Berkeley Group Holdings Plc · LSE:BKG
Berkeley — The Berkeley Group Holdings — FY2020 Earnings Presentation
32 slides from Berkeley's earnings presentation, Jun 17, 2020
Slide 1: Full Year Results Presentation, Year ended 30th April 2020
The Berkeley Group Holdings plc Full Year Results Presentation Year ended 30th April 2020 17th June 2020
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 Kidbrooke Village
Slide 3: Tony Pidgley CBE, Chairman
Tony Pidgley CBE Chairman Berkeley | StEdward | StGeorge | StJames | StWilliam | StJoseph tS; Berkeley y 4 3
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 - 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 April 2020 30 April 2019 Change £ Change % Profit before tax £503.7m £775.2m -£271.5m -35.0% EPS – Basic 324.9p 481.1p -156.2p -32.5% EPS – Diluted 313.4p 469.9p -156.5p -33.3% Operating margin 24.5% 26.0% Pre-Tax Return on Equity * 16.6% 27.9% (*)
Slide 7: Summary of Financial Position
Finance Review Summary of Financial Position As at As at Change £ Change % 30 April 2020 30 April 2019 Balance Sheet Shareholders’ funds £3,101.6m £2,963.3m +£138.3m +4.7% Closing net cash (£1,138.9m) (£975.0m) -£163.9m +16.8% Capital employed £1,962.7m £1,988.3m -£25.6m -1.3% Net asset value per sh
Slide 8: Homes Completed and ASP - Group
Finance Review Homes Completed and ASP - Group Homes 3,776 3,802 3,678 3,698 2,723 2,091 2,058 2,190 2,027 1,685 1,744 1,671 1,488 1,389 1,334 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY 2015/16 2016/17 (restated) 2017/18 (restated) 2018/19 2019/20 Average Selling Price £713k £721k £731k £725k £740
Slide 9: Homes Completed and ASP – Joint Ventures (St Edward & St William)
Finance Review Homes Completed and ASP – Joint Ventures (St Edward & St William) Homes 435 372 240 258 261 191 208 204 212 223 162 164 78 67 57 H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY H1 H2 FY 2015/16 2016/17 (restated) 2017/18 (restated) 2018/19 2019/20 St Edward St Edward St Edward St Edward & St Will
Slide 10: Income Statement
Finance Review Income Statement Year ended 30 April 2020 30 April 2019 Change Change £m £m £m % Revenue 1,920.4 2,957.4 -1,037.0 -35.1% Gross profit 637.4 33.2% 926.2 31.3% -288.8 -31.2% Operating expenses (167.7) 8.7% (157.8) 5.3% -9.9 +6.3% Operating profit 469.7 24.5% 768.4 26.0% -298.7 -38.9% Ne
Slide 11: Abridged Cash Flow
Finance Review Abridged Cash Flow Year ended 30 April 2020 30 April 2019 £m £m Profit before tax 503.7 775.2 (Increase) / decrease in inventory (440.2) 181.9 Increase/ (decrease) in customer deposits 97.4 (208.9) Other working capital movements (mainly land creditors) 267.7 49.0 Net (increase) / red
Slide 12: Abridged Balance Sheet
Finance Review Abridged Balance Sheet As at 30 April 2020 Movements As at 30 April 2019 £m £m £m Non-current assets - Intangible assets 17.2 - 17.2 - Investment in joint ventures 261.8 -112.9 374.7 - Deferred tax assets 53.6 +7.8 45.8 - Right-of-use assets 2.5 +2.5 - - Property, plant and equipment
Slide 13: Inventories
Finance Review Inventories As at As at 30 April 2020 Movements 30 April 2019 £m £m £m Land not under development 519.7 +124.5 395.2 Work in progress: Land cost 907.9 +101.2 806.7 1,427.6 +225.7 1,201.9 Work in progress: Build cost 1,987.8 +209.8 1,778.0 Completed units 139.5 +4.7 134.8 Total invento
Slide 14: Creditors
Finance Review Creditors As at As at 30 April 2020 Movements 30 April 2019 £m £m £m Trade creditors and accruals 775.6 -41.2 816.8 Provision for liabilities 114.9 +35.8 79.1 Deposits and on account receipts 783.5 +97.4 686.1 Land creditors 372.7 +280.1 92.6 Lease liability 2.5 +2.5 - Total liabiliti
Slide 15: Financing
Finance Review Financing Banking Facilities GROUP ST WILLIAM Amount: £750 million £360 million Term: £300 million (fully drawn) N/A RCF: £450 million (£200 million drawn) £360 million Maturity: November 2023 March 2023 (option to extend by further two years in one year increments)
Slide 16: Land Holdings
Finance Review Land Holdings As at As at 30 April 2020 Variance 30 April 2019 Owned 50,558 +8,919 41,639 Contracted 7,855 -5,461 13,316 Plots 58,413 +3,458 54,955 Sales value £23.7bn +£1.1bn £22.6bn Average selling price (ASP)* £473k +£1k £472k Average plot cost £45k -£6k £51k Land cost % 11.0% -1.5
Slide 17: Rob Perrins, Chief Executive
Rob Perrins Chief Executive Berkeley | StEdward | SiGeorge | SLlames | StJoseph | Stllam BB | £3 Berkeley
Slide 18: Initial Covid-19 Operational Response (1)
Strategic Review Initial Covid-19 Operational Response (1) Unprecedented operational challenge First priority has been the health, safety and well-being of our people, supply chain and customers Human tragedy with potentially profound economic consequences Construction Sites Quickly adapted si
Slide 19: Initial Covid-19 Operational Response (2)
Strategic Review Initial Covid-19 Operational Response (2) Marketing Suites Marketing suites closed from 24 March and re-opened from 16 May with clear policies to ensure social distancing is enforced Transition to use of technology to support sales and completions Offices Office based employee
Slide 20: Summary of Performance and Financial Strength
Strategic Review Summary of Performance and Financial Strength 2019/20 Performance Pre-tax profits of £504 million exceeded our initial expectations going into lockdown of £475 million In line with guidance at start of the year which was for profit to fall by one third Transition from Central
Slide 21: Long-term Regeneration Sites in Land Holdings
Strategic Review Long-term Regeneration Sites in Land Holdings Berkeley is delivering over 25 of the largest regeneration schemes in London and the South-East
Slide 22: Long-Term Purpose and Strategy
Strategic Review Long-Term Purpose and Strategy Purpose Berkeley’s purpose is to build homes, strengthen communities and improve lives Sustained commercial success enables enduring contributions to society, the economy and the natural world Continued investment in unique operating model to del
Slide 23: Sales Performance and Market
Strategic Review Sales Performance and Market Sales Performance Three new major development launched in London in the year: Grand Union in Brent, King’s Road Park in Fulham (St William) and Royal Exchange in Kingston Five new developments launched in the South East Increased launch activity an
Slide 24: Land and Planning
Strategic Review Land and Planning Land and Planning Six new developments added to the land holdings, comprising around 4,500 new homes Includes long-term sites in London in Old Kent Road (1,300 homes), Brentford (1,900 homes) and Camden (650 homes) Continued focus on bringing through the pipe
Slide 25: Build
Strategic Review Build Build Build cost inflation continued at around 4% per annum until the end of 2019 From the beginning of 2020 build costs have been neutral As the UK emerges from lockdown we expect further deflationary pressure on costs in the short-term Continuing to work with supply
Slide 26: Land and Build Investment - Delivery
Strategic Review Land and Build Investment - Delivery As at 30 April 2020 London Out of London Total Delivery of Developments: In construction 33 74% 37 70% 70 71% Not yet in construction – owned sites 6 13% 10 19% 16 16% Not yet in construction – contracted sites 6 13% 6 11% 12 13% Total developmen
Slide 27: Land and Build Investment: Sites in London
Land and Build Investment Sites in London *New sites contracted for acquisition during the year
Slide 28: Land and Build Investment: Sites outside of London
Land and Build Investment Sites outside of London *New sites contracted for acquisition during the year
Slide 29: Joint Ventures: St Edward
Strategic Review Joint Ventures St Edward Joint venture with M&G Land holdings of 5,300 homes Five sites in production Wallingford started in the year Hartland Village, Fleet
Slide 30: Joint Ventures: St William
Strategic Review Joint Ventures St William Joint venture with National Grid Land holdings of 10,900 homes Eight sites in production Planning achieved at Poplar and Hertford Bank facilities refinanced and increased to £360 million Prince of Wales Drive, Battersea
Slide 31: Guidance – Financial Strength, Profit and Land Holdings
Strategic Review Guidance – Financial Strength, Profit and Land Holdings Macro-environment Forecasting in these volatile times is inherently difficult given unprecedented nature of macro risks Berkeley will always prioritise protecting its balance sheet ahead of annual profits Financial strength
Slide 32: Guidance – Shareholder Returns and Surplus Capital
Strategic Review Guidance – Shareholder Returns and Surplus Capital Ongoing Shareholder Returns Annual Shareholder Return of £280 million re-affirmed to 2025 Effective annual return of £280 million now equivalent to £2.23 per share; an increase of 11% on the initial £2 per share Berkeley has r
The Berkeley Group Holdings — FY2020 Earnings Presentation on 6ix