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Investor Relations Presentation. Half Year to 31 st December 2005. Disclaimer. - PowerPoint PPT PresentationTRANSCRIPT
Investor Relations Presentation – February 2006
Investor Relations PresentationHalf Year to 31st December 2005
Investor Relations Presentation – February 2006
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 2005 (the “Order”) or (b) any other persons to who it may otherwise lawfully be communicated, falling within Article 49(2) 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 2005, 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.
Disclaimer
Investor Relations Presentation – February 2006
Introduction
• Record results again through good operational performance
• Acquisition of Chartdale Homes
• Construction• Margins at 2%• Order book at £1.1b
•
Housebuilding
• Record operating profits
• Margin maintained• In hand position at all time high
•
Affordable Housing Director appointed
• Sale and leaseback on two properties• Strong platform for future growth
Overview
Investor Relations Presentation – February 2006
• Turnover up 7% at £372 million
• Profit before tax up 10% at £14 million
• Earnings per share up 10% at 4.4p
• Interim dividend up 17% to 0.7p per share
• Net debt of £8.9 million (2004 £10.1m) represents gearing of 15% (2004 21%)
NB – 2004 comparison based on restated IFRS figures
Financial Review
Highlights
Investor Relations Presentation – February 2006
Financial Review
Summary Profit & Loss Account
(£m)
Dec 2004*
(£m)
Dec 2005
Profit before interest 16.3 14.7
Interest (2.3) (2.0)
Turnover 372.2 347.2
Profit before tax 14.0 12.7
Diluted earnings per share 4.4p 4.0p
Dividend per share 0.7p 0.6p
Interest Analysis
Bank interest 0.6 0.5
Interest on unwinding of discounted creditors 1.4 1.1
Net return on liability of pension fund 0.3 0.4
Total Interest 2.3 2.0
* based on restated IFRS figures
Investor Relations Presentation – February 2006
Financial Review
Dec 2004* Dec 2005
Construction 272.8 255.8 5.6 5.3
Dec 2004 *Dec 2005
Group Turnover (£m) Profit/(loss) (£m)
Housebuilding 98.3 91.1 13.9 12.7
Group 0.3 0.3 (2.7) (2.1)
372.2 347.2 16.3 14.7
Less net interest payable (2.3) (2.0)
Profit before tax 14.0 12.7
Segmental Analysis
PPP Investments 0.8 - (0.5) (1.2)
* based on restated IFRS Figure
Investor Relations Presentation – February 2006
Cash Flow Summary
Financial Review
Dec 2005 (£m)
Increase in inventories and developments 3.0 (10.2)
Decrease in land creditors (10.9) (3.7)
Increase/(decrease) in trade and payables (1.8) (10.9)
Net inflow 3.5 2.0
Decrease in trade and other receivables 7.4 23.6
Interest, tax, dividends, share capital & othermovements (10.5) (9.4)
Net debt brought forward (12.4) (12.1)
From operating activities 17.5 16.0
Dec 2004* (£m)
Net debt carried forward (8.9) (10.1)
* based on restated IFRS figures
Decrease in retirement benefit obligation (1.2) (3.4)
Investor Relations Presentation – February 2006
Financial Review
Dec 2004* (£m) Dec 2005 (£m)
Net debt 8.9 10.1
Shareholders’ funds 58.2 48.3
Total capital employed 67.1 58.4
Gearing 15% 21%
Interest cover > 7 times > 7 times
Balance Sheet, Financing
* based on restated IFRS figures
Investor Relations Presentation – February 2006
• 2% margin achieved ahead of schedule
• Affordable Housing expansion continues
• Increased presence in Water
• Financial Close Northampton Schools PFI
• Successful integration of Pentland
Construction
Key Highlights
Investor Relations Presentation – February 2006
Construction
Profitability
STABILISATION GROWTHRECOVERY
2004 20052003
1.5
1.0
0.5
0.0
1.7%*
1.1%
(0.01)%
2006
2.0 2.0%*
* based on restated IFRS figures
Investor Relations Presentation – February 2006
Construction
Forward Order Book
18 Infrastructure 45 30
47 Education 330 282
37 Water 233 233
89 Commercial 112 99
4 Interiors 14 13
15 Health 126 126
15 Telecommunications 10 10
21 Affordable Housing 145 110
19 Rail 65 65
8 Ground Engineering 3 2
Market SectorsTurnover (£m)
Half Year to Dec 05
273 1082 969
Total Work In HandNon Price Competitive
90%
Work In Hand (£m)
Non Price CompetitiveTotal
Investor Relations Presentation – February 2006
Construction
• Leading Framework Contractor
• Scottish Water
• United Utilities
• Anglian Water
Water
Investor Relations Presentation – February 2006
Construction
• Acknowledged as education specialists
• Bedford Schools PFI handed over on time
• Caludon Schools PFI Phase 1 handed over on time
• Northampton Schools PFI – on site
• Solihull Building Schools for the Future – ITN Stage
Education
Investor Relations Presentation – February 2006
Construction
• Current LIFT schemes at FC 2/3
• Fourth Wave - selected on three schemes
• Potential future opportunities in Scotland
• Government Initiatives - Community Hospital Schemes
Health
Investor Relations Presentation – February 2006
• Profit growth by volume
• Order book exceeds £1billion
• Partnering culture integrated throughout business
• Profit margins now in upper quartile
Construction
Summary and Outlook
Investor Relations Presentation – February 2006
• Northampton Closed – Construction commenced
• BSF Solihull - £75m ITN stage
• LIFT 4th Wave ITN
• South East Essex
• South East Midlands
• Bury Tameside Glossop
• Community Hospital
• Hinckley - £30m
• Market Harborough - £30m
• BSF
• Birmingham - £60m First Wave
• Nottingham - £35m First Wave
Investments
PPP Investments
Investor Relations Presentation – February 2006
Housing Highlights
• Acquisition of Chartdale Ltd.
• Record profits and margins maintained
• Sales volumes at all time high
• Significant cost reductions achieved
• Excellent customer satisfaction results
• Strengthened ‘in-hand’ position
Housebuilding
Investor Relations Presentation – February 2006
• Negotiated, ‘bolt-on’ acquisition
• Well established regional housebuilder
• Substantial land bank c. 1350 plots on 23 sites
• Acquisition on deferred payment terms
• 200 units per annum projected
• 95% of land bank for houses
Housebuilding
Acquisition of Chartdale Ltd.
Investor Relations Presentation – February 2006
HousebuildingKey Statistics
6 Months to December
2005 2004* Increase %
Units 484 387 25.1
Average Selling Price £000 203 228 (11.0)
Income per sq. ft. £ 232 220 5.4
Turnover £m 98 91 7.7
Margin % 14.1 13.9 1.4
ROCE % 19 22 (13.6)
Sales in Hand Feb 06 £m 191 166 15.1
Land bank Feb 06 units 3,800 2,464 54.2
Strategic land Feb 06 acres 697 666 4.7
* based on restated IFRS figures
Investor Relations Presentation – February 2006
Market Conditions and Focus
• Challenging market, but encouraging start to 2006
• Difficulties with planning system remain
• Highly competitive land market
• Expertise in affordable Housing
• Individually designed schemes and conversions
• Avoid consortium sites and high rise apartments
• Shortage in supply continues to underpin the market
Housebuilding
Investor Relations Presentation – February 2006
Housebuilding
Midas & Gerald Wood Homes
• Units 200
• Average selling price £000 170
• Brownfield and conversion 87%
• Customer satisfaction 93%
• Two ‘Golds’ at the What House Awards
Investor Relations Presentation – February 2006
Housebuilding
Stamford Homes
• Units
128
• Average selling price £000
168
• Brownfield and conversion
51%
• Customer satisfaction 82%
Investor Relations Presentation – February 2006
Housebuilding
Try Homes Southern
• Units 73
• Average selling price £000
278
• Brownfield and conversion
100%
• Customer satisfaction 89%
• ‘Silver’ at the What House Awards
Investor Relations Presentation – February 2006
Housebuilding
Try Homes Thames Valley
• Units 83
• Average selling price £000
272
• Brownfield and conversion
100%
• Customer satisfaction
93%
• ‘Silver’ at the What House Awards
Investor Relations Presentation – February 2006
Housebuilding
Summary & Outlook
• All business units performing well
• Land bank boosted by acquisition of Chartdale
• Exposure to apartments reduced
• Land and planning remain difficult
• Well placed to maximise opportunities in Affordable Housing
• Confident of achieving expansion plan
Investor Relations Presentation – February 2006
Affordable Housing
• Director of Affordable Housing appointed
• Work in hand up to £145m
• Strategic Alliances & Framework Agreements
• Strong Opportunities - East London Regeneration
• Mixed Tenure Expertise
• Opportunities for grant direct from Housing Corporation
• Considerable scope for growth
Construction and Housebuilding Divisions
Investor Relations Presentation – February 2006
• Strong financial position
• Construction:
• Maintain profit margins
• Increase turnover and cash generation
• Growth in chosen markets
• Housebuilding:
• Continuing to perform in challenging market
• Uncertain land and planning environment
• Proven business model
• Cost reduction plan
• Excellent opportunities in affordable housing
• Confidence in growth plans:
• Organic and by acquisition
Summary and Outlook