Berkeley Group Holdings Plc · LSE:BKG

Berkeley — The Berkeley Group Holdings — FY2018 Earnings Presentation

31 slides from Berkeley's earnings presentation, Jun 20, 2018

  1. Slide 1: The Berkeley Group Holdings plc Full Year Results Presentation

    The Berkeley Group Holdings plc Full Year Results Presentation Year ended 30th April 2018 20th June 2018

  2. Slide 2: Preliminary Results Presentation

    Preliminary Results Presentation Format of Presentation Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Chiswick Gate

  3. Slide 3: Tony Pidgley CBE, Chairman

    Tony Pidgley CBE Chairman

  4. Slide 4: Richard Stearn, Finance Director

    Richard Stearn Finance Director

  5. Slide 5: Finance Review: Introduction

    Finance Review Introduction - Summary of performance - Summary of financial position - Future potential share dilution - Homes completed and Average Selling Price - Income statement - Abridged cash flow - Abridged balance sheet - Inventories - Creditors - Financing - Land holdings

  6. Slide 6: Summary of Performance

    Finance Review Summary of Performance Year ended 30 Apr 2018 30 Apr 2017 Change (£) Change (%) Profit before tax £934.9m £812.4m +£122.5m +15.1% EPS – Basic 562.7p 467.8p +94.9p +20.3% EPS – Diluted 550.2p 451.4p +98.8p +21.9% Operating Margin 28.8% 27.8% Return on equity * 39.3% 41.1% * Return on e

  7. Slide 7: Summary of Financial Position

    Finance Review Summary of Financial Position April 2018 April 2017 Change (£) Change (%) Balance Sheet Shareholders’ funds £2,620.0m £2,136.9m +£483.1m +22.6% Closing net cash (£687.3m) (£285.5m) +£401.8m Capital Employed £1,932.7m £1,851.4m +£81.3m +4.4% Net asset value per share 1,959p 1,556p +403

  8. Slide 8: Future potential share dilution

    Finance Review Future potential share dilution Vesting No. (million) No. (million) – Date adjusted ** Shares in issue at 1 May 2017 (net of Treasury and EBT shares) 137.3 Share buy-backs (4.0) 2011 LTIP vestings – Tranche 2 September 2017 0.4 Shares in issue at 1 May 2018 133.7 133.7 2011 LTIP vesti

  9. Slide 9: Homes Completed and ASP – Group

    Finance Review Homes Completed and ASP – Group Homes 3,742 3,776 3,905 3,536 3,355 2,294 2,117 1,983 2,091 2,076 1,685 1,829 1,448 1,372 1,419 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY 2013/14 2014/15 2015/16 2016/17 2017/18 Average Selling Price £697k £719k £710k £715k £649k £655k £675k £539k £5

  10. Slide 10: Homes Completed and ASP – Joint Ventures

    Finance Review Homes Completed and ASP – Joint Ventures Homes 361 240 251 230 203 190 206 144 162 155 132 71 86 78 61 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY 2013/14 2014/15 2015/16 2016/17 2017/18 Average Selling Price £2,192k £1,646k £1,464k £1,484k £1,520k £1,380k £1,329k £1,321k £1,235k £1,

  11. Slide 11: Income Statement

    Finance Review Income Statement Year ended Apr 2018 Apr 2017 Change Change £m £m £m % Revenue 2,703.7 2,723.5 -19.8 -0.7% Gross profit 946.1 35.0% 939.8 34.5% +6.3 +0.7% Operating expenses (166.5) 6.2% (183.6) 6.7% +17.1 +9.3% Operating profit 779.6 28.8% 756.2 27.8% +23.4 +3.1% Net finance costs (2

  12. Slide 12: Abridged Cash Flow

    Finance Review Abridged Cash Flow Year ended April 2018 April 2017 £m £m Profit before tax 934.9 812.4 Decrease / (increase) in inventory 243.5 (227.3) Decrease in customer deposits (79.9) (130.9) Other working capital movements 2.7 125.1 Net reduction / (investment) in working capital 166.3 (233.1)

  13. Slide 13: Abridged Balance Sheet

    Finance Review Abridged Balance Sheet April 2018 Movements April 2017 £m £m £m Non-current assets - Intangible assets 17.2 - 17.2 - Investment in JVs 315.0 +180.0 135.0 - Deferred tax assets 58.9 -0.5 59.4 - Property, plant and equipment 25.9 +3.1 22.8 Total non-current assets 417.0 +182.6 234.4 Inv

  14. Slide 14: Inventories

    Finance Review Inventories April 2018 Movements April 2017 £m £m £m Land not under development 337.7 -76.4 414.1 Work in progress: Land cost 728.7 -190.3 919.0 1,066.4 -266.7 1,333.1 Work in progress: Build cost 2,051.1 -11.6 2,062.7 Completed units 122.4 +34.8 87.6 Inventories 3,239.9 -243.5 3,483.

  15. Slide 15: Creditors

    Finance Review Creditors April 2018 Movements April 2017 £m £m £m Trade creditors and accruals 727.2 -33.4 760.6 Provision for liabilities 81.8 -18.1 99.9 Deposits and on account receipts 895.0 -79.9 974.9 Land creditors 105.2 -37.7 142.9 Current tax liability 47.3 -70.3 117.6 Total liabilities befo

  16. Slide 16: Financing

    Finance Review Financing Banking Facilities Amount: £750 million Term: £300 million RCF: £450 million Maturity: November 2022 (with optional extension to November 2023) Margin, utilisation and commitment fees: Market rates

  17. Slide 17: Land Holdings

    Finance Review Land Holdings April 2018 Variance April 2017 Owned 32,921 -850 33,771 Contracted 13,946 +1,366 12,580 Plots 46,867 +516 46,351 Sales value £21.3bn -£0.5bn £21.8bn Average selling price (ASP)* £507k -£13k £520k Average plot cost £61k -£1k £62k Land cost % 13.3% +0.1% 13.2% Gross margin

  18. Slide 18: Rob Perrins, Chief Executive

    Rob Perrins Chief Executive e Berkeley | StEdward | StGeorge StJames StWillam | StJoseph me

  19. Slide 19: Chief Executive’s Review: Introduction

    Chief Executive’s Review Introduction - Results - Macro Environment – uncertainty balanced with opportunity - The Market - Land and Build Investment - Joint ventures - Long term strategic plan - Guidance

  20. Slide 20: Macro Environment – uncertainty balanced with opportunity (1)

    Chief Executive’s Review Macro Environment – uncertainty balanced with opportunity (1) Macro uncertainty  Evolving planning environment through changes to the NPPF and London Plan  Land is slow to come forward for development o High demands from Affordable Housing, S.106 and CIL o Infrastructure a

  21. Slide 21: Macro Environment – uncertainty balanced with opportunity (2)

    Chief Executive’s Review Macro Environment – uncertainty balanced with opportunity (2) Opportunity  Under-supply  High barriers to entry o Small developers cannot compete due to funding, complexity and risk o Large developers are also leaving or scaling back operations o Berkeley has the necessary

  22. Slide 22: The Market

    Chief Executive’s Review The Market Sales  New development launches in the year (in London at White City, Ealing Filmworks and Millbank)  Run rate for private reservations up 12% on last year - steady not spectacular  Customer mix reflects taxation changes and other macro factors  Continue to se

  23. Slide 23: Land and Build Investment - Inventories

    Chief Executive’s Review Land and Build Investment - Inventories Inventories £4,000m £3,483m £3,500m £3,256m £3,240m £3,000m £2,654m £2,481m £2,500m £2,067m £1,852m £2,000m £1,614m £1,500m £1,254m £1,115m £1,000m £500m - 30 Apr 09 30 Apr 10 30 Apr 11 30 Apr 12 30 Apr 13 30 Apr 14 30 Apr 15 30 Apr 16

  24. Slide 24: Land and Build Investment – Delivery

    Chief Executive’s Review Land and Build Investment – Delivery London Out of London Total Delivery of Developments: In construction 39 75% 23 56% 62 67% Not yet in construction 13 25% 18 44% 31 33% Total developments 52 100% 41 100% 93 100% Proportion with planning (by sites) 81% 83% 82% Number of pl

  25. Slide 25: Land and build investment: Sites in London

    Land and build investment Sites in London ® ® 8 Qo © Qe» og ©. mee” ©9,,© Sase ® ® [Oey 5 @ 8099 08 5 je Ox ® Berkeley StEdward StGeorge $tJames StWillam StJoseph LONDON UNDER CONSTRUCTION @ 190 Strand @) One Tower Bridge @ 250 City Road, City of London @4) Prince of Wales Drive, @ 375 Kensington Hi

  26. Slide 26: Land and build investment: Sites out of London

    Land and build investment Sites out of London OUT OF LONDON UNDER CONSTRUCTION @ Bersted Park @ Fairwood Place, Borehamwood SCARCE PRG, @) Green Park Village, Rea @ Hawkenbury © Edenbrook Village, Fleet @) Holborough Lakes @ Kennet Island, Reading @ London Road, Sevenoaks @) London Road, Staines” ES

  27. Slide 27: Joint Ventures: St Edward

    Chief Executive’s Review Joint Ventures St Edward  Joint venture with Prudential  Five developments in the land holdings (1,835 units) Schemes:  190 Strand  Green Park Village, Reading (Opposite)  375 Kensington High Street, Kensington Row & Royal Warwick Square  Millbank  Wallingford, Oxford

  28. Slide 28: Joint Ventures: St William

    Chief Executive’s Review Joint Ventures St William  Joint venture with National Grid  Fourteen developments in the land holdings (7,900 units) Schemes:  Prince of Wales Drive, Battersea  Highbury  Clarendon  Bow Common  Borehamwood  Bethnal Green  Fulham  Hemel Hempstead  Hertford  Ascot

  29. Slide 29: Long Term Strategic Plan

    Chief Executive’s Review Long Term Strategic Plan Milestone Paid or announced Outstanding Total £/share £’m £/share (*) £’m £/share £’m To 30 September 2017 8.34 1,132.6 - - 8.34 1,132.6 To 31 March 2018 1.34 139.2 - - 1.00 139.2 By 30 September 2018 1.00 139.2 - - 1.00 139.2 Returns - announced 10.

  30. Slide 30: Guidance

    Chief Executive’s Review Guidance Performance Guidance  £9.34 per share returned to date  Remaining £6.00 per share (absolute value: £835.2 million) to be made through mix of dividends and share buy-backs  £1.00 per share (£139.2 million) announced to be Shareholder Returns returned by 30 Septemb

  31. Slide 31: Questions

    Questions Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions The Bridge Theatre, One Tower Bridge

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