Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
Countryside Properties PLCCapital Markets Day – June 2019
Modular Panel Factory, Warrington
HousebuildingPhillip Lyons, CEO Housebuilding
St Mary’s Island, Chatham
2 CAPITAL MARKETS DAY JUNE 2019
331
427
552 595 609
2015 2016 2017 2018 2019 E
Strong Housebuilding growth and improving returns
51.6
68.1
91.4
109.6 113.2
2015 2016 2017 2018 2019 E
16.6%18.0%
21.0%
25.0% 26.0%
2015 2016 2017 2018 2019 E
653783
1,197 1,276 1,312
2015 2016 2017 2018 2019 E
Completions
19% CAGR
22%CAGR
+940bps
Note: Group financials are shown on an adjusted basis to include the proportional contribution of the joint ventures and associate and exclude non-underlying items; 2019 figures based on consensus; 2019 ROCE company estimate
17% CAGR
Adjusted revenue (£m)
Operating profit (£m) Return on Capital Employed
3 CAPITAL MARKETS DAY JUNE 2019
Highly experienced executive team
Phillip
Lyons
David
Everett
Chris
Bladon
Tom
Sherriff
Paul
Beaney
Andrew
Carrington
Rebecca
Cowan
MD Central
• Cambridgeshire
• Bedfordshire
• Hertfordshire
• Buckinghamshire
44 years’ experience
MD East
• Essex
• South East London
MD South
• Kent
• Sussex
• Surrey
MD Millgate
• Buckinghamshire
• Berkshire
• Surrey
• Oxfordshire
• Sussex
FD Housebuilding
• All geographies
MD Strategic Land
• All geographies
21 years’ experience
22 years’ experience
28 years’ experience
16 years’ experience
24 years’ experience
36 years’ experience
Chief Executive
Housebuilding
4 CAPITAL MARKETS DAY JUNE 2019
South East based business without London exposure
Current active site
Future active site
5 CAPITAL MARKETS DAY JUNE 2019
Key sites in Housebuilding
Active site
Future active site
St Michael’s Hurst405 units£163m GDV
Newhall962 units£343m GDV
Beaulieu Park1,300 units£452m GDV
Besselsleigh44 units£25m GDV
Tattenhoe Park309 units£101m GDV
GMV711 units£300m GDV
Burgess Hill
460 units£156m GDV
Langford
1,138 units£276m GDV
North Weald728 units£182m GDV
Whittington Way750 units£246m GDV
Langley800 units£217m GDV
Bourn Airfield3,500 units£720m GDV
Tangmere1,000 units
£207m GDV
Rawreth Road308 units£110m GDV
Royal Hill Park77 units£62m GDV
Springhead183 units£64m GDV
6 CAPITAL MARKETS DAY JUNE 2019
86% of Housebuilding land sourced strategically
Over 15 years visibility of supply
Planning promotion of larger sites
Strategic land held on options
Option costs written off each year
10% discount to open market value
Placemaking expertise to enhance value
Strategic 86%
18,439 plotsOpen Market 14%
2,845 plots
21,284Plots
As at 31 March 2019
7 CAPITAL MARKETS DAY JUNE 2019
Flexibility and embedded value of the strategic land
Short term land bank1 (on balance sheet)
Owned and controlled
GDV of £2.2bn
TNAV of £582m at 31 March 2019
Strategic land2 (off balance sheet)
Options and conditional contracts
GDV of £4.3bn
TNAV of £0m
Embedded gross profit of c. £1bn
Implied TNAV of over £200m3
Conditional Contracts 4%951 plots
Option 66%
13,947 plots
Owned 22%4,681 plots
21,284Plots
1 Short term land bank includes sites owned or controlled through unconditional contracts
2 Strategic land includes sites controlled through conditional contracts and options
3 Calculated as the present value of estimated retained profits
Controlled 8%1,705 plots
Land bank by ownership status
As at 31 March 2019
8 CAPITAL MARKETS DAY JUNE 2019
Strategic land pull through
Strategically sourced land underpins future growth and margin
Limited short term land buying requirement
Balance between strategic and short term land gives flexibility
Strategic plots Other plots
FY19 FY20 FY21 FY23+FY22 FY23
Phasing of land by source
68% 64%
79%87% 89% 93%
0%
20%
40%
60%
80%
100%
Note: Estimates for future years are based on company estimates
9 CAPITAL MARKETS DAY JUNE 2019
Strategic land case study – Bourn Airfield, Cambridge
660 acre site located 7 miles from Cambridge
Allocation secured in Local Plan for 3,500
homes. Outline planning application submitted
Private average selling price £420k
Controlled under Option with 15% discount to
open market value
Option allows for phased drawdown of land
Start on site Q4 2020
12-15 year development pipeline
Insert picture to
support Bourn
3,500Plots
£720mGDV
60%Private
40%Affordable
10 CAPITAL MARKETS DAY JUNE 2019
Developing large strategic sites
Management of margin and ROCE
Infrastructure joint ventures with land owners
or Housing Associations
Land sale strategy principally to Housing
Associations and for alternate uses
Avoid land sales to direct competitors
Enhanced returns through fees and capital
efficiency
Maintain control of the masterplan and design
code
0
10
20
30
40
50
60
70
80
90
FY18 FY19E FY20E FY21E FY22E
£m Revenue Profit
Land sales strategy
Note: Estimates for future years are based on company estimates
11 CAPITAL MARKETS DAY JUNE 2019
515 512 509496
487
Product positioning in Housebuilding
Private Affordable
70% 67% 68% 69%
32%32%33%30%
FY20E FY21EFY19EFY18FY17
HTB region Price cap
up to
April 2021
Price cap
up to
April 2023
East of England £600,000 £407,400
London £600,000 £600,000
South East £600,000 £437,600
1 Estimates for future years are based on consensus 2 Private HPI compares net sales price achieved to budgeted sales price. Bars on the chart represent proportion of H1 delivery by price point.
Private ASP £’0001
Tenure mix1Help to Buy
FY20E FY21EFY19EFY18FY17
68%
31%
55%
31%
12%2%
(2.2%)
1.0%
(3.5%)
(4.4%)
HPI
£601k-
£1m
£1m+£251k-
£600k
<£250k
Private HPI by price point2
12 CAPITAL MARKETS DAY JUNE 2019
Build cost inflation running at 3-4%
for FY19
– Materials
– Labour
– Regulations
Offset by
– Removal of legacy land
– Standard house types
– Standard details
– On site efficiency
Build costs & operational efficiency
The Chaffinch (3 bed detached)
Benefits of standardisation
Reduced time on site
Mitigate labour supply issues
Enhance quality and customer experience
Procurement benefits
13 CAPITAL MARKETS DAY JUNE 2019
Tattenhoe, Milton Keynes
First Housebuilding modular panel
construction in the South of England
Site comprises 309 homes with outline
planning
Secured through Homes England Delivery
Partner Panel selection
Tenure split: 70% private; 30% affordable
Average selling price of £414k
Delivery of 96 homes p.a.
Start on site March 2020
22%Gross Margin
309Units
£100mGDV
35%ROCE
14 CAPITAL MARKETS DAY JUNE 2019
Now at scale and performing well
Excellent visibility from strategic land
Value and flexibility from options
Implied TNAV benefit from strategic land
Geographic footprint expanded around
M25
Managing product to meet areas of
strongest demand
Increased standardisation offsetting
build cost inflation
Housebuilding key takeaways
St Luke’s Park, Runwell
Partnerships opportunitiesIain McPherson, CEO Partnerships South
Beam Park, Rainham
16 CAPITAL MARKETS DAY JUNE 2019
`
69.4%72.1%
77.4%
84.0%
75.4%
30%
40%
50%
60%
70%
80%
90%
2015 2016 2017 2018 2019 E
Outstanding growth and returns in Partnerships
39.6
56.7
79.4
110.6
128.4
2015 2016 2017 2018 2019 E
1,711 1,8742,192
3,019
4,544
2015 2016 2017 2018 2019 E
TARGET
28%CAGR
34%CAGR
Note: Group financials are shown on an adjusted basis to include the proportional contribution of the joint ventures and associate andexclude non-underlying items; 2019 figures based on consensus
285.1 349.9
476.7
634.8
850.4
2015 2016 2017 2018 2019 E
31%CAGR
Completions Revenue (£m)
Operating profit (£m) Return on Capital Employed
17 CAPITAL MARKETS DAY JUNE 2019
Excellent visibility of future Partnerships earnings
Note: As at 31 March 2019
9 years’ supply at current volumes Significant ongoing opportunity
South 41%14,916 plots£3,715m GDV
North 38%
13,809 plots
£2,320m GDV
36,132
plots
Midlands 21%7,407 plots£1,231m GDV
Controlled Land Bank
South 63%52,675 plots
North 13%10,971 plots
Midlands 24%20,558 plots
84,204
plots
Bid Pipeline
18 CAPITAL MARKETS DAY JUNE 2019
Ways in which we procure Partnerships work
Land Bank by source
Other 3%1,173 plots£258m GDV
Direct Negotiation 49%17,710 plots£3,023m GDV
Housing Association 7%2,315 plots£425m GDV
36,132
OJEU 41%14,934 plots£3,560m GDV
OJEU 49%41,149 plots
Direct Negotiation 37%30,858 plots
Housing Association 13%11,092 plots
Other 1%1,105 plots
84,204
Bid Pipeline by source
Note: As at 31 March 2019
19 CAPITAL MARKETS DAY JUNE 2019
Track record in public procurement
Bid structure results in long lead time
Typically 3 to 4 years for larger developments
Timeline not improving on estate regeneration
– Local authority resource constraints
– Resident ballots in London
Competitive landscape largely unchanged
– Housing Associations and contractors still main competition
Strong track record of delivery gives us a competitive advantage
Information
gathering
+12months
+3months
-3months
-12months
-24months
+30months
-9months
-18months
Soft
market
testing
Invitation
to tender
Selectionquestionnaire
Bid submission
Selection ofpreferred bidder
Contract
Planning, S106,
vacant possession
Starton site
Bipartite
negotiations
20 CAPITAL MARKETS DAY JUNE 2019
Clear visibility of medium-term earningsActive site
Future active site
Beam Park1,474 plots£518m GDV
Fresh Wharf421 plots£169m GDV
Rochester Riverside542 plots£221m GDV
Trinity Place96 plots£28m GDV
New Avenue440 plots£174m GDV Elements
868 plots£273m GDV
Dash54 plots£40m GDV
Acton1,187 plots£547m GDV
Tower Court131 plots£68m GDV
Brook Valley Gardens361 plots£134m GDV
Feature 17294 plots£111m GDV
South Oxhey174 plots£72m GDV
Hounslow204 plots£70m GDV
Atelier95 plots£26m GDV
Churchill Gardens407 plots£172m GDV
Peel Centre308 plots£161m GDV
Eastern Quarry
York Road
205 plots
£85m GDV
Cambridge Road
Pike Close
Calverley Gardens
21 CAPITAL MARKETS DAY JUNE 2019
Increased geographic coverageActive site
Future site
Houghton Regis255 units£72m GDV
Bilston Urban Village420 units£72m GDV
Belmont Place82 units£16m GDV
North Leigh Park1,762 units£328m GDV
Abbotsfield283 units£55m GDV
Baberton Grange295 units£61m GDV
The Airfields274 units£49m GDV
Maghull407 units£79m GDV
Sherburn-in-Elmet270 units£35m GDV
Bombardier269 units£43m GDV
22 CAPITAL MARKETS DAY JUNE 2019
16 new sites in ex Westleigh geography
Watnall Road108 units
Eye Green67 units
Grantham, Barrowby Road300 units
Derby, Brook Farm275 units
Annesley60 units
Worksop, Turner Road111 units
Derwent St, Belper80 units
Delves Farm65 units
Lavendar Farm135 units
Houghton Regis336 units
Sherburn-in-Elmet270 units
Bombardier Works800 units
Goldthorpe138 units
Barugh Green125 units
Halfpenny Lane85 units
Spen View Lane122 units
New wins
3,077new plots in H1 19
23 CAPITAL MARKETS DAY JUNE 2019
Increased private mix drives margin improvement
Note: Group financials are shown on an adjusted basis to include the proportional contribution of the joint ventures and associate andexclude non-underlying items; 2019 & 2020 figures based on consensus
PRS
Affordable
Private
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2019 E 2020 E 2021 E 2022 E
24 CAPITAL MARKETS DAY JUNE 2019
Partnerships FY19 Active Sites
0%
20%
40%
60%
80%
100%
0% 5% 10% 15% 20% 25% 30%
50% ROCEROCE
18% Margin
Bilston Urban Village
Eaton Works
Airfields, Deeside
Tower CourtPeel
Alma EstateDollis Valley
ChurchillGardens
Marlowe Road
New Avenue
Rochester Riverside
Fresh Wharf
Acton
Gardens
Maghull
Gateacre Park
Newhaven
Reginald Road
Beam Park
= £100m total site revenue
Note: Size of bubble represents CP share of future revenue, Gross margin is on a to go basis, ROCE is that of the overall development
Note: Developments included are either currently active at H119 or becoming active during FY19
25 CAPITAL MARKETS DAY JUNE 2019
2,517 2,607
3,463
2012 2016 2018
Site improvement over time - Acton Gardens
Note: represents whole site including JV partner share
Units with planning permission
`
£400
£450
£500
£550
£600
£650
£700
Sep 2014 Sep 2015 Sep 2016 Sep 2017 Sep 2018 Sep 2019
Average £psf
-
51
0
129
86117
29
54
231
152 200
137
0
50
100
150
200
250
300
FY14 FY15 FY16 FY17 FY18 FY19
Unit delivery per year
PRS & Affordable
Private
26 CAPITAL MARKETS DAY JUNE 2019
Eastern Quarry, Ebbsfleet Garden Village
Delivery of up to 2,600 units in 11 phases over the
next 12 years
£90m of infrastructure investment from Homes
England
Tenure split: 75% private; 25% affordable
Housing split: 70% houses; 30% apartments
Fastrack Bus Service Site linked to Ebbsfleet
International Rail Station
Site includes construction of a Primary and
Secondary school, two commercial centres and over
seven acres of open space and parks
Key partners:
– Homes England
– Clarion Housing Group
– Henley Camland
– Ebbsfleet Development Corporation
£20mPeak funds
2,600Units
£915mGDV
24%Gross Margin
Q1 20Start on site
Dec 19Phase 1 land
drawdown
Dec 18Site
masterplan approved
Mar 18Contract signed
Q4 20First
completions
Jun 19Area masterplan and design code
approval
Aug 19Phase 1 Planning
submission
2031:Final
completions
27 CAPITAL MARKETS DAY JUNE 2019
Partnerships opportunity continues to
grow
Source of new work expanding
Main challenge to start large
developments on time
Larger sites improve margin over time
Margin growth through tenure mix
change
Growth will come from geographic
expansion
Partnerships key takeaways
Rochester Riverside, Kent
COFFEE BREAK
Modular panel factory updateIan Kelley, CEO Partnerships North
Barrowcroft Green, Standish
30 CAPITAL MARKETS DAY JUNE 2019
Modular panel factory in Warrington now
operational
Total set up costs c.£6m
Anticipated pay back in 2-3 years
Reduces reliance on sub contract labour
Helps secure the supply chain
On site efficiencies
Plans for further innovation/next steps
Countryside Modular Housing
Blackberry Point, Stockport
31 CAPITAL MARKETS DAY JUNE 2019
Countryside Modular Housing: Timeline
128,000 sq ft warehouse and offices located under a mile from M62 and 3 miles from the
M62/M6 junction
Semi-automation to deliver Closed Panel Timber Frame wall units using Homag/Weinman
specialist carpentry machinery
CP
Board
Approval
Feb2018
Aug-Dec2018
Factory
Fit Out
139
Homes
Built
Start
Second
Shift
FY19E
c. 400
Homes
Equipment
Fit Out
Mar2019
Jun2019
2 Shifts
Fully
Operational
FY20E
up to 1500
Homes
Sept2019
Oct2019
Jan2020
Sept2020
32 CAPITAL MARKETS DAY JUNE 2019
Countryside Modular Housing: Manufacturing Process
33 CAPITAL MARKETS DAY JUNE 2019
Modular Panels: Preparation for Delivery
Factory runs all logistics in supply chain
including site delivery and erection
30 employees per shift currently 1 shift
per day
Targeting 4 houses per shift
Accredited to NHBC standards
34 CAPITAL MARKETS DAY JUNE 2019
Modular Housing: Panel Installation – Day 1
Modular panel with windows insulation,
plasterboard, first fix plumbing and
electrical voids
Significant waste reduction
Scaffolding and erection currently sub
contracted
We are moving to direct labour for erection
Day 1 Ground floor walls being installed
Day 1 First floor installation
Day 1 Ground floor complete
35 CAPITAL MARKETS DAY JUNE 2019
Modular Housing: Day 2 and 3
Roof currently delivered as loose
materials and manufactured onsite
Roof and floor components currently
developed at Westframe
Opportunity for roof to be manufactured
offsite including felt and tiles
Further opportunity to develop pod
bathrooms and kitchens
Day 2 Roof construction
Day 3 Roof cassette installation
Day 3 First floor panels installed
36 CAPITAL MARKETS DAY JUNE 2019
Modular Housing: Days 4, 5 and 6
Windows now included in structural
panels
Watertight within a week and ready for
internal trades
Site logistics; slab, scaffold and
finishing trades
Day 4 Soffits, Facias and Fire Socks
Day 6 Roof tiling
Day 5 Roof felted and battened
37 CAPITAL MARKETS DAY JUNE 2019
Countryside Modular Housing – Benefits on Site
Refined methodology - Faster build period -
improved productivity
Improved build quality - factory production
Mitigate against demand inflation of trades
Protect our supply chain
Internal business efficiency and culture change
Health and Safety benefit from less construction
operations on site
Reduced deliveries to site
More efficient Site Management
Automation to Deliver:
38 CAPITAL MARKETS DAY JUNE 2019
Countryside Modular Housing – Economics
Build costs c. 50% of GDV
Modular panels are 25% of
superstructure build cost
Estimated savings of c. 15% compared
with purchase from external supplier
Margin benefit of 1-2% once fully
operational
Mitigating other build cost inflation,
currently running at 3-5% in North and
Midlands
Target build time of 6-8 weeks from slab
to completion across all house types
20%Gross profit50%
Build costs
100%
GDV
Typical Partnerships North site
5%Fees
25%Serviced land
39 CAPITAL MARKETS DAY JUNE 2019
Strategically located factories will deliver future homes
Plans for three factories over time:
1. Warrington (current factory);
capacity of 1,500 units p.a.
2. Midlands (18-24 months);
capacity of 3,000 units p.a.
3. Essex/Kent (3-4 years);
capacity of 3,000 units p.a.
Existing Westframe factory supplying
components
Mature total capacity to be 80% of total
Group output
2
3
1
Westframe
40 CAPITAL MARKETS DAY JUNE 2019
Potential evolution
Brick Slips factory fitted, initially on PRS
/ affordable homes, single external wall
panel with inbuilt cavity including
insulation, windows, plasterboard
Significant time savings for build and
reduction in scaffold usage
Robotic brick slip manufacturing
solutions already exist
Roof Cassettes including felt and battens
so houses built in one sequence and
modular panel erectors capable of tiling
the roof
Inclusion of first fix electric and plumbing
within wall panels factory fitted
41 CAPITAL MARKETS DAY JUNE 2019
Modular panel key takeaways
First factory fully operational with clear
benefits emerging
– Security of supply chain
– Cost efficiency
– Reduced labour on site
– Faster build speed
Relatively low set up cost with payback
in 2-3 years
Opportunities to evolve product further
Second factory planned to service
Midlands geography in next 18-24
months
Tenure mix, margins and cashMike Scott, Group CFO
Belmont Place, Hindley Green
43 CAPITAL MARKETS DAY JUNE 2019
Note: Group financials are shown on an adjusted basis to include the proportional contribution of the Joint Ventures and associate
and exclude non-underlying items. 2019 figures are based on consensus.
Five years of continued growth
616777
1,029
1,230
1,460
FY15 FY16 FY17 FY18 FY19E
Adjusted revenue (£m)
24% CAGR
24.7%26.8%
30.6%
37.1% 37.5%
FY15 FY16 FY17 FY18 FY19E
+1,280bps
Return on Capital Employed
91.2
122.5
165.3
211.4232.4
FY15 FY16 FY17 FY18 FY19E
26%CAGR
Operating profit/margin (£m/%)
14.8%
15.8%
16.1%
17.2%15.9%
1,090 1,1271,662
1,995 2,187813 792 1,006
1,491
2,509
461 738
721
809
1,160
FY15 FY16 FY17 FY18 FY19E
Completions (no. of homes)
25% CAGR
Private Affordable PRS
44 CAPITAL MARKETS DAY JUNE 2019
82.7% 84.8% 88.6% 84.6% 93.1%
FY15 FY16 FY17 FY18 HY19
With continuing focus on quality and safety
1 Defects reported per plot at NHBC inspections at key build stages2 The number of reportable incidents per 100,000 people at risk3 The percentage of customers returning an NHBC post-completion survey who would recommend us to a friend
Note: * 2019E data as per consensus
Recommend a Friend
0.22 0.230.21 0.22
0.19
FY15 FY16 FY17 FY18 HY19
Build quality0.19 (NHBC RIs per home1)
93.1% (NHBC RAF3)
4 4 45
4
2,3642,657
3,389
4,295
5,856
FY15 FY16 FY17 FY18 FY19E
Total completions* (no. of homes)5,856
265
305
220
162186
FY15 FY16 FY17 FY18 HY19
Health & Safety186 (Accident Injury Incident Rate2)
45 CAPITAL MARKETS DAY JUNE 2019
FY19 tenure mix
Housebuilding GroupPartnerships
37%
Private
FY19E (units)
28%
Private
70%
Private
20%
PRS26%
PRS
30%
Affordable
43%
Affordable
46%
Affordable
Partnerships margin in FY19 impacted by:
– Westleigh acquisition
– Geographic mix
– Return to normal margins in Partnerships South
Housebuilding margin on track
Note: FY19E based on consensus
46 CAPITAL MARKETS DAY JUNE 2019
Target tenure mix for future delivery
Housebuilding GroupPartnerships
37%
Private
FY19 (units)
Future (units)41%
Private33%
Private
28%
Private
70%
Private
70%
Private
20%
PRS
26%
PRS
33%
PRS
26%
PRS
30%
Affordable
30%
Affordable
33%
Affordable
43%
Affordable
33%
Affordable
46%
Affordable
47 CAPITAL MARKETS DAY JUNE 2019
Implied margin from future tenure mix
Housebuilding GroupPartnerships
Private Affordable PRS
18%
Gross Margin
24%
Gross
Margin
21%
Gross
Margin
Margin dynamics
49 CAPITAL MARKETS DAY JUNE 2019
Housebuilding margin dynamics
HPI
+£10k+2% 82%
Margin impactPrivate18%
Revenue
+£8.2k
-2% -£10k -£8.2k
+1.6%
-1.6%
£500kASP
Build
costs
Operational
efficiency
+£10k+2%
0% £0k
£500kASP
-£4.5k+3%
+5% -£7.5k
£150kBuild cost
80%Margin impact
20%
Procurement
-£3.6k
-£6.0k
-0.7%
-1.2%
76%
Total
costs24%Margin
+£7.6k
£0k
Margin impact
+2.4%
-2.8%
Best case
Worst case
+1.5%
0%
Affordable
Pre-
procured
To procure
50 CAPITAL MARKETS DAY JUNE 2019
Partnerships in-phase margin dynamics
HPI
+£6k+2% 50%
Margin impactPrivate
50%
Affordable/
PRS
+£1.5k*
-2% -£6k -£3k
+0.5%
-1.0%
£300kASP
Build
costs
Operational
efficiency
+£6k+2%
0% £0k
£300kASP
-£3.6k+3%
+5% -£6.0k
£120kBuild cost
80%Margin impact
20%
-£0.7k
-£1.2k
-0.2%
-0.4%
82%
Total
costs18%Margin
+£2.4k*
£0k
Margin impact
+0.8%
0%
*our share of surplus profit assuming 50/50 overage agreement
Pre-
procured
To procure
+1.1%
-1.4%
Best case
Worst case
Revenue
Procurement
51 CAPITAL MARKETS DAY JUNE 2019
Group margin dynamics illustration
HPI
Build
Costs
Operational
efficiency
Housebuilding Partnerships Group
-1.6%
+1.6%
-1.2%
-0.7%
0%
+1.5%
-1.0%
+0.5%
-0.4%
-0.2%
0%
+0.8%
-1.2%
0.9%
-0.7%
-0.4%
0%
+1.1%
+1.6%
-1.9%
+1.1%
-1.4%
+2.4%
-2.8%
Best case
Worst case
Best case
Worst case
Best case
Worst case
Best case
Worst case
Cash
53 CAPITAL MARKETS DAY JUNE 2019
HB Infrastructure HB Land
PS Infrastructure PS Land
£m
83
4262
4766
91 98
130
125 85
66
121
122
143
11 22 22 2237 43
1617
24 13
64
111 92 150
Balance of spend shifts due to Partnerships growth
FY15 FY16 FY17 FY18 FY19E
Note: Company estimates; Excludes all work in progress
213 28
241
167 46
213
147 35
182
113 86
199
187 148
335
FY20E FY21E
213 135
348 241 167
408
54 CAPITAL MARKETS DAY JUNE 2019
Cash (£m)
(100)
0
100
200
300
FY17 FY18 FY19E FY20E FY21E
FY19 average net debt of c.£60m
Expected cash of £80-90m at year end
Assuming 10% p.a. EBIT growth, cash
grows by £60m+ p.a.
Debt-free through the year in FY21
Modest growth in land creditors
Adjusted gearing at peak 40% in FY19
Cash forecast
Note: Company estimates
55 CAPITAL MARKETS DAY JUNE 2019
Capital allocation
Organic growth
of Partnerships
Organic
growth of
Housebuilding
Acquisitions
and geographic
expansion
Increased
shareholder
returns
1 2 3 4
• South Midlands & Yorkshire grow to scale
• Deliver large estate regeneration projects won in South
• Potential South West London region
• Neighbouring geographies present opportunities
• Keep dividend policy under review
• Awaiting macro developments at the end of 2019
Wrap up & closeIan Sutcliffe, Group CEO
Blackberry Point, Stockport
57 CAPITAL MARKETS DAY JUNE 2019
Key takeaways from today
Trading in line with previous statements
Partnerships changing tenure mix over time and margin resilience
– Standardisation
– Modular build
Housebuilding business in good shape with embedded value in the land bank
Commitment to further offsite production with new timber frame factory
Continued strong ROCE and cash generation
Next news:
– Q3 trading statement 25 July 2019
– FY 2019 results 21 November 2019
Q&A
Rochester Riverside, Kent