Transcript No Slide Title
Investor Relations Presentation
Half Year to 31 st December 2005 Investor Relations Presentation – February 2006
Disclaimer
This presentation is being made only to and is directed at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (b) any other persons to who it may otherwise lawfully be communicated, falling within Article 49(2) of the Order (all such persons being referred to as “relevant persons”).
Any person who is not a relevant person should not act or rely on this presentation or any of its comments.
The financial information set out in this document does not constitute the Company’s statutory accounts. Statutory accounts for 2005, which received an auditors’ report that was unqualified and did not contain any statement concerning accounting records or failure to obtain necessary information and explanations, have been filed with the Registrar of Companies.
Investor Relations Presentation – February 2006
Introduction
Overview •
Record results again through good operational performance
• •
Acquisition of Chartdale Homes Construction
• •
Margins at 2% Order book at £1.1b
•
Housebuilding
•
Record operating profits
• •
Margin maintained In hand position at all time high
• • •
Affordable Housing Director appointed Sale and leaseback on two properties Strong platform for future growth
Investor Relations Presentation – February 2006
Financial Review
Highlights •
Turnover up 7% at £372 million
•
Profit before tax up 10% at £14 million
•
Earnings per share up 10% at 4.4p
•
Interim dividend up 17% to 0.7p per share
•
Net debt of £8.9 million (2004 £10.1m) represents gearing of 15% (2004 21%)
NB – 2004 comparison based on restated IFRS figures Investor Relations Presentation – February 2006
Financial Review
Summary Profit & Loss Account Turnover Profit before interest Interest Profit before tax Diluted earnings per share Dividend per share
Interest Analysis Bank interest Interest on unwinding of discounted creditors Net return on liability of pension fund Total Interest
* based on restated IFRS figures (£m) Dec 2005 372.2 16.3
(2.3) 14.0
4.4p
0.7p (£m) Dec 2004* 347.2
14.7
(2.0) 12.7
4.0p
0.6p
0.6
1.4
0.3
2.3
0.5
1.1
0.4
2.0
Investor Relations Presentation – February 2006
Financial Review
Segmental Analysis Construction PPP Investments Housebuilding Group Less net interest payable Profit before tax * based on restated IFRS Figure Group Turnover (£m) Dec 2005 272.8
0.8
98.3
0.3
372.2
Dec 2004* 255.8
91.1
0.3
347.2
Profit/(loss) (£m) Dec 2005 5.6
(0.5) 13.9
(2.7) 16.3
(2.3) 14.0
Dec 2004 * 5.3
(1.2) 12.7
(2.1) 14.7
(2.0) 12.7
Investor Relations Presentation – February 2006
Financial Review
Cash Flow Summary From operating activities Increase in inventories and developments Decrease in land creditors Decrease in trade and other receivables Increase/(decrease) in trade and payables Decrease in retirement benefit obligation Interest, tax, dividends, share capital & other movements Net inflow Net debt brought forward Net debt carried forward * based on restated IFRS figures Dec 2005 (£m) 17.5 3.0
(10.9) 7.4
(1.8) (1.2) Dec 2004* (£m) 16.0
(10.2) (3.7) 23.6
(10.9) (3.4) (10.5) 3.5
(12.4) (8.9) (9.4) 2.0
(12.1) (10.1) Investor Relations Presentation – February 2006
Financial Review
Balance Sheet, Financing Shareholders’ funds Net debt Total capital employed Gearing Interest cover * based on restated IFRS figures Dec 2005 (£m) 58.2
8.9 67.1
15% > 7 times Dec 2004* (£m) 48.3
10.1
58.4
21% > 7 times Investor Relations Presentation – February 2006
Construction
Key Highlights •
2% margin achieved ahead of schedule
•
Affordable Housing expansion continues
•
Increased presence in Water
•
Financial Close Northampton Schools PFI
•
Successful integration of Pentland
Investor Relations Presentation – February 2006
Construction
Profitability RECOVERY STABILISATION 2.0
1.7%* GROWTH 2.0%* 1.5
1.1% 1.0
0.5
0.0
(0.01)% 2003 * based on restated IFRS figures 2004 2005 2006 Investor Relations Presentation – February 2006
Construction
Forward Order Book
Turnover (£m) Half Year to Dec 05 37 19 18 15 47 89 4 21 15 8 273 Market Sectors Water Rail Infrastructure Health Education Commercial Interiors Affordable Housing Telecommunications Ground Engineering Total 233 65 45 126 330 112 14 145 10 3 1082 233 65 30 126 282 99 13 110 10 2 969 90%
Investor Relations Presentation – February 2006
Construction
Water •
Leading Framework Contractor
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Scottish Water
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United Utilities
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Anglian Water
Investor Relations Presentation – February 2006
Construction
Education •
Acknowledged as education specialists
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Bedford Schools PFI handed over on time
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Caludon Schools PFI Phase 1 handed over on time
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Northampton Schools PFI – on site
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Solihull Building Schools for the Future – ITN Stage
Investor Relations Presentation – February 2006
Construction
Health •
Current LIFT schemes at FC 2/3
•
Fourth Wave - selected on three schemes
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Potential future opportunities in Scotland
•
Government Initiatives Community Hospital Schemes
Investor Relations Presentation – February 2006
Construction
Summary and Outlook •
Profit growth by volume
•
Order book exceeds £1billion
•
Partnering culture integrated throughout business
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Profit margins now in upper quartile
Investor Relations Presentation – February 2006
Investments
PPP Investments •
Northampton Closed – Construction commenced
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BSF Solihull £75m ITN stage
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LIFT 4 th Wave ITN
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South East Essex
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South East Midlands
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Bury Tameside Glossop
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Community Hospital
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Hinckley £30m
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Market Harborough £30m
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BSF
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Birmingham £60m First Wave
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Nottingham £35m First Wave
Investor Relations Presentation – February 2006
Housebuilding
Housing Highlights •
Acquisition of Chartdale Ltd.
•
Record profits and margins maintained
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Sales volumes at all time high
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Significant cost reductions achieved
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Excellent customer satisfaction results
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Strengthened ‘in-hand’ position
Investor Relations Presentation – February 2006
Housebuilding
Acquisition of Chartdale Ltd.
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Negotiated, ‘bolt-on’ acquisition
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Well established regional housebuilder
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Substantial land bank c. 1350 plots on 23 sites
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Acquisition on deferred payment terms
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200 units per annum projected
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95% of land bank for houses
Investor Relations Presentation – February 2006
Housebuilding
Key Statistics Units Average Selling Price £000 Income per sq. ft. £ Turnover £m Margin % ROCE % Sales in Hand Feb 06 £m Land bank Feb 06 units Strategic land Feb 06 acres * based on restated IFRS figures
6 Months to December
2005 484 203 232 98 14.1
19 191 3,800 697 2004* 387 228 220 91 13.9
22 166 2,464 666 Increase % 25.1
(11.0) 5.4
7.7
1.4
(13.6) 15.1
54.2
4.7
Investor Relations Presentation – February 2006
Housebuilding
Market Conditions and Focus • • • • • • •
Challenging market, but encouraging start to 2006 Difficulties with planning system remain Highly competitive land market Expertise in affordable Housing Individually designed schemes and conversions Avoid consortium sites and high rise apartments Shortage in supply continues to underpin the market
Investor Relations Presentation – February 2006
Housebuilding
Midas & Gerald Wood Homes • • • • •
Units Average selling price £000 Brownfield and conversion 200 170 87% Customer satisfaction Two ‘Golds’ at the What House Awards 93%
Investor Relations Presentation – February 2006
Housebuilding
Stamford Homes • • • •
Units Average selling price £000 Brownfield and conversion Customer satisfaction 128 168 51% 82%
Investor Relations Presentation – February 2006
Housebuilding
Try Homes Southern • • • • •
Units Average selling price £000 Brownfield and conversion Customer satisfaction ‘Silver’ at the What House Awards 73 278 100% 89%
Investor Relations Presentation – February 2006
Housebuilding
Try Homes Thames Valley • • • • •
Units Average selling price £000 Brownfield and conversion Customer satisfaction ‘Silver’ at the What House Awards 83 272 100% 93%
Investor Relations Presentation – February 2006
Housebuilding
Summary & Outlook • • • • • •
All business units performing well Land bank boosted by acquisition of Chartdale Exposure to apartments reduced Land and planning remain difficult Well placed to maximise opportunities in Affordable Housing Confident of achieving expansion plan
Investor Relations Presentation – February 2006
Affordable Housing
Construction and Housebuilding Divisions •
Director of Affordable Housing appointed
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Work in hand up to £145m
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Strategic Alliances & Framework Agreements
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Strong Opportunities - East London Regeneration
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Mixed Tenure Expertise
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Opportunities for grant direct from Housing Corporation
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Considerable scope for growth
Investor Relations Presentation – February 2006
Summary and Outlook
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Strong financial position
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Construction:
• • •
Maintain profit margins Increase turnover and cash generation Growth in chosen markets
• • • •
Housebuilding:
• • •
Continuing to perform in challenging market Uncertain land and planning environment Proven business model Cost reduction plan Excellent opportunities in affordable housing Confidence in growth plans:
•
Organic and by acquisition
Investor Relations Presentation – February 2006