MJ Gleeson PLC · LSE:GLE

MJ Gleeson — H1 FY2021 Earnings Presentation

35 slides from MJ Gleeson's earnings presentation, Feb 11, 2021

  1. Slide 1: MJ Gleeson plc Results for the half year ended 31 December 2020

    MJ Gleeson plc 11 February 2021 1 Results for the half year ended 31 December 2020

  2. Slide 2: Results for the half year ended 31 December 2020

    Results for the half year ended 31 December 2020 ➢ Introduction 3 James Thomson ➢ Financial review 5 Stefan Allanson ➢ Sustainability 11 James Thomson ➢ Business review 14 James Thomson ➢ Summary 31 James Thomson 2

  3. Slide 3: Introduction

    Introduction suing Homes. chnsins Lies gleeson

  4. Slide 4: Strong start - Expect FY results to be significantly ahead of consensus

    Strong start - Expect FY results to be significantly ahead of consensus ➢ Gleeson Homes volumes up 17.3% to 951 units, with demand resilient ➢ 17 sites opened, foot-print growing ➢ Strong pipeline, up 10% to 14,900 plots (8.4 years*) ➢ On-track to deliver 1,775 units this year, 2,000 units next year

  5. Slide 5: Financial review

    Financial review suing Homes. chnsins Lies gleeson

  6. Slide 6: Financial highlights

    Financial highlights ➢ Operating profit: Up 57% at £20.9m (H1 19/20: £13.3m) ➢ PBT: Up 53% at £20.3m (H1 19/20: £13.3m) ➢ EPS: Up 44% at 28.2 pence (H1 19/20: 19.6 pence) ➢ Net Cash: £31.6m (H1 19/20: £30.6m) ➢ ROCE: 7.2% (H1 19/20: 19.1%)* ➢ Dividend: 5 pence per share (H1 19/20: Interim dividend c

  7. Slide 7: Income statement

    Income statement £ million H1 20/21 H1 19/20 Change Notes Homes 134.4 105.0 28.0% Volumes +17.3%, ASP +9.1% Strategic Land 8.3 - Four land sales Revenue 142.7 105.0 35.9% Homes 20.5 15.9 28.9% Strategic Land 2.6 (0.7) Group overhead (2.2) (1.9) 15.8% Operating profit 20.9 13.3 57.1% Interest (0.6) -

  8. Slide 8: Balance sheet

    Balance sheet 31 December 31 December £ million 2020 2019 Notes Homes Land 72.7 63.1 Land WIP c£9,700 per plot (Dec 19: £9,400 per plot) WIP 115.3 97.5 80 build sites (Dec 19: 64 build sites) Strategic Land Land 15.5 14.1 WIP 17.9 17.2 Total inventories 221.4 191.9 Other assets 34.2 41.6 £17m Homes

  9. Slide 9: Cash flow

    Cash flow £ million H1 20/21 H1 19/20 Notes Profit before tax from continuing operations 20.3 13.3 Non-cash items & discontinued operations 2.1 1.1 Depreciation, interest & share-based payments Working capital movements (0.3) 6.1 Cash generated from operating activities 22.1 20.5 Tax (4.3) (6.8) Acc

  10. Slide 10: Dividend

    Dividend ➢ Interim dividend of 5.0 pence per share ➢ Final dividend to represent 2/3rd of full year total ➢ Reviewing capital allocation policy for future years 10

  11. Slide 11: Sustainability

    Sustainability suing Homes. chnsins Lies gleeson

  12. Slide 12: Sustainability developments

    Sustainability developments ➢ Good progress on achieving targets published in September 2020 ➢ Particularly the reduction in carbon emissions per home sold ➢ Customer satisfaction soon to exceed 90% (5-star) ➢ 98.5% of homes with EPC rating of B ➢ Waste recycled or converted to energy increased to 9

  13. Slide 13: Communities People Environment

    Sustainability Policy Gleeson places social responsibility at the core of its operations. We are committed to being a responsible business, and to improving communities, lives and the environment. Our strategy and aims are structured around three key themes: We want to create sustainable places to l

  14. Slide 14: Business review

    Business review suing Homes. chnsins Lies gleeson

  15. Slide 15: What we do

    What we do Gleeson Homes We build and sell high-quality, low-cost homes to young, first-time buyers on low to mid incomes, where they are needed, for people who need them most. Gleeson Strategic Land We promote land, enhancing its value by securing mainly residential planning consent.

  16. Slide 16: Gleeson Strategic Land

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  18. Slide 18: Strong demand from medium and large-sized developers

    Strong demand from medium and large-sized developers ➢ Four sites sold in the first half ➢ Total 745 developable plots ➢ Land market busy – all major housebuilders buying land ➢ Nine sites consented ➢ Four sites progressing for sale ➢ Bids received on one further site sale 18

  19. Slide 19: Gleeson Strategic Land Overview

    Gleeson Strategic Land Overview ➢ Four land deals completed (H1 19/20: nil sales) ➢ Total developable plots 745 ➢ Gross profit £3.7m (H1 19/20: £nil) ➢ Overheads £1.1m (H1 19/20: £1.1m) ➢ Operating profit £2.6m (H1 19/20: loss -£0.7m) 19

  20. Slide 20: Planning status

    Planning status ➢ 70 sites (H1 19/20: 66 sites) ➢ 23,015 plots (H1 19/20: 22,524 plots) ➢ 3,209 plots on 9 sites consented (H1 19/20: 3,384 plots on 10 sites) As at 31 December As at 31 December 2020 2019 At 31 December 2020 No. Sites Plots No. Sites Plots Planning Planning consented 9 3,209 10 3,38

  21. Slide 21: Gleeson Homes

    Gleeson Homes suldins Homes chaning Uver gleeson

  22. Slide 22: Our Mission: Changing lives by building affordable, quality homes

    Our Mission: Changing lives by building affordable, quality homes. Where they are needed, for the people who need them most. Carrwood Park, Bradford West Yorkshire

  23. Slide 23: Strong start to the year

    Strong start to the year ➢ Unit sales up 17.3% to 951 (H1 19/20: 811) ➢ ASP increased 9.1% to £140,600 (H1 19/20: £128,900) ➢ Underlying prices increased by 7.0% ➢ 17 sites opened (H1 19/20: 5 sites opened) ➢ 80 active build sites (31 December 2019: 64) ➢ 65 active sales sites (31 December 2019: 63)

  24. Slide 24: Profit growth

    Profit growth ➢ Revenue up 28.0% to £134.4m (H1 19/20: £105.0m) ➢ Includes £0.7m on land sale (H1 2019/20: £0.5m) ➢ Gross profit on sales up 20.0% to £37.8m (H1 19/20: £31.5m) ➢ Includes £0.2m on land sale (H1 2019/20: £0.1m) ➢ Gross margin on unit sales 28.1% (H1 19/20: 30.1%, Full year 2019/20: 27

  25. Slide 25: Well positioned for H2 and next year

    Well positioned for H2 and next year ➢ First half commenced with strong levels of build WIP and forward orders enabling the strong delivery in H1 ➢ Forward orders at 31 December were 795 plots* (June 20: 1,033 plots) ➢ Expect full year 2020/21 completions of 1,775 homes ➢ Expect to be selling from a

  26. Slide 26: Healthy & growing pipeline

    Healthy & growing pipeline ➢ Pipeline up 9.6% to 14,937 plots on 151 sites ➢ 80 active build sites ➢ 71 pipeline sites ➢ 64 conditionally purchased sites, 7 owned ➢ 8.4 years supply at 1,775 homes p.a. ➢ Average cost circa £10,000 per plot ➢ Majority brownfield – little competition ➢ Land remains av

  27. Slide 27: Strength of model

    Strength of model ➢ All Gleeson homes are: ➢ Gleeson customers are: ➢ Traditional brick and block construction ➢ 4 out of 5 first-time buyers ➢ 2, 3 or 4 bed houses ➢ 2/3rd key workers ➢ Significantly cheaper to buy than rent ➢ 29 years old - median age ➢ Traditional: ➢ 74% are 35 years or younger ➢

  28. Slide 28: Case studies

    Case studies Case study 1: Buyer (single): Leigh-Anne age 25 Occupation: Trauma Nurse, NHS Hospital Year of purchase: 2019 Development: Balderstones, Rochdale House type: Cork, 2 bedroom semi-detached Purchase price: £106,995 Mortgage cost: £340 per month, 25 year, Help to Buy Solo-buyer Leigh-Anne

  29. Slide 29: Case studies

    Case studies Case study 2: Buyers (couple): Abbie age 26 and Chris age 32 Occupations: NHS Ambulance Dispatcher IT Analyst Year of purchase: 2020 Development: Sutton Park, St Helen’s, Merseyside House type: Galway, 3 bedroom semi-detached Purchase price: £129,995 Mortgage cost: £375 per month (3-bed

  30. Slide 30: Customer First – at the heart of what we do

    Customer First – at the heart of what we do ➢ Independent customer surveys by In-house: ➢ Currently 89% recommend score – equivalent to 4-star ➢ Target to be above 90% by year end - 5-star ➢ Gleeson Quality Charter ➢ MyGleeson portal for new owners ➢ Independent inspection throughout build (NHBC) ➢

  31. Slide 31: Summary

    Summary suing Homes. chnsins Lies gleeson

  32. Slide 32: Summary

    Summary ➢ Strong first half year ➢ Homes volume up 17% despite Covid ➢ Strategic Land sold 4 sites ➢ Expect full year results to be significantly ahead of current market consensus ➢ Robust platform for continued growth ➢ 2,000 units next year, achieving 5 year target to double volume ➢ Site opening

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  34. Slide 34: Organisational structure

    Organisational structure James Thomson Stefan Allanson CEO CFO Mark Knight James Pitt MD Gleeson Homes MD Gleeson Strategic Land Formerly Divisional Chairman Formerly Land Director for Barratt Keepmoat Homes, Ops Dir/MD plc, joined Gleeson as Land Director Miller Homes, David Wilson in 2010. Homes S

  35. Slide 35: Thank you

    Thank you Gleeson (Head Office) 5 Europa Court, Sheffield Business Park Sheffield S9 1XE 35

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