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Laing Homes. Integration and future strategy. David Livingstone. Disclaimer.

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Laing homes

Laing Homes

Integration and future strategy

David Livingstone


Disclaimer
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
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 processes Benchmarking introduced

March 2003 MK overhead reduced

June 2003 PQA introduced EDG devolved into regions

December 2003 975 PD units delivered to profit


Integration into gwuk1
Integration into GWUK

January 2004 Six regions reduced to five: North Thames South East Thames South West Thames Thames Valley Midlands

March 2004 Paul Healey retires

April 2004 David Livingstone becomes DMD – joined George Wimpey in 1973 Confirmation 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
Shared Values

  • Safety

  • Customer satisfaction

    • Referral cultivation

  • Performance delivery

  • Value from scale

    • procurement

    • sharing knowledge

    • common processes


Laing homes1
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 homes2
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
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
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
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




Scale of volume opportunity
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
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

Laing Homes SW Thames

Gerry McCormackManaging Director


Introduction
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

Structure

  • Total monthly paid staff 67

  • Weekly paid staff 14



Current outlets

Current outlets

Avg Selling Price £’000’s

Barnes – Creek Bridge Road

600

Ewell

356

Guildford – Creek Bridge Road

950

Guildford – Queen Elizabeth Park Ph6

408

Ph8

335

Reigate

393

Current Outlets


Future outlets

Future outlets

Avg Selling Price £’000’s

Ewell

356

Guildford – Queen Elizabeth Park Ph6

408

Ph8

335

Hindhead

303

Kingsworthy

416

Reigate

393

Winchester

298

Future Outlets


Business performance

T/over

PBIT

Units

Outlets

PBIT%

2002

45

7.0

157

6

10.5%

2003

47

3.6

142

4

7.6%

2004

76

11.0

213

6

14.4%

Business Performance


Cost excesses

Build/ Sales

Overhead

2002

£4.6m

£5.0m

2003

£0.9m

£4.3m

2004

£0.2m

£4.3m

Cost Excesses


Laing homes within gwuk
Laing Homes within GWUK

  • Culture

  • Commitment to growth

  • Specialist meetings

  • Benchmarking and cost control

  • Improved margins

  • PQA


Production quality awards pqa
Production Quality Awards (PQA)

  • Tours throughout the UK

  • PQA panel

  • 50 sites visited

  • What was learned?


Staff south west thames
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
Customers

  • Customer satisfaction monitoring

  • Growing Wiser

  • Quality and service

  • Clean and ready


The future
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

A Clear Strategy of Margin Improvement and Growth


Guildford queen elizabeth park

GuildfordQueen Elizabeth Park


Guildford queen elizabeth park history
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
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 community1
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
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



Cost trail

£ per ft

2002

81

2003

70

2004

62

Cost Trail


The site team
The Site Team

  • 4 teams

  • Team Leaders

    • Dave Livingstone

    • Gerry McCormack

    • Paul Hogarth

    • Bruce Heffer


Laing homes sw thames1

Laing Homes SW Thames

Gerry McCormackManaging Director


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