Berkeley Group Holdings plc · LSE:BKG
Berkeley — The Berkeley Group Holdings — H1 2016/17 Earnings Presentation
31 slides from Berkeley's earnings presentation, Dec 2, 2016
Slide 1: Half Year Results Presentation
The Berkeley Group Holdings plc Half Year Results Presentation Six months ended 31st October 2016 2nd December 2016
Slide 2: Format of Presentation
Preliminary Results Presentation Format of Presentation Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Woodhurst Park, Warfield
Slide 3: Tony Pidgley CBE, Chairman
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Slide 4: Richard Stearn, Finance Director
Richard Stearn Finance Director
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 - Financing - Land holdings
Slide 6: Summary of Performance
Finance Review Summary of Performance Year ended 31 Oct 2016 31 Oct 2015 Change (£) Change (%) Profit before tax £392.7m £293.3m +£99.4m +33.9% EPS – Basic 225.7p 166.9p +58.8p +35.2% EPS – Diluted 209.6p 149.2p +60.4p +40.5% Operating Margin 27.7% 25.5% +2.2% Return on equity * 41.5% 34.5% * Return
Slide 7: Summary of Financial Position
Finance Review Summary of Financial Position Oct 2016 April 2016 Change (£) Change (%) Balance Sheet Shareholders’ funds £1,969.1m £1,812.8m +£156.3m +8.6% Closing net cash (£207.9m) (£107.4m) -£100.5m Capital Employed £1,761.2m £1,705.4m +£55.8m +3.3% Net asset value per share 1,418p 1,314p +104p +
Slide 8: Future Potential Share Dilution
Finance Review Future Potential Share Dilution Vesting No. (million) Exercise Approved by Date Price shareholders Shares in issue at 1 May 2016 137.9 Company share purchase (0.9) September 2011 & February 2016 2011 LTIP vesting September 2016 1.8 £10.00 Shares in issue at 1 Nov 2016 138.8 2011 LTIP
Slide 9: Homes Completed and ASP - Group
Finance Review Homes Completed and ASP - Group Plots 3,712 3,742 3,776 3,355 2,294 2,076 1,927 1,983 2,091 1,785 1,685 1,448 1,372 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 2012/13 2013/14 2014/15 2015/16 2016/17 Average Selling Price £649k £655k £575k £539k £523k £527k £515k £506k £423k £376k £354k £3
Slide 10: Homes Completed and ASP – Joint Ventures
Finance Review Homes Completed and ASP – Joint Ventures Units 230 240 203 144 162 132 71 86 78 66 61 32 34 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 2012/13 2013/14 2014/15 2015/16 2016/17 Average Selling Price £1,464k £1,380k £1,484k £1,235k £1,229k £1,329k £1,139k £1,006k £810k £702k £272k £282k £277
Slide 11: Income Statement
Finance Review Income Statement Year ended Oct 2016 Oct 2015 Change Change £m £m £m % Revenue 1,413.4 1,138.7 +274.7 +24.1% Gross profit 503.6 35.6% 391.4 34.4% +112.2 +28.7% Operating expenses (112.2) 7.9% (100.7) 8.8% -11.5 +11.4% Operating profit 391.4 27.7% 290.7 25.5% +100.7 +34.6% Net finance
Slide 12: Abridged Cash Flow
Finance Review Abridged Cash Flow Year ended October 2016 October 2015 £m £m Profit before tax 392.7 293.3 Increase in inventory (90.1) (262.3) (Decrease) / increase in customer deposits (69.0) 80.8 Other working capital movements 40.3 61.8 Net (investment) / reduction in working capital (118.8) (24
Slide 13: Abridged Balance Sheet
Finance Review Abridged Balance Sheet October 2016 Movements April 2016 £m £m £m Non current assets - Intangible assets 17.2 - 17.2 - Investment in JVs 117.6 -32.4 150.0 - Deferred tax assets 59.9 -12.0 71.9 - Property, plant and equipment 21.8 -1.7 23.5 Total non current assets 216.5 -46.1 262.6 In
Slide 14: Inventories
Finance Review Inventories October 2016 Movements April 2016 £m £m £m Land not under development 466.4 +82.3 384.1 Work in progress: Land cost 907.4 -68.4 975.8 1,373.8 +13.9 1,359.9 Work in progress: Build cost 1,937.7 +59.6 1,878.1 Completed units 34.7 +16.6 18.1 Inventories 3,346.2 +90.1 3,256.1
Slide 15: Creditors
Finance Review Creditors October 2016 Movements April 2016 £m £m £m Trade creditors and accruals 671.7 +93.3 578.4 Provision for liabilities 94.6 +6.1 88.5 Deposits and on account receipts 1,036.8 -69.0 1,105.8 Land creditors 131.0 -43.7 174.7 Current tax liability 79.7 +1.5 78.2 Total creditors 2,0
Slide 16: Financing
Finance Review Financing Banking Facilities Amount: £750 million Term: £300 million RCF: £450 million Maturity: November 2021 (with optional extensions to November 2023) Margin, utilisation and commitment fees: Market rates
Slide 17: Land Holdings
Finance Review Land Holdings October 2016 Variance April 2016 Owned 33,457 -329 33,786 Contracted 8,668 -404 9,072 Plots 42,125 -733 42,858 Sales value £20.3bn -0.5bn £20.8bn Average selling price (ASP)* £481k -£3k £484k Average plot cost £63k - £63k Land cost % 13.2% +0.3% 12.9% Gross margin £5.9bn
Slide 18: Rob Perrins, Chief Executive
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Slide 19: Strategic Review: Introduction
Strategic Review Introduction - Performance highlights - Macro backdrop and market fundamentals - The Market - Land and Build Investment - Joint ventures - Long term strategic plan - Guidance
Slide 20: Performance Highlights
Strategic Review Performance Highlights Highlights Adjusted PBT up 33.9% to £392.7 million Dividends paid of 100 pence (£137.0 million) £100 million of cash generated in the period Cash due on forward sales £2.9 billion (FY 2016: £3.25 billion) Gross margin in land holdings at £5.9 billion
Slide 21: Macro back-drop and market fundamentals
Strategic Review Macro back-drop and market fundamentals Global Political and Economic Instability UK Political Backdrop EU referendum result uncertainty Government support for housebuilding SDLT changes New London Mayor Tension between CIL and Affordable Housing Market Fundamentals Lond
Slide 22: The Market
Strategic Review The Market Sales Began 2016 strongly forward sold Excluding a hiatus around Brexit, reservations remain 20% down on 2015. The transaction volume fall is across all price points Investor mix reflects impact of SDLT changes on UK investors and currency on international custome
Slide 23: Land and Build Investment - Inventories
Strategic Review Land and Build Investment - Inventories Inventories £4,000m £3,346m £3,500m £3,256m £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 31 Oct 16 Land
Slide 24: Land and Build Investment – Delivery
Strategic Review Land and Build Investment – Delivery London South Total Delivery of Developments: In construction 41 77% 15 58% 56 71% Not yet in construction 12 23% 11 42% 23 29% Total developments 53 100% 26 100% 79 100% Proportion with planning (by sites) 87% 88% 87% Number of plots 35,246 84% 6
Slide 25: Land and Build Investment – Sites in London
Strategic Review Land and Build Investment – Sites in London
Slide 26: Land and Build Investment – Sites in the South of England
Strategic Review Land and Build Investment – Sites in the South of England
Slide 27: Joint Ventures: St Edward
Strategic Review Joint Ventures St Edward Joint venture with Prudential Four schemes in development (Stanmore, Kensington High Street, 190 Strand and Green Park Reading – pictured below)
Slide 28: Joint Ventures: St William
Strategic Review Joint Ventures St William Joint venture with National Grid Six schemes in Land Holdings (Battersea – pictured below, Rickmansworth, Fulham, Hornsey, Borehamwood & Watford)
Slide 29: Long Term Strategic Plan
Strategic Review Long Term Strategic Plan Milestone Paid Outstanding Total £/share £’m £/share £’m £/share £’m By 30th April 2016 5.34 718 - - 5.34 718 Year ending 30 April 2017 1.00 137 1.00 139 2.00 276 Year ending 30 April 2018 - - 2.00 278 2.00 278 Year ending 30 April 2019 - - 2.00 278 2.00 278
Slide 30: Guidance
Strategic Review Guidance Performance Guidance £6.34 per share paid to date Remaining £10.00 per share converted to absolute value Returns £1.00 per share (£138.8m) announced to be paid by 31 and flexibility introduced to include dividends and share buy-backs March 2016 Capacity to increase
Slide 31: Questions
Questions Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Abell & Cleland, Westminster
The Berkeley Group Holdings — H1 2016/17 Earnings Presentation on 6ix