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Investor Relations Presentation

Investor Relations Presentation. Half Year to 31 st December 2005. Disclaimer.

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Investor Relations Presentation

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  1. Investor Relations Presentation Half Year to 31st December 2005

  2. 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 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.

  3. Introduction Overview • 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

  4. 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

  5. Financial Review Summary Profit & Loss Account (£m) Dec 2005 (£m) Dec 2004* Turnover 372.2 347.2 Profit before interest 16.3 14.7 Interest (2.3) (2.0) 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

  6. Financial Review Segmental Analysis Group Turnover (£m) Profit/(loss) (£m) Dec 2004* Dec 2005 Dec 2005 Dec 2004 * Construction 272.8 255.8 5.6 5.3 PPP Investments 0.8 - (0.5) (1.2) 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 * based on restated IFRS Figure

  7. Financial Review Cash Flow Summary Dec 2004* (£m) Dec 2005 (£m) From operating activities 17.5 16.0 Increase in inventories and developments 3.0 (10.2) Decrease in land creditors (10.9) (3.7) Decrease in trade and other receivables 7.4 23.6 Increase/(decrease) in trade and payables (1.8) (10.9) Decrease in retirement benefit obligation (1.2) (3.4) Interest, tax, dividends, share capital & other movements (10.5) (9.4) Net inflow 3.5 2.0 Net debt brought forward (12.4) (12.1) Net debt carried forward (8.9) (10.1) * based on restated IFRS figures

  8. Financial Review Balance Sheet, Financing Dec 2005 (£m) Dec 2004* (£m) Shareholders’ funds 58.2 48.3 Net debt 8.9 10.1 Total capital employed 67.1 58.4 Gearing 15% 21% Interest cover > 7 times > 7 times * based on restated IFRS figures

  9. Construction Key Highlights • 2% margin achieved ahead of schedule • Affordable Housing expansion continues • Increased presence in Water • Financial Close Northampton Schools PFI • Successful integration of Pentland

  10. Construction Profitability RECOVERY STABILISATION GROWTH 2.0 2.0%* 1.7%* 1.5 1.1% 1.0 0.5 0.0 (0.01)% 2003 2004 2005 2006 * based on restated IFRS figures

  11. Construction Forward Order Book Work In Hand (£m) Turnover (£m) Half Year to Dec 05 Total Work In Hand Non Price Competitive Market Sectors Total Non Price Competitive 37 Water 233 233 19 Rail 65 65 18 Infrastructure 45 30 15 Health 126 126 47 Education 330 282 89 Commercial 112 99 4 Interiors 14 13 21 Affordable Housing 145 110 15 Telecommunications 10 10 8 Ground Engineering 3 2 273 1082 969 90%

  12. Construction Water • Leading Framework Contractor • Scottish Water • United Utilities • Anglian Water

  13. Construction Education • 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

  14. Construction Health • Current LIFT schemes at FC 2/3 • Fourth Wave - selected on three schemes • Potential future opportunities in Scotland • Government Initiatives - Community Hospital Schemes

  15. Construction Summary and Outlook • Profit growth by volume • Order book exceeds £1billion • Partnering culture integrated throughout business • Profit margins now in upper quartile

  16. Investments PPP Investments • 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

  17. 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 Housing Highlights

  18. 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.

  19. Housebuilding Key Statistics * based on restated IFRS figures

  20. 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 Market Conditions and Focus

  21. 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

  22. Housebuilding Stamford Homes • Units 128 • Average selling price £000 168 • Brownfield and conversion 51% • Customer satisfaction 82%

  23. Housebuilding Try Homes Southern • Units 73 • Average selling price £000 278 • Brownfield and conversion 100% • Customer satisfaction 89% • ‘Silver’ at the What House Awards

  24. 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

  25. 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 Housebuilding Summary & Outlook

  26. Affordable Housing Construction and Housebuilding Divisions • 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

  27. Summary and Outlook • 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

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