Glenveagh Properties Plc · EURONEXT:GVR
Glenveagh Properties — H1 2019 Earnings Presentation
38 slides from Glenveagh Properties's earnings presentation, Aug 23, 2019
Slide 1: 2019 Interim Results
23 August 2019 2019 Interim Results Bringing new ideas home.
Slide 2: Agenda
Agenda Section Results Highlights 3 Financial Results 9 Development Portfolio 14 Homes: Operational Delivery and Selling Activity 17 Living: Progress Update 22 Conclusion 26 Appendices I - Market, Regulatory & Competitive Environment (Pg 28) II - Controlling CPI (Pg 32) III - Our Portfolio: Further
Slide 3: Results Highlights
Section 01 Results Highlights Quality: We do not compromise on quality. We build homes that last, are energy efficient, and are designed for the way that people live today.
Slide 4: Operational Highlights - On Track
Results Highlights Operational Highlights - On Track Sales Activity Construction Planning Acquisitions 13 17 6,500 / 16 6 Current selling sites Active construction sites Units/sites in planning process Further strategic acquisitions 800 Units 455 4 / 376 €106m Units sold, signed or reserved 2019 uni
Slide 5: Financial Highlights - Strong Progress
Results Highlights Financial Highlights - Strong Progress Income Balance Cashflow Commentary Statement Sheet Statement • H1 Revenue of €45.5m primarily relating to the sale of 158 units across seven sites • Gross margin of 16.5% for H1 reflects a significant investment in marketing of sites where sa
Slide 6: Recent Land Acquisitions – Landbank now 3,350 units
Results Highlights Recent Land Acquisitions – Landbank now 13,350 units Commentary Drogheda, Co. Meath Kilruddery, Co. Wicklow Howth, Co. Dublin • The Group has strategically added to its development land portfolio via six attractive acquisitions in the period • The total development land investment
Slide 7: Residential Market Backdrop Supportive of Volume Homebuilding
Results Highlights Residential Market Backdrop Supportive of Volume Homebuilding Strong Population Growth Driving Housing Need Mortgages Are Available for the Right Product • +13.5% / 631k by 2030 +37% 7m 25,000 In the six months to June, the number of FTB mortgage approvals grew by 12.5% YoY 6m 20,
Slide 8: Delivery Differentiators
Results Highlights Delivery Differentiators Homes People Can In Areas of At Sales Rates Projected 2020 Deliveries by Site (ASP / Velocity)A Afford to Live In Sustainable Demand Which Drive Return on Capital 250 • 20 Selling Sites • Average velocity 50 per site 200 84% of portfolio at selling 90% of
Slide 9: Financial Results
Section 02 Financial Results Access: We are giving more people the opportunity of owning their own new home — Building where they want to live and at a price that is more affordable.
Slide 10: Income Statement
Financial Results Income Statement Six months ended Six months ended 30 June 2019 30 June 2018 Commentary €m €m • H1 Revenue of €45.5m primarily relating to the sale of 158 units (H1 2018: 6 units) across seven sites Revenue 45.5 1.3 • The corresponding gross margin of 16.5% (H1 2018: Cost of Sales
Slide 11: Balance Sheet
Financial Results Balance Sheet 30-Jun 31-Dec 2019 2018 €’000 €’000 Commentary Property, plant and equipment 12.6 11.5 • Inventory is split as follows: Intangible assets 0.8 0.7 Deferred tax asset 0.5 0.2 ➢ Land held for development - €710m (Dec 2018: Restricted cash 1.5 1.5 €618m) Non-current asset
Slide 12: Cash Flow Statement
Financial Results Cash Flow Statement 30-Jun 30-Jun 2019 2018 Commentary €m €m • The cash movement in the period primarily relates to the EBITDA (2.2) (7.7) continued investment in our land portfolio and in working capital ahead of the anticipated increase in unit closings Equity-settled share-based
Slide 13: The Impact of HPI / CPI on Margin Progression in 2020
Financial Results The Impact of HPI / CPI on Margin Progression in 2020 Commentary • As the IPO sites continue to work their way through, an excess of HPI over CPI will be required in order to deliver a 20% margin in 2020 • The Group’s assumptions for achieving our 20% target for 2020 include ‒ HPI:
Slide 14: Development Portfolio
Section 03 Development Portfolio Innovation: We achieve quality and greater accessibility to new homes by relentlessly innovating the way we plan, design and build. We bring new ideas home.
Slide 15: Our Land Portfolio is positioned towards delivering affordable product
Development Portfolio Our Land Portfolio is positioned towards delivering affordable product in large urban locations Overview of Capital Invested in Development Land (€710m1) 90% 14% Geography 38% 38% 8% 2% GDA Focused Dublin Cork Other (By Value) Dublin (ex Docklands) GDA Docklands 95% Build-to-Se
Slide 16: Help-to-Buy Scheme – Glenveagh Well Positioned
Development Portfolio Help-to-Buy Scheme – Glenveagh Well Positioned If Maximum Property Value Reduced Commentary • The Help-to-Buy (“HTB”) scheme is due to end this year and there is much speculation surrounding its renewal and the potential terms thereof • The scheme was introduced in January 2017
Slide 17: Homes: Operational Delivery and Selling Activity
Section 04 Homes: Operational Delivery and Selling Activity Quality: We do not compromise on quality. We build homes that last, are energy efficient, and are designed for the way that people live today
Slide 18: Planning – 6,500 units in the planning process
Homes: Operational Delivery and Selling Activity Planning – 6,500 units in the planning process Planning Process SHD Application Process – 31 Weeks Overview Design and Pre- • 98% of our lands are zoned residential Period Progress application Consultations • We have the necessary Full Planning 16- 20
Slide 19: Strong Execution in Construction
Homes: Operational Delivery and Selling Activity Strong Execution in Construction Starter Homes – 3,650 units H1 Highlights SITE Location Start Date SITE Location Start Date Balbriggan (Taylor Hill) Dublin 2017 Eden (Blackrock Villas) Cork 2018 • We are now actively constructing on 17 sites Ballybou
Slide 20: Construction Supply Chain - Ensuring Glenveagh is Brexit Ready
Homes: Operational Delivery and Selling Activity Construction Supply Chain - Ensuring Glenveagh is Brexit Ready Commentary • During 2018 we undertook an assessment of our entire supplier base in order to identify potential risks to our supply chain as a result of Brexit • This assessment involved wr
Slide 21: Sales Underpinned by New Launches and Bulk Sales
Homes: Operational Delivery and Selling Activity Sales Underpinned by New Launches and Bulk Sales Selling Sites Commentary • Sales for 2019 are progressing to 2018 Selling Sites Additional Selling Sites 2019 plan and ahead of construction with PRS reservations in H1. Selling to 800 units sold, signe
Slide 22: Living: Progress Update
Section 05 Living: Progress Update Innovation: We achieve quality and greater accessibility to new homes by relentlessly innovating the way we plan, design and build. We bring new ideas home.
Slide 23: Market Environment - PRS
Living: Progress Update Market Environment - PRS Rapid population growth in Dublin Low Vacancy and Persistent Rental Growth PRS Yield Compression 12.0% 4.0% 5.0% 5.3 1.6 5.2 4.8% 1.4 10.0% 5.1 4.6% 3.0% 1.2 Investment Yields (Net) 5.0 8.0% 4.4% 4.9 1.0 (Millions) 4.2% (Millions) 6.0% 2.0% 4.8 0.8 4.
Slide 24: Our Docklands PRS Portfolio
Living: Progress Update Our Docklands PRS Portfolio Dublin Docklands Campus Update Unique and • East Rd SHD application lodged Attractive and decision due Q4 2019 • Castleforbes SHD formal Assets application process (Stage 1) to commence Q4 2019 • Castleforbes non residential 1,150 / 11 elements (ho
Slide 25: Mixed-Tenure Overview and Business Model Characteristics
Living: Progress Update Mixed-Tenure Overview and Business Model Characteristics Local Council / State Agency Benefits What is Mixed-Tenure? Why it’s Attractive • Mixed-Tenure is a housing delivery model • The Agency contributes to the delivery of a Placemaking Utilise Site Value Overage whereby a d
Slide 26: Conclusion
Section 06 Conclusion Quality: We do not compromise on quality. We build homes that last, are energy efficient, and are designed for the way that people live today.
Slide 27: Conclusion: Glenveagh's Delivery Differentiators
Conclusion Glenveagh’s Delivery Differentiators Commentary • Glenveagh has delivered on its IPO objectives to Homes People Can In Areas of At Sales Rates date Afford Sustainable Which Drive Return • Furthermore, the Group has good visibility on Demand on Capital achieving its medium-term volume targ
Slide 28: Appendix I: Market, Regulatory and Competitive Environment
Appendix I Market, Regulatory and Competitive Environment Innovation: We achieve quality and greater accessibility to new homes by relentlessly innovating the way we plan, design and build. We bring new ideas home.
Slide 29: Market Environment – Strong fundamentals for Irish Homebuilders
Market, Regulatory and Competitive Environment Market Environment – Strong fundamentals for Irish Homebuilders Rapid Population Growth Exceptional FDI Jobs Growth Strengthening Labour Market 7m 140.0 2,500 18% No. of People in Full-time Employment 16% Unemployment Rate (%) 6m 120.0 2,000 14% 5m 100.
Slide 30: Mortgage Approvals and Mortgage Lending
Market, Regulatory and Competitive Environment Market Environment – Strong fundamentals for Irish Homebuilders Mortgage Approvals by Volume Mortgage Lending Continues its Recovery Commentary • The majority of transactions involving mortgages in 60,000 45,000 €40bn Ireland relate to the second hand p
Slide 31: Competitive Environment
Market, Regulatory and Competitive Environment Competitive Environment • Highly fragmented market with few scale Top 50 Developers - 2018 operators outside the two PLC’s • Larger operators focussed on higher density €300m 2019 Homes 2020 Homes 2021 Homes urban areas outside of GLV’s target ASP Outpu
Slide 32: Appendix II: Controlling CPI
Appendix II Controlling CPI Quality: We do not compromise on quality. We build homes that last, are energy efficient, and are designed for the way that people live today.
Slide 33: How We Maintain Operational Cost Discipline
Controlling CPI How We Maintain Operational Cost Discipline Largest Opportunity Stable Platform for Optimised Processes Reduced Risk Growth • The scale of the opportunity as • We offer continuity of work on • We have optimised processes • We pay our sub-contractors on- 1. Our Sub- a partner to Glenv
Slide 34: CPI: Mitigating Cost Inflation Over the Longer-Term
Controlling CPI CPI: Mitigating Cost Inflation Over the Longer-Term Utilising Our Structural Advantages Over The Longer-Term While strong mutually beneficial relationships with sub-contractors and suppliers are a key CPI mitigant in the near-term, we are investing ahead of time to ensure the Group m
Slide 35: Appendix III: Our Portfolio — Further Information
Appendix III Our Portfolio — Further Information Access: We are giving more people the opportunity of owning their own new home — Building where they want to live and at a price that is more affordable.
Slide 36: The Importance of Starter-Homes
Our Portfolio - Further Information The Importance of Starter-Homes Key Attractions of Starter-Home Market Implications for Landbank Construction • Segment with the deepest demand – 83% of units sold in Ireland were below €425k • Average site size in 20181 ➢ The GDA Starter Home market is localised
Slide 37: Continued Attractiveness of Cork and our Market Leadership Position
Our Portfolio - Further Information Continued Attractiveness of Cork and our Market Leadership Position There Our Cork Portfolio Site Target Site Units Cost Market Designated Ireland’s Young and Growing Maryborough 2nd City1 Population 500 €25m FTB Ridge Population – 542,868 35% aged 20-39 (+4.6% 20
Slide 38: Disclaimer
Disclaimer This presentation has been prepared looking statements. No by Glenveagh Properties PLC (the representation or warranty is made “Company” or “Glenveagh”) for as to the achievement or information purposes only. reasonableness of, and no reliance should be placed on, such forward- This prese