Transcript No Slide Title

Preliminary Results Presentation
Year to 30th June 2005
Preliminary Results Presentation – September 2005
Introduction
Greg Fitzgerald - Chief Executive
Preliminary Results Presentation – September 2005
Introduction
Overview
• Record results through good operational performance
• Construction
• Margins up to 1.5%
• Housebuilding
• Record profits and increase in margins in difficult market
• Potential in affordable housing
• Proven and motivated management
• Strong platform for future growth
Preliminary Results Presentation – September 2005
Financial Review
Frank Nelson – Finance Director
Preliminary Results Presentation – September 2005
Financial Review
Summary
• Exceeded targets in 2005
• Group turnover £718m
-
up 5%
• Profit before tax £26.3m
-
up 16%
• Earnings per share 8.4p
-
up 17%
• Dividend 2.1p
-
up 24%
• Strong Construction cash flow - gearing of 15%
• Return on shareholders’ funds of 33%
• Tax charge reduced to 29.3%
Preliminary Results Presentation – September 2005
Financial Review
Segmental Analysis to 30th June 2005 (including Joint Ventures)
Group Turnover
Profit/(loss)
(£m)
2005
2004
2005
Construction
537.7
512.9
7.8
5.7
-
-
(1.2)
(1.5)
188.0
182.0
26.4
25.5
0.5
0.5
(4.5)
(3.9)
726.2
695.4
28.5
25.8
Less net interest payable
(2.2)
(3.1)
Profit before tax
26.3
22.7
PPP Investments
Housebuilding
Group
2004
Preliminary Results Presentation – September 2005
Financial Review
International Financial Reporting Standards
Profit & Loss
Effect
Balance Sheet
Effect
Pensions
Low
High
Share based payments
Low
Low
Dividend recognition
Timing
Low
Preliminary Results Presentation – September 2005
Financial Review
Balance Sheet Highlights
(£m)
2005
2004
Shareholders’ funds
86.2
72.3
Net debt
12.5
12.3
Total capital employed
98.7
84 6
Gearing
15%
17%
Interest cover
12.8
8.5
143.9
122.4
Work in Progress
64.1
53.8
Land Creditors
(48.7)
(44.7)
Land
.
Preliminary Results Presentation – September 2005
Financial Review
Cash Flow Summary
(£m)
2005
2004
Group operating profit
26.9
24.5
1.8
1.8
Working capital and other movements
(14.9)
(9.2)
Net cash flow from operating activities
13.8
17.1
Interest
(1.6)
(2.0)
Tax
(8.5)
(5.6)
Capital expenditure
(1.6)
(1.2)
Dividends
(3.9)
(3.4)
1.6
0.6
(0.2)
5.5
Depreciation and amortisation
Other
Movement in net debt
Preliminary Results Presentation – September 2005
Construction
Andy Sturgess – Managing Director
Preliminary Results Presentation – September 2005
Construction
Key Highlights
• Margins up to 1.5% in line
with expectation
• Excellent cash generation
circa £40m throughout year
• Quality order book
maintained
• Management team further
strengthened
Preliminary Results Presentation – September 2005
Construction
Profitability % Net Margin
RECOVERY
STABILISATION
GROWTH
1.5%
1.5
1.1%
1.0
0.5
0.0
(0.01)%
2003
2004
2005
Preliminary Results Presentation – September 2005
Construction
Forward Order Book
Market Sectors
WorkTotal
In Hand
(£m) In
Work
Total
Hand
Non Price
Competitive
Non Price
Competitive
Water
229.4
229.4
Rail
65.7
65.7
Infrastructure
61.3
61.3
Health
117.8
115.8
Education
137.7
104.7
Commercial
152.6
129.9
Interiors
24.0
14.9
Affordable Housing
144.2
116.1
7.7
5.3
3.5
2.5
943.9
845.6
Telecommunications
Ground Engineering
90%
Preliminary Results Presentation – September 2005
Construction
Key Opportunities
• LIFT second tranche in design
• United Utilities AMP4
• Affordable Housing remains strong
• BSF – Shortlisted Solihull
• Northampton Schools PFI
Preliminary Results Presentation – September 2005
Construction
Northampton Schools PFI
• 41 schools
• 34 month construction period
• 80% new build
• 20% refurbishment
• Planning achieved on all but one school
• Late autumn financial close
Preliminary Results Presentation – September 2005
Construction
Summary & Outlook
• Strong management teams
• Sector focus well established
• Earliest possible involvement
• Partnership approach
• Profitability towards 2% margins
Preliminary Results Presentation – September 2005
PPP Investments
Andy Sturgess – Managing Director
Preliminary Results Presentation – September 2005
PPP Investments
Overview
• Creating construction opportunities
• Stringent selection criteria
• Equity stake 15%-50%
• Performance 2004 – 2005
• Financial close on four projects
Value £120m
• Preferred bidder Northampton Schools
Value £150m
• Future prospects
• LIFT – 2nd tranche
• LIFT – 4th wave
• BSF Solihull – short listed
Preliminary Results Presentation – September 2005
Housebuilding
Greg Fitzgerald – Chief Executive
Preliminary Results Presentation – September 2005
Housebuilding
Housing Highlights
•
Record profits and increase in margins
•
Further cost reductions achieved
•
Exceptional customer satisfaction results
•
Controlled increase in land bank
•
Encouraging ‘in-hand’ position
•
Planning permissions in place for current year
Preliminary Results Presentation – September 2005
Housebuilding
Key Statistics (including Joint Ventures)
12 months to June
2005
2004
Average Selling Price £000
853
208
761
224
12.1
(7.1)
Income per Sq. Ft. £
222
209
6.2
Turnover £m
188
182
3.3
Operating Profit £m
26.4
25.5
3.5
Margin %
14.1
14.0
0.7
ROCE %
22.3
23.6
(5.5)
Sales in hand August 05 £m
100.4
95.3
5.3
Landbank August 05 units
2605
2520
3.4
Strategic land August 05 acres
695
660
5.3
Units
Increase %
Preliminary Results Presentation – September 2005
Housebuilding
Market Conditions and Focus
•
Encouraging sales activity since July
•
No house price inflation for next two years
•
Planning process continues to be difficult
•
Labour readily available
•
Differentiation through individual design
•
Avoid consortium sites and high rise apartments
•
Capitalise on strengths in affordable housing
Preliminary Results Presentation – September 2005
Housebuilding
Midas & Gerald Wood Homes
•
Units
310
•
Average selling price £000
191
•
Brownfield and conversion %
65
•
Land bank
985
•
Customer satisfaction %
91
•
Planning for Truro hospital site
•
First completions from expansion area
Preliminary Results Presentation – September 2005
Housebuilding
Stamford Homes
•
Units
269
•
Average selling price £000
169
•
Brownfield and conversion %
53
•
Land bank
599
•
Customer satisfaction %
91
•
Good progress in affordable housing
•
Land acquired from Coventry LIFT
Preliminary Results Presentation – September 2005
Housebuilding
Try Homes Southern
•
Units
144
•
Average selling price £000
267
•
Brownfield and conversion %
100
•
Land bank
385
•
Customer satisfaction %
89
•
Large conversion site in Banstead
acquired
•
Expansion into Kent and East Sussex
Preliminary Results Presentation – September 2005
Housebuilding
Try Homes Thames Valley
•
Units
130
•
Average selling price £000
258
•
Brownfield and conversion %
100
•
Land bank
636
•
Customer satisfaction %
95
•
Substantial eight acre site
acquired in West London
Preliminary Results Presentation – September 2005
Housebuilding
Summary & Outlook
•
All business units performing well
•
Expansion proceeding to plan
•
More opportunities for land acquisition
•
Expertise in affordable housing
•
Comfortable with current market conditions
Preliminary Results Presentation – September 2005
Affordable Housing
Greg Fitzgerald – Chief Executive
Preliminary Results Presentation – September 2005
Affordable Housing
Construction and Housebuilding Divisions
• Comprehensive capability for affordable
housing
• Working with 16 affordable housing
providers
• Work in hand up to £152 million
• New opportunities through:
•
Construction taking development role
•
Planning requirements on housebuilding
sites
•
Pre-qualified for grant direct from the
Housing Corporation
• Considerable scope for growth
Preliminary Results Presentation – September 2005
Summary and Outlook
Greg Fitzgerald - Chief Executive
Preliminary Results Presentation – September 2005
Summary and Outlook
Platform for Growth
• Strong financial position
• Construction:
• Increase in profit margins and cash generation
• Growth in chosen markets
• Housebuilding:
• Performing in a difficult market
• Proven business model
• Synergies between divisions
• Excellent opportunities in affordable housing
• Confidence in growth plans
• Organic and by acquisition
Preliminary Results Presentation – September 2005