FULL YEAR RESULTS TO 30 JUNE 2016 14 September 2016 Peter Truscott, Chief Executive Graham Prothero, Finance Director Wilshere Park, Welwyn, Hertfordshire
Peter Truscott CHIEF EXECUTIVE
AGENDA Full year results to 30 June 2016 Highlights Operating Review Financial Review Outlook Appendices FY16 Results – Analyst Presentation, 14 September 2016
HIGHLIGHTS Full year results to 30 June 2016 Alphabeta, central London Meldon Fields, Okehampton, Devon
GROUP HIGHLIGHTS 5 Strong performance across the Group PBT up 18% EPS up 17% 150 150 Record full year profit before tax up 18% to £135.0m 100 100 £135.0m 132.5p Return on net assets increased to 25.3% £114.0m 112.8p 50 50 Full year dividend up 21% to 82p per share 0 0 FY15 1 FY15 1 FY16 FY16 Management reorganised to enhance strategic focus Dividend up 21% Total units up 5% 100 6000 Continued to drive operational excellence 80 4000 Further detail around longer-term strategy 60 5,204 4,977 82.0p 40 and objectives to be communicated at 68.0p 2000 20 Capital Markets Day in February 2017 0 0 FY15 FY16 FY15 FY16 1 Stated after exceptional costs of £3.7m at June 2015 FY16 Results – Analyst Presentation, 14 September 2016
LINDEN HOMES Operating Review Oaklands, Horsham Waterside, South London
LINDEN HOMES 7 Operating Review Overview Operating margin increased to 17.5% (FY15: 16.0%) Revenue up 8% to £841m (FY15: £779m) 3,078 completions in the period, up 11% (FY15: 2,769) 22.7% £350k Strong in-hand position of £510m, up 19% (FY15: £427m) Efficiencies to generate annual cost savings of over £5m from FY17 Average outlets increased to 80 (FY15: 62); sales per outlet per week stable at 0.62 (FY15: 0.61) New management structure in place; opened new business unit in Yorkshire on 1 July 2016 11,700 plots in landbank (FY15: 13,550) with GDV of £3.6bn £73k 24% FY16 Results – Analyst Presentation, 14 September 2016
LINDEN HOMES 8 Operating Review Landbank analysis 1 ASP in landbank Gross margin of landbank £k % 400 25 20 300 15 200 22.6% 22.7% 10 21.8% £310k £291k £272k 100 5 0 0 FY14 FY15 FY16 FY14 FY15 FY16 Cost per plot Plot cost as % of ASP £k % 80 30 60 20 40 £73k £69k 24% 24% 23% £61k 10 20 0 0 1 As at 30 June; includes affordable FY14 FY15 FY16 FY14 FY15 FY16 FY16 Results – Analyst Presentation, 14 September 2016
PARTNERSHIPS AND REGENERATION Operating Review Devons Road, East London Webster Place, Newton Abbot
PARTNERSHIPS AND REGENERATION 10 Operating Review Overview Margin improved to 3.9% (FY15: 2.9%) New Bristol office opened in July 2016 Partnerships and Regeneration teams merged to enhance strategic and operational focus; executive strengthened Regional Low capital requirements, with impressive returns Offices Current Growth in landbank to 2,800 plots (FY15: 2,200) with Operating Areas GDV of £693m FY16 Results – Analyst Presentation, 14 September 2016
PARTNERSHIPS AND REGENERATION 11 Operating Review Units delivered 1,800 2500 CAGR 1 : 61% 2,208 2,126 2000 1,720 1500 1,800 1,600 1,800 1000 1,500 1,500 726 500 600 408 526 408 220 126 0 FY13 FY14 FY15 FY16 Contracting – equivalent units Private mixed-tenure units 1 Compound annual growth rate for mixed-tenure FY16 Results – Analyst Presentation, 14 September 2016
CONSTRUCTION Operating Review Black Rock Specialist Queensferry Crossing, Firth of Forth Training Centre, Portishead
CONSTRUCTION 13 Operating Review Overview Continues to be profitable with a margin of 1.1% Strong growth in revenue up 16% to £1.5bn (FY15: £1.3bn), with a cash position of £161m (FY15: £173m) 85% of work secured for 2016/17 (FY15: 90%); £3.5bn order book (FY15: £3.8bn) Continue to prioritise risk management, margin and cash; focus on frameworks and two-stage negotiated work Management changes embedded with high-quality people throughout the business FY16 Results – Analyst Presentation, 14 September 2016
CONSTRUCTION 14 Operating Review Order book By client type Building Education 100% 10 12 Other Public and Regulated 19 £2.34bn 28 Facilities Management 16 16 Commercial 75% 23 Health 19 Defence 50% 72 74 58 53 25% Infrastructure Water 0% Roads £1.16bn FY 13 FY 14 FY 15 FY 16 Rail Flood Alleviation Private Other Civil Engineering Regulated Public FY16 Results – Analyst Presentation, 14 September 2016
CONSTRUCTION 15 Operating Review Building North East PSBP Schools Framework NGEC National Capital Works Framework Hub South East Scotland PPP ProCure21+ Framework North Wales Schools Framework Hub North Scotland PPP FY16 Results – Analyst Presentation, 14 September 2016
CONSTRUCTION 16 Operating Review Infrastructure Flood Alleviation Scheme, Moray Urban Vision Partnership, Salford East Midlands Airport, Leicestershire Beckton Wastewater Moorfields Railway Station, Liverpool Treatment Works, East London Smart Motorways Framework South Devon Highway, Devon FY16 Results – Analyst Presentation, 14 September 2016
Graham Prothero FINANCE DIRECTOR
FINANCIAL REVIEW Full year results to 30 June 2016 Creechbarrow Road, Taunton, Somerset Great Eastern Quays, East London Protheroe House, North London
FINANCIAL REVIEW 19 Full year results 30 June 2016 Summary Income Statement: Full Year to 30 June £m £m 2016 2016 2015 2015 % Revenue 1 2,670.4 2,67 .4 2,430.7 9.9 Profit from operations 2 157.5 .5 138.9 13.4 Profit before exceptional items 3 135.0 13 5.0 117.7 14.7 and tax Profit before tax 13 135.0 5.0 114.0 18.4 Earnings per share: Pre-exceptional 3 13 132.5 2.5p 116.3p 13.9 Post-exceptional 13 132.5 2.5p 112.8p 17.5 Dividend per share 82.0 .0p 68.0p 20.6 1 Includes share of joint ventures 2 Profit from operations stated before finance costs, amortisation, exceptional items, joint ventures’ interest and tax, and ta xation 3 No exceptional costs in FY16. Exceptional costs of £3.7m in FY15 relate to the integration of Miller Construction FY16 Results – Analyst Presentation, 14 September 2016
FINANCIAL REVIEW 20 Full year results 30 June 2016 Segmental Analysis: Full Year to 30 June 2016 2016 Profi ofit/ t/(Loss) Ope peratin ing £m £m Revenue 1 from om Ope peratio tions 2 Mar argin in Linden Homes 84 840.8 0.8 14 147.2 7.2 17 17.5% Partnerships and Regeneration 300.6 30 0.6 11.7 11 3. 3.9% Construction 1, 1,50 503.4 15 15.8 1. 1.1% PPP Investments 25 25.0 (1.4 1.4) NA NA Group 0. 0.6 6 (15 15.8) NA NA TOTAL 2,67 2, 670.4 15 157.5 7.5 5. 5.9% 9% 2015 2015 Profi ofit/ t/(Loss) Ope peratin ing £m £m Revenue 1 from om Ope peratio tions 2 Mar argin in Linden Homes 779.0 124.3 16.0% Partnerships and Regeneration 329.4 9.4 2.9% Construction 1,293.2 15.7 1.2% PPP Investments 28.8 3.7 NA Group 0.3 (14.2) NA TOTAL 2,430.7 138.9 5.7% 1 Revenue includes share of joint ventures 2 Profit from operations stated before finance costs, amortisation, exceptional items, joint ventures’ interest and tax, and taxation FY16 Results – Analyst Presentation, 14 September 2016
FINANCIAL REVIEW 21 Full year results 30 June 2016 Linden Homes Linden Homes gross margin COMPS/ S/REVENUE Revenue up up 8% 8% 25% 23.8 Units: 3,078 (FY15: 2,769) 22.5 21.4 Revenue: £841m (FY15: £779m) 19.8 6.3 20% 6.5 6.3 SALES S MIX X (UNITS) S) Units up 11% 6.5 15% Private: 2,487 (FY15: 2,059) Affordable: 591 (FY15: 710) 10% 17.5 16.0 PRICE 1 AVERAGE SALES S PR up up 2% 2% 15.1 13.3 £335k (FY15: £327k) 5% ETURN 2 RETU up 3. up 3.8pts ts 0% Return on net assets: 31.7% (FY15: 27.9%) FY13 FY14 FY15 FY16 Overhead Operating margin HAND 3 SALES S IN N HAN up 19% 1 Excludes affordable £510m (FY15: £427m) 2 Definition updated – see Appendix 1.6 3 Current at 12 September 2016 FY16 Results – Analyst Presentation, 14 September 2016
FINANCIAL REVIEW 22 Full year results 30 June 2016 Partnerships and Regeneration REVENUE down £28.8m Partnerships and Regeneration gross margin 10% Contracting: £233.9m (FY15: £273.3m) 9.3 8.6 Mixed-tenure: £ 66.7m (FY15: £ 56.1m) 7.6 8% 5.4 6.0 UNITS DELIVERED ASP up 4% 6% 4.8 ASP: £166k (FY15: £160k) 7.2 4% 3.9 Mixed-tenure: 526 (FY15: 408) 3.9 Equivalent 1,600 (FY15: 1,800) 2% contracting units: 2.9 2.1 1.4 0% ORDER BOOK/SALES IN HAND 1 up 2%/40% FY13 FY14 FY15 FY16 Contracting: £865m (FY15: £850m) Overhead Operating margin Mixed-tenure: £ 73m (FY15: £ 52m) 1 Current at 12 September 2016 FY16 Results – Analyst Presentation, 14 September 2016
FINANCIAL REVIEW 23 Full year results 30 June 2016 Construction Construction gross margin REVENUE up £210.2m 10% £1,503.4m (FY15: £1,293.2m) 8% CASH robust 6.8 6.1 5.8 £161.1m (FY15: £173m) 6% 4.9 ORDER BOOK 1 high quality 5.2 4% 5.1 4.6 3.8 £3.5bn (FY15: £3.8bn) 2% 1.6 WORK SECURED 1 good visibility 1.2 1.1 1.0 0% FY13 FY14 FY15 FY16 85% (FY17) (FY15: 90%) Overhead Operating margin 1 Current at 12 September 2016 FY16 Results – Analyst Presentation, 14 September 2016
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