Full year ended 30 June 2012 12 September 2012 Full Year 2012 2 - PowerPoint PPT Presentation

Full Year 2012 1 Results presentation Full year ended 30 June 2012 12 September 2012

Full Year 2012 2 Bob Lawson Chairman Nightingale Woods,Wendover

Full Year 2012 3 Mark Clare Group Chief Executive Newberry Corner, Churchinford

Full Year 2012 4 Overview • Key highlights • Market backdrop, lending & Government support • Key objectives • Sizing the business & land supply • Targeted funding structure & dividend policy • Current trading & outlook

Full Year 2012 5 Key highlights – another year of progress Operating margin (1) Pre-tax profits £m (2) Private ASP £k 205 120 9% 200 8% 100 110.7 7% 80 195 6% 60 190 5% 40 42.7 4% 8.2% 185 6.6% 4.4% 20 198.9 3% 201.8 185.2 0 180 2% (33.0) 1% -20 175 0% -40 FY 09/10 FY 10/11 FY 11/12 FY 09/10 FY 10/11 FY 11/12 FY 09/10 FY 10/11 FY 11/12 Average active sites (3) Land approvals £m Net debt £m 600 400 380 500 350 578.1 360 400 300 300 250 340 387 322.6 366.9 489.8 200 200 364 454.1 360 320 150 167.7 100 0 100 300 FY 09/10 FY 10/11 FY 11/12 FY 09/10 FY 10/11 FY 11/12 FY 09/10 FY 10/11 FY 11/12 (1) Group profit from operations before exceptional items divided by Group revenue (2) Pre exceptional cost of FY 11/12 £10.7m (FY 10/11 £54.2m, FY 09/10 £129.9m) (3) Active site defined as a site with one unit available for sale. Average active site number during the period

Full Year 2012 6 Market backdrop • Greater stability in market conditions • Strongest spring selling season for five years • Overall, underlying selling prices broadly stable – continued regional variation, with greater robustness in the South East and London • Some easing of mortgage availability – particularly for new build sector

Full Year 2012 7 Improved LTVs for new build sector SECONDHAND (1) NEW BUILD (1) Max LTV Max LTV (2) Rate Max LTV Max LTV Rate Lender Feb 10 Sept 12 Sept 12 Feb 10 Sept 12 Sept 12 (inc NB) (3) (NB) (3) 90% 90% 6.29% 80% 95% 5.89% 85% 90% 5.69% 85% 95% 5.49% 90% 90% 5.99% 80% 95% 4.99% 85% 90% 5.99% 85% 95% 5.49% 4.79% (FTB) 90% 90% 80% 95% 4.49% 5.95% (movers) (1) LTVs apply to houses only Max secondhand LTVs do not include niche areas – e.g. existing customers (2) (3) NB = NewBuy

Full Year 2012 8 Government’s support for housing • FirstBuy and NewBuy • Private rental sector • Planning • Affordable housing • Public sector land release Prime Minister launches NewBuy at • Get Britain Building Renaissance, Barratt London

Full Year 2012 9 Key objectives Sales optimisation Rebuilding Operational efficiency profitability Targeted land buying Return cash on legacy land Reduced average Reducing overall investment per site indebtedness Other assets

Full Year 2012 10 Sales optimisation - sales & marketing

Full Year 2012 11 Sales optimisation - sales & marketing Marston Park Sales Offices David Wilson Barratt

Full Year 2012 12 Targeted land buying – delivery profile (1) 100% 14% 30% 35% 80% 51% % of total completions 60% 55% 38% 54% 40% 31% 20% 20% 27% 11% 18% 11% 5% 0% FY 11/12 FY 12/13 FY 13/14 FY 14/15 (2) (2) (3) Impaired old Non impaired old New owned, conditional & approved Strategic, terms agreed & unidentified (1) Analysis is for illustrative purposes only and is based on landbank as at 30 June 2012. Assumes planning granted on all land (2) Old land owned prior to re-entry into land market in mid 2009 (3) Includes land conditionally contracted prior to mid 2009 land approval committee

Full Year 2012 13 Key objectives Sales optimisation Rebuilding Operational efficiency profitability Targeted land buying Return cash on legacy land Reduced average Reducing overall investment per site indebtedness Other assets

Full Year 2012 14 Sizing the business National housebuilder Optimising growth opportunities across the country Future Current 6 regions 6 regions No Change 25 operating divisions 25 operating divisions Av. 514 completions (1) /division Av. 600 completions/division Running at 85% Capacity 450 sites 387 sites 15k completions (1) 12.9k completions (1) (1) Includes Joint Venture completions in which the Group has a share

Full Year 2012 15 Land supply (1) 61k plots Strategic land 241 sites 8k plots Approved & terms agreed land 68 sites Conditional land 10k plots 73 sites (2) Owned land 477 sites 45k plots Maximise ROCE Optimise balance of risk & return (1) Landbank as at 30 June 2012 (2) Including Joint Ventures in which the Group has a share

Full Year 2012 16 Target funding structure Owned land bank Short & medium term WIP & long term WIP Funded by Funded by Shareholders Lending syndicate & land vendors Zero year-end balance sheet debt

Full Year 2012 17 Dividend policy • Board recognises importance of both capital growth and dividend • Expect to propose final dividend payment for June 2013 – initially conservative cover – progressive policy with target of 3.0 times cover

Full Year 2012 18 Current trading Last 9 Last 9 weeks Weeks H1 FY 12/13 FY 11/12 Change FY 11/12 Average net private reservations 0.50 0.50 - 0.48 per active site per week (1) Cancellation rate 14.8% 13.7% 1.1% 17.7% Average active sites 371 374 (0.8%) 382 Private forward sales (2) £609.6m £528.7m 15.3% £395.9m (1) An active site is defined by the Group as a site with at least one unit available for sale (2) Private forward sales (excluding joint ventures) as at 9 th September 2012, 11 th September 2011 and 31 st December 2011

Full Year 2012 19 Outlook • Stable market backdrop • Continued government support • Market fundamentals remain strong • More recently acquired land will continue to drive profitability and debt reduction

Full Year 2012 20 Steven Boyes Group Chief Operating Officer Derwenthorpe, York

Full Year 2012 21 Overview • Revenue drivers • Operating efficiency • Land supply

Full Year 2012 22 Revenue and completions by region Total FY 11/12 Completions 12,637 Revenue £2,281m Active sites 387 Northern FY 11/12 East FY 11/12 Completions 2,326 Completions 2,359 Revenue £376m Revenue £429m Active sites 94 Active sites 79 Central FY 11/12 Southern FY 11/12 Completions 2,153 Completions 2,103 Revenue £310m Revenue £454m Active sites 73 Active sites 52 West FY 11/12 London FY 11/12 Completions 2,463 Completions 1,233 Revenue £403m Revenue £309m Active sites 73 Active sites 16 Note : Revenue represents plot completions and excludes other revenue of £42m : Average active sites during period. Active site defined as a site with at least one unit available for sale

Full Year 2012 23 Private sales rates Total FY 11/12 FY 10/11 0.52 0.44 +18% East FY 11/12 FY 10/11 Northern FY 11/12 FY 10/11 0.51 0.42 0.47 0.37 +21% +27% Southern FY 11/12 FY 10/11 Central 0.63 0.54 FY 11/12 FY 10/11 +17% 0.48 0.42 +14% West London FY 11/12 FY 10/11 FY 11/12 FY 10/11 0.45 0.38 1.19 0.90 +18% +32% Note : Average active sites during period. Active site defined as a site with at least one unit available for sale

Full Year 2012 24 Completions: Product mix 8% 100% 9% 3% 4% 18% 24% 15% 20% 80% 29% 23% 60% 31% 6% 44% 40% 13% 45% 20% 23% 0% FY 08/09 FY 11/12 Flats (non-London) 1 & 2 Bed 3 Bed 4 Bed 5 & 6 Bed Flats (London)

Full Year 2012 25 Our brands Private ASP (FY 11/12 ) Private completions (FY11/12) Barratt (non London) £174.3k Barratt Homes David Wilson Homes (1) £227.6k London 8% Barratt London £299.6k David Wilson Homes (1) 33% Barratt Homes (non London) 59% (1) DWH includes Ward Homes (FY 11/12 : 241 private completions)

Full Year 2012 26 Highest quality product • HBF 5 Star status achieved for third consecutive year – 94% customer satisfaction for quality of home – 95% of customers would recommend Barratt to a friend • NHBC ‘Pride in the Job’ quality awards – more than any other housebuilder for the eighth consecutive year

Full Year 2012 27 Trends in private ASP Private average selling price 220 £201.8k £198.9k 200 £185.2k 180 £166.5k 160 140 FY 08/09 FY 09/10 FY10/11 FY11/12

Full Year 2012 28 Operational efficiency- costs • Further standardisation • Site reviews / replans • Maximising Group procurement capability • Code Level 3 and 4 costs Maximising efficiency across the Group

Full Year 2012 29 Operational efficiency- standard product Barratt Classic Range David Wilson Homes Range Barratt County Range

Full Year 2012 30 Operational efficiency – Commercial Action Group Reviewing site security Alternative solutions Radiator Valves Making sure we have the Using Insulslab (an Introducing a Group correct type of patrols and alternative to traditional raft procurement agreement for CCTV remote cameras will foundations) will save £1.2m thermostatic radiator valves save c. £3m (£1m delivered (£250k delivered in FY11/12) will save £1.1m (£220k in FY11/12) delivered in FY11/12)