preliminary results presentation – september 2004 year to 30 th june 2004 preliminary results...

Preliminary Results Presentation – September 2004

Year to 30th June 2004

Preliminary Results Presentation


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 who 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.

Disclaimer

*


David Calverley - Chief Executive

Introduction


• Record results driven by operational performance

• Construction

• Margins up

• Quality of order book

• Housebuilding

• Expansion plan on track

• Strong in hand sales

• Finances strong

• Good growth opportunities

Introduction

Overview


Frank Nelson – Finance Director

Financial Review


Highlights

• Group turnover up 8% to £687m

• Profit before tax up 32% to £22.7m

• Strong cash flow, gearing of 17%

• Dividend increased 13% to 1.7p

Financial Review

* Comparison 2002/03 pre exceptionals


Financial Review

Summarised Profit & Loss Account to 30th June 2004

20032004(£m)

Profit before interest (pre exceptional) 25.8 20.4

Turnover (including Joint Ventures) 695.4 640.4

Interest charge (3.1) (3.2)

Profit before tax (pre exceptional) 22.7 17.2

Exceptional charge - (3.9)

Profit before tax (post exceptional) 22.7 13.3

Earnings per share (fully diluted):

Pre exceptional 6.9p 5.4p

Post exceptional 6.9p 4.2p

Dividend per share 1.7p 1.5p

Return on shareholders’ funds (pre exceptional) 34% 31%


Financial Review

Segmental Analysis to 30th June 2004

2003 2004(£m)

Construction 512.9 480.3 4.2 (0.4)

2003 2004

Group Turnover(including joint ventures)

Profit/(loss)

Housebuilding 182.0 159.5 25.5 24.1

Group 0.5 0.6 (3.9) (3.3)

Exceptional charge - - - (3.9)

695.4 640.4 25.8 16.5

Less net interest payable (3.1) (3.2)

Profit before tax 22.7 13.3


Financial Review

Charge for Pension Deficit

As reported(£m)

Construction 4.2 2.0 6.2 (0.4)

Pre Charge

Segmental Profit 2004 2003

Housebuilding 25.5 0.6 26.1 24.1

Group (3.9) 0.1 (3.8) (3.3)

Exceptional charge - - - (3.9)

25.8 2.7 28.5 16.5

Less net interest payable (3.1) - (3.1) (3.2)

Profit before tax 22.7 2.7 25.4 13.3

Deficit Charge As reported


Financial Review

Balance Sheet Highlights

20032004(£m)

Net debt 12.3 17.8

Shareholders’ funds 72.3 59.7

Total capital employed 84.6 77.5

Gearing 17% 30%

Interest cover 8.5 5.2 *

* Post exceptional charge

Land 122.4 95.7

Work in Progress 53.8 51.6

Land Creditors (44.7) (25.4)


Financial Review

Cash Flow Summary

20032004(£m)

Depreciation and amortisation 1.8 1.9

Group operating profit (post exceptional) 24.5 15.4

Working capital movements (9.2) (10.1)

Interest (2.0) (2.5)

Tax (5.6) (4.2)

Dividends (3.4) (3.3)

Net cash flow from operating activities 17.1 7.2

Movement in net debt 5.5 (4.9)

Capital expenditure (1.2) (1.7)

Other 0.6 (0.4)


Andy Sturgess – Managing Director

Construction Business Review



Key Highlights

• Growth in profit continues as planned

• Improved cash management

• Success in securing work in chosen markets

• Improved quality of forward order book



Margin Improvement

-1.00%

-0.80%

-0.60%

-0.40%

-0.20%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

.Jun-02 Dec-02 Jun-03 Dec-03 Jun-04% net margin



Key Success Factors

• Collaborative working

• Life cycle management

• Design management

• Risk management

• Ability to say NO

Holyhead Wastewater Treatment Scheme


Sector Opportunities

Infrastructure

Health & Education

Business Units

Commercial

Interiors

PFI/PPP

Telecommunications

Affordable Housing

Rail

Ground Engineering

Market Sectors Wo

lve

y

Wa

rrin

gto

n

Ux

bri

dg

e

Pa

rtn

ers

hip

s

Co

mm

un

ica

tio

ns

Ro

ck

& A

llu

viu

m

Water

Growth >10% Growth 5-10% Growth 0-5% Decline 0-5%




Recent Successes

• Bridge-guard - £50m

• British Waterways - £24m

• Northampton Schools, preferred bidder - £150m

• LIFT Closures - £92m

• Holyhead - £34m

• Bedford, successful handover - £20m

• Swan Housing Framework

Samuel Whitbread School



Total Work in Hand

32.1 Infrastructure 59.1 55.4

69.3 Education 113.3 96.5

73.9 Water 146.8 146.8

128.1 Commercial 60.4 29.4

56.4 Interiors 29.2 24.3

16.9 Health 96.6 91.2

38.2 Telecommunications 6.3 6.3

52.1 Affordable Housing 43.5 39.4

32.6 Rail 62.4 62.4

14.8 Ground Engineering 3.3 1.0

Market SectorsTurnover (£m)

Year to Jun 04

514.4 620.9 552.7

Total Work In HandNon Price Competitive

89%

Work In Hand (£m)

Non Price CompetitiveTotal


Current Opportunities


• PFI

• Ealing, financial close - £20m

• Caludon Castle School, financial close - £20m

• Birmingham Schools II, one of two

• Bromsgrove School, one of three

• Rochdale, one of three

• PPP

• Coventry LIFT, financial close - £42m

• Building Schools for the Future

• AMP 4 Water Renewals

• Wimbledon Roof

Wimbledon Roof



Current Opportunities

ED

UC

AT

ION

- P

FI Caludon Castle, Coventry

Northampton Schools

Ealing

Birmingham Schools II

Rochdale

Bromsgrove

HE

ALT

H

WA

TE

RF

RA

ME

WO

RK

2004 2005 2006 2007 2008 2009 2010

Coventry

Barnet, Enfield & Haringey

Liverpool & Sefton

Welsh Water

United Utilities

Northumbrian Water

Scottish Water

2011

AMP 3 AMP 4

AMP 3 AMP 4

2012

Q&S 3

AMP 4



Summary and Outlook

• Profit improvement continues

• Full benefit of recent successes yet to impact profit

• Continue to win in our chosen sectors

• Improving quality of order book

• Confident of 2% margin by 2006

• Current strategy/success will enhance profit beyond 2006


Greg Fitzgerald – Managing Director

Housebuilding Business Review


Housing Highlights

• Record profits

• New management team at Stamford performing

• Cost reductions going to plan

• Continued good progress with customer satisfaction

• Land bank increased

• Strong ‘in hand’ position



Strong Regional Brands


29% £225k aspTURNOVER % - AVERAGE SELLING PRICE

29% - £225,000 38% - £278,000 33% - £176,000

NEWTON ABBOT

UXBRIDGE

LEATHERHEAD

PETERBOROUGH

FAIRFIELD


2004

Key Statistics


12 months to June

2003 Increase %

Units 761 741 2.7

ASP £000 224 200 12.0

Turnover £m 182.0 159.5 14.1

Margin % 14.0 15.1 (7.3)

ROCE % 23.6 23.7 (0.4)

Sales in hand August 04 £m 95.3 67.1 42.0

Operating Profit £m 25.5 24.1 5.8

Income per Sq. Ft. £ 209 174 20.1


Product Mix and Range of Selling Prices


52

32

12

4

49

35

13

3

0

10

20

30

40

50

60

Up to 200K 200-300 300-500 over 500K

Actual to June 04 Forecast to June 05

%

33

67

37

63

0

10

20

30

40

50

60

70

Apartments Houses

Actual to June 04 Forecast to June 05

PRODUCT MIX RANGE OF SELLING PRICES

%


Expertise in Individual Design

Housebuilding Building Review

Austyns Place, Ewell Hyperion, Torquay

Little Bithywind, Bradninch New Inn Court, East Molesey


Land Bank – Owned or Under Our Control


2004

Land Bank August 04 - Units

Increase %

Detailed Planning Permission 1742 1617 8

Outline Planning Permission 185 32 578

Awaiting Planning Permission 593 406 46

2003

Total 2520 2055 23

Strategic Land August 04

Acres 660 612 8

Probable Unit Numbers 2000+ 2000 -


Market Conditions & Planned Growth

• Minimal house price inflation

• Shortage in supply continues to underpin market

• Strengthen position within existing areas and expansion into new

• Maximise opportunities within affordable housing market

• Quality of management

• Confident of achieving 1250 units by 2007




Expertise in Conversion and Restoration

Coombe Hall Park, East Grinstead

Livingstone Park, Epsom

Norah Fry, Shepton Mallet

Berrybrook Meadow, Berry Pomeroy, Totnes


Summary and Outlook

• Expect to achieve half & full year planned performance

• Detailed planning permission in place

• Restructuring at Stamford delivering improved results

• Stringent land buying criteria

• Enhance efficiency through additional cost reductions

• Confident of achieving expansion plan



David Calverley - Chief Executive

Summary and Outlook


• Delivered targets for 2004

• Significant opportunities in construction

• Housebuilding expansion plan positions us well

• Strong financial platform

• Quality of management teams throughout business

• Business in excellent shape for future growth

Summary and Outlook

Platform for Growth


Year to 30th June 2004

Preliminary Results Presentation

preliminary results presentation – september 2004 year to 30 th june 2004 preliminary results...

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