Crest Nicholson Holdings PLC · LSE:CRST
Crest Nicholson — H1 2012 Earnings Presentation
25 slides from Crest Nicholson's earnings presentation, Jun 27, 2012
Slide 1: Crest Nicholson
Crest Nicholson 27 June 2012 1
Slide 2: Half Year Results presentation
Half Year Results presentation 1. Introduction and Highlights Stephen Stone 2. Financial Results Patrick Bergin 3. Summary Stephen Stone 4. Q&A 2
Slide 3: Crest Nicholson Today
Crest Nicholson Today A leading developer of sustainable housing and mixed-use communities in the South of England 50 years of heritage and experience;35 years as a publicly listed company, sold on a high valuation in 2007 Robust operational results Strong, conservatively valued balance shee
Slide 4: Performance Highlights – HY 2012
Performance Highlights – HY 2012 Housing legal completions up 33% at 746 [2011: 560] Open-market ASP up 12% at £233k [2011: £208k] Housing revenue up 37.6% on 2011 Gross profit up 19.1% at £39.2m [2011: £32.9m] Gross profit margins up 3.1% to 28.3% [2011: 25.2%] Operating profit margins
Slide 5: A quality, Southern-focused land bank
A quality, Southern-focused land bank 96% of land in London, South and South West Short term portfolio represents over 9 years supply1 VS a sector average of c.6 years Held on blend of commercial terms, reducing capital lock-up Mix increasingly dominated by houses Gross Development Value (“G
Slide 6: Operational highlights
Operational highlights Land acquisitions in the period at good margins continue to secure outlet breadth, a key driver of growth Progress made on a number of strategic sites, including a resolution to grant planning on 1,695 plots at Tadpole Farm, Swindon London office opened in New Street Squ
Slide 7: Portfolio progress
Portfolio progress 8 7 SITES PURCHASED THIS YEAR: 1. Leverstock Green 3 2. Welwyn Garden City 10 2 3. Colchester 1 5 4. Wells 1 11 5. Clapham 3 6. Bloomsbury 2 4 7. Daventry 9 8. Bentley Heath 4 6 9. Horsham 10. Great Dunmow 11. Reading STRATEGIC SITES WHERE 6 PLANNING HAS BEEN GRANTED Apr 2012 Apr
Slide 8: New London office opened
New London office opened • Crest has experience of operating in London; c600 units delivered at peak from home county divisions • Team established over last 12 months to bring specific focus on London market • Focus on smaller schemes, housing and lower-rise apartments; five sites in various stages
Slide 9: Improving efficiency
Improving efficiency 1 Crest has completed the first key stages of supply chain engagement to drive real cost reduction into the production process Consultant panels established to challenge Crest & each other; early engagement facilitates design optimisation Key suppliers being identified and
Slide 10: Improving efficiency
Improving efficiency 2 Efficiencies can be achieved without compromise on quality of design or development flair: Group Construction Specification NHBC Approved Applicable to both Standard House Types and Non-Standard Standard Details Specification and drawings for common elements of construct
Slide 11: Government initiatives and HCA partnership
Government initiatives and HCA partnership HCA JV Partner on 10 separate developments with over 2,300 plots & GDV circa £450m HCA Delivery Partner under DPP – 248 dwellings at Severalls hospital commenced Kickstart & FTB Initiatives: – £18.25m was secured on 11 developments under Kickstart – 3
Slide 12: Financial Results
Financial Results Patrick Bergin 12
Slide 13: Key Performance Indicators
Key Performance Indicators Turnover £m Private ASP £000 Gross profit margin 138.6 233 28.3% 25.2% 130.6 208 2011 2011 2011 2012 2012 2012 Operating profit £m Net result after tax Net debt £m 356.6 12.5 21.7 17.9 78.6 -21.5 2011 2011 2011 2012 2012 2012 13
Slide 14: Income Statement
Income Statement HY12 HY11 Change £m £m % Total sales 138.6 130.6 6.1% Gross margin 39.2 28.3% 32.9 25.2% 19.1% Other operating income 0.1 0.1 Overhead (17.6) 12.7% (15.1) 11.6% 16.6% Operating profit 21.7 15.7% 17.9 13.7% 21.2% Net financing expense (4.8) (38.7) Share of associates results (0.9) (0
Slide 15: Gross margins: strong underlying position
Gross margins: strong underlying position 25.0% 20.0% 15.0% Historic Cost margin 10.0% 5.0% 0.0% Oct'10 Apr'11 Oct'11 Apr'12 Strong underlying historic cost margins reflect: – Good price recovery in prime locations in the South – Effective negotiations with land vendors, suppliers and local author
Slide 16: Gross margins: sustaining over time
Gross margins: sustaining over time 35.0% 30.0% Strong underlying 25.0% historic cost margins 20.0% are showing steady improvement 15.0% New land acquisitions at 25% GM 10.0% 5.0% Rising proportion of 0.0% land from Strategic Oct'10 Apr'11 Oct'11 Apr'12 conversions at good Historic cost margin
Slide 17: Balance Sheet
Balance Sheet HY12 HY11 Change £m £m £m Inventories 438.3 365.1 73.2 Land creditors (55.2) (46.8) (8.4) Net inventories 383.1 318.3 64.8 Receivables & other payables (154.7) (145.2) (9.5) Non-current assets 136.2 59.2 77.0 C apital employed 364.6 232.3 132.3 Net debt (78.6) (356.6) 278.0 Net Assets/
Slide 18: Cash flow
Cash flow HY12 HY11 Change £m £m £m Operating profit, pre working-capital changes 22.4 18.6 3.8 Decrease/(increase) in receivables 1.9 (5.2) 7.1 Increase in inventories (44.1) (3.2) (40.9) Decrease in payables (8.5) (25.4) 16.9 Investments & capex (1.4) (2.8) 1.4 Interest (7.1) (2.9) (4.2) Financing
Slide 19: Forward Sales
Forward Sales YTD YTD FY11 FY10 FY12 FY11 Units 1,327 1,259 947 809 % change on prior period +5% +17% GDV (£m) 220.5 198.5 142.2 99.1 % change on prior period +11% +43% % of FY2012/11 target 82% 84% 34% 27% 19
Slide 20: Increased reservation rates
Increased reservation rates YTD YTD FY11 FY10 Apr 12 Apr 11 Open market reservations 673 527 1,180 982 % change on prior period +28% +20% Average outlets 40 37 38 33 % change on prior period +8% +15% Sales per outlet week (SPOW) 0.66 0.55 0.60 0.57 % change on prior period +19% +4% C ancellation rat
Slide 21: Outlook
Outlook After a very strong start to the year, activity levels moderated somewhat, with slower sales evident either side of the extended Jubilee holiday Recent weeks have recovered, with sale rates per outlet week back at 0.66 The government continues to demonstrate support for the sector and
Slide 22: Summary
Summary Stephen Stone 22
Slide 23: Summary
Summary An excellent set of first half results Increase in value of both short-term and strategic land banks Operational disciplines delivering strong performance Helpful political support for housing & house building Business set to continue on its growth trajectory 23
Slide 24: Q&A
Q&A 24
Slide 25: Disclaimer
Disclaimer You should note that the financial projections and other statements regarding Crest Nicholson's intentions, beliefs or current expectations referred to in this document are forward looking and do not relate solely to historical or current facts. These statements are provided on a confiden