Berkeley Group Holdings Plc · LSE:BKG
Berkeley — H1 FY2025 Earnings Presentation
34 slides from Berkeley's earnings presentation, Dec 6, 2024
Slide 1: Interim Results Presentation for the six months ended 31 October 2024
Interim Results Presentation for the six months ended 31 October 2024 Homes Communities People 6th December 2024
Slide 2: Rob Perrins, Chief Executive Officer
Rob Perrins Chief Executive Officer Regent’s View, Bethnal Green (CGI) Named the world’s best Future Residential Project at the World Architecture Festival 1
Slide 3: Introduction to Results
Strategic Review Introduction to Results 1 2 3 4 Interim Results Operating Environment Planning System Berkeley 2035 Strong execution, results in Remained volatile during Positive step-change in Agile £7 billion capital line with guidance the interim period tone of the planning system allocation fra
Slide 4: Robust Operating Performance
Strategic Review Robust Operating Performance Prince of Wales Drive, Battersea ‐ Market conditions stable with sales consistent with FY24 levels, although a third lower than FY23. Slight improvement since September ‐ Sales pricing generally ahead of business plan with cancellations at normal rates ‐
Slide 5: Positive Momentum on Planning but More to Do
Strategic Review Positive Momentum on Planning but More to Do Positive momentum from Government’s pro-homebuilding mandate and pro-active approach to unlocking the planning system Conditions to attract required investment to deliver White City Living 1.5 million new homes ‐ Stable and predictable op
Slide 6: Positive Momentum on Planning but More to Do
Strategic Review Positive Momentum on Planning but More to Do Positive momentum from Government’s pro-homebuilding mandate and pro-active approach to unlocking the planning system Conditions to attract required investment to deliver Roadmap to address specific challenges 1.5 million new homes ‐ Stab
Slide 7: Positive Momentum for Berkeley
Strategic Review Positive Momentum for Berkeley Southall Gasworks in use as The Green Quarter today a Heathrow car park Good progress made in the period Five resolutions to grant planning permission : London - Bromley-By-Bow 2,100 homes Working with - Lea Bridge 640 homes Local Authorities - Mitcham
Slide 8: Berkeley 2035 (1)
Strategic Review Berkeley 2035 (1) Berkeley’s Approach to Long-term Value Creation Clear Approach to Capital Allocation Added-value property company… driving individual asset value through land and planning strategy and great placemaking 1 Investment… adopt a counter-cyclical approach Ensure financi
Slide 9: Berkeley 2035 (2)
Strategic Review Berkeley 2035 (2) Improving Operating Environment Long-term Value Drivers ‐ Conditions for growth and investment have Optimisation through re-planning of existing regeneration been absent for some time, amidst sites with great placemaking and customer service unprecedented volatilit
Slide 10: Berkeley 2035 (3)
Strategic Review Berkeley 2035 (3) Flexible Capital Allocation Total £7 billion of capital to deploy over the next 10 years There is the opportunity to introduce third- party funding to Berkeley’s BTR platform Initial allocation: Land investment (broadly replacement) £2.5 billion This provides addit
Slide 11: Berkeley 2035 (4)
Strategic Review Berkeley 2035 (4) Shareholder Value Proposition ‐ Increase the return on capital in the core business Minimum £2 billion shareholder returns: ‐ Materially grow the value of the rental platform ‐ £260 million by 30 September 2025 ‐ £34 million dividend in March 2025 (33p) ‐ Maintain
Slide 12: Richard Stearn, Chief Financial Officer
Richard Stearn Chief Financial Officer Abbey Barn Park, High Wycombe 11
Slide 13: Introduction
Finance Review Introduction 1. SUMMARY OF PERFORMANCE 7. ABRIDGED BALANCE SHEET 2. SUMMARY OF FINANCIAL POSITION 8. INVENTORY 3. KEY BUSINESS METRICS 9. CREDITORS 4. HOMES COMPLETED AND AVERAGE SELLING PRICE 10. DEBT FINANCING 5. INCOME STATEMENT 11. LAND HOLDINGS AND PIPELINE 6. ABRIDGED CASH FLOW
Slide 14: Summary of Performance
Finance Review Summary of Performance PROFIT BEFORE TAX CHANGE / CHANGE % PRE-TAX RETURN ON EQUITY* 31 October 2024 31 October 2023 31 October 2024 31 October 2023 -£23m £275m £298m (-7.7%) 15.6% 17.7% BASIC EARNINGS PER SHARE CHANGE / CHANGE % RETURN ON CAPITAL EMPLOYED** 31 October 2024 31 October
Slide 15: Summary of Financial Position – Balance Sheet
Finance Review Summary of Financial Position – Balance Sheet SHAREHOLDERS’ FUNDS CHANGE / CHANGE % NET ASSET VALUE PER SHARE CHANGE / CHANGE % 31 October 2024 30 April 2024 31 October 2024 30 April 2024 -£50m +84p £3,510m £3,560m (-1.4%) 3,447p 3,363p (+2.5%) TOTAL SHARES IN ISSUE – EXCLUDING TREASU
Slide 16: Key Metrics – Forward Sales and Land Holdings
Finance Review Key Metrics – Forward Sales and Land Holdings FORWARD SALES LAND HOLDINGS CASH DUE * CHANGE / CHANGE % FUTURE GROSS MARGIN CHANGE / CHANGE % 31 October 2024 30 April 2024 31 October 2024 30 April 2024 -£191m -£206m £1,510m £1,701m (-11.2%) £6,723m £6,929m (-3.0%) * Cash due on private
Slide 17: Homes Completed and Average Selling Price – Group
Finance Review Homes Completed and Average Selling Price (ASP) – Group Homes ASP H1 2,103 H1 £600k 2024/2025 H2 H2 FY FY H1 1,785 H1 £624k 2023/2024 H2 1,736 H2 £706k FY 3,521 FY £664k H1 2,080 H1 £560k 2022/2023 H2 1,963 H2 £658k FY 4,043 FY £608k H1 1,828 H1 £647k 2021/2022* H2 1,932 H2 £562k FY 3
Slide 18: Income Statement
Finance Review Income Statement 31 October 2024 31 October 2023 CHANGE CHANGE Period ended £’m £’m £’m % ‐ Group (non-JV) revenue ahead of last year due to higher completion Revenue 1,278.9 1,191.9 +87.0 +7.3% volumes Gross profit 338.5 26.5% 311.6 26.1% +26.9 +8.6% Operating expenses (80.1) 6.3% (7
Slide 19: Abridged Cash Flow
Finance Review Abridged Cash Flow 31 October 2024 31 October 2023 First half of FY25 Period ended £’m £’m Profit before tax 275.1 298.0 ‐ Small underlying release in working capital from inventory - Decrease/(Increase) in inventory 53.1 (68.2) - (Decrease)/Increase in customer deposits (96.6) 51.8 ‐
Slide 20: Abridged Balance Sheet
Finance Review Abridged Balance Sheet 31 October 2024 CHANGE 30 April 2024 As at ‐ Net assets reduced by £50m: £’m £’m £’m - Intangible assets 17.2 - 17.2 £’m Profit after tax +195.6 - Investment in joint ventures 235.0 +8.0 227.0 Shareholder returns -242.0 - Deferred tax assets 105.0 -11.9 116.9 Ot
Slide 21: Inventory
Finance Review Inventory As at 31 October 2024 CHANGE 30 April 2024 ‐ Four sites moved into production: £’m £’m £’m ▪ Milton Keynes Land not under development (LNUD) 568.4 -157.4 725.8 ▪ Wandsworth Mills ▪ Spring Hill, Maidenhead Work in progress: Land cost 1,778.4 +63.1 1,715.3 ▪ Hurlingham in Fulh
Slide 22: Creditors
Finance Review Creditors 31 Oct’ 2024 CHANGE 30 April 2024 Land Creditor Settlement Profile As at £’m £’m £’m 1,000 Trade creditors and accruals 749.2 -23.0 772.2 Provisions 223.9 +14.1 209.8 800 c.£185m Amounts due (£’m) Customer deposits and on 811.1 -96.6 907.7 account receipts 600 c.£235m Land c
Slide 23: Debt Financing
Finance Review Debt Financing £400m ▪ £400 million Green Bonds in issue (until August 2031) ▪ £800 million total borrowing facilities (six banks) Green Bonds (2031) ➢ Term loan £260 million 2.50% coupon ➢ Undrawn RCF £540 million (undrawn) Investment Grade ➢ Maturity February 2029 Credit Rating ▪ £1
Slide 24: Land Holdings and Pipeline
Finance Review Land Holdings and Pipeline As at 31 October 2024 CHANGE 30 April 2024 ‐ Three key movements in the £206m reduction in future gross margin: Land Holdings ▪ Homes completed (> 2,200 units and Owned 52,501 -1,099 53,600 GM of £0.4bn) Contracted - -481 481 ▪ One site acquired (>200 units)
Slide 25: Guidance
Finance Review Guidance - Deliver at least £975 million of pre-tax profit across FY25 (£525 million) and FY26 (£450 million) - Operating margins in the historic range (17.5% to 19.5%), with overheads stable - Remaining £260 million shareholder return to complete the £283 million annual return to 30
Slide 26: Questions
Results Presentation for the six months ended 31 October 2024 Questions Rob Perrins Chief Executive Richard Stearn Chief Financial Officer Horlicks Quarter, Slough 25
Slide 27: Appendices
Results Presentation for the six months ended 31 October 2024 Appendices ▪ Delivering for all Stakeholders ▪ Market Fundamentals ▪ Build to Rent Portfolio ▪ Sites – Delivery and Land Status ▪ Sites in London (map) ▪ Sites out of London (map) ▪ 20-year financial track record Bromley-by-Bow 26
Slide 28: Delivering for all Stakeholders – Our Vision 2030 (ESG)
Appendix Delivering for all Stakeholders Our Vision 2030 (ESG) ▪ 92% of 2,103 homes, plus 177 in joint ventures, delivered on brownfield land ▪ Over £300 million subsidies for affordable housing and committed to infrastructure ‘A’ rated ▪ Supporting 26,000 jobs and delivering some 10% of London’s ne
Slide 29: Market Fundamentals – Compounding Under-Supply
Appendix Market Fundamentals – Compounding Under-Supply National Figure 1: Construction Starts 300,000 60,000 ▪ The Government’s long-term annual delivery target is 300,000 new homes a year (1.5 million over five years) England Starts (Rolling 12 months) 250,000 50,000 London Starts (Rolling 12 mont
Slide 30: Build to Rent Portfolio
Appendix Build to Rent Portfolio Initial BTR Total BTR Regeneration Development Location Future BTR Portfolio Sites Homes Homes London London - Alexandra Gate, Haringey Zone 3 187 402 ▪ Lombard Square, Plumstead (Zone 4) - Grand Union, Brent Zone 3 177 326 ▪ The Green Quarter, Southall (Zone 4) - Ki
Slide 31: Sites - Delivery and Land Status
Appendix Sites - Delivery and Land Status LARGE LONG-TERM OTHER TOTAL AS AT 31 OCTOBER 2024 REGENERATION PIPELINE SITES LAND HOLDINGS SITES (approximately) Delivery of Developments: In construction 27 90% 25 66% 52 76% - - Not yet in construction – owned 3 10% 13 34% 16 24% 10 77% Not yet in constru
Slide 32: Land Holding Sites in London
Appendix Land Holding Sites in London UNDER CONSTRUCTION FUTURE SITES 1 250 City Road, Islington 1 Aylesham Centre, 2 9 Millbank, Westminster Peckham 3 Alexandra Gate, Haringey 2 Borough Triangle 4 Beaufort Park, Hendon 3 Lea Bridge 5 Bermondsey Place, Southwark 4 Mitcham 5 Paddington Green Berkeley
Slide 33: Land Holding Sites outside of London
Appendix Land Holding Sites outside of London UNDER CONSTRUCTION FUTURE SITES 1 Abbey Barn Park, High Wycombe 1 Bath 2 Broadacres, Southwater 2 Bracknell 3 Eden Grove, Staines 3 Brighton 4 Farmstead, Cranbrook 4 Effingham 5 Foal Hurst Green, Paddock Wood 5 Guildford Berkeley 6 Glasswater Locks, Birm
Slide 34: Berkeley's 20-Year Track Record – through the market cycle
Appendix Berkeley’s 20-Year Track Record – through the market cycle AS AT HY25 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Income Statement* Units Sold 2,103u 3,521u 4,043u 3,760u 2,825u 2,723u 3,698u 3,678u 3,802u 3,776u 3,355u 3,742u 3,712u 3
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