Barratt Redrow Plc · LSE:BTRW
Barratt Redrow — Barratt Developments — Shareholder Meeting (October 2019)
14 slides from Barratt Redrow's shareholder meeting presentation, Oct 16, 2019
Slide 1: Annual General Meeting 2019
Annual General Meeting 2019 16 October 2019 Tarleton Lock, Tarleton 1
Slide 2: Another Year of Strong Performance
ANOTHER YEAR OF STRONG PERFORMANCE Total completions(1) 17,856 +1.6% Operating margin 18.9% +120bps Profit before tax £909.8m +8.9% ROCE(2) 29.7% +10bps Net cash(3) £765.7m (3.2%) (1) Includes joint ventures (‘JV’s’) in which the Group has an interest (2) Return on Capital Employed (‘ROCE’) is calcu
Slide 3: Operational Performance – External Awards
OPERATIONAL PERFORMANCE – EXTERNAL AWARDS • 5 Star award for 10 years • Only national housebuilder • 84 awards in 2019 to achieve this • More than any other housebuilder for 15 consecutive years • 76 accreditations including 19 • Highest scoring outstanding national awards housebuilder in 2018 • Mor
Slide 4: Market Fundamentals Remain Attractive
MARKET FUNDAMENTALS REMAIN ATTRACTIVE 1.70% Government average 2 year target: fixed rate at 85% 300,000 homes LTV(1) per annum Positive lending Clarity on Help to Demand continues Attractive land market environment Buy to exceed supply (1) Rates are from an average of five lenders. Standard 85% prod
Slide 5: Investment Proposition – Driving Value
INVESTMENT PROPOSITION – Driving value Growing Delivering margin Attractive volumes improvement cash returns 3 - 5% volume growth per annum in wholly Land acquisition hurdle rate of 2.5 x dividend cover supplemented owned home completions minimum 23% gross margin by special returns when over the med
Slide 6: Operational Targets – Progress Update
OPERATIONAL TARGETS – PROGRESS UPDATE Medium term targets Progress in FY19 3 - 5% growth per annum in wholly owned 2.6% increase in wholly owned home Completions home completions completions to 17,111 with total home Present business capacity of 20,000 per annum completions at 17,856(1) 210 bps incr
Slide 7: Operating Framework – Progress Update
OPERATING FRAMEWORK – PROGRESS UPDATE Operating framework Progress in the year 3.9 years owned / 0.8 years controlled Land bank c. 3.5 years owned / c. 1.0 year controlled (30 June 2018: 3.7 years / 1.1 years) Reduce to 25 - 30% of the land bank Land creditors Reduced to 31.3% (30 June 2018: 33.6%)
Slide 8: Investing in Our People
INVESTING IN OUR PEOPLE • Future talent 7% of employees • 269 new apprentices, trainees and graduates, 32% increase from FY18 • Award winning employment schemes • Reduced employee turnover to 16% 8
Slide 9: Modern Methods of Construction
MODERN METHODS OF CONSTRUCTION • Mitigate industry skill shortage • New target set to build 25% of completions using Modern Methods of Construction by 2025 • Acquisition of Oregon - High quality products and experienced management team - Security of supply - Supports our growth target and enables in
Slide 10: Building a Sustainable Business
BUILDING A SUSTAINABLE BUSINESS • Renewed stakeholder and Government focus on sustainability and decarbonisation • Rapid pace and scale of potential change in UK legislation • Building a sustainable business which is resilient and ready for the future Legislation and regulation Our response and acti
Slide 11: Attractive Cash Returns
ATTRACTIVE CASH RETURNS 500 Total: £2.1bn Capital Return Plan 450 • Ordinary dividend payable through the cycle: 400 - 2.5 x dividend cover 350 • FY19 total dividend: 46.4p(1) 300 Special £m • When market conditions allow, excess cash will 250 be returned to shareholders in the form of special divid
Slide 12: Current Trading
CURRENT TRADING FY 20 FY 19 Change to date to date Net private reservations per active 0.72 0.72 - outlet per average week(1) Total forward sales (incl JVs)(2) £3,070.2m £3,146.5m (2.4%) (1) An active outlet is defined by the Group as an outlet with at least one home for sale (2) As at 13 October 20
Slide 13: Positive on Outlook
POSITIVE ON OUTLOOK • Progressing well towards medium term targets • Further margin improvements • Continue to lead on quality and service • Strong forward order book • Confidence in the business going forward Willow Grove, Wixams 13
Slide 14: Q&A
Q&A Riverside Quarter, Bucksburn 14
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