PRELIMINARY RESULTS PRESENTATION Year ended 30 June 2017 DELIVERING VALUE THROUGH HOUSEBUILDING AND BROWNFIELD DEVELOPMENT SEPTEMBER 2017
BUSINESS MODEL DELIVERING VALUE THROUGH HOUSEBUILDING AND BROWNFIELD DEVELOPMENT
ACTIVITIES Land Housebuilding Construction ▪ ▪ Target market for homes priced Developed in-house construction ▪ 100% track record in obtaining between c £200k - £450k team residentially-led, mixed-use planning consents ▪ ▪ Construction of private units for open Far less reliance on main contractors market sale on sites brought through ▪ Acquisition of predominantly ▪ the planning process by the Group 427 units under construction brownfield land in town centres and including 316 units through self- regeneration areas ▪ Construction of private and delivery affordable housing for partners such ▪ Secure options over strategic land ▪ Act as contractor for housing as housing associations where land and focus on capital light structures purchased from Inland Homes associations where sites purchased such as joint ventures from Inland Homes ▪ Constructing more apartments than ▪ Area of operations around M25 and ▪ houses Construction output increasing M11 corridor as well as South Coast ▪ Target to obtain consents between 18 - 24 months from acquisition ▪ Choice of: - disposal to developers - disposal with construction contract - development by Inland Homes ▪ Target land value uplift between 60% - 100%
STRATEGY ▪ Increase the size of land bank - brownfield sites - strategic sites - tactical sites to unlock future potential value ▪ Priority to secure planning consents on Inland’s major projects including strategic sites ▪ Maximise value through housebuilding - capture land profit - capture development profit ▪ Ensure strong and flexible balance sheet - manage borrowings - focus on cash management
KEY HIGHLIGHTS ▪ Robust results with strong profitability 30 June 2017 30 June 2016 and significantly improved balance sheet restated ▪ 12.2% increase in net asset value to £131m Profit before tax & before revaluation gain £18.1m £15.7m ▪ 188 (2016: 147) private units sold EPRA NAV £194.4m £186.3m ▪ Current forward sales of £33 million and construction contracts of £41 million Stated NAV £130.6m £116.3m ▪ 31% increase in total dividend of 1.7p Net current assets £159.9m £96.7m ▪ Land bank of 6,936 plots (2016: 6.681) Cash £26.5m £16.7m after disposal of 780 plots and 188 units in the year Net gearing 52.1% 46.9% ▪ Planning application for 350 homes and Net EPRA gearing 35.0% 29.3% commercial space on Wilton Park, Beaconsfield submitted in September 2017 ▪ 427 units under construction of which 74% through self-delivery
FINANCIAL HIGHLIGHTS 30 June 30 June 2017 2016 restated Revenue £90.7m £101.9m Two land disposals shown as gains separately Gross profit £19.5m £29.6m Administrative expenses £7.6m £6.3m Expansion of in-house construction teams and HO staff Gain on sale of subsidiary and JV £13.0m - Sale of Alperton site and 50% of Aylesbury Revaluation of investment £1.5m £18.0m Further valuation increase in 86 residential properties properties at Wilton Park, Beaconsfield Profit before tax £19.6m £33.7m Significant revaluation gain in previous period Proposed final dividend per share 1.2p 0.9p 33% increase Non-current assets £67.1m £54.5m Increase in loans to associates and debtors > 1 year Current assets £207.1m £185.5m Increase in receivables and cash Current liabilities £47.2m £88.8m Borrowings restructured with over 50% maturing after three years Non-current liabilities £96.5m £34.8m
SEGMENTAL ANALYSIS 30 June 30 June Land sales Housebuilding 2017 2016 restated Contract Rental Hotel Fees & other Revenue Revenue by segment Land sales £22.4m £43.3m 207 (2016: 425) plots sold across 7 sites 25% 2% 3% Housebuilding £57.8m £51.5m 188 (2016: 147) private units sold 3% 3% Contract income £3.1m £2.9m Rental income £2.3m £2.1m Hotel income £2.6m £1.7m Relates to Wessex hotel site Management fees & other £2.5m £0.4m Additional revenue received on a land sale £90.7m £101.9m 64% Gross profit Gross profit by segment Land sales £6.2m £17.0m Two land sales via corporate disposals 13% Housebuilding £8.7m £11.3m 31% 1% Contract income (£0.2m) (£0.7m) Rental income £2.1m £1.7m Predominantly from investment properties 10% at Wilton Park -1% Hotel income £0.2m - Management fees & other £2.5m £0.3m £19.5m £29.6m 44%
ROBUST FINANCIAL POSITION 30 June 30 June 2017 2016 restated Non-current assets • Investment properties £53.6m £51.7m • Investment and amounts due from £7.1m £2.2m Loan of £3m to Troy Homes and deferred consideration on associate and JVs two land disposals • Receivables > 1 year £5.8m - Deferred consideration on land disposal Current assets • Inventories £139.9m £148.4m • Trade receivables £22.5m £6.8m Principally deferred consideration on land disposals • Due from JVs £18.3m £10.1m • Cash £26.5m £16.7m Current liabilities • Borrowings - £40.1m Restructured borrowings • Other £47.2m £48.6m Non-current liabilities • Borrowings £94.5m £31.1m 54% of debt maturing after 3 years • Other £2.0m £3.6m Net assets £130.6m £116.3m Average maturity of debt (years) 2.7 1.9 Weighted average cost of debt: • Housebuilding 3.5% 3.9% • Land & investment properties 6.2% 7.8%
JOINT VENTURES ▪ Project Helix - Joint venture platform to acquire sites between £7m – £20m - Inland required to inject 20% equity - 15% priority return on equity from both partners - Minimum 40% to Inland, thereafter enhanced returns based on hurdles - Inland’s equity invested at 30 June 2017: £8.5m - Projects: Church Road, Ashford (357 units), Lily’s Walk, High Wycombe (239 units), Buckingham House, High Wycombe (85 units) ▪ Cheshunt Lakeside Developments - 50:50 joint venture with leverage - Inland’s investment: £8.2m - 50% share of profits - Management fee to Inland - Project: Delamare Road, Cheshunt (1,400 units) ▪ Garston - 50:50 joint venture with landowner - Inland’s investment: £4.4m - 50% share of profits - Management fee for Inland - Project: Bucknalls Lane, Garston (100 units) ▪ Chapel Riverside, Southampton - Joint venture with landowner - Inland’s investment: £2.3m - Priority return to Inland - 457 units
LAND PORTFOLIO DELIVERING VALUE THROUGH HOUSEBUILDING AND BROWNFIELD DEVELOPMENT
VISIBLE AND GROWING PIPELINE OF FUTURE OPPORTUNITIES Land Bank Plots owned / managed 7500 8,000 6,936 7000 6,681 6,936 7,000 6,681 6500 1,163 6,000 6000 1,805 2,470 2,137 5,176 5500 5,176 5,000 49 5000 1,303 1,200 4,000 3,734 4500 114 2,589 1,836 3,734 4000 1,329 3,000 1,811 2,306 3500 143 493 66 1,318 2,000 3000 942 1,344 605 1,124 5,518 2,306 2500 307 4,799 1,000 1,994 1,318 2000 3,976 1,057 1,086 1,048 1,057 - 1500 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 2,416 1000 Plots controlled or terms agreed without consent (including strategic options) 1249 Plots controlled or terms agreed with consent or resolution to grant planning consent 500 Managed or held within joint ventures without consent (contracted or terms agreed) 0 Managed or held within joint ventures with consent (contracted or terms agreed) FY 2012 FY 2013 FY 2014 FY 2015 FY 2017 Owned or contracted without planning consent Plots With Planning Permission Owned or contracted with planning consent or resolution to grant planning consent Plots Without Planning Permission Total Significant brownfield and strategic land bank with visible pipeline of opportunities
100% RECORD OF OBTAINING PLANNING PERMISSION Visible pipeline of assets moving through the planning cycle Planning status of residential plots Strategic To be progressed Pre-application Planning applications Target plots for discussions submitted consent by 31 December 2017 Ownership status No. of No. of sites No. of No. of sites No. of No. of sites No. of No. of sites plots plots plots plots Managed or held in joint ventures (contracted or terms agreed) - - 46 1 1,470 1 366 1 - Owned or contracted - - 28 1 28 2 391 2 399 Plots controlled or terms agreed 1,798 17 128 1 472 6 72 1 - Grand Total 1,798 17 202 3 1,970 9 829 4 399 Land progressing through planning system Planning status of commercial space To be progressed Pre-application Planning applications discussions submitted Planning Ownership status No. of sites Sq ft No. of sites Sq ft No. of sites Sq ft applications submitted, Managed or held in joint 829 ventures (contracted or terms Strategic, agreed) - - 1 30,000 1 11,420 1,798 Owned or contracted - - 1 53,820 1 22,808 Plots controlled or terms agreed - - - - 1 53,820 Grand Total - - 2 83,820 3 88,048 Pre- To be application progressed, discussions, 202 1,970
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