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Disclaimer. The information in this presentation does not constitute an offer to sell or an invitation to buy shares in George Wimpey Plc or any other invitation or inducement to engage in investment activities. Past performance cannot be relied upon as a guide to future performance. 2.

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  1. Disclaimer The information in this presentation does not constitute an offer to sell or an invitation to buy shares in George Wimpey Plc or any other invitation or inducement to engage in investment activities. Past performance cannot be relied upon as a guide to future performance 2

  2. George Wimpey PlcPreliminary Resultsfor the year ended 31 December 2005 Tuesday 21 February 2006

  3. Welcome and introduction John Robinson Chairman

  4. Agenda • Key messages Peter Johnson • 2005 financial review Andrew Carr-Locke • US business review Peter Johnson • UK business review Pete Redfern • Group outlook Pete Redfern 5

  5. Key messages Peter Johnson Group Chief Executive

  6. 2005:US growth strategy paid off, offset by disappointing UK result • Weak market exposed challenges of short term landbank as well as weaknesses within our business • Bulk of UK business remains sound; those weaknesses have been addressed • UK soundly based to rebuild margins in stable and improved market • Morrison Homes has outperformed in a strong market • Management team is strong; internal succession ensures continuity of strategy 7

  7. 2005 financial review Andrew Carr-Locke Group Finance Director

  8. 2005 results £m 2005 2004* Change Turnover 3,003.2 2,976.0 + 1% Operating profit 437.5 497.5 - 12% Interest (71.0) (59.9) + 19% Profit before tax 366.5 437.6 - 16% Tax 31% 31% - EPS 64.3p 78.4p - 18% NAV per share 389p 340p + 14% DPS 17.6p 16.0p + 10% Dividend cover 3.7x 4.9x - * restated for IFRS and land sales 9

  9. 2005 completions Completions Ave selling price No Change £ / $ Change UK private 10,678 - 5% £188,600 - 2% UK affordable 1,422 + 48% £98,600 + 10% UK total 12,100 - 1% £178,000 - 4% US total 4,921 + 11% $312,700 + 8% GROUP TOTAL 17,021 + 2% 10

  10. 18.0% 14.7% Segmental analysis Turnover Operating profit Operating margin* £m Change £m Change 2005 2004 UK 2,157.6 - 5% 278.0 - 32% 12.9% US 845.5 + 21% 169.4 + 65% 20.0% Other 0.1 - (9.9) - 33% TOTAL 3,003.2 + 1% 437.5 - 12% *Exchange rate in 2005 $/£=1.82, 2004 $/£=1.83 *UK operating profits stated after charging £5m of restructuring costs 11

  11. £m 2005 2004 Change Loans 50.0 48.0 + 4% Pensions 8.5 8.1 + 5% Derivatives 5.3 - Other 7.2 3.8 + 89% TOTAL 71.0 59.9 + 19% Interest charge 12

  12. Cash flow summary Yr to Dec 2005 Yr to Dec 2004 £m Operating profit 437.5 497.5 Land spend (839.0) (935.1) Land realisations 737.4 702.1 Other working capital movements (49.0) (88.3) CASH INFLOW FROM OPERATIONS 286.9 176.2 Interest (53.6) (49.2) Tax (117.7) (91.3) Dividends (53.7) (33.7) Exchange rate effects (38.8) 20.8 Other movements (24.1) (14.5) REDUCTION / (INCREASE) IN NET DEBT (1.0) 8.3 13

  13. Balance sheet net assets Dec 2005 Dec 2004* £m Fixed assets and joint ventures 57.6 36.4 Land 2,153.4 1,932.3 Land creditors (380.5) (274.7) Other net operating assets 469.9 403.0 Tax and provisions (104.9) (114.4) Net pension deficit (129.2) (130.3) TOTAL NET ASSETS EMPLOYED 2,066.3 1,852.3 * restated for IFRS 14

  14. Balance sheetfinancing Dec 2005 Dec 2004 Shareholders’ funds £m 1,544.4 1,331.4 Net debt £m 521.9 520.9 Capital employed £m 2,066.3 1,852.3 Gearing 34% 39% Interest cover - reported 6.2x 8.3x Interest cover - underlying 8.8x 10.4x ROACE 22.3% 28.9% * restated for IFRS 15

  15. 5 year review • Profits increased by 141% • Dividends annual growth rate 21% • Balance sheet strengthened IAS UK GAAP 2005 2004 2004 2003 2002 2001 Group completions 17,021 16,654 16,654 16,570 16,917 14,437 PBT £m 366.5 437.6 450.7 378.2 285.9 152.0 Net worth £m 1,544.4 1,331.4 1,439.1 1,168.4 944.6 783.3 Dividends per share 17.6p 16.0p 16.0p 12.25p 9.1p 8.25p Gearing 34% 39% 36% 45% 40% 49% 16

  16. US business review Peter Johnson Group Chief Executive

  17. 2005 financial summary 2005 2004* Change Legal completions 4,921 4,422 + 11% Comps excluding Atlanta 4,797 4,110 + 17% Ave selling price $312,700 $288,900 + 8% Turnover $1,538.8m $1,277.3m + 20% Operating profit $308.3m $188.3m + 64% Operating margin 20.0% 14.7% + 5.3pp 18 * restated for IFRS and land sales

  18. Five year review Turnover* $m Operating profit* $m Operating margin % Completions ASP $ 2001 687.7 66.4 9.7% 2,900 238,000 2002 804.7 80.7 10.0% 3,197 252,000 2003 988.3 118.6 12.0% 3,661 270,000 2004 1,277.3 188.3 14.7% 4,422 289,000 2005 1,538.8 308.3 20.0% 4,921 313,000 CAGR 22.3% 46.8% - - 7.1% * restated for IFRS and land sales 19

  19. Margin • Gross margin up from 25% to 30% • average selling prices +8% but big mix changes • underlying house price inflation >10% in Florida, Phoenix, North California; <5% in Texas, Denver • increase in land costs offset by change in regional mix • impact of build cost inflation on margin ~4.5% - 5% • Overhead to sales stable at 10% • increased bonuses offset by scale efficiencies 20

  20. Some industry comparisons : Company Est PBT margins 2005 asp 2005 increase % US GAAP $000 % Toll Brothers 21.6 654 13 NVR 21.0 376 13 Morrison 18.5 313 8 Standard Pacific 17.6 352 -6 DR Horton 17.0 263 9 Hovnanian 16.7 319 14 Pulte 15.8 316 10 Ryland 15.6 274 9 Centex 14.4 297 10 Beazer 12.2 271 17 Estimates from broker reports 21

  21. Successful growth strategy • Focus on growth markets • Growth through satellites • Growth through product development • Addressing underperforming businesses • Landbank 22

  22. Successful growth strategy • Focus on growth markets • Morrison markets account for 45% of job growth • 49% of population growth • 38% of 2005 H2 SF permits • Growth through satellites • Growth through product development • Addressing underperforming businesses • Landbank 23

  23. SF Permits H2 2005 Rank 209 1 151 3 166 2 81 6 40 12 647 1,681 38% Morrison Homes marketsmajor beneficiaries of underlying trends Job Growth last 12 mths Rank Population Growth Rank 000s Florida 297 1 404 1 California 278 2 290 3 Texas 154 3 388 2 Arizona 117 4 199 4 Colorado 55 18 63 11 TOTAL 901 1.344m Total US 2,010 2.753m 45% Morrison Markets 49% 24

  24. Successful growth strategy • Focus on growth markets • Growth through satellites • 2001 new satellites in Jacksonville, Sarasota, Central Valley • 2005 these satellites accounted for 20% completions • 2005 new satellites in Daytona Beach, Fort Myers and Reno • Growth through product development • Addressing underperforming businesses • Landbank 25

  25. Successful growth strategy • Focus on growth markets • Growth through satellites • Growth through product development • townhomes were >12% of Florida completions in 2005 • townhome volumes expected to grow 2.5 times in 2006 • Addressing underperforming businesses • Land bank 26

  26. Successful growth strategy • Focus on growth markets • Growth through satellites • Growth through product development • Addressing underperforming businesses • Atlanta exited • Texas 2005 completions +47% • Texas order book at 31 December +55% • net reservations weeks 1-6 2006 +14% • Landbank 27

  27. Successful growth strategy • Focus on growth markets • Growth through satellites • Growth through product development • Addressing underperforming businesses • Landbank • total plots at end 2005 23,514 • % of plots used during the year 140 • % of land for 2006 targeted completions 100 • % of land for 2007 targeted completions 90 28

  28. Landbank in place to deliver growth 29

  29. 2004 2003 2005 comps land comps land comps land West 1,187 4,093 1,130 3,997 832 3,125 Southeast 2,253 12,040 2,092 10,573 1,684 8,816 Southwest 1,481 7,381 1,200 7,009 1,145 5,886 Focus on growth marketsbalanced landbank to support growth 30

  30. 2005/3 2003 2005/4 comps land comps land comps land West 5% 2% 43% 31% 832 3,125 Southeast 8% 14% 34% 37% 1,684 8,816 Southwest 23% 5% 29% 25% 1,145 5,886 Focus on growth marketsgrowth in completions and landbank 31

  31. Outlook economy, housing market- macro picture remains healthy • US economy remains strong • 600,000 jobs created in last three months • consumer confidence at highest since June 2002 • unemployment rate down to 4.7% • 30 year fixed rate mortgage at 6.22% • Housing industry projected to remain at high levels • NAHB projects SF new home sales down 8.1% to 1.19m • that matches 2004 and is 10%> average 2002-2004 • 1.28m new owner households created to grow home ownership rate from 69% in 2004 to 70% in 2010 32

  32. Outlook Morrison Homes -too early to call full year outlook • Outlets* +10% • Order book at 1 Jan 06* +20% in volume +36% in value • at margins and prices ahead of 2005 full year • Order book at end week 6 * +19% in volume • +36% in value • Sales • weeks 1-6 -3% on 2005 • sales rate 0.93 vs 1.05 • West down, Southeast flat, Southwest up *excluding Atlanta 33

  33. UK business review Pete Redfern Deputy Group Chief Executive

  34. Two key questions • Why have UK margins fallen in 2005? • What have we done to address these issues? 35

  35. Two key questions • Why have UK margins fallen in 2005? • What have we done to address these issues? 36

  36. Causes of margin reduction • Impact of tough market and mix on selling prices • affordable housing • smaller private product – houses and apartments • southern market significantly weaker • Habitual second half volume weighting reduced business flexibility • Impact of rising costs – mostly land, due to short term landbank • Underperforming businesses and sites affected overall margin performance 37

  37. Margin movement 2005 2004 margin 18.0% Sales pricing impact (1.8%) Mix / volume impact (0.3%) Build cost impact (0.4%) Land cost impact (2.6%) Net operating expenses impact 0.0% 2005 margin 12.9% 38

  38. 2005 financial summary 2005 2004* Total completions 12,100 12,232 Private completions 10,678 11,274 Affordable completions 1,422 958 Private ASP £188,600 £193,400 Total turnover £m 2,157.6 2,277.9 Gross margin % 21.5% 26.1% Operating profit £m 278.0 409.4 Operating margin % 12.9% 18.0% * restated for IFRS and land sales 39

  39. 2 key questions • Why have UK margins fallen significantly in 2005? • What have we done to address these issues? 40

  40. Actions to improve margin performance • Put sales on front foot • improve quality of sales processes and performance • ensure sales are moving on all sites • lengthen order book to create urgency for customers • Improve H1/H2 volume balance • through sales catch up and focus on next six months • through build planning • Continue to improve land processes, culture and people • Drive down build and overhead costs • £20m of cost savings achieved (£2m in 2006) • further overhead reductions to come through • more to go on build costs in 2006 41

  41. Actions to improve margin performance • Addressing underperforming businesses • challenging management, changing where necessary • new Management Team established - experienced housebuilding team • structure simplified, central drive and control, not more overhead • Laing business structure rationalised and absorbed • all UK businesses run on same model • two smallest subscale businesses closed • strong underlying Laing businesses and people retained • two brands nationally available to allow local differentiation for growth • Decision to withdraw from high rise City business • strong skills within business retained • releases £100m of cash over two years for reinvestment 42

  42. 2005 2004 2003 109 118 117 2006 business structure • New business structure • North 8 • Midlands 8 • South 9 • TOTAL 25 • + 3 new satellites • Completions from 350 – 700 per business • Overheads before restructuring costs (£m) Aberdeen Edinburgh Glasgow Newcastle Leeds Liverpool Manchester Birmingham London Bristol Plymouth 43

  43. 2005 market • Market has been difficult since mid 2004 • total market volumes down 17.2% (source: Land Registry) • second hand market very slow • price sensitive and incentive led • In H1, North was strongest and South weakest • H2 started to show slow improvement • particularly in the last two months • particularly in South • Apartment market has been particularly price and product sensitive • impact c. 2.5% margin difference to average 44

  44. Ave weekly sales ratesGW 2003 – 2005 • H2 sales create 32% growth in order book • Nov/Dec sales remain strong due to focussed pressure 45

  45. Net prices on reservationsGW 2003 – 2005 • Sales growth driven by performance not just price – cost 1% of net price • Building order book will allow reduction in incentives 46

  46. PD completions 2004 2005 31% Apartments 36% 32% 32% 2 / 3 bed houses 37% 4 / 5 bed houses 32% 100% 100% Product mix • Managing our apartment mix • 2005 land approvals 30% apartments • margin hurdles increased on apartments in 2004 • size down 5% and still being reduced • preferred range 10 - 15% more efficient in size/plotting 47

  47. Cost reduction • 2005 cost saving programme • sub-contractor savings • replans of high cost sites/products • More potential for 2006 • standard build detail eg floor systems • rationalisation of doors/fittings • option cost efficiencies • Preferred housetype range designed and in place • adopted first in new and underperforming businesses • cost per square foot 5% below average product • rationalisation of brick supply chain • rationalisation of site overheads • loading scaffolding/joist hangers • kerb remedials • sales and showhome costs 48

  48. Landbank Owned and controlled plots Strategic acres 2005 2004 2005 2004 North 16,447 18,615 5,112 4,934 Midlands 13,878 11,882 4,662 5,529 South 20,660 20,622 4,395 7,108 TOTAL 50,985 51,119 14,169 17,571 • Landbank broadly maintained, North land prices still inflating until late 2005 • Strategic landbank and process challenged – sifting sand, finding some nuggets 49

  49. Cost Per Plot (£000) 2005 2004 Opening landbank 45.6 44.6 Acquired net* 51.0 46.8 Completions* (47.3) (44.3) Closing landbank 47.2 45.6 *Plot cost high in year, driven by South/North mix 2005 completions Landbank ASP £000s 178.0 181.2 Cost per plot £000s 47.3 47.2 Land value % ASP 26.6% 26.0% Owned land cost and value • Closing plot cost marginally lower than 2005 completions • Landbank average selling price higher than completions due to South mix 50

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