Berkeley Group Holdings Plc · LSE:BKG

Berkeley — The Berkeley Group Holdings — H1 FY2023 Earnings Presentation

35 slides from Berkeley's earnings presentation, Dec 9, 2022

  1. Slide 1: Interim Results Presentation

    THE BERKELEY GROUP HOLDINGS PLC Interim Results Presentation Six Months Ended 31 October 2022 9th December 2022

  2. Slide 2: Introduction: Interim Results for Six Months Ended 31 October 2022

    Interim Results Presentation For the Six Months Ended 31 October 2022 Rob Perrins INTRODUCTION Chief Executive 1 INTRODUCTION Strong results with £285 million PBT slightly ahead of September guidance, in spite of the challenging operating environment Richard Stearn Chief Financial Officer 2 Sales fo

  3. Slide 3: Richard Stearn, Chief Financial Officer

    Richard Stearn Chief Financial Officer Royal Arsenal, Woolwich 2

  4. Slide 4: 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 % 31 October 2022 31 October 2021 -£5.9m £284.8m £290.7m (-2.0%) OPERATING MARGIN 31 October 2022 31 October 2021 EPS - BASIC CHANGE / CHANGE % 19.5% 22.2% 31 October 2022 31 October 2021 -1.3p 200.4p 201.7p (-0.6%) PRE-TAX RETU

  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 % 31 October 2022 30 April 2022 31 October 2022 30 April 2022 +£73.5m +138p £3,209.6m £3,136.1m (+2.3%) 2,956p 2,818p (+4.9%) CLOSING NET CASH CHANGE / CHANGE

  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 % 31 October 2022 30 April 2022 +£159.4m £2,330.0m £2,170.6m (+7.3%) LAND HOLDINGS PLOTS CHANGE / CHANGE % 31 October 2022 30 April 2022 -2,042 64,121 66,163 (-3.1%)

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

    Finance Review Homes Completed and Average Selling Price (ASP) – Group Homes ASP H1 2,080 H1 £560k 2022/2023 H2 H2 FY FY H1 1,828 H1 £647k 2021/2022* H2 1,932 H2 £562k FY 3,760 FY £603k 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

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

    Finance Review Homes Completed and ASP – Joint Ventures (St Edward & St William*) Homes ASP H1 251 H1 £1,036k St Edward 2022/2023 H2 H2 FY FY H1 395 H1 £558k 2021/2022 H2 477 H2 £658k FY 872 FY £612k St Edward & H1 145 H1 £782k St William* 2020/2021 H2 284 H2 £628k FY 429 FY £680k H1 212 H1 £805k 20

  10. Slide 10: Income Statement

    Finance Review Income Statement 31 October 2022 31 October 2021 CHANGE CHANGE SIX MONTHS ENDED £’m £’m £’m % Revenue 1,200.7 1,220.7 -20.0 -1.6% Gross profit 323.8 27.0% 346.5 28.4% -22.7 -6.6% Operating expenses (89.9) 7.5% (75.5) 6.2% -14.4 +19.1% Operating profit 233.9 19.5% 271.0 22.2% -37.1 -13

  11. Slide 11: Abridged Cash Flow

    Finance Review Abridged Cash Flow 31 October 2022 31 October 2021 SIX MONTHS ENDED £’m £’m Profit before tax 284.8 290.7 Increase in inventory (164.3) (54.8) Increase/(decrease) in customer deposits 7.8 (13.1) Other working capital movements 142.8 89.0 Net (increase)/decrease in working capital (13.

  12. Slide 12: Abridged Balance Sheet

    Finance Review Abridged Balance Sheet 31 October 2022 CHANGE 30 April 2022 AS AT £’m £’m £’m Non–current assets - Intangible assets 17.2 - 17.2 - Investment in joint ventures 184.2 -6.2 190.4 - Deferred tax assets 116.4 -4.3 120.7 - Right-of-use assets 5.0 -0.8 5.8 - Property, plant and equipment 40

  13. Slide 13: Inventories

    Finance Review Inventories AS AT 31 October 2022 CHANGE 30 April 2022 £’m £’m £’m Land not under development 919.7 +181.6 738.1 Work in progress: Land cost 1,897.5 -55.0 1,952.5 Total land 2,817.2 +126.6 2,690.6 Work in progress: Build cost 2,362.1 +59.5 2,302.6 Completed units 118.9 -21.9 140.8 Tot

  14. Slide 14: Creditors

    Finance Review Creditors AS AT 31 October 2022 CHANGE 30 April 2022 £’m £’m £’m Land Creditor Forecast by Year 828.3 -64.2 892.5 Trade creditors and accruals Provisions for liabilities 175.3 +14.3 161.0 1,000 900 Deposits and on account Amounts due (£’m) 939.2 +7.8 931.4 800 receipts 700 Land credit

  15. Slide 15: Financing: Borrowing Capacity

    Finance Review Financing Borrowing Capacity  £400 million Green Bonds in issue (until Aug 2031) £400m Green Bonds (2031)  £800 million total borrowing facilities 2.50% coupon  Term loan £260 million Investment Grade  Undrawn RCF £540 million Credit Rating  Maturity February 2027 with options to

  16. Slide 16: Land Holdings

    Finance Review Land Holdings AS AT 31 October 2022 CHANGE 30 April 2022 Owned * 60,956 -2,042 62,998 Contracted 3,165 - 3,165 Plots 64,121 -2,042 66,163 Sales value £30.8bn -£0.3bn £31.1bn Average selling price ** £495k +£4k £491k Average plot cost ** £51k -£1k £52k Land cost % 10.2% -0.4% 10.6% Gro

  17. Slide 17: Rob Perrins, Chief Executive Officer

    Rob Perrins Chief Executive Officer The Eight Gardens, Watford CGI 16

  18. Slide 18: Introduction

    Strategic Review Introduction 1. KEY FEATURES OF BERKELEY’S BUSINESS MODEL 3. TODAY’S OPERATING ENVIRONMENT 2. LAND HOLDINGS 3a. SALES MARKET AND SUPPLY SIDE 2a. BROWNFIELD REGENERATION AT SCALE 4. BERKELEY’S CURRENT POSITIONING 2b. DELIVERY AND LAND STATUS 5. GUIDANCE 17

  19. Slide 19: Uniquely long-term business model underpinned by five key features

    Strategic Review Key Features of Berkeley’s Business Model Uniquely long-term business model underpinned by five key features 1. Sustainable brownfield regeneration 2. London and South-East Focus 3. Financial Strength 4. Strong unrivalled land holdings 5. Added value developer London Dock, Wapping 1

  20. Slide 20: Sustainable brownfield regeneration at scale

    Strategic Review Key Features of Berkeley’s Business Model (1) Sustainable brownfield regeneration at scale  Only home-builder unlocking and delivering brownfield regeneration at scale  Fully aligned to the Government’s “Brownfield first” agenda  32 complex and challenging regeneration projects,

  21. Slide 21: London and South East focused – building 10% of London's homes

    Strategic Review Key Features of Berkeley’s Business Model (2) London and South East focused – building 10% of London’s homes 20

  22. Slide 22: Berkeley begins this next period from a position of strength

    Strategic Review Key Features of Berkeley’s Business Model (3) Berkeley begins this next period from a position of strength  Sustainable brownfield regeneration  London and South-East Focus  Financial Strength  Increased net cash to £343 million  Increased forward sales to £2.3 billion  Mainta

  23. Slide 23: Unrivalled land holdings will sustain delivery for the next 10 years

    Strategic Review Key Features of Berkeley’s Business Model (4) Unrivalled land holdings will sustain Berkeley’s delivery profile for the next 10 years REGENERATION OTHER TOTAL LONDON OUT OF LONDON AS AT 31 October 2022 SITES SITES LAND HOLDINGS SITES SITES Delivery of Developments: In construction 2

  24. Slide 24: Added value developer

    Strategic Review Key Features of Berkeley’s Business Model (5) Added value developer What this means Operationally  Bottom up approach which identifies the best development solution and maximises absolute return from each site  Sales volumes important on a site by site basis, but is not the sole d

  25. Slide 25: Today's Operating Environment – Sales Market

    Strategic Review Today’s Operating Environment – (1) Sales Market Increasingly complex operating and regulatory environment with deteriorating economic outlook Berkeley’s Sales Market Fundamentals  Underlying sales reservations for the six month period are 2%  Supportive fundamentals ahead of last

  26. Slide 26: Today's Operating Environment – Planning and Regulation

    Strategic Review Today’s Operating Environment – (2) Supply Side Increasingly complex operating and regulatory environment with deteriorating economic outlook Planning and Regulation  Record levels of planning tariff amidst complex, slow and under-resourced system  Levelling Up and Regeneration Bi

  27. Slide 27: Today's Operating Environment – Build Costs

    Strategic Review Today’s Operating Environment – (2) Supply Side Increasingly complex operating and regulatory environment with deteriorating economic outlook Build Costs  Material inflation reducing, but high for certain products  Material availability eased  Labour inflation benign relative to

  28. Slide 28: Today's Operating Environment – Building Safety

    Strategic Review Today’s Operating Environment – (2) Supply Side Increasingly complex operating and regulatory environment with deteriorating economic outlook Building Safety  Carrying out PAS9980 assessments on all historic buildings  In discussions with DLUHC in respect of long form contract  W

  29. Slide 29: Positioning the business for today's environment

    Strategic Review Berkeley’s Current Positioning Positioning the business for today’s environment Clear Strategy In Place  Realise forward sales and match supply to demand  Add value to existing land holdings and pipeline sites  Protect operating margins as they return to historic norms  Limited

  30. Slide 30: Guidance

    Strategic Review Guidance - On target to deliver pre-tax earnings of approximately £600 million for the year ending 30 April 2023 Profit Guidance: - Targeting pre-tax earnings of at least £1.05 billion for the following two years, likely to be slightly weighted to the first of these - Targeting a su

  31. Slide 31: Questions

    Results Presentation for the six months ended 31 October 2022 Questions Rob Perrins Chief Executive Richard Stearn Chief Financial Officer Silkstream, Hendon CGI 30

  32. Slide 32: Sites in London

    Appendix Sites in London Berkeley is delivering 43 sites in London. 29 of these are currently in production 31

  33. Slide 33: Sites outside of London

    Appendix Sites outside of London Berkeley is delivering 41 sites outside London. 26 of these are currently in production 32

  34. Slide 34: Market Fundamentals – Compounding Under-Supply

    Appendix Market Fundamentals – Compounding Under-Supply National Figure 1: Construction Starts  The current housing delivery target under Government’s 300,000 60,000 manifesto is 300,000 new homes a year by mid 2020’s. 275,000 55,000 250,000 50,000 England Starts (LHS) London Starts (Rolling 12 mon

  35. Slide 35: Accreditations

    Appendix Our Vision 2030: Transforming Tomorrow Accreditations 34

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