Slide 1: Designed for Living. Built for Life.
Designed for Living. Built for Life. CAIRN HOMES plc 2017 PRELIMINARY RESULTS PRESENTATION 06 MARCH 2018 WWW.CAIRNHOMES.COM 1 © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM
Slide 2: 2017 Preliminary Results
2017 PRELIMINARY RESULTS Michael Stanley Tim Kenny Declan Murray Chief Executive Group Finance Head of Investor & Co-Founder Director Relations 2 © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM
Slide 3: Agenda
1. Highlights 2. Financial 3. Land Bank 4. Outlook 5. Appendix incl. a) Cairn’s Sites b) Market Backdrop Hanover Quay – 6th Floor Penthouse 33 © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM
Slide 4: Financial Highlights
Financial Highlights Revenue: €150m Gross Profit: €27m (2016: €41m) (2016: €7.1m) 418 completions (ASP - €315k) up from 105 Gross Margin 18.2% (2016: 17.3%). completions (ASP - €295k) in 2016. Inventories: €911m Operating Profit*: €15m (2016: €727m) (2016: €3.6m) 34 individual sites containing c.14,
Slide 5: Operational Highlights
Operational Highlights Land Acquisitions Enhancing Value in Six Hanover Quay Unique Land Bank Cairn’s well located land bank has been 1,447 units granted planning permission Due to significant demand from acquired at a cost of 16% of estimated NDV since the start of 2017. international capital, we h
Slide 6: Financial Highlights: Sales Agreed, Completions, Forward Sales
Financial Highlights Considerable Progress to Achieve Medium Term Objectives Sales agreed, legal completions and forward sales by unit numbers and revenue €’m €250 €209m €200 €131.5m €134m €150 €100 €65m €42m €50 €31m €0 Sales Agreed Legal Completions Forward Sales 2016 2017 Unit # 700 617 units 600
Slide 7: Financials
1. Highlights 2. Financials 3. Land Bank 4. Outlook 5. Appendix incl. a) Cairn’s Sites b) Market Backdrop Churchfields Marianella 7 © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM
Slide 8: December 2017 Full Year Results
31 December 2017 Full Year Results Income Statement for the Year Ended 31 December 2017 (Preliminary) Commentary Year ended 31 December 2017 Year ended 31 December 2016 ▪ Revenue of €150m predominantly (Unaudited) (Audited) from the sale of 418 houses (€131m) and site sales (€17m). Before Exceptiona
Slide 9: December 2017 Full Year Results (contd.)
31 December 2017 Full Year Results (contd.) Balance Sheet at 31 December 2017 (Preliminary) Commentary Unaudited Audited ▪ Total assets of €1bn (2016: €834m). 31 December 2017 31 December 2016 €'000 €'000 ▪ Total equity of €722m (2016: €664m). PP&E and intangibles 2,193 1,379 ▪ Inventories of €911m
Slide 10: Cash Flow Statement for the Year Ended 31 December 2017
31 December 2017 Full Year Results (contd.) Cash Flow Statement for the Year Ended 31 December 2017 (Preliminary) Commentary Unaudited Audited Year ended Year ended ▪ EBITDA of €15.6m (2016: €2.5m). 31 December 2017 31 December 2016 €'000 €'000 ▪ €184m increase in inventories represents 2017 site ac
Slide 11: Land Bank
1. Highlights 2. Financials 3. Land Bank 4. Outlook 5. Appendix incl. a) Cairn’s Sites b) Market Backdrop Shackleton Park – Site Team 11 © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM
Slide 12: Core Land Bank – Timing and Location Key Drivers to Future Success
Core Land Bank – Timing and Location Key Drivers to Future Success Investment in our Core Land Bank – Capital Allocations Timeline Core land bank acquisition dates €’m €822m capital deployed on a land bank of c. 14.100 units # Units 450 14,000 400 75% 12,000 of core land bank 350 capital deployed in
Slide 13: Core Land Bank – Capital Allocations Geographical Split
Core Land Bank – Timing and Location Key Drivers to Future Success Investment in our Core Land Bank – Capital Allocations Geographical Split Targeted Capital Allocation Focused on the GDA 18.2% Rest of Dublin €150m 49.8% Dublin within M50 €409m 27.0% Greater Dublin Area €222m 5.0% Regional €41m 45%
Slide 14: Core Land Bank - Brands
Core Land Bank - Brands The Brands of our Current Developments Housing High Density Apartments Cork Street Stillorgan Student Apartments @ Maynooth Blackhall Place Galway 14 © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM
Slide 15: Core Land Bank – Enhancing Value
Core Land Bank – Enhancing Value 14,100 RESIDENTIAL UNITS ACROSS 34 CORE SITES Unique Wholly Owned Land Bank with Inherent Planning Upside High Density Housing Student Apartment Total Apartment # Units # Units # Units # Units Land Bank 1/1/17 9,900 1,618 400 11,918 Less: 2017 Unit Sales (373) (45) -
Slide 16: Core Land Bank - Composition
Core Land Bank - Composition Composition of c. 14,100 Units UNIT TYPE PLANNING STATUS BUYER PROFILE Buyer Profile 4% 4% 4% 10% 36% 22% 28% 14% a 74% 32% 25% 47% Full Planning Permission FTB (from €250k) SDZ Effective FPP Trade Up / Mover (up to €600k) Houses Apartments Student Zoned Residential Prem
Slide 17: Core Land Bank Analysis - Housing
Core Land Bank Analysis - Housing 22 well located HOUSING sites (c. 10,500 units) with excellent public transport links and no planning risk Active Units SCALE 10 km 1. Parkside, Malahide Road 395 2. Churchfields, Ashbourne, Co. Meath 397 3. Elsmore, Naas, Co. Kildare 465 4. Shackleton Park, Lucan 1
Slide 18: Core Land Bank Analysis – High Density Apartments
Core Land Bank Analysis – High Density Apartments 14 prime APARTMENT Sites (c. 3,100 units) in and near Dublin City 2 Active Units SCALE 1 km 1. Marianella, Rathgar, Dublin 6W 231 2. Hanover Quay, Dublin 2 120 3. Greenfields, Donnybrook, Dublin 4 86 2 Options for 2018/19 Commencements 1. Montrose, D
Slide 19: Core Land Bank – Options
Core Land Bank – Options UNIT DELIVERY OPTIONS AND BROADENING BUYER POOL Buyer profiles across core land bank continues to expand Housing - Existing Buyer Profile High Density Apartments - Existing Buyer Profile Broadening Pool First Time Buyers (> €250k) First Time Buyers (> €250k) International In
Slide 20: Six Hanover Quay
Six Hanover Quay Formal Sales Process Commenced Background ▪ There are a large number of international institutional investors and PRS operators looking to own residential assets in Ireland, and particularly in Dublin. ▪ The Multi‐Family / Build to Rent residential investment market in Dublin has se
Slide 21: Core Land Bank Analysis – Student Apartments
Core Land Bank Analysis – Student Apartments c. 1,717 STUDENT BED pipeline in close proximity to Ireland’s major universities Under Construction Student Beds SCALE 10 km 1. Blackhall Place, Dublin 1 112 Full Planning Permission Student Beds 2. Eyre Square, Galway 147 3. Cork Street, Dublin 8 399 In
Slide 22: Student Accommodation – An Irish Backdrop
Land Bank Analysis - Student Accommodation – An Irish Backdrop SIGNIFICANT SUPPLY AND DEMAND IMBALANCE GROWING THIRD LEVEL STUDENT POPULATION Dublin, Kildare & 2018 2020 2024 Galway Full Time Third Level Students Supply 19,177 27,067 30,901 160,000 150,000 Demand 37,493 41,062 44,864 140,000 Shortfa
Slide 23: Core Land Bank Analysis – Development Metrics
Core Land Bank Analysis CORE LAND BANK – DEVELOPMENT METRICS Key development metrics by construction activity High Density Student Housing Overall Land Bank Apartments Apartments Capital Allocation 53% 41% 6% 100% Total Units 10,500 3,100 500* 14,100 Average Unit Cost €41k €105k €95k €57k Estimated
Slide 24: Business Outlook
Business Outlook Irish recovery complete – Supply / demand now in expansionary imbalance intensifying phase Clearly defined strategy Unique land bank with Talented and experienced across distinct product sites in the best locations team of housebuilders in mixes place 2020 medium-term run Strong for
Slide 25: Cairn's Sites
1. Highlights 2. Land Bank 3. Operations 4. Outlook 5. Appendix incl.Mket a) Cairn’s Sites b) Market b) Market Backdrop Backdrop Shackleton Park © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM 25
Slide 26: Housing - Selling Sites
Housing - Selling Sites PARKSIDE, MALAHIDE ROAD PARKSIDE NAMA JV CHURCHFIELDS, ASHBOURNE SHACKLETON PARK, LUCAN Total Units: 395 Total Units: 71 Total Units: 397 Total Units: 1,005 Completions to FYE 17: 245 Completions to FYE 17: 32 Completions to FYE 17: 130 Completions to FYE 17: 29 UPDATE: UPDAT
Slide 27: Housing - Selling Sites
Housing - Selling Sites GLENHERON, GREYSTONES ELSMORE, NAAS ALBANY, KILLINEY Total Units: 352 Total Units: 465 Total Units: 20 Completions to FYE 17: 11 Completions to FYE 17: - Completions to FYE 17: 5 UPDATE: UPDATE: UPDATE: Construction of Phase 1 (50 units) Construction of Phase 1 (117 units) Co
Slide 28: Housing – Options for 2018/2019 Site Commencements
Housing – Options for 2018/2019 Site Commencements MARIAVILLA, MAYNOOTH CRADDOCKSTOWN, NAAS CHERRYWOOD, DUBLIN CLONBURRIS, DUBLIN 22 Size: 49 acres Size: 30 acres Size: 10.5 acres Size: 177 acres Total Units: 462 Total Units: 251 Total Units: 294 Total Units: Up to 3,086 units UPDATE: UPDATE: UPDATE
Slide 29: Housing – Options for 2018/2019 Site Commencements
Housing – Options for 2018/2019 Site Commencements FARRANKELLY, DELGANY CITYWEST, DUBLIN 24 SWORDS, CO. DUBLIN RAHOON, GALWAY Size: 21.5 acres Size: 20 acres Size: 28 acres Size: 21 acres Total Units: 440 Total Units: 354 Total Units: 500 Total Units: 220 UPDATE: UPDATE: UPDATE: UPDATE: Currently in
Slide 30: High Density Apartments - Active Sites
High Density Apartments - Active Sites MARIANELLA, RATHGAR HANOVER QUAY, DUBLIN 2 GREENFIELD PARK, DUBLIN 4 Total Units: 231 Total Units: 120 Total Units: 86 Completions to FYE 17: 45 Completions to FYE 17: - Completions to FYE 17: - UPDATE: UPDATE: UPDATE: Completions in Block A started in Q4 Const
Slide 31: High Density Apartments – Options for 2018/2019 Site Commencements
High Density Apartments – Options for 2018/2019 Site Commencements MONTROSE, DUBLIN 4 GRIFFITH AVENUE, DUBLIN 9 CROSS AVENUE, BLACKROCK BARRINGTON, CARRICKMINES Size: 8.6 acres Size: 7.5 acres Size: 8.0 acres Size: 12 acres Total Units: TBC Total Units: TBC Total Units: TBC Total Units: TBC UPDATE:
Slide 32: Student Apartments – Active Site
Student Apartments – Active Site Blackhall Place, Dublin 8 Total Units: 29 Total Beds: 112 Size: 2,800 sq.m. Target Colleges: TCD, DIT UPDATE: Refurbishment underway ahead of completion and letting for the summer student market and the start of the new academic year in September 2018. 32 © CAIRN HOM
Slide 33: Student Apartments – Future Sites
Student Apartments – Future Sites STILLORGAN, DUBLIN CORK STREET, DUBLIN 8 MARIAVILLA, MAYNOOTH EYRE SQUARE, GALWAY Units: 215 Units: 90 Units: 179 Units: 22 Total Beds: 576 Total Beds: 399 Total Beds: 483 Total Beds: 147 Size: 19,400 sq.m. Size: 13,000 sq.m. Size: 19,600 sq.m. Size: 5,750 sq.m. Uni
Slide 34: Market Backdrop
1. Highlights 2. Land Bank 3. Operations 4. Outlook 5. Appendix incl. 5. Appendix incl.Mket a) Cairn’s Sites Cairn’s Sites b) Market Backdrop Marianella 34 © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM
Slide 35: Market Backdrop – Supporting The Continuing Maturing of Cairn
Market Backdrop – Supporting The Continuing Maturing of Cairn 2017 – Irish Macro Environment GDP: +8.1% Core Domestic Demand: +6.7% 2016: +5.4% 2016: +5.4% Employment: +3.8% Gross Disposable Income: +5.1% 2016: +5.4% 2016: +5.4% 2017 – Irish Housing Market Affordability Mortgage Drawdowns HPI Supply
Slide 36: Key Drivers Boosting Affordability
Key Drivers Boosting Affordability WAGE INFLATION OUTSTRIPPING CONSUMER PRICE INDEX STRENGTHENING IRISH LABOUR MARKET 3.0% Employment (‘000) Unemployment (%) Peak 16% t 2.5% + 343,600 2,200 18.00% 2.0% 2,100 1.5% 13.00% 2,000 1.0% 1,900 8.00% 0.5% 1,800 3.00% 0.0% 1,700 -0.5% 1,600 -2.00% 2007Q1 200
Slide 37: National Residential Price Recovery vs Rental Price Recovery
National Residential Price Recovery vs Rental Price Recovery PRIVATE RENTS 19% ABOVE PEAK, DUBLIN HOUSE PRICES STILL 24% BELOW PEAK COMMENTARY Av. House Price €’k National Rental Index • Dublin average house price €344,125 j as at December 2017, 24% below + 19% €453,638 peak in February 2007. 500 14
Slide 38: Owning v's Renting
Owning v’s Renting THE FIRST TIME BUYER DECISION TREE – COST OF RENTING IS NOW 37.3% DEARER THAN ASSUMPTIONS OWNING AND FINANCING A STARTER HOME, AN INCREASE OF 4.8% SINCE SEPTEMBER 2017 • 2014: Couple, both working, earning €40,000 each. 2014 Sep-17 Mar-18 • First time buyers, purchased a three bed
Slide 39: The Mortgage Market
The Mortgage Market Mortgage Drawdown and Approval Trends supporting Cairn Growth Trajectory Mortgage Drawdowns – Value of Loans Mortgage Approvals – Value of Loans Value of Drawdowns €’m No. Loans Value of Approvals €’m No. Loans Value + 29% Value + 34% ▪ The mortgage market continues its strong gr
Slide 40: Mortgage Market Trends
Mortgage Market Trends MORTGAGE APPROVED BORROWERS CANNOT FIND HOUSES • The number of individual mortgage Mortgage Approval to Drawdown Conversion Table approved loans converting to 45,000 mortgage drawdown loans deteriorated significantly in 2017. • The average conversion rate since Q2 2015 is 83%,
Slide 41: Supply Still Lagging Demand
Supply Still Lagging Demand 2017 SUPPLY LESS THAN ONE THIRD OF MEDIUM TERM DEMAND LEVEL COMMENTARY Unit # National Supply ▪ The Department of Housing, Planning & Local Government completion statistics indicate that the level 20,000 of under-supply, based on ESRI medium term demand Medium Term Demand
Slide 42: Government Response to Supply Challenges
Government Response to Supply Challenges LOCAL INFRASTRUCTURE HOUSING ACTIVATION FUND (LIHAF) PROJECT IRELAND 2040 HELP TO BUY APARTMENT DESIGN GUIDELINES Source: CSO 42 © CAIRN HOMES PLC 2018. WWW.CAIRNHOMES.COM
Slide 43: Disclaimer
DISCLAIMER This presentation document (hereinafter “this This document has been prepared in good of the information or opinions in this made as to the achievement or document”) has been prepared by Cairn faith, but the information contained in it has document. reasonableness of and no reliance shoul