Crest Nicholson Holdings Plc · LSE:CRST
Crest Nicholson — H1 2022 Earnings Presentation
23 slides from Crest Nicholson's earnings presentation, Jun 14, 2022
Slide 1: Half Year Results 2022
KINGSMEAD FAVERSHAM Crest Nicholson Holdings plc HALF YEAR RESULTS 2022 14 June 2022
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: Agenda
AGENDA PETER TRUSCOTT • HALF YEAR SUMMARY DUNCAN COOPER • FINANCIAL REVIEW PETER TRUSCOTT • MARKET OVERVIEW • STRATEGY UPDATE AND OUTLOOK Q&A KINGS MEADOW MILTON KEYNES 3 HALF YEAR RESULTS 2022 June 2022
Slide 4: Half Year Summary
HALF YEAR SUMMARY STRONG FIRST HALF OF TRADING Excellent financial and operational performance Improved returns with strong balance sheet Retained five-star customer satisfaction rating Expansion in Yorkshire and East Anglia on track New science-based sustainability targets announced FY2
Slide 5: Financial Review
FINANCIAL REVIEW DUNCAN COOPER GROUP FINANCE DIRECTOR NINE ACRES TIPTREE 5 HALF YEAR RESULTS 2022 June 2022
Slide 6: Income Statement
INCOME STATEMENT EARNINGS RECOVERY ON TRACK £m HY22 HY21 % Change Revenue 364.3 324.5 12.3 Adjusted gross profit up 180bps Adjusted cost of sales 1 (286.8) (261.2) Admin expenses remain a focus Adjusted gross profit 1 77.5 63.3 22.4 − £2.5m JRS repayment in HY21 Adjusted gross profit margin 1 21
Slide 7: Sales Metrics
SALES METRICS DEMAND REMAINS ROBUST ACROSS ALL TENURES HY22 HY21 % Change Outlets in line with HY21 Outlets (average) 58 57 1.8 − Planning remains challenging SPOW (open market) 0.72 0.69 4.3 SPOW rate remains strong Home completions (units) − Consistent execution across all Open market (private
Slide 8: Exceptional Items
EXCEPTIONAL ITEMS COMBUSTIBLE MATERIALS REMEDIATION PROGRAMME Guided market previously to £80–120m range in April 2022 £105.0m net combustible materials charge − £70.3m for Building Safety Fund projects (£85.0m total) − £34.7m for existing projects, 30 year look back £146.1m total provision; e
Slide 9: Operating Margin Recovery
OPERATING MARGIN RECOVERY ON TRACK WITH OUR FIVE YEAR TARGETS OPERATING MARGIN Depleting poor legacy sites and bringing new land in FY17 – FY26e − Old Vinyl, Hayes completed in H1 25% − Sherborne Wharf, Birmingham to complete in H2 Phase 1 Phase 2 − Brightwells Yard, Farnham in FY22 to FY25 20% −
Slide 10: Balance Sheet
BALANCE SHEET SET FOR GROWTH, RETURNS AND RESILIENCE Net cash at £173.3m (HY21: £130.4m) LAND CREDITOR ROLL OUT BY YEAR (£m) 160 Net debt including land creditors at £6.6m (HY21: £48.1m) 140 Average net cash at £98.6m (HY21: £80.5m) 120 100 Pension surplus under IAS 19 at £35.4m (HY21: £8.6m
Slide 11: Cash Management
CASH MANAGEMENT RETAINED FOCUS ON CASH AND DISCIPLINED CAPITAL ALLOCATION £m HY22 HY21 Change Exceptional charge impact Operating (loss)/ profit before changes in working capital, provisions, and contributions to retirement benefit obligations (54.5) 30.0 (84.5) − Profit and growth of provision De
Slide 12: Current Land Portfolio
CURRENT LAND PORTFOLIO INCREASED ACTIVITY IN COMPETITIVE LAND MARKET Short-term land Plots 1 36,985 37,813 1,096 home completions GDV (£bn) 11.8 12.3 2,204 plots added since FY21 ASP (£k) 326 330 − 558 plots at Stefen Way, Daventry Short-term − 500 plots at Charlotte Avenue, Bicester land 14,677
Slide 13: Summary
SUMMARY Strong first half of trading Forward sales of 2,891 units and £814.9m GDV Net cash at £173.3m provides flexibility Five-year financial targets on track − ROCE up to 18.3% − Adjusted operating margin up to 15.0% FY22 APBT to be in range of £135-140m MORTON PARK MILTON KEYNES 13 HALF
Slide 14: Market Overview and Strategy Update
MARKET OVERVIEW AND STRATEGY UPDATE PETER TRUSCOTT CHIEF EXECUTIVE SEVINGTON LAKES 14 HALF YEAR RESULTS 2022 June 2022 FINBERRY
Slide 15: Market Overview
MARKET OVERVIEW Current trading − Robust lead indicators − Sales rate in line with seasonal expectation − Sales price inflation continues to offset build cost inflation Sector challenges − Materials availability and pricing − Competitive land market − Planning and regulatory change Strong long
Slide 16: Five-Year Financial Targets
FIVE-YEAR FINANCIAL TARGETS FY24 TARGETS ON TRACK HY22 FY24 FY26 Targets to reflect 2-phase growth agenda HOME COMPLETIONS (UNITS) 1,096 >3,000 >4,200 − Aspiration to deliver >4,200 units by FY26 TRADING DIVISIONS 5 5+ 8 Growing partnerships business − Significant market opportunity REVENUE COMP
Slide 17: Good Progress Against Strategy
GOOD PROGRESS AGAINST STRATEGY STRONG FUNDAMENTALS TO SUPPORT GROWTH Margin and ROCE recovery on track Volume growth Active in land market at targeted returns Expansion plan on track Standardised house types The Roydon The Chesham c. 75% of private open market houses in FY22 ALCONBURY WEALD
Slide 18: Delivering Growth
DELIVERING GROWTH YORKSHIRE AND EAST ANGLIA EXPANSION TAKING SHAPE Yorkshire Northumberland − New office opened in Thorpe Park, Leeds Tyne & Wear − Key leadership appointments now in place Durham Cumbria − Two sites approved for purchase North Yorkshire East Riding East Anglia Lancashire West Yo
Slide 19: Five-Star Customer Service
FIVE-STAR CUSTOMER SERVICE DELIVERING A GREAT CUSTOMER EXPERIENCE Retained five-star customer satisfaction rating Preparing for the New Homes Quality Code Increased social media campaigns and engagement New process for identifying customer after care issues 19 HALF YEAR RESULTS 2022 June 202
Slide 20: Multi Channel Approach
MULTI CHANNEL APPROACH STRATEGIC LAND CAPABILITY Growth in sales to PRS and affordable partners Strong track record in strategic land − Enhanced team capability Recent success to support future growth New opportunities secured 20 HALF YEAR RESULTS 2022 June 2022
Slide 21: Sustainability & Social Value
SUSTAINABILITY & SOCIAL VALUE GOING FURTHER WITH NEW SCIENCE-BASED TARGETS Good progress against 2025 sustainability targets − Reduce scope 1 and 2 carbon intensity by 25% − Reduce waste intensity by 15% − Procure 100% renewable electricity Embedded in business strategy − Strong governance and l
Slide 22: Summary and Outlook
SUMMARY AND OUTLOOK Summary Strong operational and financial performance Clarity on fire safety remediation Good visibility on forward order book Outlook Earnings upgrade for FY22 Five-year targets on track WATERMAN’S GATE ARBORFIELD GREEN 22 HALF YEAR RESULTS 2022 June 2022
Slide 23: Q&A
ST JOHN’S MEAD BURY ST EDMUNDS Q&A
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