laing homes
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Integration and future strategy
Laing Homes
David Livingstone
Disclaimer
This presentation is being made only to and is directed at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the "Order") or (b) any other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1)of the Order (all such persons being referred to as "relevant persons").
Any person who is not a relevant person should not act or rely on this presentation or any of its comments.
The financial information set out in this document does not constitute the Company's statutory accounts. Statutory accounts for 2003, which received an auditors' report that was unqualified and did not contain any statement concerning accounting records or failure to obtain necessary information and explanations, have been filed with the Registrar of Companies.
Integration into GWUK
November 2002 Acquired by GWUK Paul Healey appointed DMD at MK
January – Dec 2003 Six regions contributing to overall business
January 2003 Laing introduced to procurement processesBenchmarking introduced
March 2003 MK overhead reduced
June 2003 PQA introduced EDG devolved into regions
December 2003 975 PD units delivered to profit
Integration into GWUK
January 2004 Six regions reduced to five:North ThamesSouth East ThamesSouth West ThamesThames ValleyMidlands
March 2004 Paul Healey retires
April 2004 David Livingstone becomes DMD – joined George Wimpey in 1973Confirmation of price points to remove high end exposure
July 2004 Laing HQ closure announced
September 2004 Full integration of bench marking and best practice
Shared Values
Safety
Customer satisfaction
Referral cultivation
Performance delivery
Value from scale
procurement
sharing knowledge
common processes
Laing Homes
A premium product, driven by local management
Higher average selling price than George Wimpey
better locations with larger plots
higher specification but not radically different
greater emphasis on design
Like Audi and VW
Laing Homes
However
Had moved into high end premium market
Strategy has been to
significantly reduce exposure to products over £750,000
plan new product over £500,000 carefully
Opportunities for the Future
Working out poor historical sites
Margin improvement through ‘sweating’ overheads and build cost efficiency
Continued improvement through sharing of best practice
Laing learning from GW benchmarking and build cost reduction programmes
GW learning from Laing land consultation and PR
Improving land bank
opportunities to share large sites
better cash management - increased opportunities
Capacity to grow business across the country
Existing businesses -focus on margin improvement
Reduction in build costs
benchmarking
value engineering
Improving land purchase terms
Volume growth within existing businesses
New businesses - growth potential
First steps on geographical growth underway
model defined
target markets identified
Liaison with existing George Wimpey businesses can assist growth and use of assets
Introduce three new businesses
Eastern - Essex
Western - Bristol
Scotland - Edinburgh
Limited overheads
Laing Homes Current Businesses
Laing Homes potential - first steps
Scale of volume opportunity
Long term potential is for a business to compete in size with GW, however
Speed of growth within our own control
Dependent on
general market conditions
land market
Not pushing for volume growth at any cost
Conclusions
Laing Homes is now well positioned
restructuring successfully complete
moving away from high priced markets
further programme of cost reductions in hand
improving landbank to support growth of existing businesses
sensible strategy of volume growth as market conditions allow
Laing Homes SW Thames
Gerry McCormackManaging Director
Introduction
Structure
Area of operation
Current and future outlets
Business performance
Cost excesses
Laing Homes within George Wimpey UK
PQA
Staff
Customers
Structure
Gerry McCormack
Jim Dennis
Technical
Paul Hogarth
Sales & Marketing
Bruce Heffer
Production &
construction
Gordon Patterson
Finance
Steve Andrews
Commercial
Steve Collins
Land
Total monthly paid staff 67
Weekly paid staff 14
Area Map
Current Outlets
393Reigate
335Ph8
408Guildford – Queen Elizabeth Park Ph6
950Guildford – Creek Bridge Road
356Ewell
600Barnes – Creek Bridge Road
Avg Selling Price £’000’s
Current outlets
Future Outlets
298Winchester
393Reigate
416Kingsworthy
303Hindhead
335Ph8
408Guildford – Queen Elizabeth Park Ph6
356Ewell
Avg Selling Price £’000’s
Future outlets
Business Performance
6
4
6
Outlets
14.4%21311.0762004
7.6%1423.6472003
10.5%1577.0452002
PBIT%UnitsPBITT/over
Cost Excesses
£4.3m£0.2m2004
£4.3m£0.9m2003
£5.0m£4.6m2002
OverheadBuild/ Sales
Laing Homes within GWUK
Culture
Commitment to growth
Specialist meetings
Benchmarking and cost control
Improved margins
PQA
Production Quality Awards (PQA)
Tours throughout the UK
PQA panel
50 sites visited
What was learned?
Staff (South West Thames)
Monthly and weekly paid staff
Building in Service Excellence (Core Values)
Business Change Team (B.C.T.)
Investors in People
Staff Communication
Induction programme
Newsletters
Welcome days
Staff conference
Employees satisfaction survey
Customers
Customer satisfaction monitoring
Growing Wiser
Quality and service
Clean and ready
The Future
Outlet growth 2007/8 10-15 outlets
Turnover growth 2008 £120m
PBIT growth 90%
People growth 10%
Overhead efficiency
A Clear Strategy of
Margin Improvement and Growth
GuildfordQueen Elizabeth Park
Guildford – Queen Elizabeth Park History
Former use
Acquired in March 2001- £46m
Planning Trail
Consultation process/ community planning week
Secure planning
Continued liaison with public
Sales launch April 2002
Output per year - 50 units
Laing Homes – consortium leader
The Community
Total site residential 525
35% Affordable Housing
• Key Worker/ Shared Ownership and Housing for rent
Commercial – 100,000 sqft
Office accommodation
Current facilities
• Nursing Homes
• Health and Fitness (Esporta)
• Community Hall
• Doctors Surgery
• Café/ restaurant and food store (Budgens)
The Community
Section 106 benefits Environmental/ Infrastructure improvements to local area -
£800,000
Park and Ride - £1.6m
Bus route - £700,000
Travel vouchers - £105,000
Green Travel Plan
Recycling materials Demolition materials retained on site
17 acres of woodland retained and improved
The Product
Types Price Point
5 Bedroom £740,000
4 Bedroom £600,000
3 & 4 Bedroom £450,000
3 Bedroom £350,000
3 Bedroom £295,000
Awards
Cost Trail
622004
702003
812002
£ per ft
The Site Team
4 teams
Team Leaders Dave Livingstone
Gerry McCormack
Paul Hogarth
Bruce Heffer
Laing Homes SW Thames
Gerry McCormackManaging Director
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