Slide 1: Cairn Homes plc 2019 Interim Results Presentation
Cairn Homes plc 2019 Interim Results Presentation Six Hanover Quay, Dublin 2
Slide 2: Table of Contents
2019 Interim Results Presentation Table of Contents Page Michael Stanley 1 Highlights 02 Co-Founder & CEO 2 Financial 08 3 Operations 12 Ian Cahill Head of Finance 4 Market & Land Bank 16 5 Outlook 23 Declan Murray Head of Investor Relations 6 Appendices 25 1
Slide 3: Highlights
01 Highlights New owners in Glenheron, Greystones
Slide 4: Financial Highlights
Financial Highlights ASPs €192.4m (+48%) Sales Units Revenue Houses Apartments Overall H1 2019 390 €337k €608k €449k €175.3m Revenue H1 2018 293 €326k €599k €393k €115.2m (H1 2018: €130.2m) 2019 – closed and forward sales* 1,250 €326k €413k €357k €446.6m €35.7m (+37%) €27.3m (+51%) 2.37cent (+139%)
Slide 5: Long-Term Capital Returns
Capital Returns Share buyback programme Interim ordinary dividend to commencing 13 September 2019 be paid on 18 October 2019 €25 million 2.5 cent 2019 €44.7m shareholder returns announced today 2019 interim dividend is the commencement of a Long-Term progressive biannual ordinary dividend Distributi
Slide 6: Illustrative Cash Generation 2019 – 2022
Illustrative Cash Generation 2019 – 2022 Assumptions behind the Cash €’m Generation Illustration to 2022 600 • Term bank debt remains constant at €150m 400 • No house price inflation or build cost inflation • WIP investment in 2021 and 2022 delivering 200 revenue post-2022 • Land acquisitions – focu
Slide 7: Market Leading Sales Performance
Market Leading Sales Performance On Target for 2019 Strong Sales Absorption Cairn H1 2019 Completions Unit Delivery Rates in 2019 c. 1,100 2.87 units + 33% closed sales per active housing sales outlet year on year compared to the rest of Currently active on 15 developments Selling on 12 sites and a
Slide 8: 2019 Full Year Outlook
2019 Full Year Outlook c. 1,100 closed sales expected in 2019 • As in previous years and reflecting our continuing growth, revenue is weighted towards the second half of the year Customers Who have Chosen • For the full year, increasing guidance marginally from c. 1,075 to c.1,100 a Cairn New Home i
Slide 9: Financial
02 Financial Roof Gardens at Six Hanover Quay, Dublin 2
Slide 10: Income Statement for the Six Month Period Ended 30 June 2019
Income Statement for the Six Month Period Ended 30 June 2019 (Unaudited) Commentary June 2019 Unaudited June 2018 Unaudited • Revenue of €192.4m (+48%) Total Total from the sale of 390 units €m €m (€175.3m) and site sales (€16.2m) • ASP’s in H1 were boosted by Revenue 192.4 130.2 the sale of 120 uni
Slide 11: Balance Sheet at 30 June 2019
Balance Sheet at 30 June 2019 Commentary June 2019 Unaudited December 2018 Audited €m €m • Total assets of €1,091.8m PP&E and intangibles 2.5 2.2 (31 December 2018: €1,005.8m) Right-of-use asset 1.3 - Non-current assets 3.8 2.2 • Total equity of €775.2m (31 December 2018: €756.5m) Inventories 937.0
Slide 12: Cash Flow Statement for the Six Month Period Ended 30 June 2019
Cash Flow Statement for the Six Month Period Ended 30 June 2019 (Unaudited) Commentary June 2019 Unaudited June 2018 Unaudited €m €m • EBITDA of €28.1m EBITDA 28.1 18.8 (H1 2018: €18.8m) Increase in inventories (3.4) (39.1) • Net cash from operating activities €44.7m (H1 2018: outflow €9.3m) Other w
Slide 13: Operations
03 Operations Gandon Park, Lucan
Slide 14: Our Sustainable Business
Our Sustainable Business Quality Homes Innovation Market recognising Cairn’s commitment to quality Timber frame duplex units A3 Bathroom pods energy rating of all our new homes SFS framing Electric car points 8 days average snagging turnaround Placemaking Community 5 €70m commitment to 2021 trees pl
Slide 15: People
People Supporting Our People Our Talented Team • Four recent appointments adding more depth and Apprenticeship Programme experience to our senior management team: continue to provide financial support to subcontractors in supporting their apprenticeship programmes Maura Sarah Winston Murray Director
Slide 16: Scale and Procurement Advantages
Scale and Procurement Advantages Collaboration with our established subcontractor base and supply chain optimisation are driving procurement efficiencies as we leverage our scale and business model Procurement – current committed order book on active sites €300m Top 20 subcontractors 67% Average tot
Slide 17: Market & Land Bank
04 Market & Land Bank Donnybrook Gardens, Dublin 4
Slide 18: Characteristics of Housing and Apartments
Characteristics of Housing and Apartments Key Metrics and Characteristics Housing Apartments * Total Land Bank Capital Allocation 55% 45% 100% Total Units 10,800 4,600 15,400 Average Site Cost per Unit €36k €68k €45k Average Selling Price €308k €527k €373k (estimated) (ex. VAT) (no HPI) Net Developm
Slide 19: Composition of c.15,400 units
Composition of c.15,400 units Targeted Capital Allocation 10% 30% • GDA – 95% capital allocation 15% • 90% of units Unit Buyer 57% Type Profile • 100% of active developments 70% • 90% of all units 18% contracted by the end of 2015 FTB (from €250k – €375k) Capital Houses Units Allocation Trade Up / M
Slide 20: Buyer Profile
# Land Bank Units * Our Land Bank and Addressable Market 4,000 3,100 2,400 2,200 1,400 800 ASP (incl. €250k - €300k €300k - €350k €350k - €400k €400k - €450k €450k - €500k €500k + VAT) Cumulative % of our land bank* addressing these price points 29% 51% 67% 77% 83% 100% FTB– salary range €65k to €90
Slide 21: Sales Absorption Rates
Sales Absorption Rates Housing Site Sales Autumn selling season • Average 2019 year to date weekly sales rate of 2.87 • Positive start to season. 11 site reopenings with continuing units per active housing sales outlet (2018: 2.78 strong demand for our competitively priced starter homes units; 2017:
Slide 22: The Irish Multifamily PRS Market – H1 2019
The Irish Multifamily PRS Market – H1 2019 Positive Backdrop • 43% of all real estate investment in H1 2019 1000 € 930m € 898m 6.0% 5.0% • Current residential yields 3.85% and rental 800 inflation 4.4% 600 4.0% 3.85% 3.0% • There are only c. 1,500 properties currently 400 available to rent in Dublin
Slide 23: Exceptional Design and Planning
Exceptional Design and Planning Land Bank Planning Status Efficient Planning Processes • The Strategic Housing Development (SHD) and 2% Strategic Development Zones (SDZ) processes covers 29% our entire residentially zoned land bank: 31% No Planning SHD Process SDZ Process Risk Full Planning Permissi
Slide 24: Outlook
05 Outlook Shackleton Park, Lucan
Slide 25: Outlook
Outlook Up to 9 new site commencements in Further multifamily PRS the next 6 – 12 months sales expected across both and strong forward apartments and housing sales pipeline c. €500m cash generation c. 1,100 closed sales in (or c. 60% of market cap) 2019 and a gross margin of by the end of 2022 c. 19
Slide 26: Appendices
06 Appendices Churchfields, Ashbourne
Slide 27: Macroeconomic Drivers for Cairn
Macroeconomic Drivers for Cairn Supply Population 19.4k new homes Annual Housing +1.3% (+ 64,500) in year to H1 2019 – only Demand in the year to April 2019 14.4k in multi unit ESRI Estimate (3x EU average) developments of which 35,000 10k are in the GDA GDA annual demand – c. 20k Employment Shortfa
Slide 28: Well Located Housing Sites
Well Located Housing Sites c. 10,800 units with excellent public Active Units transport links and no planning risk 1 Parkside, Malahide Road 395 2 Churchfields, Ashbourne, Co. Meath 397 3 Elsmore, Naas, Co. Kildare 500 4 Shackleton Park, Lucan 756 5 Glenheron, Greystones, Co. Wicklow 426 6 Mariavill
Slide 29: Competitively Priced Starter Homes
Competitively Priced Starter Homes Starter Homes Priced to Sell at Volume • Our starter homes closed sales in H1 2019 were all priced between €275,000 and €375,000 (incl. of VAT) House Price Cairn Land Purchaser • The ASP of our 214 starter homes sales in the period Bands (€’000) Bank Units was €343
Slide 30: Prime Apartment Sites
Prime Apartment Sites c. 4,600 units in and near Dublin City Active PRS Opportunity Units 1 Marianella, Rathgar, Dublin 6W 208 3 SCALE 2 Donnybrook Gardens, Donnybrook, Dublin 4 86 1 km 3 Griffith Wood, Griffith Avenue, Dublin 9 385 4 Rostrevor Place, Marianella, Rathgar, Dublin 6W 108 5 The Quarter
Slide 31: GDA Undersupply – Lagging Demand
GDA Undersupply – Lagging Demand Cairn GDA Supply Forecast – Structural Imbalance to Remain GDA – 12 Months to June 2019 22,000 GDA Demand – 20,000 units 10,879 completions - 920 (8%) one off houses 19,000 Only 2,198 apartments; 7,761 new homes in multi- Estimated Undersupply 2019 – 2023: c. 27,500
Slide 32: H1 2019 Multifamily PRS Transactions
H1 2019 Multifamily PRS Transactions No. of Reported Property Buyer Type Status Apartments Price XVI Portfolio (predominantly in Dublin) 815 REIT Existing Stock Completed €285m Project Turner (Dublin, Cork & Galway) 600 International institutional investor Existing Stock Completed €150m Fairway, Cua
Slide 33: 2019 Land Market Transactions
2019 Land Market Transactions Acres Units Reported Seller Seller Buyer (estimate) (estimate) Price DIT Kevin Street, Dublin 2 Technological University Dublin Private Homebuilder 3.6 Unknown €140m Cherrywood SDZ, South Co. Dublin Private Equity Private Homebuilder 118 2,600 €120m John Player Site, Du
Slide 34: Positive Outlook for Affordability
Positive Outlook for Affordability Wage inflation outstripping Consumer Price Index Strong labour market 437k new jobs created in Ireland since 2012 = 5.0% 2,400 16% 2,300 broader buyer pool 14% 4.0% 2,200 2,100 12% 3.0% 2,000 10% 1,900 8% 2.0% 1,800 1,700 6% 1.0% 1,600 4% 2007Q1 2007Q3 2008Q1 2008Q
Slide 35: Demographics Driving Demand
Demographics Driving Demand • Strong population growth is being driven by the highest birth rate in Europe (13.5 births for every 1,000 of population), one of the highest household formation sizes in Europe (2.8x compared to 2.3x average) and inward migration • Our population will reach 5m in 2020 (
Slide 36: Mortgage Market Conditions
Mortgage Market Conditions Two entrants to a more competitive market Drawdowns by value growing €’m Total Loans +13.8% 1,400 14,000 1,200 12,000 1,000 10,000 800 8,000 600 6,000 400 4,000 200 2,000 0 - ? Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 2018 2019
Slide 37: Cairn Brands
CAIRN DESIGNED FOR LIVING BUILT FOR LIFE. Cairn Brands GLENHERON. J Park Side THE QUARTER
Slide 38: Disclaimer
Disclaimer This presentation document (hereinafter “this document”) has Certain information contained herein constitutes “forward- been prepared by Cairn Homes plc (“Cairn” or the “Company”). looking statements”, which can be identified by the use of terms such as “may”, “will”, “should”, “expect”,
Slide 39: www.cairnhomes.com
www.cairnhomes.com 7 Grand Canal Grand Canal Street Lower Dublin 2 Ireland D02 KW81 +353 1 696 4600 investors@cairnhomes.com Glenheron, Greystones