Glenveagh Properties Plc · EURONEXT:GVR
Glenveagh Properties — FY2018 Earnings Presentation
46 slides from Glenveagh Properties's earnings presentation, Mar 6, 2019
Slide 1: 2018 Final Results
2018 Final Results 6 March 2019 Cluain Adain, Navan, Co. Meath
Slide 2: Agenda
Agenda Section Page Results Highlights 3 Financial Results 9 Development Portfolio and Pipeline 14 Homes: Operational Delivery and Selling Activity 18 Living: Progress Update 26 Conclusion and Outlook 30 Appendix I - Market and Regulatory Environment Appendix II - Key Brexit Considerations Appendix
Slide 3: 1. Results Highlights
1. Results Highlights Marina Village, Greystones, Co. Wicklow
Slide 4: Results Highlights: Operational Highlights
Results Highlights Operational Highlights Development Land Assembled At Attractive Rates Sales Focussed On Starter Homes • Landbank now in excess of 12,600 units • Actively selling from 11 sites at year-end • Assembled at attractive rates in the context of both cost per site (€51k) and site • 74% of
Slide 5: Results Highlights: Financial Highlights
Results Highlights Financial Highlights 2018 Performance Commentary • Revenues for the year of c.€84m Income €84.2m €15.3m / 18.2% (€1.9)m – €79m from 275 housing units Statement Revenue Gross Margin Pre-exceptional EBITDA – €5m of land revenue • Gross margin of €15.3m (18.2%) reflecting a strong re
Slide 6: Further Substantial Land Acquisitions
Results Highlights Further Substantial Land Acquisitions Project Arrow Effective Capital Deployment Performance • The Group has exchanged contracts to acquire two sites in the GDA via an off-market transaction for a consideration of approximately €50m • Located at Leixlip and Newbridge Co. Kildare,
Slide 7: Market Environment – three key opportunities for Glenveagh
Results Highlights Market Environment – three key opportunities for Glenveagh Build-To-Sell PRS Mixed-Tenure • Strong demand for housing in Ireland driven by the • The structural shift to rental is continuing in the Irish • Rebuilding Ireland goal is to ramp up delivery of fundamentals of population
Slide 8: Summary and Outlook
Results Highlights Summary and Outlook 2018 Achievements 2019 Priorities ✓ Acquired our development landbank prudently, largely off-market (17% of NDV) 725 homes built and sold by Glenveagh Homes ✓ Planning lodgments have accelerated, construction is ahead of schedule with costs being actively manag
Slide 9: 2. Financial Results
2. Financial Results Herbert Hill, Dundrum, Dublin 16 9
Slide 10: Income Statement
Financial Results Income Statement Period from incorporation on 7 Aug Commentary Year Ended 31 Dec 2018 2017 to 31 Dec 2017 Before Before exceptional Exceptional Total exceptional Exceptional Total • Revenue of c.€84m in the year relates to: Items Items items items − 275 units, with an ASP of €287k
Slide 11: Balance Sheet
Financial Results Balance Sheet 31-Dec 31-Dec 2018 2017 €’000 €’000 Commentary Property, plant and equipment 11.5 1.5 • Inventory is split as follows: Intangible assets 0.7 0.1 Deferred tax asset 0.2 0.2 − Land held for development - €618m (2017: €217m) Restricted cash 1.5 1.5 − Development expendit
Slide 12: Cashflow statement
Financial Results Cashflow statement 31-Dec 31-Dec 2018 2017 €m €m Commentary EBITDA1 (2.3) (51.6) • The cash movement in the year primarily relates to the continued investment in our land portfolio and significantly increased construction activity with the Equity-settled share-based payment expense
Slide 13: Our Group targets
Financial Results Our Group targets Overview Profitability • Detailed opposite are A B C the key components of Unit Deliveries ASP Gross Margin our future operational and financial targets Starter-Home Focused Homes • 2019: 725 Homes • Further volume guidance • 2020: 1,000 • 20% by 2020 • 2019: €340
Slide 14: 3. Development Portfolio and Pipeline
3. Development Portfolio and Pipeline Hewrbert Hill, Dundrum, Dublin 16 Glenveagh Blackrock Villas, Blackrock, Co. Cork
Slide 15: Balanced GDA Focused Portfolio Assembled Largely Off-Market
Development Portfolio and Pipeline Balanced GDA Focused Portfolio Assembled Largely Off-Market 81% GDA 85% Glenveagh Homes • The Group has strategically grown its development portfolio primarily via off-market transactions 3% 81% GDA 15% • The portfolio is now Greater Dublin Area focussed (81%), 16%
Slide 16: Acquiring at Improved Rates in Attractive Locations
Development Portfolio and Pipeline Acquiring at Improved Rates in Attractive Locations Increasingly attractive portfolio… ...assembled at attractive creation values • We have continued to acquire sites closer to, or in Dublin which can Increasingly attractive site locations Lower average site cost p
Slide 17: Pipeline – Scope for Value Accretive Site Acquisitions
Development Portfolio and Pipeline Pipeline – Scope for Value Accretive Site Acquisitions Current Land Market and Our Approach Strong Pipeline For Remaining Capital Raise Proceeds • Vacant site levy 3% in 2018, 7% in 2019 now impacting vendors disposal decision Pipeline Targeting Smaller Sites and E
Slide 18: 4. Homes: Operational Delivery and Selling Activity
4. Homes: Operational Delivery and Selling Activity Cois Glaisin, Navan, Co. Meath 18
Slide 19: Planning – Lodging over 5,500 units within 18 months
Homes: Operational Delivery and Selling Activity Planning – Lodging over 5,500 units within 18 months Overview Cumulative Planning Applications (Units)1 SHD Application Process – 31 Weeks • 98% of our lands are zoned residential Design and Pre-application • We have the necessary Full Planning Permis
Slide 20: Strong Execution in Construction
Homes: Operational Delivery and Selling Activity Strong Execution in Construction 2018 Progress Construction Progress on Our Sites • The Group were actively constructing on 14 A B sites at year-end Sites Contributing Units in 2018 and 2019 Opened in 2018 Delivering in 2019 • With in excess of 1,100
Slide 21: Targets Substantially De-risked by Site Openings and Acquisitions
Homes: Operational Delivery and Selling Activity Targets Substantially De-risked by Site Openings and Acquisitions Sites In Place Meet Our IPO Delivery Targets • All of the Group’s 2019 deliveries are from sites where construction is well progressed and selling Existing Open Sites Will Deliver 81% o
Slide 22: CPI: How We Maintain Operational Cost Discipline
Homes: Operational Delivery and Selling Activity CPI: How We Maintain Operational Cost Discipline Commentary Our Sub-contractor Value Proposition • The Group’s ability to control CPI on our sites has Scale of Opportunity Stable Platform for Standardised Processes Reduced Risk been driven by our Grow
Slide 23: CPI: Our Experience On Like-for-like Starter Home Schemes
Homes: Operational Delivery and Selling Activity CPI: Our Experience On Like-for-like Starter Home Schemes CPI Reducing on New Phases of Existing Starter-Home Sites • Pricing packages for two of the Group’s core multi-year starter home sites are significantly below the 4% portfolio wide experience e
Slide 24: CPI: Mitigating Cost Inflation Over the Longer-Term
Homes: Operational Delivery and Selling Activity CPI: Mitigating Cost Inflation Over the Longer-Term Utilising Our Structural Advantages Over The Longer-Term • While strong mutually beneficial relationships with sub-contractors and suppliers are a key CPI mitigant in the near-term, we are investing
Slide 25: Sales Underpinned by New Launches and Bulk Sales
Homes: Operational Delivery and Selling Activity Sales Underpinned by New Launches and Bulk Sales Commentary 2019 Selling Sites • Sales for 2019 have been substantially de- Selling Sites From 2018 New Selling Sites risked with 451 units sold, signed or reserved at 5 March1 Comment Comment • 2019 sal
Slide 26: 5. Living: Progress Update
5. Living: Progress Update East Road, Dublin Docklands, Dublin 1
Slide 27: Market Environment - PRS
Living: Progress Update Market Environment - PRS Rapid population growth in Dublin Low Vacancy and Attractive Rental Growth PRS Yield Compression 5.3 1.6 20% 12% 5.0% 5.2 4.8% 1.4 5.1 18.6% 4.6% 1.2 5.0 Investment Yields (Net) 18% 8% 4.4% 1.0 4.9 (Millions) (Millions) 4.2% 4.8 0.8 4.0% 4.7 0.6 3.8%
Slide 28: PRS: Progress on Our Existing Sites
Living: Progress Update PRS: Progress on Our Existing Sites Dublin Docklands Campus Update East Road Castleforbes • Planning preparation and applications are progressing well on each asset Site Price €41.6m €61m • East Road SHD application was lodged in 650 Units at Underwrite 450 December 2018 – 56
Slide 29: Mixed-Tenure Overview and Business Model Characteristics
Living: Progress Update Mixed-Tenure Overview and Business Model Characteristics • Mixed-Tenure is a housing delivery model whereby a developer provides a combination of social, affordable and private (PRS and private for sale) units on lands owned by a third party, Local Council / State Agency Bene
Slide 30: 6. Conclusion and Outlook
6. Conclusion and Outlook Taylor Cluain Hill,Navan, Adain, Balbriggan, Co. Dublin Co. Meath
Slide 31: Conclusion and Outlook
Conclusion and Outlook 2018 Achievements 2019 Priorities ✓ Acquired our development landbank prudently, largely off-market (17% of NDV) 725 homes built and sold by Glenveagh Homes ✓ Planning lodgments have accelerated, construction is ahead of schedule with costs being actively managed (<3%CPI) Depl
Slide 32: Appendix I: Market and Regulatory Environment
Appendix I Market and Regulatory Environment Cluain Adain, Navan, Co. Meath 32
Slide 33: Market Environment – Strong fundamentals for Irish Homebuilders
Market and Regulatory Environment Market Environment – Strong fundamentals for Irish Homebuilders Rapid Population Growth Exceptional FDI Jobs Growth Strengthening Labour Market 5.3 1.6 140.0 5.2 2,500 16% 1.4 5.1 120.0 14% 1.2 2,000 5.0 12% 100.0 4.9 1.0 10% 1,500 (Millions) (Millions) 4.8 0.8 80.0
Slide 34: Mortgage Market – Our Experience
Market and Regulatory Environment Mortgage Market – Our Experience Commentary Mortgage Approvals by Volume Mortgage Lending Continues its Recovery • The majority of transactions involving mortgages in Ireland relate to the second hand purchases (c.82%) 50,000 45 €40bn 40 • As such the statistics are
Slide 35: Strong Government Support for Housing Sector
Market and Regulatory Environment Strong Government Support for Housing Sector Infrastructure/Land Availability Construction Costs Affordability 1. Vacant Site Levy 4. 6. Help-to-Buy Scheme Apartment Building • Introduced in 2018 Standards • Up to €20,000 tax rebate for deposits on • Payable in 2019
Slide 36: Appendix II: Key Brexit Considerations
Appendix II Key Brexit Considerations Taylor Hill, Balbriggan, Co. Dublin
Slide 37: Brexit and Our Market
Key Brexit Considerations Brexit and Our Market Commentary UK share of Irish exports has declined rapidly Dublin is a beneficiary of company relocations • The charts opposite put Brexit in context for the Irish economy 50% Dublin 48 • Our land portfolio is resilient as it is weighted 40% Luxembourg
Slide 38: Ensuring Glenveagh is Brexit Ready
Key Brexit Considerations Ensuring Glenveagh is Brexit Ready Commentary • During 2018 we undertook an assessment of our entire supplier base in order to identify potential risks to our supply chain as a result of Brexit • This assessment involved writing to each of our material suppliers, manufactur
Slide 39: Appendix III: Living Business Model
Appendix III Living Business Model Castleforbes, Dublin Docklands, Dublin 1
Slide 40: Living Business Model: Overview
Living Business Model Overview Glenveagh Living designs, develops and delivers residential solutions for institutional investors and public bodies • Complementary to Glenveagh Homes business • Diversifies risk through Mixed-Tenure delivery • Increases access to prime site opportunities • Efficient c
Slide 41: Typical Mixed-Tenure bid timeline creates barrier to entry
Living Business Model Typical Mixed-Tenure bid timeline creates barrier to entry Submit final bid Invitation to submit Documentation outline solution complete Prequalification Select Invitation preferred Start Questionnaire Submit Outline for final bidder on site Solution tender Prepare Preparation
Slide 42: Appendix IV: Our Portfolio: Further Information
Appendix IV Our Portfolio: Further Information Castleforbes, Dublin Docklands, Dublin 1
Slide 43: The Importance of Starter-Homes
Our Portfolio: Further Information The Importance of Starter-Homes Key Attractions of Starter-Home Market Strong New Homes Transactions in Ireland Below €350k • Segment with the deepest demand – 83% of units sold in Ireland were 100% 7% 10% 8% 16% 29% below €425k in 20181 14% 80% 12% 18% 14% 79% 78%
Slide 44: Dublin Docklands is Ireland's Fastest Growing Employment Area
Our Portfolio: Further Information Dublin Docklands is Ireland’s Fastest Growing Employment Area Large existing employer base will continue to grow significantly • The Docklands is a significant employment hub and it has attracted the world’s leading employers in Finance, Legal, TMT and Professional
Slide 45: Attractiveness of Cork
Our Portfolio: Further Information Attractiveness of Cork An Attractive Market Underserved to Date Our Cork Portfolio Site Target Site Units Cost Market Designated Ireland’s Young and Growing Maryborough 500 €25m FTB 2nd City1 Population Ridge Population – 542,868 35% aged 20-39 (28% Cork Docklands
Slide 46: Disclaimer
Disclaimer This presentation has been prepared by the Company may differ materially from Glenveagh Properties PLC (the “Company” those reflected or contemplated in such or “Glenveagh”) for information purposes forward-looking statements. No only. representation or warranty is made as to the achievem