Barratt Redrow Plc · LSE:BTRW
Barratt Redrow — Barratt Developments — Investor Day (2014)
73 slides from Barratt Redrow's investor day presentation, 2014
Slide 1: Analyst and Investor Site Visit Montague Park
Analyst and Investor Site Visit Montague Park Hosted by Barratt Southern Region BDW Southern Counties & DWH Southern
Slide 2: Introduction
Introduction Mark Clare Group Chief Executive
Slide 3: Good progress with Group's key objectives
Good progress with Group’s key 3 objectives Targets for FY16 On 16,000 completions (inc JV’s) track Build profitability 90% completions from higher On margin land track On 18% ROCE track Drive ROCE Minimal year end net debt Maintain appropriate capital Land creditors c. 35% of owned land structu
Slide 4: Operational highlights
4 Operational highlights Great customer experience Prime Efficient Retail land production capability Public Right Best Planning Standardised first time – Great places sector designed capability product to live delivery Quality & cost homes Strategic Exceptional Industry Mixed use Safe Resource land
Slide 5: Management team
5 Management team Mark Clare Group Chief Executive Tom Keevil Rob Tansey Group General Group HR Director Counsel & Company Secretary Patrick Law David Thomas Steven Boyes Nick Richardson Jeremy Hipkiss Group Corporate Group FD Group COO MD, Group Sales Affairs Director Wilson Bowden & Marketing Dire
Slide 6: Agenda
6 Agenda Gary Ennis Introduction to Southern Regional Managing Director Paul Crispin David Wilson at Montague Park Managing Director, DWH Southern Tour of David Wilson showhomes In Groups Presentation on Design Tour of construction site In Groups James Watson Barratt Homes at Montague Park Managing
Slide 7: Introduction to Southern Region
Introduction to Southern Region Gary Ennis Regional Managing Director, Southern
Slide 8: Southern Region – management team
Southern Region – management team 8 Julian Hodder Gary Ennis Adam Tillion Regional Finance Director Regional Managing Director Regional Technical Director 2 years with Barratt 18 years with Barratt 15 years with Barratt 14 years in industry 25 years in industry 32 years in industry James Watson Davi
Slide 9: Southern Region – operational area
Southern Region – operational area 9 SOUTHERN REGION 1. Barratt David Wilson Southern Counties Guildford, Surrey (Surrey, West Sussex, Hampshire) 2. David Wilson Homes Southern Hungerford, Berkshire (Wiltshire, Berkshire, Oxfordshire) 3. Barratt David Wilson North London Watford, Hertfordshire (Nort
Slide 10: Southern Region – key strengths
10 Southern Region – key strengths • Diverse product range • Dual branding capability • Excellent design & customer care • Long term local presence – excellent reputation – in-depth relationships • Strong local management team – home grown talent – training & development
Slide 11: Southern Region – sales performance
Southern Region – sales performance(1) 11 Total completions Sales rate £k Private ASP 2,500 1.2 350 327 1.06 1.0 300 275 2,000 0.85 249 250 0.8 1,500 0.62 200 0.6 1,000 150 0.4 100 500 0.2 50 - 0.0 0 FY12 FY13 FY14 (f) FY12 FY13 FY14 YTD FY12 FY13 FY14 (f) Private Affordable (1) Excluding joint vent
Slide 12: Southern Region – brand performance
Southern Region – brand performance(1) 12 £k Sales rate by brand Private ASP by brand Private completions 1.2 400 1,200 350 1.0 1,000 300 0.8 800 250 0.6 200 600 150 0.4 400 100 0.2 200 50 0.0 0 - FY12 FY13 FY14 YTD FY12 FY13 FY14 (f) FY12 FY13 FY14 (f) Barratt Homes DWH Barratt Homes DWH Barratt Ho
Slide 13: Southern Region – product mix
Southern Region – product mix(1) 13 Completions houses/apartments Completions by buyer type 100% 100% 80% 40% 35% 80% 48% 60% 60% 40% 40% 60% 65% 52% 20% 20% 0% 0% FY12 FY13 FY14 (f) FY12 FY13 FY14 (f) Houses Apartments Affordable Part exchange Help to Buy Other shared equity (1) Excluding joint ven
Slide 14: Southern Region – strengthening landbank
Southern Region – strengthening landbank(1) 14 Completions by land type Landbank years – owned and conditional 100% 6 5.6 80% 5 4.5 3.9 4 60% 3 40% 2 20% 1 0% 0 FY12 FY13 FY14 (f) FY 12 FY 13 FY 14 (f) Impaired old Non impaired old New Landbank years (1) Excluding joint ventures • 23% of completions
Slide 15: Montague Park, Wokingham
Montague Park, Wokingham 15 An outstanding greenfield site located in the traditional market town of Wokingham. This innovative and highly desirable development will provide quality homes and associated infrastructure to create a whole new community. Key Data Divisions DWH Southern BDW Southern Coun
Slide 16: Montague Park – timeline
Montague Park – timeline 16 December 1996 DWH acquired freehold for Buckhurst Farm (74.5 acres greenfield land) November 2000 DWH acquired option over 10.75 acres of land between Buckhurst Farm and London Road December 2012 Outline planning permission granted July 2013 Group land committee approval
Slide 17: Masterplan
Local Centre Masterplan Barratt Homes Marketing Suite including shops, community facility & public square YOU ARE HERE DWH Marketing Suite 17 SANG 30.8 acres including woodland area and footpath network Primary School with multi-use games area
Slide 18: Pricing a development
Pricing a development 18 Land Assessment parameters New New assessment release/phase release/phase viability • Market data (new build & second hand) (1) • Hometrack Report Conditionally New New contracted release/phase release/phase • Our sites • Product matrix • Mortgage valuers Planning Launch New
Slide 19: Paul Crispin Managing Director, DWH Southern
19 Paul Crispin Managing Director, DWH Southern
Slide 20: David Wilson Homes at Montague Park
David Wilson Homes at Montague Park 20 GDV £100m Acreage 17 Total plots 351 Private plots 280 Affordable 20% Private ASP(1) £270k - £700k Private revenue / sq ft £360 Private units sold to date 16 ROCE(1) 40% (1) Forecast based on current house price expectations
Slide 21: David Wilson Homes at Montague Park
David Wilson Homes at Montague Park 21 Pre launch marketing plan • Public exhibitions 2013 • Local newsletters 2013 • ‘Coming Soon’ on website Nov-13 • Other media activity Feb-14 • CRM leads qualified (2000) Mar-14 • VIP launch invitation only Apr-14 • Public launch 2 weeks later Apr-14 Pricing str
Slide 22: David Wilson Homes at Montague Park
David Wilson Homes at Montague Park 22 Private reservations to date Split by product type Split by buyer type 1 2 1 5 6 8 9 HTB Other private 3 bed 4 bed 5 bed Part exchange Showhome sales & leaseback
Slide 23: Where quality lives in
Where quality lives iN David Wilson Homes
Slide 24: Design
Trumpington Meadows, Cambridge Design Adam Tillion Southern Region Technical Director
Slide 25: Benefits of good design
25 Benefits of good design Customers General public Good design Local authorities Land owners
Slide 26: Great design delivering real benefits
26 Great design delivering real benefits Trumpington Meadows, Cambridge Leithfield Park, Milford • Excellent Vendor relationship • 13 weeks to secure planning • Impressed with Phase 1 delivery • Sensitive greenbelt • Offered Phase 2 – 850 homes • 98 homes • Contemporary design • Rural, parkland desi
Slide 27: Building for Life 12
27 Building for Life 12 • Government recognised independent standard for residential design quality in place making • Re-worked in 2012 to respond to change in government, the new NPPF and the Localism Act • Tool for shaping design discussion around12 key issues for good residential design • Simple
Slide 28: Great Places
Great Places 28 • Designed to help Divisions achieve Built for Life quality mark • Based on twelve Building for Life key design issues • Three main aspects: − Publicity Booklet (demonstrate design ethos and illustrate recent achievements) − Design Guidance (guide focused on Built for Life with “How
Slide 29: 12 key issues for good design
29 12 key issues for good design Integrating into the Neighbourhood Connections Public 1 (links to the existing area) 2 Facilities & Services 3 Transport Connections 4 Local Housing Need Creating a Place Well defined 5 6 7 8 Working with Finding your Character the site and its street way around cont
Slide 30: 1: Connections
1: Connections Shed ae ® Where quality lives iN David Wilson Homes
Slide 31: 2: Facilities and services
31 2: Facilities and services
Slide 32: 6: Working with the site and its context
32 6: Working with the site and its context
Slide 33: 8: Finding your way around
8: Finding your way around Kev [Ell botnurstrank Gateway ME cay Lane HI uct ence ge Where quality lives iN David Wilson Homes
Slide 34: Barratt design success
34 Barratt design success • National Urban Design Awards 2014 (Developer Award) – Barratt Homes for Maple Quays, London • London Evening Standard 2014 New Homes Awards (Best Large Development) – Trumpington Meadows, Cambridge • Built for Life 2014 Awards – Montague Park, Wokingham; De Lacy Court, Ca
Slide 35: Benefits of good design
35 Benefits of good design Customers General public Good design Local authorities Land owners
Slide 36: Where quality lives in
Where quality lives iN David Wilson Homes
Slide 37: Standard product
Standard product • Utilisation of standard house types New standard range launched – David Wilson and Barratt ranges in 2010 – private and affordable c. 75% of total Group • Wokingham planners required more completions (excluding contemporary design London) use standard product – elevational treatme
Slide 38: Affordable housing
Affordable housing • Southern region – FY13 21% affordable FY13: 2,268 affordable • Staged payments throughout construction completions – c. 40% of house value at ‘Golden Brick’ FY13: £232.3m affordable stage - one brick course above ground floor revenue slab • Montague Park % of total FY13 completi
Slide 39: Work in progress
Work in progress • Project programme As at 31 Dec 2013 • Plots managed in 9 key build stages Total Group WIP £1,136m • WIP release reviewed monthly at Divisional - London: 21% Board meetings - Regional: 79% • Build stage release authorised by Regional Top 25 sites: £368m Managing Director - London:
Slide 40: Joint project plan
Joint project plan • Compounds located centrally Phase 1 Project Programme 2013 2014 2015 2016 2017 2018 Buckhurst Boulevard to junction to Primary School access – efficiently serve project over a longer period and boundarywith bridge land (excluding approved junction with London Road) Secondary acc
Slide 41: Labour and material supply
Labour and material supply Labour Materials & labour c.25% of • Subcontractors employed on all trades revenue (typical house) • ‘Partnering approach’ Employees on site (31 Dec 13): • Seminars provide ‘advance’ notice of workload - Barratt c. 3,700 - Sub contractors c. 12,500 • Trades tendered on a p
Slide 42: Health and safety
Health and safety • Health and Safety Plan for each development Divisions adhere to Safety, Health and Environmental • Independent Checks not less than monthly by (SHE) guidelines SHE Advisors • All sites must achieve target score of 93% – FY13 - 5,437 monitoring visits, process for immediate correc
Slide 43: Quality
Quality • Site team and NHBC inspect all plots at key HBF 5 Star Status build stages 5 Star status for fifth • ‘Forward Through Quality’ - internal consecutive year framework - ahead of any – development inspected monthly by other national housebuilder divisional directors NHBC Pride in the Job – on
Slide 44: Barratt Homes at Montague Park
Barratt Homes at Montague Park GDV £75m Acreage 14 Total plots 267 Private plots 198 Affordable 26% Private ASP(1) £190k - £495k Private revenue / sq ft £345 Private units sold to date 23 ROCE(1) 40% (1) Forecast based on current house price expectations
Slide 45: Barratt Homes at Montague Park
Barratt Homes at Montague Park Pre launch marketing plan • ‘Coming soon’ website launch Nov-13 • ‘Pre-launch’ media activity starts Jan-14 • 2,000 registered leads Mar 14 • Launch – invitation only Mar-14 • First 20 homes released Mar-14 • Public launch Apr-14 Pricing strategy • Detailed local secon
Slide 46: Barratt Homes at Montague Park
Barratt Homes at Montague Park Private reservations to date Split by product type Split by buyer type 3 3 9 10 9 10 2 HtB Investor Other private 2 bed 3 bed 4 bed Showhome sales & leaseback
Slide 47: Land Presentation
Land Presentation Steven Boyes Group Chief Operating Officer Gary Ennis Regional Managing Director, Southern Nick Richardson Managing Director, Wilson Bowden Developments
Slide 48: Optimised operational model
48 Optimised operational model Land acquisition Construction Sales & marketing • Right sites & product • Minimise ‘paid for’ • Affordable housing infrastructure delivery • 4.5 year landbank • Standardised product • Dual branded sites • Smaller site size • Control of WIP • Best in class sales & • Con
Slide 49: Land buying - criteria
49 Land buying - criteria • Targeted areas – 35% of local authorities • Regionally balanced portfolio • Minimum hurdle rates – 20% Gross Margin – 25% ROCE • Deferred terms – matching revenues and costs • Maximise planning opportunity, minimise planning risk Operational Public sector Strategic Maximi
Slide 50: Flexible, efficient land supply
50 Flexible, efficient land supply Strategic Operational Public sector Options granted 60,950 plots 9,360 plots Approved & terms agreed land (1)(2) 51 sites 17,391 plots Conditional land (2) 114 sites Target 4.5 (2) 50,745 plots Owned land 516 sites year supply Maximise ROCE Optimise balance of risk
Slide 51: Public sector land – best in class
Public sector land – best in class 51 • Excellent track record • Key strength especially in more competitive London and South East land markets • Strong HCA and Government relationships • Unique specialist public sector partnerships team • Gross margin exceeds hurdle rate (2) • Very attractive ROCE
Slide 52: Public sector land
52 Public sector land • Public land from multiple sources • Member of all HCA Delivery Partner Panels • More than 21,500 plots with gross development value of c. £4.6bn secured since mid 2009 • C. 49% of land secured by London and Southern regions • Government on track to release 100k plots by 2015
Slide 53: Sources of Barratt Public Sector Land
53 Sources of Barratt Public Sector Land May 2009 to date Total GDV £4.6bn 38% Total sites 123 45% Total units 21,514 2% 15% OJEU HCA Delivery Partner Panel Local Authority Framework Conventional public land disposal
Slide 54: Public land – bidding process & criteria
54 Public land – bidding process & criteria • Lengthy, heavily regulated selection process • Multiple stages - between 6 to 12 months • Focus on selection of long term developer partner NOT simply selling land • Assessment against ‘Evaluation Criteria’ based on ‘Quality’ and ‘Price’ • Detailed propo
Slide 55: Milford Hospital, Upper Tuesley, Surrey
55 Milford Hospital, Upper Tuesley, Surrey GDV: £53.6m Site Area: 31.3 acres Division: Barratt Homes Southern Counties Delivery Period: January 2014 to June 2017 Accommodation: 98 dwellings plus 10 self-build plots Tenure: 60% Private & 40% Affordable Partner: HCA Status: Won FY13 / Contracted FY14
Slide 56: Spencer Park, Hemel Hempstead
56 Spencer Park, Hemel Hempstead GDV: £89.4m Site Area: 30.63 acres Division: Barratt David Wilson, North London Delivery Period: September 2014 to August 2018 Accommodation: 357 dwellings plus Community Tenure: 60% Private & 40% Affordable Centre & shop Status: Won FY13 / Contracted FY14 Partner(s)
Slide 57: Strategic land – accelerating ambition
Strategic land – accelerating ambition 57 • Increasingly important part of our operating model – securing future land pipeline – focus is on optioned land Increasing rate of Strong flow through Increasing % of acquisition to consented completions • FY13 – c. 11,800 landbank • FY13 – 7% plots on 61 s
Slide 58: Strategic land by region
58 Strategic land by region 31 Dec 2013 Plots Sites Northern 20,130 85 Central 4,820 27 East 13,200 50 West 8,170 44 Southern 14,630 41 Group 60,950 247 • 71% of plots allocated or in LA’s with no 5 year land supply • 85% of strategic sites are smaller than 500 units
Slide 59: Popley, Basingstoke, Hampshire
59 Popley, Basingstoke, Hampshire GDV: £106.5m Site Area: 50.13 acres Division: David Wilson Homes Southern Delivery Period: April 2015 to December 2020 Accommodation: 450 dwellings Tenure: 60% Private & 40% Affordable Partner(s): Land Owner Status: Won FY14 / Contracted FY14 Procurement: Option Agr
Slide 60: Henfield, Horsham, West Sussex
60 Henfield, Horsham, West Sussex GDV: £44.4m Site Area: 18 acres Division: Barratt David Wilson Southern Delivery Period: December 2015 to December 2018 Counties Tenure: 60% Private & 40% Affordable Accommodation: 160 dwellings Status: Won FY11 / Contracted FY15 Partner(s): Private Land Owner Procu
Slide 61: Wilson Bowden Developments
Wilson Bowden Developments Nick Richardson Managing Director
Slide 62: Wilson Bowden Developments – Areas of Operation
Wilson Bowden Developments – Areas of Operation 62 Legacy Assets - Commercial Legacy - Town Centre Retail Macclesfield Mixed Use Urban Developments Edge of Urban Area or Strategic Mixed Use Urban With Barratt/ David Wilson Homes Developments with Barratt/ David Wilson Homes Rochdale Macclesfield Wok
Slide 63: Wokingham – Mixed Use
Wokingham – Mixed Use 63 Key Information: • Total commercial area – 145,000 sq ft • David Wilson Homes –112 new homes • ROCE >50%
Slide 64: Hounslow – Mixed Use
Hounslow – Mixed Use 64 Key Information: • 525 apartments • Cinema, Restaurant, Retail 110,000 sq ft • ROCE 38%
Slide 65: Leicester – Mixed Use Urban Extension
Leicester – Mixed Use Urban Extension 65 Key Information: • Commercial Option land – Planning won at appeal • Consent obtained for 250 homes • Potential for additional c. 140 homes • Commercial land remaining – 59 acres
Slide 66: Key Objectives
66 Key Objectives • Develop legacy assets - deliver cash back into the Group • Secure further mixed use opportunities • Leverage Group’s commercial expertise to secure residential opportunities
Slide 67: Robust land strategy driving returns
67 Robust land strategy driving returns Operational Public sector Strategic • Prime location • Best in class • Accelerating ambition • 4.5 year • Competitive landbank advantage in • Increasingly South East significant • Smaller site size source of land • High ROCE supply • Minimise planning risk Max
Slide 68: Where quality lives in
Where quality lives iN David Wilson Homes
Slide 69: Industry Leading Sales & Marketing
Industry Leading Sales & Marketing Jeremy Hipkiss Group Sales and Marketing Director & Ed McCoy Group Head of Sales
Slide 70: Where quality lives in
Where quality lives iN David Wilson Homes
Slide 71: Closing Remarks
Closing Remarks Mark Clare Group Chief Executive
Slide 72: Operational highlights
Operational highlights Great customer experience Prime Efficient Retail land production capability Public Right Best Planning Standardised first time – Great places sector designed capability product to live delivery Quality & cost homes Strategic Exceptional Industry Mixed use Safe Resource land cu
Slide 73: Conclusion
73 Conclusion • Maintain investment discipline • Secure long term land • Keep tight control on costs • Retain good people • Ensure great customer experience • Deliver to our shareholders – ROCE/Margin