McCarthy & Stone Half Year Results Presentation Wednesday, 15 th July 2020 Transcript produced by Global Lingo London - 020 7870 7100 www.global-lingo.com
McCarthy & Stone Half Year Results Presentation Wednesday, 15 th July 2020 Overview John Tonkiss CEO, McCarthy & Stone Welcome Good morning everybody, I am John Tonkiss. Welcome to our interim results presentation for the period to 30th April. Some brief introductions first of all. As we are all in our offices here in Bournemouth for the first time, socially distanced of course, if I can introduce vocally as it were, firstly our CFO, Rowan Baker. Rowan Baker (CFO, McCarthy & Stone): Good morning, everybody. Secondly, our CFO Designate, Martin Abell. Martin Abell (CFO Designate, McCarthy & Stone): Good morning. Thirdly, our COO, Mike Lloyd. Mike Lloyd (COO, McCarthy & Stone): Good morning. Collectively this morning we are going to cover a few points on our agenda. I will start as you would anticipate with an overview and a strategic update. Mike will then update on our operational responses, particularly focusing on our Customers & Services side, before handing over to Rowan who will talk through our financial performance. I will draw things together with a brief summary and outlook before opening up to the Q&A session. Overview Let me start with the overview. It has been an extraordinary period in which our half year results reside. I will cover some of the more routine achievements and our high level numbers shortly but of course the impact of Covid-19 has been significant on the business. Throughout, our absolute focus has been on the safety and wellbeing of our customers and staff throughout. Due to our unique proposition our customers have experienced a far lower infection rate than older people in wider society. While we have also been acting decisively to protect the financial health of the business and Rowan of course will cover our solid financial and cash position later on. Looking forward, we are gradually remobilising the business recognising the specific nature of our customer base, typically over 75 years of age, at more risk to Covid-19, who are invariably cautious. We are therefore matching our ramp-up actions with a steady return of customer activity. Stepping back and looking more broadly, I believe our response to Covid-19 has been decisive and has illustrated the special nature and benefits of our proposition. Independent retirement living with help and support on hand, a third way of living in your retirement years. Not in your own home and isolated, nor in a care home with all the challenges that that provides. It has also reaffirmed I think that we are pursuing the right long-term strategy where we have made solid progress offering customers choice of tenure with flexible services and more affordable products. Looking beyond Covid-19, for there surely will be an end to this pandemic, we see significant opportunities. With our brand proposition and awareness enhanced by our response to the outbreak and the land market dislocated by the challenges within retail and commercial property with a push for more brownfield housebuilding in our towns and cities, which of www.global-lingo.com 2
McCarthy & Stone Half Year Results Presentation Wednesday, 15 th July 2020 course is where we naturally specialise. With government actually pursuing supportive policies around stamp duty, planning policy reform and ultimately a solution to the adult social care dilemma. Ultimately an emergence of a new and attractive retirement living property asset class. Emerging from extraordinary period – HY2- Review If I look back at H1 in my mind it has been a game of three thirds. You can see in the schematic at the top of page five, we had prior to Christmas the distraction of the General Election, followed by clearly improving trends in the Boris bounce after the new year and then a hard break on activities in March. We have been making good progress with our margin improvement and cash generation plans, notably our build cost reduction programme, with £30 million secured in build, while our rental activity has performed well with attractive yields being delivered. In addition, we are delighted to report that we have achieved our 15 th consecutive year of HBF five-star customer satisfaction and five NHBC Pride in the Job Awards. This is a real reflection on both the quality and consistency of the schemes that we deliver. Our health and safety metrics have improved significantly during the period, well ahead of industry benchmarks. However, of course, at the bottom of the page H1 financial impact has been significant. Legal completions were down 44% at 471 resulting in a £25 million underlying operating loss in the period. Safety and wellbeing of customers and employees has been our absolute priority Customers As I said at the outset, the safety and wellbeing of our customers and staff has been our absolute priority during the period. For our customers, amongst many things, we have adopted strict hygiene controls, adapted our service activities, provided on-site support and guidance and a range of wellbeing activities. Critically, as you can see in the bar chart on the right of this page, Covid-19 infection rates for our customers have been better than the entire UK population and have been four times lower than the over-85s in the population, which is testimony to the professionalism of our teams. I believe this is an achievement that has enhanced our reputation and underlines the strength of our customer proposition. Employees Throughout the pandemic our staff have been protected with PPE, engaged and proactively volunteered through our Buddying programme and we have supported home-based working through video blogs, cascade communications and online courses. As a result we have seen excellent levels of employee engagement in recent surveys. Bringing these together, I have been both impressed and extremely proud of how we have responded to the crisis. To share this sentiment we recently ran a national ‘ thank you ’ campaign to show our appreciation of our customers and our employees. You can see on the right some of the wonderful thank you comments sent to our teams. Acting decisively to protect the financial health of our business On the next slide we have also been acting decisively to protect the financial health of the business with a series of measures. These include cancelling the dividend, stopping discretionary spend, a voluntary 20% salary reduction for Board and Senior Leadership Team members, furloughing some of our build and sales staff at 80% salary, agreeing relaxations to www.global-lingo.com 3
Recommend
More recommend