Crest Nicholson Holdings Plc · LSE:CRST
Crest Nicholson — H1 2024 Earnings Presentation
35 slides from Crest Nicholson's earnings presentation, Jun 13, 2024
Slide 1: Interim Results 2024
KEGWORTH GATE DERBY Crest Nicholson Holdings plc INTERIM RESULTS 2024 13 June 2024
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may include statements that are, or may be deemed to be, ‘forward-looking statements’. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ‘believes’, ‘estimates’
Slide 3: Welcome
WELCOME IAIN FERGUSON Chairman 3 INTERIM RESULTS 2024 June 2024
Slide 4: Agenda
AGENDA PETER TRUSCOTT • INTRODUCTION & OVERVIEW BILL FLOYDD • HY24 PERFORMANCE • FINANCIAL UPDATE • FY24 OUTLOOK PETER TRUSCOTT • MARKET OVERVIEW • OPERATIONAL UPDATE Q&A IAIN FERGUSON INTRODUCTION: MARTYN CLARK, CEO DESIGNATE BILHAM LAWN 4 INTERIM RESULTS 2024 June 2024 ASHFORD
Slide 5: Introduction & Overview
INTRODUCTION & OVERVIEW PETER TRUSCOTT Chief Executive BLYTHE VALLEY 5 INTERIM RESULTS 2024 June 2024 SOLIHULL
Slide 6: HY24 Performance Overview
HY24 PERFORMANCE OVERVIEW • Trading conditions, a mixed picture − Base rate stable − Rate cut expectation • Transaction levels aligned with expectations − SPOW rate 0.47 − Pricing remains stable • Highly selective on land acquisition in tightened land market − Strong land portfolio − Short-term focu
Slide 7: HY24 Results
HY24 RESULTS BILL FLOYDD Group Finance Director 7 INTERIM RESULTS 2024 June 2024
Slide 8: Income Statement
INCOME STATEMENT £m HY24 HY23 Revenue 257.5 282.7 • Revenue down 9% reflecting weak forward order book coming into the year Adjusted gross profit1 32.5 50.6 Adjusted gross margin1 13.6% 17.9% • Gross profit impacted by flat sales prices and mix Adjusted operating profit1 6.2 22.1 − Actively managing
Slide 9: Sales Metrics
SALES METRICS HY24 HY23 % Change Outlets (average) 45 48 -6.3% • Lower outlets due to planning constraints SPOW (open market) 0.47 0.54 -13.0% • Full year SPOW rate of 0.45 on track Home completions (units) 1,2 • Pricing remains stable Open market (private) 435 532 -18.2% Bulk 3 177 115 53.9% • Canc
Slide 10: Farnham: Progress on Track
FARNHAM PROGRESS ON TRACK Outstanding work At 17 Jan 2024 At 7 June 2024 Apartment 2 buildings 1 remaining buildings remaining (completion: July 2024) Grade 1 listed Preliminary stage Final sign off: June 2024 building Road/Pavement Not started Delayed but to complete in August Landscaping Not start
Slide 11: Farnham: Grade Building Works Nearing Completion
FARNHAM GRADE 1 BUILDING WORKS NEARING COMPLETION Jan 2024 Jan 2024 June 2024 June 2024 11 INTERIM RESULTS 2024 June 2024
Slide 12: Farnham: External Building Works Completed
FARNHAM EXTERNAL BUILDING WORKS COMPLETED Jan 2024 Jan 2024 June 2024 June 2024 12 INTERIM RESULTS 2024 June 2024
Slide 13: Farnham: Site Overview
FARNHAM SITE OVERVIEW June 2024 13 INTERIM RESULTS 2024 June 2024
Slide 14: Completed Sites Provision
COMPLETED SITES PROVISION • Scope of review • Review recently concluded − Initial review covered four key sites and sites − Extension of scope has resulted in higher costs completed prior to FY19 than previously indicated − Subsequently extended to cover all − One-off costs estimated at £31.4m compl
Slide 15: Exceptional Items
EXCEPTIONAL ITEMS £m HY24 HY23 Fire remediation Adjusted cost of sales • £8.9m charge related to build costs inflation Combustible materials charge (8.9) (1.4) and scope of work Combustible materials credit 4.4 10.0 • £4.4m recovered from third parties Net combustible materials (charge) /credit (4.5
Slide 16: Current Land Portfolio
CURRENT LAND PORTFOLIO BALANCE IN LOW MARGIN SITES REDUCING • Focus on working through low margin sites Plots 1 31,959 33,752 GDV (£bn) 11.6 12.2 • Share of portfolio with low margins reduced from 8% to 5% ASP 1 (£k) 367 364 • Sub 10% margin revenue in FY24 similar to FY23 and halving in FY25 Short-
Slide 17: Balance Sheet
BALANCE SHEET NET DEBT BETTER THAN EXPECTATIONS Balance sheet – key items (£m) HY24 HY23 LAND CREDITOR ROLL OUT (£m) Inventories 1,181.9 1,108.1 100 Land creditors (175.9) (148.2) Net (debt) / cash (9.4) 66.2 80 Net assets 803.1 876.6 60 • Net asset reduction from completed site costs and dividend p
Slide 18: Cash Flow
CASH FLOW Operating cash flow (£m) HY24 HY23 Key HY24 cash flow items are: PAT (23.4) 21.1 • Dividend of £29.5m (HY23: £29.5m) Non cash items 2.2 14.6 Operating cash before working capital charges (21.2) 35.7 • Working capital £45.8m vs £201.1m prior year Movement in inventories (17.8) (120.0) • FY2
Slide 19: FY24 Outlook
FY24 OUTLOOK GUIDANCE FY24 Completions 1,800 – 1,900 units c. 25% affordable c. 75% open market and bulk Outlets c. 45 SPOW 0.45 Build cost inflation c. flat Net finance costs £8 -9m Adjusted profit before tax1 £22m- £29m Net debt (£40m) – (£60m) 1 Including one-off completed site charge of £5.9m 19
Slide 20: H1 Operational Summary
H1 OPERATIONAL SUMMARY • Improvement in operational disciplines • Completed sites review concluded • Farnham and low margin sites being progressed to conclusion • Strong land portfolio • Focus on balance sheet discipline Good progress enabling stronger performance as market conditions improve 20 INT
Slide 21: Market Overview
MARKET OVERVIEW PETER TRUSCOTT Chief Executive 21 INTERIM RESULTS 2024 June 2024
Slide 22: Market Context
MARKET CONTEXT FY24 OPERATING ENVIRONMENT • Political and economic environment − UK General Election imminent − Global issues persist • Land and planning − Slowing new site releases pose a sector- wide challenge for outlets − Approvals process remains slow − Nutrient neutrality continues to impact •
Slide 23: Operational Update
OPERATIONAL UPDATE PETER TRUSCOTT Chief Executive PERRYBROOK 23 INTERIM RESULTS 2024 June 2024 GLOUCESTER
Slide 24: Progress on Priorities FY24
PROGRESS ON PRIORITIES FY24 OPERATIONAL FOCUS • To return to five star customer service rating − Consistently tracking above 90% since February last year • Maintain flexible and efficient operating platform − Improvement in operation rigour and sharpened focus on efficiency • Progress made in conver
Slide 25: Current Land Portfolio
CURRENT LAND PORTFOLIO SUPPORT FUTURE GROWTH • Sufficient land at advanced planning stages LAND PLANNING PROFILE GM EVOLUTION − Good visibility for FY25 and beyond • Land market remains tight • Ongoing focus on strategic land bank pull through FY24 FY25 FY26 FY27 Controlled with / without consent Ow
Slide 26: Sustainability & Social Value
SUSTAINABILITY & SOCIAL VALUE GOOD PROGRESS ON TARGETS • On track with environmental targets, including good progress in reducing greenhouse gas emissions • Advancing our preparation for the Future Homes Standard, with some sites implementing air source heat pumps alongside other technologies • Main
Slide 27: Summary
SUMMARY PETER TRUSCOTT Chief Executive ACKENDER HILL 27 INTERIM RESULTS 2024 June 2024 ALTON
Slide 28: Summary
SUMMARY • Operationally good progress made in the half • Net debt better than expectations • Effective resolution of legacy issues − Roadmap being rolled out • Ability to capitalise on higher margin land portfolio in future years • Well positioned for future growth − High quality short term land por
Slide 29: Q&A
KEGWORTH FULLERS GROVE GATE DERBY WANTAGE Q&A
Slide 30: Wrap Up
WRAP UP IAIN FERGUSON Chairman 30 INTERIM RESULTS 2024 June 2024
Slide 31: Introduction: Martyn Clark, CEO Designate
INTRODUCTION MARTYN CLARK Chief Executive Officer, designate UNION PLACE 31 INTERIM RESULTS 2024 June 2024 DAVENTRY
Slide 32: Appendix
APPENDIX UNION PLACE 32 INTERIM RESULTS 2024 June 2024 DAVENTRY
Slide 33: Income Statement
INCOME STATEMENT £m (unless otherwise stated) HY24 HY23 % Change Revenue 257.5 282.7 (8.9) Cost of sales (225.0) (232.1) Adjusted gross profit 1 32.5 50.6 (35.8) Adjusted gross profit margin 1 12.6% 17.9% Net administrative expenses (26.1) (28.3) Net impairment losses on financial assets (0.2) (0.2)
Slide 34: Balance Sheet
BALANCE SHEET As at 30 April 2024, £m HY24 HY23 Non-current assets 70.7 80.3 Inventories 1,181.9 1,108.1 Cash and cash equivalents 88.7 163.6 Other current assets 117.8 110.3 Total assets 1,459.1 1,462.3 Non-current interest-bearing loans + borrowings (83.9) (97.4) Other non-current liabilities (128
Slide 35: Cash Flow (Full Version)
CASH FLOW (FULL VERSION) £m HY24 HY23 Operating (loss) / profit before changes in working capital and provisions (21.2) 35.7 Increase / (decrease) in trade and other receivables (7.8) 34.2 Increase in inventories (17.8) (120.0) Decrease in trade, other payables and provisions (24.4) (114.6) Contribu
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