INTERIM RESULTS PRESENTATION Six months to 31 December 2016 MARCH 2017 DELIVERING VALUE THROUGH HOUSEBUILDING AND BROWNFIELD DEVELOPMENT
01 Our business 01 • AIM listed with market cap of £129m • Housebuilding and brownfield regeneration business in Southern Who we are England • 100% track record in obtaining planning consents St Johns, Chelmsford • Identify and acquire brownfield land opportunities with strategic angles • Secure options over strategic greenfield land Strategy • Add value by navigating through complex planning system • Develop homes for private sale; sell consented plots; control substantial land bank; generate rental income Meridian Waterside, Southampton • Grow in -house construction capabilities to increase housebuilding output Business focus • Increase size of land bank • Increase proportion of consented plots within land bank The Wessex Hotel, Bournemouth
02 Clear business model Beaumont Works, St Albans St Johns, Chelmsford Land bank House building programme Brownfield Navigation land of complex acquisition planning process Sale of system consented plots Investment portfolio Creating value through planning expertise
03 Group highlights Operational Financial ▪ 87 units (2015: 93) sold, of which 85 private units sold at average ▪ EPRA net asset value of 87.05p (2015: 80.64p) per share and price of £319,000 (2015: £325,000) adjusted EPRA net asset value of 92.03p (2015: 84.38p) per share ▪ Forward sales of £31.8m ▪ Profit before tax of £4.4m (2015: £21.5m including revaluation surplus of £14.0m) ▪ 389 units currently under construction ▪ Housebuilding revenue of £27.5m (2015 : £30.3m) ▪ 866 plots awaiting planning decisions and 1,344 plots the subject of ▪ Gross margin on housebuilding 20.0% (2015 : 24.1%) – reduction pre-application discussions with local authorities due to increased costs related to failed contractor ▪ Land bank increased to 7,151 plots (2015: 5,672 plots) of which ▪ Profit from plot sales of £6.3m (including £6.0m gain on the sale 2,440 have planning consent; strategic land with 2,094 plots across 21 sites and over 390 acres of a subsidiary) (2015 : 6.3m) ▪ New joint venture with Anderson Group to develop 43 homes at ▪ 36% increase in gross rental income to £1.2m (2015: £0.9m) Gardiners Park, Basildon – first phase of potentially much larger ▪ Net current asset position transformed with 98% of total project borrowings non-current (2015: 20%) with cheaper funding costs ▪ Minimal impact seen from referendum decision ▪ 10% increase in net asset value to £118m (2015: £107m) ▪ 25% increase in interim dividend to 0.5p (2015 : 0.4p) per share ▪ Strengthened balance sheet with cash balances of £17.6m (2015: £16.6m)
04 Income statement H1 2017 H1 2016 Change Comments Revenue £32.6m £55.1m -40.8% Land sale shown as disposal of subsidiary in H1 2017 Gross margin 21.1% 26.5% Profit before tax (including valuation gain) £4.4m £21.5m -79.5% Revaluation uplift of £14m in H1 2016 Profit before tax (excluding revaluation gain) £4.4m £7.5m -41.3% Major part of profits expected in H2 2017 Earnings per share 1.71p 10.04p -83.0% No revaluation uplift Interim dividend per share 0.5p 0.4p +25% Payable in June 2017
05 Revenue & gross profit analysis Revenue by segment Revenue by segment H1 2016 H1 2017 2% 2% 4% 4% 5% ▪ 101 units sold (2015: 105) 5% 39% Land sales Land sales ▪ 45% (2015: 32%) of private sales with Help to Buy Housebuilding Housebuilding Contract ▪ Average private unit selling price of £319,000 (2015: Contract Rental and other £325,000) Rental and other Hotel ▪ Gross margin of 20.0% (2015: 24.1%) on housebuilding 55% 84% ▪ Forward sales of £31.8m made up of 78 private units and 36 Housing Association contract equivalent units Gross profit by segment Gross profit by segment H1 2016 H1 2017 ▪ Gross profit of £6.3m on sale of 177 plots including a 3% 3% 6% 1% corporate land sale (2015: £6.3m on 244 plots) 15% 43% Land sales Land sales ▪ Significant increase in rental income with current -3% annualised amount of £2.3m Housebuilding Housebuilding Contract Contract Rental and other Rental and Hotel other 50% 76%
Balance sheet highlights 06 Debt profile H1 2017 H1 2017 H1 2016 Comments 2% EPRA NAV 87.05p 80.64p Reflection of increase in unrealised value within projects Adjusted EPRA NAV 92.03p 84.38p Investment Properties £52.1m £48.1m Joint Ventures £20.0m £7.3m New JVs in Cheshunt and Basildon Associate £2.0m £0.8m 25% interest in Troy Homes Ltd Due <1 year 98% Due >1 year Inventories £146.0m £129.7m Increase in housebuilding WIP Debt profile H1 2016 Cash & cash equivalents £17.6m £16.6m 20% Borrowings <1 year £(1.8)m £(57.0)m Net current assets £155.6m £77.5m Debt profile transformed Borrowings > 1 year £(94.1)m £(14.2)m Land creditors £(22.1)m £(17.2)m Deferred consideration on three sites Equity attributable to shareholders £118.0m £107.1m 80% Due <1 year NAV 58.42p 53.06p Due >1 year
Land bank
07 Land Portfolio ▪ Operations focused on sustainable Southern locations ▪ Strong and visible pipeline of new opportunities ▪ Delivery of first time buyer and mid-tier price range homes into high-demand areas in Southern England
Visible and growing pipeline of future opportunities 08 Land Bank Plots owned / managed (number) 8000 8,000 7,151 7500 7,151 7,000 6,681 7000 6,681 66 1,265 1,048 6500 6,000 49 1,163 5,176 6000 1,175 2,440 5,000 1,124 5500 5,176 1,086 842 5000 3,734 114 4,000 1,200 4500 1,344 2,589 1,575 1,318 3,000 3,734 4000 2,306 3500 605 2,000 1,329 1,057 1,318 3000 5,518 2,294 2,306 307 1,000 1,811 1,805 2500 4,711 1,303 942 2000 3,976 - 1,057 FY 2013 FY 2014 FY 2015 FY 2016 H1 2017 1500 2,416 Managed or held within joint ventures with consent (contracted or terms agreed) 1000 Owned or contracted with planning consent or resolution to grant planning consent 1249 500 Plots controlled or terms agreed with consent or resolution to grant planning consent 0 Owned or contracted without planning consent FY 2013 FY 2014 FY 2015 FY 2016 H1 2017 Managed or held within joint ventures without consent (contracted or terms agreed) Plots With Planning Permission Plots Without Planning Permission total Plots controlled or terms agreed without consent (including strategic options) Significant brownfield and strategic land bank with visible pipeline of opportunities
9 100% record of obtaining planning permission Planning status of residential plots Visible pipeline of assets moving through the planning cycle Strategic To be progressed Pre-application discussions Planning applications submitted Target plots for consent by 30 June Ownership status No. of plots No. of sites No. of plots No. of sites No. of plots No. of sites No. of plots No. of sites 2017 Managed or held in joint ventures (contracted or terms agreed) - - 250 1 900 1 425 3 59 Owned or contracted 335 2 46 1 444 4 352 4 352 Plots controlled or terms agreed 1,759 19 111 1 - - 89 1 - Grand Total 2,094 21 407 3 1,344 5 866 8 411 Land progressing through planning system Planning status of commercial space To be progressed Pre-application discussions Planning applications submitted Planning applications Ownership status No. of sites Sq ft No. of sites Sq ft No. of sites Sq ft submitted: 866 Managed or held in joint ventures (contracted or terms agreed) - - 1 30,000 2 14,982 Strategic: 2094 Owned or contracted - - 3 81,628 2 57,209 Plots controlled or terms agreed - - - - 1 53,820 Pre-application Grand Total - - 4 111,628 5 126,011 discussions: 1,344 To be progressed: 407
Wilton Park, Beaconsfield, Buckinghamshire 10 ▪ 114 acres ▪ Estimated GDV £300m ▪ Development Brief adopted in 2015 for 350 homes ▪ Access road from Pyebush roundabout now opened ▪ Short term rental income in excess of £1.5m p.a. ▪ Existing residential properties valued at £45.5m ▪ Financial viability assessment to be finalised with LA followed by planning application expected in May 2017 ▪ Site included in Local Authority’s Preferred Option list for Green Belt release which could result in further residential and commercial space
11 Cheshunt, Hertfordshire ▪ Former headquarters of Tesco plc ▪ Acquired in a 50:50 joint venture for £30 million ▪ Framework for a Masterplan being developed in collaboration with Broxbourne Borough Council ▪ Plan expected to be adopted mid 2018 ▪ Expect approximately 1,900 residential units and 200,000 sq ft of commercial space on 25 acres of which the JV owns 13 acres ▪ Further land assembly agreed to bring total JV land up to 16 acres ▪ Half an hour to Liverpool Street Station by train. Site identified as part of Crossrail 2 proposals
12 Aylesbury, Buckinghamshire ▪ Major greenfield release of approximately 75 acres, of which 40 are developable ▪ Site had existing planning permission for 125 residential units and 250,000 sq ft of commercial space ▪ Resolution to grant planning consent received for 400 residential units and 100,000 sq ft of commercial space ▪ Site encompasses Scheduled Ancient Monument ▪ Estimated GDV in excess of £100m ▪ Held in a joint venture with Europa Capital
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