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Preliminary Results Presentation
Year to 30th June 2004
Preliminary Results Presentation – September 2004
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 2001 (the “Order”) or (b) any
other persons to who it may otherwise lawfully be communicated, falling within Article 49(1) 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 2003, 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.
Preliminary Results Presentation – September 2004
Introduction
David Calverley - Chief Executive
Preliminary Results Presentation – September 2004
Introduction
Overview
•
Record results driven by operational performance
•
Construction
• Margins up
• Quality of order book
•
Housebuilding
• Expansion plan on track
• Strong in hand sales
•
Finances strong
•
Good growth opportunities
Preliminary Results Presentation – September 2004
Financial Review
Frank Nelson – Finance Director
Preliminary Results Presentation – September 2004
Financial Review
Highlights
• Group turnover up 8% to £687m
• Profit before tax up 32% to £22.7m
• Strong cash flow, gearing of 17%
• Dividend increased 13% to 1.7p
* Comparison 2002/03 pre exceptionals
Preliminary Results Presentation – September 2004
Financial Review
Summarised Profit & Loss Account to 30th June 2004
(£m)
2004
Turnover (including Joint Ventures)
2003
695.4
640.4
Profit before interest (pre exceptional)
25.8
20.4
Interest charge
(3.1)
(3.2)
Profit before tax (pre exceptional)
22.7
17.2
-
(3.9)
22.7
13.3
Exceptional charge
Profit before tax (post exceptional)
Earnings per share (fully diluted):
Pre exceptional
6.9p
5.4p
Post exceptional
6.9p
4.2p
1.7p
1.5p
Dividend per share
Return on shareholders’ funds (pre exceptional)
34%
31%
Preliminary Results Presentation – September 2004
Financial Review
Segmental Analysis to 30th June 2004
Group Turnover
Profit/(loss)
(including joint ventures)
(£m)
2004
2003
2004
Construction
512.9
480.3
4.2
(0.4)
Housebuilding
182.0
159.5
25.5
24.1
Group
0.5
0.6
(3.9)
(3.3)
Exceptional charge
-
-
-
(3.9)
695.4
640.4
25.8
16.5
Less net interest payable
(3.1)
(3.2)
Profit before tax
22.7
13.3
2003
Preliminary Results Presentation – September 2004
Financial Review
Charge for Pension Deficit
Segmental Profit 2004
2003
As reported
Deficit Charge
4.2
2.0
6.2
(0.4)
Housebuilding
25.5
0.6
26.1
24.1
Group
(3.9)
0.1
(3.8)
(3.3)
-
(3.9)
(£m)
Construction
Exceptional charge
-
-
Pre Charge
As reported
25.8
2.7
28.5
16.5
Less net interest payable
(3.1)
-
(3.1)
(3.2)
Profit before tax
22.7
2.7
25.4
13.3
Preliminary Results Presentation – September 2004
Financial Review
Balance Sheet Highlights
(£m)
2004
2003
Shareholders’ funds
72.3
59.7
Net debt
12.3
17.8
Total capital employed
84.6
77.5
Gearing
17%
30%
Interest cover
Land
8.5
5.2 *
122.4
95.7
Work in Progress
53.8
51.6
Land Creditors
(44.7)
(25.4)
* Post exceptional charge
Preliminary Results Presentation – September 2004
Financial Review
Cash Flow Summary
(£m)
2004
2003
Group operating profit (post exceptional)
24.5
15.4
1.8
1.9
Working capital movements
(9.2)
(10.1)
Net cash flow from operating activities
17.1
7.2
Interest
(2.0)
(2.5)
Tax
(5.6)
(4.2)
Capital expenditure
(1.2)
(1.7)
Dividends
(3.4)
(3.3)
Other
0.6
(0.4)
Movement in net debt
5.5
(4.9)
Depreciation and amortisation
Preliminary Results Presentation – September 2004
Construction Business Review
Andy Sturgess – Managing Director
Preliminary Results Presentation – September 2004
Construction Business Review
Key Highlights
• Growth in profit continues as planned
• Improved cash management
• Success in securing work in chosen markets
• Improved quality of forward order book
Preliminary Results Presentation – September 2004
Construction Business Review
Margin Improvement
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
-0.20%
-0.40%
-0.60%
-0.80%
-1.00%
.Jun-02
Dec-02
Jun-03
Dec-03
Jun-04
% net margin
Preliminary Results Presentation – September 2004
Construction Business Review
Key Success Factors
• Collaborative working
• Life cycle management
• Design management
• Risk management
• Ability to say NO
Holyhead Wastewater Treatment Scheme
Preliminary Results Presentation – September 2004
Construction Business Review
Sector Opportunities
Rock & Alluvium
Communications
Partnerships
Uxbridge
Wolvey
Market Sectors
Warrington
Business Units
Water
Rail
Infrastructure
Health & Education
PFI/PPP
Commercial
Interiors
Affordable Housing
Telecommunications
Ground Engineering
Growth >10%
Growth 5-10%
Growth 0-5%
Decline 0-5%
Preliminary Results Presentation – September 2004
Construction Business Review
Recent Successes
• Bridge-guard - £50m
• British Waterways - £24m
• Northampton Schools, preferred bidder £150m
• LIFT Closures - £92m
• Holyhead - £34m
• Bedford, successful handover - £20m
Samuel Whitbread School
• Swan Housing Framework
Preliminary Results Presentation – September 2004
Construction Business Review
Total Work in Hand
Turnover (£m)
Year to Jun 04
Market Sectors
WorkTotal
In Hand
(£m) In
Work
Total
Hand
Non Price
Competitive
Non Price
Competitive
73.9
Water
146.8
146.8
32.6
Rail
62.4
62.4
32.1
Infrastructure
59.1
55.4
16.9
Health
96.6
91.2
69.3
Education
113.3
96.5
128.1
Commercial
60.4
29.4
56.4
Interiors
29.2
24.3
52.1
Affordable Housing
43.5
39.4
38.2
Telecommunications
6.3
6.3
3.3
1.0
620.9
552.7
14.8
514.4
Ground Engineering
89%
Preliminary Results Presentation – September 2004
Construction Business Review
Current Opportunities
• PFI
• Ealing, financial close - £20m
• Caludon Castle School, financial
close - £20m
• Birmingham Schools II, one of two
• Bromsgrove School, one of three
• Rochdale, one of three
• PPP
• Coventry LIFT, financial close - £42m
• Building Schools for the Future
• AMP 4 Water Renewals
Wimbledon Roof
• Wimbledon Roof
Preliminary Results Presentation – September 2004
Construction Business Review
Current Opportunities
EDUCATION - PFI
Caludon Castle, Coventry
Northampton Schools
Birmingham Schools II
Bromsgrove
Rochdale
HEALTH
Barnet, Enfield & Haringey
Liverpool & Sefton
Ealing
WATER
FRAMEWORK
Coventry
Welsh Water
AMP 3
United Utilities
AMP 3
AMP 4
AMP 4
Northumbrian Water
AMP 4
Scottish Water
Q&S 3
2004
2005
2006
2007
2008
2009
2010
2011
2012
Preliminary Results Presentation – September 2004
Construction Business Review
Summary and Outlook
• Profit improvement continues
• Full benefit of recent successes yet to impact profit
• Continue to win in our chosen sectors
• Improving quality of order book
• Confident of 2% margin by 2006
• Current strategy/success will enhance profit beyond 2006
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Greg Fitzgerald – Managing Director
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Housing Highlights
•
Record profits
•
New management team at Stamford performing
•
Cost reductions going to plan
•
Continued good progress with customer satisfaction
•
Land bank increased
•
Strong ‘in hand’ position
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Strong Regional Brands
PETERBOROUGH
FAIRFIELD
UXBRIDGE
LEATHERHEAD
NEWTON ABBOT
29% - £225,000
29% £225k
asp
38% - £278,000
33% - £176,000
TURNOVER % - AVERAGE SELLING PRICE
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Key Statistics
12 months to June
2004
2003
Increase %
Units
761
741
2.7
ASP £000
224
200
12.0
Income per Sq. Ft. £
209
174
20.1
Turnover £m
182.0
159.5
14.1
Operating Profit £m
25.5
24.1
5.8
Margin %
14.0
15.1
(7.3)
ROCE %
23.6
23.7
(0.4)
Sales in hand August 04 £m
95.3
67.1
42.0
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Product Mix and Range of Selling Prices
%
%
67
70
63
60
60
52
50
50
49
37
40
40
33
32
30
35
30
20
20
12
10
13
10
4
3
0
Apartments
Actual to June 04
PRODUCT MIX
Houses
Forecast to June 05
0
Up to 200K
200-300
Actual to June 04
300-500
over 500K
Forecast to June 05
RANGE OF SELLING PRICES
Preliminary Results Presentation – September 2004
Housebuilding Building Review
Expertise in Individual Design
Little Bithywind, Bradninch
New Inn Court, East Molesey
Austyns Place, Ewell
Hyperion, Torquay
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Land Bank – Owned or Under Our Control
2004
2003
Increase %
Land Bank August 04 - Units
Detailed Planning Permission
1742
1617
8
Outline Planning Permission
185
32
578
Awaiting Planning Permission
593
406
46
2520
2055
23
660
612
8
2000+
2000
-
Total
Strategic Land August 04
Acres
Probable Unit Numbers
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Market Conditions & Planned Growth
•
Minimal house price inflation
•
Shortage in supply continues to underpin market
•
Strengthen position within existing areas and expansion into new
•
Maximise opportunities within affordable housing market
•
Quality of management
•
Confident of achieving 1250 units by 2007
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Expertise in Conversion and Restoration
Coombe Hall Park, East Grinstead
Livingstone Park, Epsom
Norah Fry, Shepton Mallet
Berrybrook Meadow, Berry Pomeroy, Totnes
Preliminary Results Presentation – September 2004
Housebuilding Business Review
Summary and Outlook
• Expect to achieve half & full year planned performance
• Detailed planning permission in place
• Restructuring at Stamford delivering improved results
• Stringent land buying criteria
• Enhance efficiency through additional cost reductions
• Confident of achieving expansion plan
Preliminary Results Presentation – September 2004
Summary and Outlook
David Calverley - Chief Executive
Preliminary Results Presentation – September 2004
Summary and Outlook
Platform for Growth
•
Delivered targets for 2004
•
Significant opportunities in construction
•
Housebuilding expansion plan positions us well
•
Strong financial platform
•
Quality of management teams throughout business
•
Business in excellent shape for future growth
Preliminary Results Presentation – September 2004
Preliminary Results Presentation
Year to 30th June 2004
Preliminary Results Presentation – September 2004