Berkeley Group Holdings Plc · LSE:BKG

Berkeley — The Berkeley Group Holdings — FY2021 Earnings Presentation

43 slides from Berkeley's earnings presentation, Jun 23, 2021

  1. Slide 1: Full Year Results Presentation

    THE BERKELEY GROUP HOLDINGS PLC Full Year Results Presentation Year Ended 30th April 2021 Grand Union, Brent Green Quarter, Southall White City 23rd June 2021

  2. Slide 2: Full Year Results Presentation – Introduction

    Full Year Results Presentation For the Year Ended 30 April 2021 Rob Perrins INTRODUCTION Chief Executive INTRODUCTION Agile response to Covid-19 enabled production to be sustained and 1 commitments to customers and communities met, underpinning strong financial results. Richard Stearn Chief Financia

  3. Slide 3: Richard Stearn, Chief Financial Officer

    Richard Stearn Chief Financial Officer Chelsea Creek 2

  4. Slide 4: Finance Review Introduction

    Finance Review Introduction 1. SUMMARY OF PERFORMANCE 6. ABRIDGED BALANCE SHEET 2. SUMMARY OF FINANCIAL POSITION 7. INVENTORIES 3. HOMES COMPLETED AND AVERAGE SELLING PRICE 8. CREDITORS 4. INCOME STATEMENT 9. FINANCING 5. ABRIDGED CASH FLOW 10. LAND HOLDINGS 3

  5. Slide 5: Summary of Performance

    Finance Review Summary of Performance PROFIT BEFORE TAX CHANGE / CHANGE % 30 April 2021 30 April 2020 +£14.4m £518.1m £503.7m (+2.9%) OPERATING MARGIN 30 April 2021 30 April 2020 EPS - BASIC CHANGE / CHANGE % 22.8% 24.5% 30 April 2021 30 April 2020 +14.5p 339.4p 324.9p (+4.5%) PRE-TAX RETURN ON EQUI

  6. Slide 6: 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 % 30 April 2021 30 April 2020 30 April 2021 30 April 2020 +£73.8m +140p £3,175.4m £3,101.6m (+2.4%) 2,612p 2,472p (+5.7%) CLOSING NET CASH CHANGE / CHANGE % TO

  7. Slide 7: Summary of Financial Position – Forward Sales and Land Holdings

    Finance Review Summary of Financial Position – Forward Sales and Land Holdings FORWARD SALES CASH DUE ON FORWARD SALES CHANGE / CHANGE % 30 April 2021 30 April 2020 -£145.5m £1,712.2m £1,857.7m (-7.8%) LAND HOLDINGS PLOTS CHANGE / CHANGE % 30 April 2021 30 April 2020 +4,857 63,270 58,413 (+8.3%) GRO

  8. Slide 8: Homes Completed and Average Selling Price – Group

    Finance Review Homes Completed and Average Selling Price (ASP) – Group Homes ASP H1 1,104 H1 £799k 2020/2021 H2 1,721 H2 £751k FY 2,825 FY £770k H1 1,389 H1 £644k 2019/2020 H2 1,334 H2 £711k FY 2,723 FY £677k H1 2,027 H1 £740k 2018/2019 H2 1,698 H2 £757k FY 3,678 FY £748k H1 2,190 H1 £721k 2017/2018

  9. Slide 9: Homes Completed and ASP – Joint Ventures

    Finance Review Homes Completed and ASP – Joint Ventures (St Edward & St William) Homes ASP H1 145 H1 £782k 2020/2021 H2 284 H2 £628k FY 429 FY £680k H1 212 H1 £805k St Edward & 2019/2020 H2 223 H2 £645k St William FY 435 FY £723k H1 57 H1 £863k 2018/2019 H2 204 H2 £366k FY 261 FY £475k H1 164 H1 £96

  10. Slide 10: Income Statement

    Finance Review Income Statement 30 April 2021 30 April 2020 CHANGE CHANGE YEAR ENDED £’m £’m £’m % Revenue 2,202.2 1,920.4 +281.8 +14.7% Gross profit 635.3 28.8% 637.4 33.2% -2.1 -0.3% Operating expenses (133.0) 6.0% (167.7) 8.7% +34.7 +20.7% Operating profit 502.3 22.8% 469.7 24.5% +32.6 +6.9% Net

  11. Slide 11: Abridged Cash Flow

    Finance Review Abridged Cash Flow 30 April 2021 30 April 2020 YEAR ENDED £’m £’m Profit before tax 518.1 503.7 Increase in inventory (97.6) (440.2) Increase in customer deposits 7.1 97.4 Other working capital movements 13.3 267.7 Net increase in working capital (77.2) (75.1) Net (investment in) / re

  12. Slide 12: Abridged Balance Sheet

    Finance Review Abridged Balance Sheet 30 April 2021 CHANGE 30 APRIL 2020 AS AT £’m £’m £’m Non–current assets - Intangible assets 17.2 - 17.2 - Investment in joint ventures 281.7 +19.9 261.8 - Deferred tax assets 40.1 -13.5 53.6 - Right-of-use assets 3.2 +0.7 2.5 - Property, plant and equipment 46.0

  13. Slide 13: Inventories

    Finance Review Inventories 30 April 2021 CHANGE 30 APRIL 2020 AS AT £’m £’m £’m Land not under development 331.4 -188.3 519.7 Work in progress: Land cost 1,134.7 +226.8 907.9 Total land 1,466.1 +38.5 1,427.6 Work in progress: Build cost 2,081.0 +93.2 1,987.8 Completed units 105.4 -34.1 139.5 Total i

  14. Slide 14: Creditors

    Finance Review Creditors 30 April 2021 CHANGE 30 APRIL 2020 AS AT £’m £’m £’m Trade creditors and accruals 766.7 -8.9 775.6 Provisions for liabilities 128.1 +13.2 114.9 Deposits and on account receipts 790.6 +7.1 783.5 Land creditors 388.2 +15.5 372.7 Lease liabilities 3.2 +0.7 2.5 Total liabilities

  15. Slide 15: Financing

    Finance Review Financing Group St William £750m Group facilities  £750 million total borrowing facilities  £360 million RCF  Fully drawn term loan £300 million  Maturity March 2024 with an option to extend by a further year  RCF £450 million (£200 million drawn to March 2020 repaid in September

  16. Slide 16: Land Holdings

    Finance Review Land Holdings AS AT 30 APRIL 2021 CHANGE 30 APRIL 2020 Owned 52,080 +1,522 50,558 Contract 11,190 +3,335 7,855 Plots 63,270 +4,857 58,413 Sales value £25.5bn +£1.8bn £23.7bn Average selling price (ASP)* £472k -£1k £473k Average plot cost £42k -£3k £45k Land cost % 10.5% -0.5% 11.0% Gr

  17. Slide 17: Rob Perrins, Chief Executive

    Rob Perrins Chief Executive Woodberry Down, Finsbury 16

  18. Slide 18: Introduction

    Strategic Review Introduction 1. BERKELEY’S UNIQUE LONG-TERM OPERATING MODEL 5a. SALES PERFORMANCE AND MARKET 2. LONG-TERM REGENERATION 5b. LAND AND PLANNING 3. STRONG SET OF RESULTS DURING THE PANDEMIC 5c. CONSTRUCTION 4. OUR VISION 2030: TRANSFORMING TOMORROW 6. SITES – DELIVERY AND LAND STATUS 4a

  19. Slide 19: Berkeley's Unique Long-term Operating Model

    Strategic Review Berkeley’s Unique Long-term Operating Model Complex Brownfield Land Land-led, Value Added  Focus on transforming large scale brownfield sites into unique, welcoming and sustainable places with a mix of homes and amenities for all  Prioritise the optimal development solution for al

  20. Slide 20: Long-term Regeneration – Complexities of Brownfield

    Strategic Review Long-term Regeneration - Brownfield Complexities of Brownfield  Tends to be in built-up areas  Multiple land ownerships and land assembly challenges  Sensitive neighbours (existing homes, schools, businesses or railway lines)  Extensive demolition, land remediation and restorati

  21. Slide 21: Long-term Regeneration: Kidbrooke Village

    Strategic Review Long-term Regeneration: Kidbrooke Village Before Today / Future Regenerating the failing post war 270-acre Ferrier Estate 5,268 mixed-tenure homes 86 acres of biodiverse parkland + open space | natural children’s playspace Wetland habitats, swales and wildflower meadows | 500+ new t

  22. Slide 22: Long-term Regeneration: White City Living

    Strategic Review Long-term Regeneration: White City Living Before Today / Future 11-acre former warehousing and logistics site 2,350 mixed-tenure homes | 100,000 sqft shops, cafes, restaurants and community space 50% public open space, including 5-acre park | 430 new trees | native planting | public

  23. Slide 23: Long-term Regeneration: The Green Quarter, Southall

    Strategic Review Long-term Regeneration: The Green Quarter, Southall Before Today / Future 88-acre former gasworks and Heathrow parking site 3,750 mixed tenure homes adjacent to forthcoming Crossrail station (Elizabeth Line) 42 acres of green open space, including 13 acres of biodiverse parks and we

  24. Slide 24: Long-term Regeneration: Grand Union, Brent

    Strategic Review Long-term Regeneration: Grand Union, Brent Before Today / Future 22-acre derelict industrial site 3,350 mixed-tenure homes | 200,000sqft flexible working hub 35% public open space, including waterside piazza and gardens 850m of rejuvenated canal and riverside walkway Rooftop photovo

  25. Slide 25: Regeneration at Scale: Sites in the Land Holdings

    Business Model Regeneration at Scale: Sites in the Land Holdings Berkeley is delivering 29 of the largest regeneration schemes in London and the South East 24

  26. Slide 26: Resilient Performance during the Pandemic

    Strategic Review Berkeley’s Resilient Performance during the Pandemic Delivering for our Stakeholders  Sustained our production throughout the pandemic  Prioritised the health, safety and wellbeing of our people and our stakeholders  Financial strength meant we could make the right decisions at t

  27. Slide 27: Our Vision 2030: Transforming Tomorrow

    Strategic Review Our Vision 2030: Transforming Tomorrow Our vision is to be a world-class business, trusted to transform the most challenging sites into exceptional places and to maximise our positive impact on society, the economy and the natural world 26

  28. Slide 28: Our Vision 2030: Climate Action

    Strategic Review Our Vision 2030: Climate Action • First climate change policy in 2007 • Reduced direct emissions by 73% between 2016 and 2019, the base year for SBT’s • Included procuring 100% renewable energy • Carbon neutral direct operations since 2018 • Ambitious science based targets 27

  29. Slide 29: Our Vision 2030: Nature Recovery

    Strategic Review Our Vision 2030: Nature Recovery • In 2016, Berkeley was the first to commit to measurably increasing biodiversity • Now have over 40 sites committed to net biodiversity gain • Creating 480 acres of new or improved natural habitats – roughly the same size as Hyde Park • Enhancing co

  30. Slide 30: Sales Performance and Post Covid Dynamic

    Strategic Review Sales Performance and Post Covid Dynamic Sales Performance Post Covid Dynamic £1.71bn  Berkeley’s sales have been resilient and at levels  Significant conjecture and debate around the which support the business plan. future of cities and offices.  Good demand outside London aided

  31. Slide 31: Market Fundamentals – London & South East Under-supply

    Strategic Review Market Fundamentals – London & South East under-supply London market Regional Housing Needs vs Completions Delivery (including new build and conversions)  The 2021 London Plan targets 52,000 homes per annum 100,000 2019/20 (net additions) over next ten years. 90,000 Housing target

  32. Slide 32: Land & Planning

    Strategic Review Land & Planning Land Planning  10 new developments added to the land holdings (over 6,650  Six new planning consents, including four major consents homes). on regeneration schemes: o Old Kent Road in Southwark (1,350 homes)  Seven sites in London: o Silk Park in Barnet (1,300 hom

  33. Slide 33: Construction Activity

    Strategic Review Build Construction Activity  Build cost rises are running at around 4% pa. during 2021 to date  Rising construction activity is driving demand at a time supply chains are adjusting to o UK’s exit from the EU, and o Covid-19  Cost increase being driven by materials with labour cos

  34. Slide 34: Sites – Delivery and Land Status

    Strategic Review Sites - Delivery and Land Status REGENERATION OTHER TOTAL LONDON OUT OF LONDON AS AT 30 APRIL 2021 SITES SITES LAND HOLDINGS SITES SITES Delivery of Developments: In construction 23 78% 41 62% 64 66% 32 70% 32 64% Not yet in construction – owned 3 11% 13 19% 16 17% 5 11% 11 22% Not

  35. Slide 35: Sites in London

    Strategic Review Sites in London Berkeley is delivering 46 sites in London. 32 of these are currently in production 34

  36. Slide 36: Sites outside of London

    Strategic Review Sites outside of London Berkeley is delivering 50 sites outside London. 32 of these are currently in production 35

  37. Slide 37: Joint Ventures: St Edward

    Strategic Review Joint Ventures St Edward Millbank Joint venture Land holdings Five sites in One site in with M&G of 5,139 homes production planning across six sites (with resolution) 36

  38. Slide 38: Joint Ventures: St William

    Strategic Review Joint Ventures St William Poplar Riverside Joint venture Land holdings Poplar moved Bank with National of 13,056 into facilities of Grid homes production in £360 million the period 37

  39. Slide 39: Shareholder Returns – Surplus Capital

    Strategic Review Shareholder Returns – Surplus Capital Financial Strength & Visibility Surplus Capital  Balance Sheet  Berkeley has acquired or identified the land that will meet its 2025 target of £7.5 billion of land holdings gross margin. Net Cash NAVPS  Berkeley anticipates investing around a

  40. Slide 40: Guidance

    Strategic Review Guidance - Berkeley will always prioritise its financial strength ahead of the income statement, when appropriate - Targeting a 15% cumulative pre-tax ROE for six years ending 30 April 2025 Profit Guidance: - Equivalent to average annual pre-tax profit of approximately £500 million

  41. Slide 41: Appendix

    Appendix Leighwood Fields Show Home, Cranleigh 40

  42. Slide 42: Berkeley's Track Record – through market cycles

    Appendix Berkeley’s Track Record – through market cycles AS AT 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Units (excl. JV’s) 2,825 2,723 3,698 3,678 3,802 3,776 3,355 3,742 3,712 3,565 2,544 2,201 1,501 3,167 2,852 3,001 Ave. Selling Price £770k £677k £748k £725k

  43. Slide 43: Berkeley's Awards and Accreditations

    Appendix Berkeley’s Awards and Accreditations For the fifth consecutive year, every Berkeley Group In September 2020, The Royal Society for the operating company has achieved both an 'Outstanding Prevention of Accidents (RoSPA) presented Berkeley Achievement Award' and a 'Gold Award' following an Gr

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