Berkeley Group Holdings Plc · LSE:BKG
Berkeley — The Berkeley Group Holdings — H1 2018/19 Earnings Presentation
33 slides from Berkeley's earnings presentation, December 2018
Slide 1: Interim Results Presentation
The Berkeley Group Holdings plc Interim Results Presentation Six months ended 31st October 2018
Slide 2: Format of Presentation
Interim Results Presentation Format of Presentation Woodberry Down Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions One Blackfriars
Slide 3: Tony Pidgley CBE, Chairman
B Berkeley a) Group Tony Pidgley CBE Chairman Berkeley StEdward StGeorge StJames SLWilliam StJoseph mY
Slide 4: Richard Stearn, Finance Director
Richard Stearn Finance Director
Slide 5: Introduction
Finance Review Introduction - Summary of Performance - Summary of Financial Position - IFRS 15 Restatement and Guidance - Future Potential Share Dilution - Homes Completed and Average Selling Price - Income Statement - Abridged Cash flow - Abridged Balance Sheet - Inventories - Creditors - Financing
Slide 6: Summary of Performance
Finance Review Summary of Performance 31 October 2018 31 October 2017 Change (£) Change (%) Six months ended (Restated) Profit before tax £401.2m £539.9m -£138.7m -25.7% EPS – Basic 246.0p 320.5p -74.5p -23.2% EPS – Diluted 240.0p 312.0p -72.0p -23.1% Operating Margin 24.3% 30.9% -6.6% Pre-Tax Retur
Slide 7: Summary of Financial Position
Finance Review Summary of Financial Position As at As at Change (£) Change (%) 31 October 2018 30 April 2018 (Restated) Balance Sheet Shareholders’ funds £2,671.0m £2,591.2m +£79.8m +3.1% Closing net cash (£859.7m) (£687.3m) -£172.4m Capital Employed £1,811.3m £1,903.9m -£92.6m -4.9% Net asset value
Slide 8: IFRS 15 Restatement and Guidance
Finance Review IFRS 15 Restatement and Guidance HY 2017/18 FY 2017/18 GDV PBT No of GDV PBT No of £m £m units £m £m units As previously reported 1,607.7 533.3 2,117 2,703.7 934.9 3,536 30 April 2017 Cut-off units 226.4 77.7 293 226.4 77.7 293 31 October 2017 Cut-off units (169.6) (71.1) (220) - - -
Slide 9: Future Potential Share Dilution
Finance Review Future Potential Share Dilution Vesting No. (million) No. (million) Date adjusted ** Shares in issue at 1 May 2018 excl. Treasury/EBT shares 133.7 Share buy-backs (5.4) 2011 LTIP vesting – tranche 3 September 2018 0.4 Shares in issue at 1 Nov 2018 excl. Treasury/EBT shares 128.7 128.7
Slide 10: Homes Completed and ASP - Group
Finance Review Homes Completed and ASP - Group Berkeley Group - Plots 3,776 3,802 3,678 3,355 2,091 2,190 2,027 1,983 2,058 1,685 1,744 1,372 1,488 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 2014/15 2015/16 2016/17 (restated) 2017/18 (restated) 2018/19 Berkeley Group - Average Selling Price £713k £721k
Slide 11: Homes Completed and ASP – Joint Ventures
Finance Review Homes Completed and ASP – Joint Ventures St Edward - Units 372 240 258 230 191 208 162 164 144 86 78 67 57 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 2014/15 2015/16 2016/17 (restated) 2017/18 (restated) 2018/19 St Edward - Average Selling Price £2,225k £1,669k £1,380k £1,484k £1,436k £1,
Slide 12: Income Statement
Finance Review Income Statement Six months ended 31 October 2018 31 October 2017 Change Change £m £m £m % (Restated) Revenue 1,653.4 1,664.5 -11.1 -0.7% Gross profit 482.8 29.2% 593.8 35.7% -111.0 -18.7% Operating expenses (80.7) 4.9% (79.6) 4.8% -1.1 +1.4% Operating profit 402.1 24.3% 514.2 30.9% -
Slide 13: Abridged Cash Flow
Finance Review Abridged Cash Flow Six months ended 31 October 2018 31 October 2017 £m £m (Restated) Profit before tax 401.2 539.9 Decrease in inventory 185.1 324.9 Decrease in customer deposits (90.6) (91.9) Other working capital movements 31.5 (129.0) Net reduction in working capital 126.0 104.0 Ne
Slide 14: Abridged Balance Sheet
Finance Review Abridged Balance Sheet As at As at 31 October 2018 Movements 30 April 2018 £m £m £m (Restated) Non-current assets - Intangible assets 17.2 - 17.2 - Investment in joint ventures 331.0 +19.1 311.9 - Deferred tax assets 45.9 -19.8 65.7 - Property, plant and equipment 30.6 +4.7 25.9 Total
Slide 15: Inventories
Finance Review Inventories As at As at 31 October 2018 Movements 30 April 2018 £m £m £m (Restated) Land not under development 497.5 +159.8 337.7 Work in progress: Land cost 636.4 -100.8 737.2 1,133.9 +59.0 1,074.9 Work in progress: Build cost 1,852.6 -246.7 2,099.3 Completed units 125.0 +2.6 122.4 I
Slide 16: Creditors
Finance Review Creditors As at As at 31 October 2018 Movements 30 April 2018 £m £m £m (Restated) Trade creditors and accruals 797.9 +70.7 727.2 Provisions for liabilities 82.7 +0.9 81.8 Deposits and on account receipts 804.4 -90.6 895.0 Land creditors 96.8 -8.4 105.2 Current tax liabilities 14.1 -33
Slide 17: Financing
Finance Review Financing Banking Facilities Amount: £750 million Term: £300 million (drawn at 31 October 2018) RCF: £450 million (undrawn at 31 October 2018) Maturity: November 2023 Margin, utilisation and commitment fees: Market rates
Slide 18: Land Holdings
Finance Review Land Holdings As at As at 31 October 2018 Variance 30 April 2018 Owned 38,299 +5,378 32,921 Contracted 13,903 -43 13,946 Plots 52,202 +5,335 46,867 Sales value £21.7bn +£0.4bn £21.3bn Average selling price (ASP)* £470k -£37k £507k Average plot cost £54k -£7k £61k Land cost % 12.9% -0.
Slide 19: Rob Perrins, Chief Executive
: Berkeley foxy Group Rob Perrins Chief Executive Berkley | StEdward StGeorge | StJames StWillam | StJoseph me
Slide 20: Strategic Review Introduction
Strategic Review Introduction - Sales Performance and Market - Land and Planning - Build - Strategy Update - Key Sites – 2019/20 and Beyond - Land and Build Investment - Joint Ventures - Shareholder Returns - Outlook
Slide 21: Sales Performance and Market
Strategic Review Sales Performance and Market Sales Performance Trading conditions and the value of new reservations have remained consistent with the previous 18 months Pricing and cancellation rates stable Sales continue to be split broadly evenly between owner occupiers and investors Five
Slide 22: Land and Planning
Strategic Review Land and Planning Land and Planning 11 new sites added to the land bank, all outside of London, comprising some 6,500 new homes Focus on bringing through the pipeline of new regeneration developments Five new planning consents obtained in the period (Stephenson Street, Northfi
Slide 23: Build
Strategic Review Build Build Build cost inflation is steady at 4% per annum Working with supply chain to assess risks around availability of labour and potential cost implications of the Brexit scenarios, to the extent possible Over 11,000 people working across Berkeley’s 64 developments in pr
Slide 24: Strategy Update
Strategic Review Strategy Update As at As at 30 April 2011 Change 31 October 2018 Net assets £0.9bn + £1.8bn £2.7bn Shares in issue 131.0m - 2.3m 128.7m NAVPS £7.09 + £13.65 £20.74 Net cash £0.0bn + £0.9bn £0.9bn Forward sales £0.8bn + £1.1bn £1.9bn Land bank: - Plots 27,026 + 25,176 52,202 - Gross
Slide 25: Key Sites – 2019/20 and Beyond
Strategic Review Key Sites – 2019/20 and Beyond Ongoing Future Group JV Group JV Royal Arsenal Riverside Green Park, Reading Southall Waterside Prince of Wales Drive Woodberry Down Kensington White City Clarendon, Hornsey Kidbrooke Village Grand Union, Northfields Poplar Beaufort Park Oval Fulham Lo
Slide 26: Land and Build Investment – Delivery
Strategic Review Land and Build Investment – Delivery London South Total Delivery of Developments: In construction 38 76% 26 51% 64 63% Not yet in construction 12 24% 25 59% 37 37% Total developments 50 100% 51 100% 101 100% Proportion with planning (by sites) 86% 75% 80% Number of plots 36,710 70%
Slide 27: Sites in London
Land and build investment Sites in London
Slide 28: Sites out of London
Land and build investment Sites out of London
Slide 29: Joint Ventures – St Edward
Strategic Review Joint Ventures St Edward Joint venture with Prudential Six developments in the land holdings (3,926 units) Developments: Green Park, Reading Kensington Row & Royal Warwick Square Millbank, Westminster (opposite) Hartland Village, Fleet Wallingford, Oxfordshire Queens
Slide 30: Joint Ventures – St William
Strategic Review Joint Ventures St William Joint venture with National Grid Fourteen developments in the land holdings (8,861 plots) Developments: Prince of Wales Drive, Battersea Oxted Elmswater, Rickmansworth Watford Fairwood Place, Borehamwood Ascot Cottonworks, Highbury Clare
Slide 31: Shareholder Returns
Strategic Review Shareholder Returns Milestone Paid or announced Outstanding Total £/share * £’m £/share * £’m £/share £’m To 30 September 2018 10.34 1,411.0 - - 10.34 1,411.0 By 31 March 2019 1.00 139.7 - - 1.00 139.7 By 30 September 2019 1.00 139.7 - - 1.00 139.7 Returns - announced 12.34 1,690.4
Slide 32: Outlook
Strategic Review Outlook Outlook 2017/18 PBT guidance increased by at least 5% with split between first and second half anticipated to be similar to last year (55:45) PBT Guidance Guidance for next two years unchanged, based upon current market conditions Thereafter ROE moving towards 15% Fo
Slide 33: Questions
Questions Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Taplow Riverside
The Berkeley Group Holdings — H1 2018/19 Earnings Presentation on 6ix