Taylor Wimpey Plc · LSE:TW.
Taylor Wimpey — FY2018 Earnings Presentation
86 slides from Taylor Wimpey's earnings presentation, Feb 27, 2019
Slide 1: Full Year Results Presentation for the year ended 31 December 2018
Full Year Results Presentation for the year ended 31 December 2018 27 February 2019
Slide 2: Disclaimer
Disclaimer This presentation is not intended to, and does not constitute or form part of, any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Taylor Wimpey plc or any other invitation or inducement to en
Slide 3: Agenda
Agenda Overview and current trading Pete Redfern Financial review and efficiency Chris Carney Operations and land Jennie Daly Outlook and strategy Pete Redfern 3
Slide 4: Overview and current trading
Overview and current trading Pete Redfern Chief Executive
Slide 5: Group financial highlights
Group financial highlights Return on net operating assets* Cash conversion* 33.4 32.5** 30.8** 100 92.6 30 87.2** 81.0** 20 % % 10 0 0 2016 2017 2018 2016 2017 2018 2018-2023 medium term target: 2018-2023 medium term target: Increase to 35% Convert 70-100% of operating profit* into operating cash fl
Slide 6: New KPIs
New KPIs Customer FY 2018 FY 2017 Customer satisfaction – would you recommend 8-week score % 90 89 Customer satisfaction – would you recommend 9-month score % 76 76 Build quality Construction Quality Review – score out of 6 3.93 3.74 Reportable items 0.28 0.26 Land and planning Land cost as % of ASP
Slide 7: 2018 market backdrop
2018 market backdrop July February July February 2-year fixed rates 2017 2018 2018 2019 HTB equity loan 1.39% – 1.87% 1.44% – 2.17% 1.61% – 2.17% 1.59% – 3.84% 85% LTV (new build) 1.52% 1.64% 1.74% 1.69% External indicators Significant warning range Q3 2018 Forecast Real Disposable Income – < 0% or
Slide 8: Forward market indicators very stable
Forward market indicators very stable Customer interest – organic website visits Website calls 150,000 10,000 120,000 8,000 90,000 6,000 60,000 4,000 30,000 2,000 0 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Week number Week number 2015 20
Slide 9: UK market performance – to date
UK market performance – to date H1 2019 (w/e 24 Feb 2019) H2 2018 H1 2018 H2 2017 H1 2017 Average outlets open 256 266 280 284 292 Private sales rate (net) 0.99 0.76 0.83 0.66 0.87 Private sales price £000 288 290 296 287 289 Cancellation rate (private) 12% 15% 13% 15% 11% ▪ 82 new outlets opened in
Slide 10: Financial review and efficiency
Financial review and efficiency Chris Carney Group Finance Director
Slide 11: Summary Group results
Summary Group results £m (before exceptional items) FY 2018 FY 2017 Change Revenue 4,082.0 3,965.2 2.9% Gross profit 1,074.5 1,031.8 4.1% Gross profit margin % 26.3 26.0 0.3ppt Operating profit* 880.2 844.1 4.3% Operating profit* margin % 21.6 21.3 0.3ppt Profit before tax and exceptional items 856.
Slide 12: UK performance summary
UK performance summary FY 2018 FY 2017 Change Legal completions – excl JVs 14,822 14,387 3.0% Private 11,421 11,602 (1.6)% Affordable 3,401 2,785 22.1% Average selling price – excl JVs 264 264 - Private £000 302 296 2.0% Affordable £000 137 131 4.6% Legal completions – JVs 111 154 (27.9)% Share of p
Slide 13: Indicative movements in UK operating profit margin
Indicative movements in UK operating profit* margin Impact on 2018 2017 to 2018 Annual change income statement Market inflation on selling prices c.2.5%** 1.6% Market inflation on build cost c.3.5% (1.9)% Net economic benefit captured (0.3)% Market impact of landbank evolution (0.5)% Net market impa
Slide 14: Cost and efficiency programme update
Cost and efficiency programme update ▪ Delivery Excellence ▪ Phase 1 (devices, drawings access, build progress entry etc) fully deployed to >800 production staff changing behaviour from laptop to mobile based activities ▪ Phase 2 (call off prompts, payments, day works control etc) testing imminent w
Slide 15: UK margin drivers
UK margin drivers £000 per unit FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 ASP 212.9 229.7 255.0 264.4 263.9 Net land cost** (45.1) (42.4) (45.4) (45.4) (41.7) Build cost (112.9) (121.9) (137.9) (143.7) (147.4) Direct selling expenses (5.3) (6.0) (6.2) (6.0) (5.9) Private and affordable gross profit* 4
Slide 16: Exceptional items
Exceptional items ▪ Total exceptional items of £46.1 million (pre-tax) ▪ £30.0 million provision relating to replacement of Aluminium Composite Material (ACM) cladding on certain buildings ▪ One building remediated, one substantially complete and one about to start ▪ Remaining spend expected to be e
Slide 17: Summary Group balance sheet
Summary Group balance sheet Group £m 31 Dec 2018 31 Dec 2017 Change Long term assets and JVs 100.2 77.6 22.6 Land 2,757.7 2,684.5 73.2 WIP 1,430.5 1,391.2 39.3 Debtors 190.4 182.3 8.1 Land creditors (738.6) (639.1) (99.5) Other creditors (824.4) (816.0) (8.4) Pensions and post retirement benefits (1
Slide 18: Strong balance sheet and long term financing
Strong balance sheet and long term financing ▪ Short term owned and controlled landbank of 75,995 units which represents 5.1 years supply ▪ Land cost as % of ASP in short term owned landbank at 15.2% ▪ Land creditors at £739 million represent 27% of the gross land value ▪ Group cash conversion* of 9
Slide 19: Land creditor matrix
Land creditor matrix Micro location – position within macro location Total UK net land creditors: £716 million A B C D Q1 – A 16% 27% 0% 0% Macro location – city, broken Q2 – B 11% 35% 5% 0% down by major suburb, Q3 – C 1% 5% 0% 0% town, village or rural area Q4 – D 0% 0% 0% 0% 19
Slide 20: Pension fund contributions
Pension fund contributions ▪ Funding update as at 31 December 2018 ▪ Technical provisions deficit of £144 million and funding level of 93.9% (including GMP of 1%) ▪ Deficit contributions of £40 million per year re-instated from January 2019 until the earlier of full funding or Q4 2020 ▪ Funding leve
Slide 21: Historic UK cash generation
Historic UK cash generation £m FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Cash generated by operations 990 1,005 1,210 1,401 1,405 before land spend Land spend (831) (592) (612) (685) (612) Cash generated by operations 159 413 598 716 793 21
Slide 22: Continued cash generation potential even in a downturn
Continued cash generation potential even in a downturn Private ASP change 0% -5% -10% -15% -20% Illustrative cash Average selling price 264 252 241 229 217 generated per UK legal Build cost (147) (147) (147) (147) (147) completion (£000) Direct selling expenses (6) (6) (6) (6) (6) Net cash generated
Slide 23: High confidence in ordinary dividend
High confidence in ordinary dividend ▪ Ordinary dividend (c.7.5% of net assets) expected to be paid through the cycle ▪ Stress tested against various downside scenarios (including a 20% price and 30% volume reduction) ▪ Excess cash will continue to be returned to shareholders in the form of special
Slide 24: Robust performance as a foundation for future strength
Robust performance as a foundation for future strength ▪ Focus on medium term targets 2018-2023 ▪ Increase of return on net operating assets* to 35% ▪ Maintaining operating profit* margins at c.21-22% ▪ Cash conversion* of between 70 and 100% of operating profit* into operating cash flow* ▪ Increase
Slide 25: Operations and land
Operations and land Jennie Daly Group Operations Director
Slide 26: New KPIs
New KPIs Customer FY 2018 FY 2017 Customer satisfaction – would you recommend 8-week score % 90 89 Customer satisfaction – would you recommend 9-month score % 76 76 Build quality Construction Quality Review – score out of 6 3.93 3.74 Reportable items 0.28 0.26 Land and planning Land cost as % of ASP
Slide 27: Customer service
Customer service Customer satisfaction (Would you recommend?) 8-week score FY 2018 average FY 2017 average Taylor Wimpey UK Ltd 90% 89% North 91% 90% Central and South West 90% 87% London and South East 91% 89% Customers moved in Customers moved in 9-month scores* Oct 17-Sep 18 Oct 16-Sep 17 Recomme
Slide 28: Build quality
Build quality ▪ Getting it ‘right first time’ – ensuring the quality and consistency of all homes, without excessive checking or remedial action ▪ Right first time build quality ▪ NHBC Construction Quality Reviews (CQR) ▪ Quality Assurance Journey ▪ Home Quality Inspection (HQI) ▪ Efficient and pred
Slide 29: UK land pipeline
UK land pipeline 31 Dec 2018 31 Dec 2017 Plots Owned Controlled Total Total Detailed planning 40,919 3,077 43,996 46,320 Outline planning 10,396 8,223 18,619 19,931 Resolution to grant 1,964 11,416 13,380 8,598 Short term 53,279 22,716 75,995 74,849 Short term with 40,795 - 40,795 42,094 implementab
Slide 30: Quality of land acquisitions
Quality of land acquisitions 42.0% 40.0% 38.0% Site based ROCE* 36.0% 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 23.0% 24.0% 25.0% 26.0% 27.0% 28.0% 29.0% Contribution margin* 2013 2014 2015 2016 2017 2018 At current costs and current selling prices in year of acquisition * See definitions slide in the app
Slide 31: Land market and politics
Land market and politics ▪ Short term land market ▪ Mixed signals – little change for smaller sites though slower to complete, whilst larger opportunities some cause for pause ▪ Anxiety to get deals done, but agents and owners reluctant to go back to market ▪ Careful relationship management as some
Slide 32: Land market and politics
Land market and politics ▪ Strategic land market ▪ TW focus on one-to-one opportunities through structured site searches, and more effective relationships ▪ Market remains competitive ▪ “Hybrid” agreements (part option / part promotion) have increased where competition is high ▪ Noticeable pressure
Slide 33: Help to Buy – a manageable adjustment
Help to Buy – a manageable adjustment First time buyers using Help to Buy as Homes England Help to Buy price a % of total 2018 Region cap** private completions % within price cap North East £186,100 31% 51% North West £224,400 38% 71% Yorkshire & The £228,100 44% 77% Humber East Midlands £261,900 44
Slide 34: Planning for future outlets
Planning for future outlets Planning status of completions 100% 90% 80% To acquire Completions excluding JVs 70% Controlled 60% 50% 40% 30% Owned 20% 10% 0% 2018 2019 2020 2021 2022 Owned with planning - short term Owned with planning - strategic Owned with no planning - short term Owned with no pla
Slide 35: Profile of future strategic land conversions
Profile of future strategic land BU conversions Projected strategic conversions to 2024 25,000 20,000 Plots converted from strategic land 15,000 10,000 5,000 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Actual Potential pipeline Potential pipeline factored into forecasting Average 2
Slide 36: Making the most of large sites
Making the most of large sites Private sales Private sales No. of outlets* rate per outlet No. of outlets* rate per outlet FY 2018 FY 2018 H1 2018 H1 2018 Super large (751+) 30 1.08 32 1.20 Large (376-750) 44 0.96 47 0.94 Medium (201-375) 76 0.84 73 0.86 Small (1-200) 123 0.64 128 0.69 Total 273 0.8
Slide 37: Outlook and strategy
Outlook and strategy Pete Redfern Chief Executive
Slide 38: Short to medium term outlook (1-2 years)
Short to medium term outlook (1-2 years) ▪ Near term uncertainty over the Brexit process and its impact on confidence and the economy ▪ Robust actual sales performance outside London and highest price points ▪ Strong lending supply, and low interest rates maintain affordability ▪ Additional land mar
Slide 39: Medium to long term outlook (3-10 years)
Medium to long term outlook (3-10 years) ▪ Underlying housing demand likely to remain above supply ▪ Interest rates the likely cyclical trigger, with manageable Help to Buy changes a risk ▪ Anticipate trend of increasing requirements for service and quality ▪ Land and planning supply likely to remai
Slide 40: Strategy overview – what are we trying to achieve?
Strategy overview – what are we trying to achieve? ▪ Deliver great performance now, but proactively create the strongest possible business for taking advantage of opportunities and risks to come ▪ Get things right for our customers, because: ▪ …it is the right thing to do ▪ …it lowers risk in a chan
Slide 41: 2019 customer priorities
2019 customer priorities ▪ Based on customer feedback ▪ Delivering the basics – build quality and after sales service ▪ Helping to create and sustain vibrant communities ▪ To add value ▪ Creative placemaking ▪ New house type range ▪ Enhanced digital interaction ▪ To broaden routes to market ▪ Build
Slide 42: Strategy overview – what are we trying to achieve?
Strategy overview – what are we trying to achieve? ▪ Continuously improve in areas of sustainable advantage ▪ Being the employer of choice in the industry ▪ Strategic land and the acquisition and management of large sites ▪ Right first time build quality ▪ Place and community development ▪ Remove hi
Slide 43: Investment proposition
Investment proposition ▪ Strong near term performance and significant dividend ▪ Balance sheet robustness, efficiency and ongoing cash generation potential ▪ Open, honest and full communication ▪ Enhanced relationships with customers, communities and policy makers ▪ Improved efficiency and consisten
Slide 44: Dividend security and growth
Dividend security and growth ▪ Ordinary dividend scaled to be sustainable in ‘normal’ downturn ▪ All of our internal planning has special dividends for 2020 and 2021 at 2019 levels ‘plus inflation’ ▪ Balance sheet strength, length of landbank and depth of strategic land mean in most scenarios the sp
Slide 45: Summary
Summary ▪ Short term macro outlook uncertain…but trading good ▪ All sensible risk mitigation in place ‘will not bet the farm’ for short term gain ▪ 2019 expect broadly stable volume and financial metrics cf 2018 ▪ Potential for volume growth into 2020 and 2021 remains meaningful ▪ Future margins sho
Slide 46: Wimpey
46 Wimpey | ple
Slide 47: Future investor communications
Future investor communications ▪ 25 April 2019 AGM and trading update ▪ 31 July 2019 Half year results ▪ 13 November 2019 Trading update 47
Slide 48: Appendices
Taylor Wimpey plc Full Year Results Presentation for the year ended 31 December 2018 Appendices
Slide 49: Summary income statement
Summary income statement* Group £m FY 2018*** FY 2017** Change H1 2018 Revenue 4,082.0 3,965.2 2.9% 1,719.8 Cost of sales (3,007.5) (2,933.4) 2.5% (1,274.8) Gross profit 1,074.5 1,031.8 4.1% 445.0 Net operating expenses (199.6) (195.3) 2.2% (98.6) Profit on ordinary activities 874.9 836.5 4.6% 346.4
Slide 50: Summary of impact of IFRS on FY 2018
Summary of impact of IFRS 16 on FY 2018 ▪ The Group has chosen to early adopt IFRS 16 ‘Leases’ from 1 January 2018 ▪ IFRS 16 requires all assets previously classified as operating leases to be capitalised along with an associated liability equal to the present value of the lease commitment ▪ The mod
Slide 51: Summary of impact of restatements
Summary of impact of restatements 31 December 2017 ▪ The impact of the accounting standards adopted in 2018 on the Group’s 31 December 2017 income statement** and key metrics is as follows: IFRS 9 IFRS 15 Group £m Published impact impact Restated Revenue 3,965.2 - - 3,965.2 Cost of sales (2,932.2) -
Slide 52: Cash flow summary
Cash flow summary Group £m FY 2018 H2 2018 H1 2018 FY 2017 Profit from ordinary activities before finance costs* 828.8 512.4 316.4 706.5 (Increase) / decrease in inventories (1.7) 185.3 (187.0) (61.7) Exceptional items 46.1 16.1 30.0 130.0 Other operating items** (57.8) (93.4) 35.6 (38.9) Cash gener
Slide 53: Group segmental analysis
Group segmental analysis FY 2018 FY 2017** Operating Operating Operating profit* Operating profit* profit* margin RONOA* profit* margin RONOA* £m % % £m % % North 307.1 21.6 36.6 294.9 22.1 35.6 Central and South West 344.7 25.6 45.3 318.0 24.6 43.0 London and South East 270.6 22.4 25.9 271.4 22.0 2
Slide 54: North Division – segmental analysis
North Division – segmental analysis Scotland, North East North West North North and North and Division Division As at 31 Dec 2018 Yorkshire Yorkshire Midlands FY 2018 FY 2017 Number of outlets 57 40 38 135 143 Private sales rate (net) 0.76 0.78 0.69 0.75 0.72 Completions 2,507 2,035 1,889 6,431 6,07
Slide 55: Central and South West Division – segmental analysis
Central and South West Division – segmental analysis Central and Central and South West South West East and Wales and Division Division As at 31 Dec 2018 Central West FY 2018 FY 2017 Number of outlets 43 29 72 83 Private sales rate (net) 0.83 0.95 0.88 0.87 Completions 2,923 2,336 5,259 5,135 Averag
Slide 56: London and South East Division – segmental analysis
London and South East Division – segmental analysis London and London and South East South East South East excl. London Division Division As at 31 Dec 2018 London market† market† FY 2018 FY 2017 Number of outlets 33 16 49 52 Private sales rate (net) 0.84 0.72 0.80 0.77 Completions 2,187 945 3,132 3,
Slide 57: Net private sales by price band
Net private sales by price band Net private £201k- £251k - £301k - £451k- £601k - sales <£200k £250k £300k £450k £600k £1m >£1m Total North 1,911 1,527 1,131 857 58 7 - 5,491 Central and South West 513 673 729 1,404 202 16 - 3,537 London and South East 62 252 330 945 437 191 66 2,283 Total 2,486 2,4
Slide 58: UK market performance – affordable homes
UK market performance – affordable homes H1 2019 (w/e 24 Feb 2019) 31 Dec 2018 31 Dec 2017 Change Average outlets open 256 273 287 (4.9%) Affordable order book £m 593 605 400 51.3% Affordable order book units 4,355 4,452 3,159 40.9% Affordable order book ASP £000 136 136 127 7.1% Data based on reser
Slide 59: Central London market performance
Central London market performance H1 2019 (w/e 24 Feb 2019) H2 2018 H1 2018 H2 2017 H1 2017 Average outlets open 6 7 8 8 8 Private sales rate (net) 0.42 0.36 0.47 0.24 0.41 Private sales price £000 976 1,092 896 962 1,147 Cancellation rate (private) 9% 39% 12% 26% 18% Data based on reservations excl
Slide 60: Tax
Tax £m Asset / (liability) Current tax Deferred tax Net tax As at 1 Jan 2018 (57.9) 29.3 (28.6) Adoption of IFRS 16 - 0.3 0.3 Income statement* (152.3) (1.8) (154.1) SOCI / SOCIE 0.9 12.7 13.6 Cash paid 139.6 - 139.6 Forex (0.2) 0.2 - As at 31 Dec 2018 (69.9) 40.7 (29.2) ▪ Pre-exceptional underlying
Slide 61: Pensions
Pensions Movement in present value of defined benefit obligations Total UK £m FY 2018 FY 2017 FY 2016 FY 2015 IAS 19 (surplus) / deficit brought forward (23.9) 232.7 177.1 182.4 Employer contributions* (34.1) (23.1) (23.1) (23.1) Administration cost 1.9 3.0 3.3 3.2 Interest cost 1.1 5.9 6.1 6.0 Incr
Slide 62: Cash management
Cash management UK metrics FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Completions (excl JVs) 12,294 13,219 13,808 14,387 14,822 Total sq ft per unit 998 1,029 1,021 1,013 1,017 ASP £ per sq ft 213 223 250 261 259 Build cost £ per sq ft 113 118 135 142 145 Land cost £ per sq ft 45 41 44 45 41 % private
Slide 63: Dividend payment profile
Dividend payment profile Change Paid (or to be paid) FY 2017 to pence per share FY 2019*** FY 2018 FY 2017 FY 2018 Ordinary dividend* c.7.6 4.9 4.6 6.5% Special dividend** c.10.7 10.4 9.2 13.0% Total c.18.3 15.3 13.8 10.9% Change Paid (or to be paid) FY 2017 to £m FY 2019*** FY 2018 FY 2017 FY 2018
Slide 64: UK land commitments
UK land commitments 2018 2017 £m < 1 yr 1-2 yrs 2-5 yrs 5+ yrs total total Committed cash payments in respect of unconditional 353 198 184 14 749 650 land contracts Expected cash payments in respect of conditional land 117 92 69 89 367 337 contracts ▪ Included in unconditional land contracts at 31 D
Slide 65: Managing UK working capital
Managing UK working capital WIP cash spend vs P&L charge 2,500 80% 70% 2,000 60% 50% 1,500 £m 40% 1,000 30% 20% 500 10% 0 0% 2014 2015 2016 2017 2018 Development & construction costs in WIP P&L charge (direct build costs) in previous 12 months Cash spend in previous 12 months % of next 12 months com
Slide 66: Movement in Group net assets
Movement in Group net assets Breakdown of 31 Dec 2018 31 Dec 2017 movement £m £m % Opening net assets 3,137.3 2,900.3 N/A Pre-exceptional net earnings 694.5 660.3 22.1% Net impact of exceptional items (37.9) (105.0) (1.2)% Actuarial (losses) / gains after tax (69.6) 128.3 (2.2)% Net share scheme and
Slide 67: UK net operating assets
UK net operating assets* £m 31 Dec 2018 31 Dec 2017 Fixed assets 51 27 Investment in JVs 48 51 Land 2,659 2,596 WIP 1,363 1,337 Total inventories 4,022 3,933 Debtors 189 180 Land creditors (716) (618) Other creditors (744) (750) Total creditors (1,460) (1,368) Pension liability and PRMA (134) (65) P
Slide 68: UK planning permissions
UK planning permissions Sites with implementable planning 20,000 permission 18,000 95.5% 16,000 14,000 12,000 10,000 8,000 6,000 4,000 4.2% 2,000 0.3% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Started on site as at 31 December 2018 Permissions gained Completions * Starting on site Q1
Slide 69: Financing
Financing ▪ Net cash* at 31 Dec 2018: £644.1 million (31 Dec 2017: £511.8 million) ▪ Adjusted gearing (net debt* plus land creditors): 2.9% (31 Dec 2017: 4.1%) ▪ Average net cash* during 2018: £259.6 million (2017: £186.5 million) ▪ Borrowings and facilities: ▪ £550 million Revolving Credit Facility
Slide 70: Finance charges
Finance charges £m FY 2018 FY 2017* Change Financial indebtedness 5.2 6.0 (13.3)% Foreign exchange movements 1.0 0.1 - Unwind of land creditors and 18.5 20.9 (11.5)% other items Pensions 1.1 5.9 (81.4)% Interest on IFRS 16 leases 0.5 - - Total 26.3 32.9 (20.1)% * FY 2017 numbers have been restated t
Slide 71: UK land portfolio – net cost
UK land portfolio ‒ net cost 31 Dec 2018 31 Dec 2017 £m Owned Controlled Total Total Detailed planning 1,909 25 1,934 1,884 Outline planning 328 145 473 496 Resolution to grant 27 27 54 42 Sub-total 2,264 197 2,461 2,422 plots 53,279 22,716 75,995 74,849 Strategic 100 85 185 159 plots 32,354 95,063
Slide 72: UK short term landbank
UK short term landbank 100,000 7,619 (14,933) 90,000 8,841 80,000 74,849 (164) (217) 75,995 70,000 60,000 Plots 50,000 40,000 30,000 20,000 10,000 - 31 Dec 2017 Plots acquired Strategic land Completions Land sales Review and 31 Dec 2018 conversion incl. JVs scope changes Data includes JV plots 72
Slide 73: UK strategic pipeline
UK strategic pipeline 160,000 20,101 (7,619) 140,000 (2,310) - 127,417 117,245 120,000 100,000 Plots 80,000 60,000 40,000 20,000 - 31 Dec 2017 Plots acquired Strategic land Land sales Review and scope 31 Dec 2018 conversion changes Excludes land with less than 50% certainty of achieving planning per
Slide 74: UK landbank
UK landbank ▪ Land cost in short term owned landbank is 15.2% of ASP (2017: 14.8%), supported by strategic pipeline conversions ▪ Land cost as % of ASP on 2018 approvals 19.2% (2017: 19.8%) ▪ Potential revenue in the landbank at 31 Dec 2018 was £50 billion (31 Dec 2017: £47 billion), comprising shor
Slide 75: North Division - land
North Division - land Scotland, North East North West North North and North and Division Division As at 31 Dec 2018 Yorkshire Yorkshire Midlands FY 2018 FY 2017 Short term owned and controlled land portfolio plots 12,933 8,121 7,955 29,009 27,821 Land portfolio years 5.2 4.0 4.2 4.5 4.6 Cost per plo
Slide 76: Central and South West Division - land
Central and South West Division - land Central and Central and South West South West East and Wales and Division Division As at 31 Dec 2018 Central West FY 2018 FY 2017 Short term owned and controlled 17,100 16,412 33,512 32,788 land portfolio plots Land portfolio years 5.9 7.0 6.4 6.4 Cost per plot
Slide 77: London and South East Division - land
London and South East Division - land London and London and South East South East South East excl. London Division Division As at 31 Dec 2018 London market† market† FY 2018 FY 2017 Short term owned and controlled 10,603 2,871 13,474 14,240 land portfolio plots Land portfolio years 4.8 2.7 4.1 4.3 Co
Slide 78: Site size of strategic land conversions
Site size of strategic land conversions Number of strategic land plots in Number of strategic land sites in planning as at end of 2018 planning as at end of 2018 Super large (751+) 6,735 6 Large (376-750) 4,358 9 Medium (201-375) 1,398 5 Small (1-200) 3,697 33 Total 16,188* 53 2018 2018 2017 2017 St
Slide 79: Land disposals
Land disposals Proceeds £m FY 2018 FY 2017 UK 56.4 39.0 Spain 0.2 0.5 Total 56.6 39.5 Gross profit £m UK 17.6 11.0 Spain (1.6) (0.3) Total 16.0 10.7 Land disposals are included in revenue and cost of sales 79
Slide 80: FTB mortgage payments as % of pay / interest rates
FTB mortgage payments as % of pay / interest rates 100% 16 90% 14 80% 12 70% % of take home pay 10 Interest rate % 60% 50% 8 40% 6 30% 4 20% 2 10% 0% - 1983 1985 1988 1990 1993 1995 1998 2000 2003 2005 2008 2010 2013 2015 2018 Interest rate London UK ▪ FPC recommend to stress test assuming Bank Rate
Slide 81: Real house prices
Real house prices £250,000 £200,000 £150,000 £100,000 £50,000 £0 1987 1989 1991 1993 1996 1998 2000 2002 2005 2007 2009 2011 2014 2016 2018 Nominal prices Real prices Source: Nationwide – Nominal house prices 81
Slide 82: UK customer segmentation
UK customer segmentation Total reservations FY 2018 H2 2018 H1 2018 FY 2017 H2 2017 H1 2017 First time buyers 34% 33% 35% 41% 40% 42% Second time buyers 31% 30% 32% 39% 37% 40% Affordable 30% 31% 29% 17% 20% 14% Investor 5% 6% 4% 3% 3% 4% Total 100% 100% 100% 100% 100% 100% Help to Buy* 36% 34% 38%
Slide 83: UK product mix
UK product mix Private completions FY 2018 H2 2018 H1 2018 FY 2017 H2 2017 H1 2017 Apartments 12% 14% 10% 16% 16% 15% 1 / 2 / 3 bed houses 48% 47% 49% 47% 47% 48% 4 / 5 / 6 bed houses 40% 39% 41% 37% 37% 37% Total 100% 100% 100% 100% 100% 100% Data based on completions excluding JVs 83
Slide 84: UK sales performance
UK sales performance H1 2019 (w/e 24 Feb 2019) H2 2018 H1 2018 H2 2017 H1 2017 Average outlets open 256 266 280 284 292 Average sales rate (net) 1.07 1.09 1.16 0.84 1.02 Average selling price £000 278 244 254 260 265 H1 2019 (w/e 24 31 Dec 1 July 31 Dec 2 July As at Feb 2019) 2018 2018 2017 2017 Tot
Slide 85: Spain financial summary
Spain financial summary FY 2018 FY 2017 Change Average number of active sites 21 18 16.7% Legal completions 342 301 13.6% Average selling price £000 304 311 (2.3)% Average selling price €000 344 352 (2.3)% Revenue £m 104.2 94.2 10.6% Operating profit* £m 29.2 26.8 9.0% Operating profit* margin % 28.
Slide 86: Definitions
Definitions ▪ Operating profit is defined as profit on ordinary activities before net finance costs, exceptional items and tax, after share of results of joint ventures. ▪ Adjusted basic earnings per share represents earnings attributed to the shareholders of the parent, excluding exceptional items