTH MANAGING THROUGH THE CYCLE • Focus on margin − Early signs of pricing holding albeit at lower sales rate − Spring selling market will be key • Growth strategy remains the right one for maximising value − Office opened in Yorkshire with strong early progress − Busine
Slide 17: Combustible Materials
COMBUSTIBLE MATERIALS FULFILLING OUR COMMITMENTS • Signed the Building Safety Pledge in April 2022 • Dedicated resources in the divisions and centrally • Broader impact to overheads given the oversight required • Response to consultation on planning levy for orphan buildings − Remain of the view the
Slide 18: Five-Star Customer Service
FIVE-STAR CUSTOMER SERVICE CHALLENGING OPERATING CONDITIONS • Returning to five-star is a strategic priority • Marginally below threshold for five-star in 2022 − Sector impacted by labour and supply chain disruption − One of our divisions heavily impacted • Action plan already implemented − Further
Slide 19: Growth Strategy: Strong Start in Yorkshire
GROWTH STRATEGY STRONG START IN YORKSHIRE • Team now in place, led by Guy Evans • Five sites in progress − Planning applications now running • Work commencing on first site in FY23 • Financial contribution in FY24 Scarborough YORKSHIRE HEAD OFFICE York Leeds Hull Halifax Sprotbrough 19 PRELIMINARY R
Slide 20: Multi Channel Approach
MULTI CHANNEL APPROACH A KEY CAPABILITY IN A POSSIBLE DOWNTURN • Key part of our strategy • Partnerships − Delivered multiple transactions with our valued partners − Actively managing discount to open market pricing − Not seeking low margin contracting schemes • Strategic Land − Secured good quality
Slide 21: Sustainability and Social Value
SUSTAINABILITY AND SOCIAL VALUE STRONG PROGRESS AGAINST EXISTING CLIMATE CHANGE TARGETS 2025 targets Carbon emissions reduction target 1 Renewable electricity target Waste reduction target 25% 100% 15% 43% 70% 10% reduction compared to this year reduction compared to 2019 equivalent up from 32% in 2
Slide 22: Sustainability & Social Value
SUSTAINABILITY & SOCIAL VALUE GOING FURTHER IN OUR SUSTAINABILITY COMMITMENTS • New science-based targets approved1 − Near term scope 1, 2 and 3 targets − Reach net-zero GHG emissions by 2045 • Good progress in FY22 − Significant reduction in scope 1 and 2 GHG emissions − Developed a new toolkit to
Slide 23: Summary and Outlook
SUMMARY AND OUTLOOK SUMMARY • Strong financial performance in FY22 − Further margin expansion and increase in ROCE • Good progress against strategy − Mobilised Yorkshire and East Anglia division − Confident customer service score will rebound OUTLOOK AND FOCUS • Near term challenging economic backdr
Slide 24: Q & A
MONKSMOOR PARK DAVENTRY CREST NICHOLSON
Crest Nicholson Holdings — FY2022 Earnings Presentation on 6ix