Berkeley Group Holdings plc · LSE:BKG
Berkeley — The Berkeley Group Holdings — FY2017 Earnings Presentation
31 slides from Berkeley's earnings presentation, Jun 21, 2017
Slide 1: Full Year Results Presentation, Year ended 30th April 2017
The Berkeley Group Holdings plc Full Year Results Presentation Year ended 30th April 2017 21st June 2017
Slide 2: Preliminary Results Presentation: Format of Presentation
Preliminary Results Presentation Format of Presentation Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Highwood, Horsham, West Sussex
Slide 3: Tony Pidgley CBE, Chairman
; Berkeley soy Group Tony Pidgley CBE Chairman Berkeley StEdward StGeorge StJames StWiliam —StJoseph Me
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 - Inventories - Creditors - Financing - Land holdings
Slide 6: Summary of Performance
Finance Review Summary of Performance Year ended 30 Apr 2017 30 Apr 2016 Change (£) Change (%) Profit before tax £812.4m £530.9m +£281.5m +53.0% EPS – Basic 467.8p 295.8p +172.0p +58.1% EPS – Diluted 451.4p 268.7p +182.7p +68.0% Operating Margin 27.8% 24.5% Return on equity * 41.1% 30.8% * Return on
Slide 7: Summary of Financial Position
Finance Review Summary of Financial Position April 2017 April 2016 Change (£) Change (%) Balance Sheet Shareholders’ funds £2,136.9m £1,812.8m +£324.1m +17.9% Closing net cash (£285.5m) (£107.4m) +£178.1m Capital Employed £1,851.4m £1,705.4m +£146.0m +8.6% Net asset value per share 1,556p 1,314p +24
Slide 8: Future potential share dilution
Finance Review Future potential share dilution Vesting No. (million) Approved by shareholders Date Shares in issue at 1 May 2016 (net of Treasury and EBT shares) 137.9 September 2016 2011 LTIP vestings – Tranche 1 1.8 September 2011 Share buy-backs – June 2016 (0.9) February 2016 Share buy-backs – S
Slide 9: Homes Completed and ASP – Group
Finance Review Homes Completed and ASP – Group Homes 3,905 3,712 3,742 3,776 3,355 2,294 2,076 1,927 1,983 2,091 1,829 1,785 1,685 1,448 1,372 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY 2012/13 2013/14 2014/15 2015/16 2016/17 Berkeley Group Average Selling Price £655k £697k £675k £649k £539k £575k
Slide 10: Homes Completed and ASP – Joint Ventures
Finance Review Homes Completed and ASP – Joint Ventures Homes 240 251 230 203 190 162 132 144 86 78 66 71 61 32 34 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY 2012/13 2013/14 2014/15 2015/16 2016/17 St Edward Average Selling Price � £1,464k £1,484k £1,520k £1,380k £1,329k £1,321k £1,235k £1,229k £1
Slide 11: Income Statement
Finance Review Income Statement Year ended Apr 2017 Apr 2016 Change Change £m £m £m % Revenue 2,723.5 2,047.5 +676.0 +33.0% Gross profit 939.8 34.5% 701.7 34.3% +238.1 +33.9% Operating expenses (183.6) 6.7% (199.8) 9.8% +16.2 -8.1% Operating profit 756.2 27.8% 501.9 24.5% +254.3 +50.7% Net finance c
Slide 12: Abridged Cash Flow
Finance Review Abridged Cash Flow Year ended April 2017 April 2016 £m £m Profit before tax 812.4 530.9 Increase in inventory (227.3) (602.0) (Decrease) / increase in customer deposits (130.9) 184.9 Other working capital movements 125.1 (21.2) Net investment in working capital (233.1) (438.3) Net rec
Slide 13: Abridged Balance Sheet
Finance Review Abridged Balance Sheet April 2017 Movements April 2016 £m £m £m Non current assets - Intangible assets 17.2 - 17.2 - Investment in JVs 135.0 -15.0 150.0 - Deferred tax assets 59.4 -12.5 71.9 - Property, plant and equipment 22.8 -0.7 23.5 Total non current assets 234.4 -28.2 262.6 Inve
Slide 14: Inventories
Finance Review Inventories April 2017 Movements April 2016 £m £m £m Land not under development 414.1 +30.0 384.1 Work in progress: Land cost 919.0 -56.8 975.8 1,333.1 -26.8 1,359.9 Work in progress: Build cost 2,062.7 +184.6 1,878.1 Completed units 87.6 +69.5 18.1 Inventories 3,483.4 +227.3 3,256.1
Slide 15: Creditors
Finance Review Creditors April 2017 Movements April 2016 £m £m £m Trade creditors and accruals 760.6 +182.2 578.4 Provision for liabilities 99.9 +11.4 88.5 Deposits and on account receipts 974.9 -130.9 1,105.8 Land creditors 142.9 -31.8 174.7 Current tax liability 117.6 +39.4 78.2 Total liabilities
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 April 2017 Variance April 2016 Owned 33,771 -15 33,786 Contracted 12,580 +3,508 9,072 Plots 46,351 +3,493 42,858 Sales value £21.8bn +£1.0bn £20.8bn Average selling price (ASP)* £520k -£9k £529k Average plot cost £62k -£1k £63k Land cost % 13.2% +0.3% 12.9% Gross margin
Slide 18: Rob Perrins, Chief Executive
; Berkeley soy Group Rob Perrins Chief Executive Berkeley StEdward StGeorge StJames. StWiliam —StJoseph me
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 � Profit before tax up 53.0% to £812.4 million � Net assets of £2.1 billion and net cash of £285.5 million � Cash due on forward sales £2.74 billion (2016: £3.25 billion) � 3.8% growth in gross margin in land holdings to £6.4 billion (2016: £6.1 bil
Slide 21: Macro back-drop and market fundamentals
Strategic Review Macro back-drop and market fundamentals Global Political and Economic Instability UK Political Backdrop � Impact of the recent UK election result on domestic policies and Brexit negotiations remains to be seen � New starts in London falling – down some 30% from a year ago � Governme
Slide 22: The Market
Strategic Review The Market Sales � Including the disruption either side of the EU Referendum sales in 2016/17 were 25% down on 2015/16 � The decline has now fully reversed with return to more normal stable market conditions � Investor mix reflects impact of taxation policy on UK investors and curre
Slide 23: Land and Build Investment - Inventories
Strategic Review Land and Build Investment - Inventories Inventories £4,000m £3,483m £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 30 Apr 17 Land
Slide 24: Land and Build Investment – Delivery
Strategic Review Land and Build Investment – Delivery London South Total Delivery of Developments: In construction 42 75% 16 47% 58 74% Not yet in construction 14 25% 18 53% 32 36% Total developments 56 100% 34 100% 90 100% Proportion with planning (by sites) 82% 76% 80% Number of plots 38,507 83% 7
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 � Five developments in the land holdings Schemes: � 190 Strand (opposite) � Green Park, Reading � Kensington High Street & Kensington Row � Stanmore � Millbank � Wallingford, Oxfordshire
Slide 28: Joint Ventures: St William
Strategic Review Joint Ventures St William � Joint venture with National Grid � Eleven developments in the land holdings Schemes: � Prince of Wales Drive, Battersea (opposite) � Ascot Gasworks � Borehamwood Gasworks � Fulham Gasworks � Hemel Hempstead Gasworks � Hertford Gasworks � Hornsey Gasworks
Slide 29: Long Term Strategic Plan
Strategic Review Long Term Strategic Plan Milestone Shareholder Return Return Mechanism £/share Value £’m Dividends Buy-backs To 30th September 2016 6.34 854.9 854.9 - To 30 March 2017 1.00 138.8 117.7 21.1 By 30 September 2017 1.00 138.8 * 23.3 Returns – announced 8.34 1,132.5 972.6 44.4 By 30 Sept
Slide 30: Guidance
Strategic Review Guidance Performance Guidance � £7.34 per share paid to date � Remaining £8.00 per share (£1.1 billion) to be delivered Shareholder Returns � £1.00 per share (£138.8 million) announced to be paid by evenly over next 4 years through combination of dividends 30 September 2017; of whic
Slide 31: Questions
Questions Tony Pidgley CBE Chairman Richard Stearn Finance Director Rob Perrins Chief Executive Questions Chelsea Creek
The Berkeley Group Holdings — FY2017 Earnings Presentation on 6ix