Berkeley Group Holdings Plc · LSE:BKG

Berkeley — The Berkeley Group Holdings — FY2022 Earnings Presentation

35 slides from Berkeley's earnings presentation, Jun 22, 2022

  1. Slide 1: Full Year Results Presentation

    THE BERKELEY GROUP HOLDINGS PLC Full Year Results Presentation Year Ended 30 April 2022 22 June 2022

  2. Slide 2: Introduction: agenda and key messages

    Full Year Results Presentation For the Year Ended 30 April 2022 Rob Perrins INTRODUCTION Chief Executive 1 INTRODUCTION Strong results with £551 million PBT in a time of unprecedented volatility In line with enhanced guidance from December’s interim results. Richard Stearn Chief Financial Officer 2

  3. Slide 3: Richard Stearn, Chief Financial Officer

    Richard Stearn Chief Financial Officer Kidbrooke Village 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 % 30 April 2022 30 April 2021 +£33.4m £551.5m £518.1m (+6.4%) OPERATING MARGIN 30 April 2022 30 April 2021 EPS - BASIC CHANGE / CHANGE % 21.6% 22.8% 30 April 2022 30 April 2021 +78.4p 417.8p 339.4p (+23.1%) PRE-TAX RETURN ON EQU

  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 % 30 April 2022 30 April 2021 30 April 2022 30 April 2021 -£39.3m +206p £3,136.1m £3,175.4m (-1.2%) 2,818p 2,612p (+7.9%) CLOSING NET CASH CHANGE / CHANGE % TO

  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 % 30 April 2022 30 April 2021 +£458.4m £2,170.6m £1,712.2m (+26.8%) LAND HOLDINGS PLOTS CHANGE / CHANGE % 30 April 2022 30 April 2021 +2,893 66,163 63,270 (+4.6%) GR

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

    Finance Review Homes Completed and Average Selling Price (ASP) – Group Homes ASP 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 2,723 FY £677k H1 2,027 H1 £740k 2018/201

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

    Finance Review Homes Completed and ASP – Joint Ventures (St Edward & St William) Homes ASP H1 395 H1 £558k 2021/2022 H2 477 H2 £658k FY 872 FY £612k H1 145 H1 £782k 2020/2021 H2 284 H2 £628k FY 429 FY £680k St Edward & St William* H1 212 H1 £805k 2019/2020 H2 223 H2 £645k FY 435 FY £723k H1 57 H1 £8

  10. Slide 10: Income Statement

    Finance Review Income Statement 30 April 2022 30 April 2021 CHANGE CHANGE YEAR ENDED £’m £’m £’m % Revenue 2,348.0 2,202.2 +145.8 +6.6% Gross profit 664.8 28.3% 635.3 28.8% +29.5 +4.6% Operating expenses (156.9) 6.7% (133.0) 6.0% -23.9 +18.0% Operating profit 507.9 21.6% 502.3 22.8% +5.6 +1.1% Net f

  11. Slide 11: Abridged Cash Flow

    Finance Review Abridged Cash Flow 30 April 2022 30 April 2021 YEAR ENDED £’m £’m Profit before tax 551.5 518.1 Increase in inventory (332.5) (97.6) Increase in customer deposits 8.1 7.1 Other working capital movements 191.8 13.3 Net increase in working capital (132.6) (77.2) Net investment in joint

  12. Slide 12: Abridged Balance Sheet

    Finance Review Abridged Balance Sheet 30 APRIL 2022 30 APRIL 2021 CHANGE AS AT St William Underlying £’m £’m £’m Non–current assets - Intangible assets 17.2 17.2 - - - - Investment in joint ventures 190.4 281.7 -91.3 -174.1 +82.8 - Deferred tax assets 120.7 40.1 +80.6 - +80.6 - Right-of-use assets 5

  13. Slide 13: Inventories

    Finance Review Inventories 30 April 2022 30 APRIL 2021 CHANGE St William Underlying AS AT £’m £’m £’m £’m £’m Land not under development 738.1 331.4 +406.7 +32.9 +373.8 Work in progress: Land cost 1,952.5 1,134.7 +817.8 +773.8 +44.0 Total land 2,690.6 1,466.1 +1,224.5 +806.7 +417.8 Work in progress:

  14. Slide 14: Creditors

    Finance Review Creditors 30 April 2022 30 APRIL 2021 CHANGE AS AT St William Underlying £’m £’m £’m Trade creditors and accruals 892.5 766.7 +125.8 +95.8 +30.0 Provisions for liabilities 161.0 128.1 +32.9 +7.7 +25.2 Deposits and on account 931.4 790.6 +140.8 +132.7 +8.1 receipts Land creditors 800.8

  15. Slide 15: Financing

    Finance Review Financing Group  £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 an option to extend by

  16. Slide 16: Land Holdings

    Finance Review Land Holdings AS AT 30 APRIL 2022 CHANGE 30 APRIL 2021 Owned * 62,998 +10,918 52,080 Contracted 3,165 -8,025 11,190 Plots 66,163 +2,893 63,270 Sales value £31.1bn +£5.6bn £25.5bn Average selling price ** £491k +£19k £472k Average plot cost ** £52k +£2k £50k Land cost % 10.6% +0.1% 10.

  17. Slide 17: Rob Perrins, Chief Executive Officer

    Rob Perrins Chief Executive Officer Green Park Village, Reading 16

  18. Slide 18: Introduction

    Strategic Review Introduction 1. BERKELEY’S UNIQUE LONG-TERM OPERATING MODEL 4a. SALES PERFORMANCE AND MARKET 2. LONG-TERM REGENERATION 4b. LAND AND PLANNING 3. OUR VISION 2030: TRANSFORMING TOMORROW 4c. CONSTRUCTION, MODULAR AND FIRE SAFETY 3a. CLIMATE ACTION 5. SITES – DELIVERY AND LAND STATUS 3b.

  19. Slide 19: Berkeley's Unique Long-term Operating Model

    Strategic Review Berkeley’s Unique Long-term Operating Model Land-led, Value Added  Acquire land selectively at the right time in the cycle, never compromising our disciplines  Focus on transforming large-scale brownfield sites in deeply under-supplied London and South East markets  Bespoke appro

  20. Slide 20: Long-term Regeneration: Grand Union Place

    Strategic Review Long-term Regeneration: Grand Union Place Before Today / Future 22 acre brownfield site 3,350 mixed-tenure homes | health centre | nursery | 5,000 sq ft community centre 50% public open space | +240% net biodiversity gain | riverside meadow | grassland habitats | 540 new trees | div

  21. Slide 21: Long-term Regeneration: Horlick's Quarter

    Strategic Review Long-term Regeneration: Horlick’s Quarter Before Today / Future 12 acre brownfield site 1,300 mixed-tenure homes | 12,500 sq ft commercial space including a nursery 2.6 acres of landscaped gardens | 315 new trees | mixed natural habitats New pedestrian and cycle route to Slough town

  22. Slide 22: Regeneration at Scale: Sites in the Land Holdings

    Strategic Review Regeneration at Scale: Sites in the Land Holdings Berkeley is delivering 32 of the largest regeneration schemes in London and the South East At 30 April 2022: 26 of these projects are in production 21

  23. Slide 23: Our Vision 2030: Accreditations

    Strategic Review Our Vision 2030: Transforming Tomorrow Accreditations Berkeley won the Transformation Award at the Better Society Awards 2022, which aims to reward commercial companies who are helping create a better, more equal, ethical and sustainable world for all. 22

  24. Slide 24: Climate Action

    Strategic Review Climate Action Scope 3 - Embodied Carbon  15 assessments across houses, mid-rise apartments and tall buildings  Berkeley is, on average, already some 30% ahead of the LETI / UK GBC ‘business-as-usual’ industry benchmark of 850 kgCO2/m2  Setting internal targets for our teams at t

  25. Slide 25: Nature Recovery and Skills

    Strategic Review Nature Recovery and Skills Nature Recovery Tackling Skills Shortages  In 2017, committed to measurably increasing  Developed a bespoke construction site biodiversity gain management apprenticeship in partnership with Farnborough College and Ixion Holdings  In May 2021, committed

  26. Slide 26: Operating Environment

    Strategic Review Operating Environment Sales Performance Market  Sales reservations sustained through the year  London and South East remain deeply under- £2.17bn at levels slightly ahead of the two years supplied markets: preceding the pandemic  DLUHC new starts in London for the last three  De

  27. Slide 27: Operating Environment: Land, Planning, Levelling Up

    Strategic Review Operating Environment (continued) Land Planning Levelling Up and Regeneration Bill  Four new sites added to the land holdings  Four new major planning consents obtained  Two in London:  Larger projects able to deliver the proposed  Leyton (570 homes) Consolidated Infrastructure

  28. Slide 28: Operating Environment: Construction, Building Safety, Modular

    Strategic Review Operating Environment (continued) Construction Building Safety  Build costs have risen through the year, between 5% and 10%  Berkeley has EWS 1 form certification on 99% of its freehold depending upon mix and impact of regulatory changes buildings  Material inflation impacted to

  29. Slide 29: Sites - Delivery and Land Status

    Strategic Review Sites - Delivery and Land Status REGENERATION OTHER TOTAL LONDON OUT OF LONDON AS AT 30 APRIL 2022 SITES SITES LAND HOLDINGS SITES SITES Delivery of Developments: In construction 26 81% 34 60% 60 68% 29 67% 31 68% Not yet in construction – owned * 5 16% 21 37% 26 29% 12 28% 14 30% N

  30. Slide 30: Sites in London

    Strategic Review Sites in London Berkeley is delivering 43 sites in London. 29 of these are currently in production 29

  31. Slide 31: Sites outside of London

    Strategic Review Sites outside of London Berkeley is delivering 46 sites outside London. 31 of these are currently in production 30

  32. Slide 32: Guidance

    Strategic Review Guidance - Three year earnings guidance period: - Approximately £600 million for year ending 30 April 2023 Profit Guidance: - Approximately £625 million for the two years thereafter - Beyond three year period, targeting a sustainable 15% pre-tax ROE - Berkeley is targeting being wor

  33. Slide 33: Questions

    Results Presentation for the year ended 30 April 2022 Questions Rob Perrins Chief Executive Richard Stearn Chief Financial Officer Kings Road Park, Fulham 32

  34. Slide 34: Berkeley's Track Record – through market cycles

    Appendix Berkeley’s Track Record – through market cycles AS AT 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Units (excl. JV’s) 3,760 2,825 2,723 3,698 3,678 3,802 3,776 3,355 3,742 3,712 3,565 2,544 2,201 1,501 3,167 2,852 Ave. Selling Price £603k £770k £677k £748k

  35. Slide 35: Berkeley's Awards and Accreditations

    Appendix Berkeley’s Awards and Accreditations Awards: In March 2022, Berkeley was awarded the Accreditations: Investor in Customers Gold Award (IIC), a mark of trust and reassurance, which recognises the Berkeley won the Transformation Award at importance that Berkeley places on customers the Better

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