Berkeley Group Holdings Plc · LSE:BKG
Berkeley — The Berkeley Group Holdings — FY2024 Earnings Presentation
31 slides from Berkeley's earnings presentation, Jun 19, 2024
Slide 1: Full Year Results Presentation
THE BERKELEY GROUP HOLDINGS PLC Full Year Results Presentation Year Ended 30 April 2024 19 June 2024
Slide 2: Rob Perrins, Chief Executive Officer
Rob Perrins Chief Executive Officer White City Living 1
Slide 3: Introduction to Results
Strategic Review Introduction to Results Strictly Private & Confidential Results in line with expectations; Collapse in house-building: 2026 heading for just over 100,000 achieved in challenging conditions new home starts unless there is focussed policy intervention ▪ Geopolitical uncertainty ▪ Dome
Slide 4: FY24 for Berkeley
Strategic Review Introduction to Results Strictly Private & Confidential FY24 for Berkeley ▪ No investment in new sites ▪ Ready and able to invest when conditions for growth return ▪ Market leading Our Vision 2030 outcomes: ▪ Run efficiently with operating costs 8% lower ▪ Customer Care ▪ Maintained
Slide 5: Strategy for Today's Environment
Strategic Review Strategy for Today’s Environment Strictly Private & Confidential 1. Sales volumes stable, but a third lower than FY23, with firm pricing 2. Build costs stable with good availability of labour 3. Planning is a huge challenge and failing to deliver implementable consents 4. Planning t
Slide 6: Strategy for Today's Environment
Strategic Review Strategy for Today’s Environment Strictly Private & Confidential 6. Focus on optimising sites and maintaining operating margin (17.5% - 19.5%) 7. Return on capital employed will decrease – speed of planning system and subdued rate of sale. Berkeley will match supply to demand 8. Est
Slide 7: Guidance and Medium-term Baseline
Strategic Review Guidance and Medium-term Baseline - Deliver at least £975 million of pre-tax profit across FY25 and FY26; with FY25 increased by 5% to £525 million and FY26 re-affirmed at £450 million - Operating margins in the historic range (17.5% to 19.5%), with overheads held at a stable level
Slide 8: Richard Stearn, Chief Financial Officer
Richard Stearn Chief Financial Officer Prince of Wales Drive, Battersea 7
Slide 9: 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 8
Slide 10: Summary of Performance
Finance Review Summary of Performance PROFIT BEFORE TAX CHANGE / CHANGE % 30 April 2024 30 April 2023 -£46.7m £557.3m £604.0m (-7.7%) OPERATING MARGIN 30 April 2024 30 April 2023 EPS - BASIC CHANGE / CHANGE % 19.5% 20.3% 30 April 2024 30 April 2023 -52.9p 373.9p 426.8p (-12.4%) PRE-TAX RETURN ON EQU
Slide 11: 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 2024 30 April 2023 30 April 2024 30 April 2023 +£228.2m +262p £3,560.5m £3,332.3m (+6.8%) 3,363p 3,101p (+8.4%) CLOSING NET CASH CHANGE / CHANGE % T
Slide 12: 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 2024 30 April 2023 -£434.7m £1,701.0m £2,135.7m (-20.4%) LAND HOLDINGS PLOTS CHANGE / CHANGE % 30 April 2024 30 April 2023 -3,964 54,081 58,045 (-6.8%) GR
Slide 13: Homes Completed and Average Selling Price – Group
Finance Review Homes Completed and Average Selling Price (ASP) – Group Homes ASP H1 1,785 H1 £624k 2023/2024 H2 1,736 H2 £706k FY 3,521 FY £664k H1 2,080 H1 £560k 2022/2023 H2 1,963 H2 £658k FY 4,043 FY £608k H1 1,828 H1 £647k 2021/2022* H2 1,932 H2 £562k FY 3,760 FY £603k H1 1, 104 H1 £799k 2020/20
Slide 14: Homes Completed and ASP – Joint Ventures
Finance Review Homes Completed and ASP – Joint Ventures (St Edward & St William) Homes ASP H1 204 H1 £1,204k St Edward 2023/2024 H2 202 H2 £368k FY 406 FY £788k H1 251 H1 £1,036k St Edward 2022/2023 H2 343 H2 £744k FY 594 FY £885k H1 395 H1 £558k 2021/2022 H2 477 H2 £658k FY 872 FY £612k H1 145 H1 £
Slide 15: Income Statement
Finance Review Income Statement 30 April 2024 30 April 2023 CHANGE CHANGE YEAR ENDED £’m £’m £’m % Revenue 2,464.3 2,550.2 -85.9 -3.4% Gross profit 644.5 26.2% 696.8 27.3% -52.3 -7.5% Operating expenses (164.8) 6.7% (178.5) 7.0% +13.7 -7.7% Operating profit 479.7 19.5% 518.3 20.3% -38.6 -7.4% Net fi
Slide 16: Abridged Cash Flow
Finance Review Abridged Cash Flow 30 April 2024 30 April 2023 YEAR ENDED £’m £’m Profit before tax 557.3 604.0 (Increase)/Decrease in inventory 18.2 (168.1) Increase/(Decrease) in customer deposits (13.6) (10.1) Other working capital movements (110.5) 128.1 Net increase in working capital (105.9) (5
Slide 17: Abridged Balance Sheet
Finance Review Abridged Balance Sheet 30 April 2024 CHANGE 30 April 2023 AS AT £’m £’m £’m Non–current assets - Intangible assets 17.2 - 17.2 - Investment in joint ventures 227.0 +3.6 223.4 - Deferred tax assets 116.9 +2.4 114.5 - Right-of-use assets 4.3 -0.9 5.2 - Property, plant and equipment 28.0
Slide 18: Inventories
Finance Review Inventories AS AT 30 April 2024 CHANGE 30 April 2023 £’m £’m £’m Land not under development 725.8 -201.3 927.1 Work in progress: Land cost 1,715.3 -13.9 1,729.2 Total land 2,441.1 -215.2 2,656.3 Work in progress: Build cost 2,632.4 +112.4 2,520.0 Completed units 210.4 +84.6 125.8 Tota
Slide 19: Creditors
Finance Review Creditors 30 April 2024 CHANGE 30 April 2023 Land Creditor Forecast by Year AS AT £’m £’m £’m Trade creditors and 1000 772.2 -74.5 846.7 accruals 800 Provisions for liabilities 209.8 +16.2 193.6 Amounts due (£’m) Deposits and on account 907.7 -13.6 921.3 600 receipts Land creditors 88
Slide 20: Financing
Finance Review Financing Group ▪ £400 million Green Bonds in issue (until August 2031) £400m Green Bonds (2031) ▪ £800 million total borrowing facilities 2.50% coupon ➢ Term loan £260 million Investment Grade ➢ Undrawn RCF £540 million (undrawn) Credit Rating ▪ Maturity February 2029 following exerc
Slide 21: Land Holdings
Finance Review Land Holdings AS AT 30 April 2024 CHANGE 30 April 2023 Owned * 53,600 -4,445 58,045 Contracted 481 +481 - Plots 54,081 -3,964 58,045 Sales value £27.6bn -£1.6bn £29.2bn Average selling price ** £516k +£8k £508k Average plot cost ** £49k -£1k £50k Land cost % 9.4% -0.4% 9.8% Gross marg
Slide 22: Questions
Results Presentation for the year ended 30 April 2024 Questions Rob Perrins Chief Executive Richard Stearn Chief Financial Officer Hartland Village, Fleet 21
Slide 23: Appendices
Results Presentation for the year ended 30 April 2024 Appendices ▪ Summary of Results ▪ Market Fundamentals ▪ BTR – Market Opportunity ▪ BTR – Unique and Strong Value Proposition ▪ Sites – Delivery and Land Status ▪ Sites in London (map) ▪ Sites out of London (map) ▪ 20-year financial track record H
Slide 24: Strong Results in a Challenging Environment: Financial and ESG
Appendix Strong Results in a Challenging Environment Financial ESG ▪ Pre-tax profits of £557 million, in line ▪ 87% of 3,900 homes delivered on brownfield with guidance provided at start of the land year ▪ £370 million subsidies for affordable housing ‘A’ rated ▪ Operating margin of 19.5% and commit
Slide 25: Market Fundamentals – Compounding Under-Supply
Appendix Market Fundamentals – Compounding Under-Supply National Figure 1: Construction Starts ▪ The Government’s long-term annual delivery target is 300,000 60,000 300,000 new homes a year. 275,000 55,000 London Starts (Rolling 12 months) England Starts (Rolling 12 months) 250,000 50,000 ▪ During 2
Slide 26: The Build to Rent Market Opportunity
Appendix The Build to Rent (“BtR”) Market Opportunity Severe shortage of high-quality, professionally Unique Opportunity to Berkeley to establish a managed rental homes fuelling demand, rental Best-in-Class BTR Platform growth and high occupancy rates ▪ c. 5 million people living in private rented s
Slide 27: BTR - Unique and Strong Value Proposition
Appendix BTR - Unique and Strong Value Proposition Significant appetite from global institutional investors seeking diversification and competitive Unique and Strong Value Proposition returns ▪ 3% of UK PRS owned by institutions (US: 40%; Germany: 37%) ▪ Strong rental growth and cost efficiency from
Slide 28: Sites - Delivery and Land Status
Appendix Sites - Delivery and Land Status LARGE LONG-TERM OTHER TOTAL AS AT 30 APRIL 2024 REGENERATION PIPELINE SITES LAND HOLDINGS SITES (approximately) Delivery of Developments: In construction 27 90% 24 60% 51 73% - - Not yet in construction – owned 3 10% 15 38% 18 26% 10 77% Not yet in construct
Slide 29: Sites in London
Appendix Sites in London UNDER CONSTRUCTION FUTURE SITES 1 250 City Road, Islington 1 Aylesham Centre, 2 9 Millbank, Westminster Peckham 3 Beaufort Park, Hendon 2 Borough Triangle 4 Bermondsey Place, Southwark 3 Fulham 5 Bow Green 4 Lea Bridge 6 Broadway East, Bethnal Green 5 Mitcham Berkeley 7 Camd
Slide 30: Sites outside of London
Appendix Sites outside of London UNDER CONSTRUCTION FUTURE SITES 1 Abbey Barn Park, High Wycombe 1 Bath 2 Berkeley Place, Farnham Royal 2 Bracknell 3 Broadacres, Southwater 3 Brighton 4 Eden Grove, Staines 4 Effingham 5 Farmstead, Cranbrook 5 Guildford Berkeley 6 Foal Hurst Green, Paddock Wood 6 Her
Slide 31: Berkeley's 20-Year Track Record – through the market cycle
Appendix Berkeley’s 20-Year Track Record – through the market cycle AS AT 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 Income Statement* Units Sold 3,521u 4,043u 3,760u 2,825u 2,723u 3,698u 3,678u 3,802u 3,776u 3,355u 3,742u 3,712u 3,565u 2,544u
The Berkeley Group Holdings — FY2024 Earnings Presentation on 6ix