MJ Gleeson PLC · LSE:GLE
MJ Gleeson — FY2021 Earnings Presentation
46 slides from MJ Gleeson's earnings presentation, 2021
Slide 1: Results for the year ended 30 June 2021
Results for the year ended 30 June 2021
Slide 2: Results for the year ended 30 June 2021
Results for the year ended 30 June 2021 ➢ Overview 3 James Thomson ➢ Financial Highlights 5 Stefan Allanson ➢ Business Highlights and Review 13 James Thomson ➢ Sustainability 36 Stefan Allanson ➢ Summary and Outlook 41 James Thomson 02
Slide 3: Overview
Overview gleeson
Slide 4: Record performance
Record performance ➢ Results ahead of pre-Covid 2019 performance ➢ Affordability remains compelling ➢ On track for 2,000 homes sold in 2022 ➢ Embedded sustainability strategy ➢ Growth platform primed and ready ➢ Well-positioned for continued growth 04
Slide 5: Financial Highlights
Financial Highlights gleeson
Slide 6: Record performance
Record performance Group Operating Profit (excluding Group overheads) Full year results ahead of pre Covid year 2019 37.4 ➢ Revenue: £288.6m (2020: £147.2m, 2019: £249.9m) 30.1 26.2 Operating profit: £43.1m (2020: £5.9m, 2019: £41.0m) £ million ➢ 22.8 Gleeson Homes ➢ PBT: £41.7m (2020: £5.6m, 2019:
Slide 7: Income statement
Income statement £ million Year ended Year ended 30 June 2021 30 June 2020 Change Notes Gleeson Homes 265.8 140.9 +89% Homes sold up 69%, ASP up 11% Gleeson Land 22.8 6.3 +262% 8 sites sold (2020: 2 sites sold) Revenue 288.6 147.2 +96% Gleeson Homes 37.4 9.0 +316% Gleeson Land 11.1 0.2 Group overhea
Slide 8: Gleeson Homes Results
Homes sold Gleeson Homes Results 1,812 1,529 ➢ Homes sold up 69.0% to 1,812 (2020: 1,072, 2019: 1,529) 1,225 1,072 861 Homes sold 1,013 838 H2 632 261 ➢ ASP up 11.4% to £145,800 (2020: £130,900, 2019: £128,900) 562 H1 ➢ Underlying selling prices up 9.3% 593 691 811 951 451 2017 2018 2019 2020 2021 ➢
Slide 9: Gleeson Land Results
Gleeson Land Results Site sales (number plots) ➢ Eight land sales completed (2020: 2, 2019: 9) 782 (Thanet) Plots 1,970 1,978 ➢ Total developable plots 1,978 (2020: 195, 2019: 1,755) 841 973 ➢ Gross profit £13.7m (2020: £1.3m, 2019: £15.7m) 195 2017 2018 2019 2020 2021 ➢ Overheads £2.6m (2020: £1.1m
Slide 10: Balance sheet
Balance sheet £ million 30 June 30 June 2021 2020 Notes Gleeson Homes Land 82.1 64.9 £9,900 per plot (2020: £9,500, 2019: £8,900) WIP 126.2 119.2 £1.56m per site (2020: £1.68m, 2019: £1.40m) Gleeson Land Land 15.5 15.0 71 sites (2020: 68 sites) WIP 16.2 17.2 Total inventories 240.0 216.3 Other asset
Slide 11: Cash flow
Cash flow £ million Year ended Year ended 30 June 2021 30 June 2020 Notes Profit before tax from continuing operations 41.7 5.6 Depreciation, loss from disc. ops. and other 5.3 3.3 Depreciation, finance costs and share based payment charges Working capital movements (10.7) (19.2) Cash generated from
Slide 12: Dividends
Dividends Dividends ➢ Final dividend of 10.0 pence per share 34.5 ➢ Total dividend for the year 15.0 pence per share 32.0 24.0 ➢ Capital allocation policy supports growth agenda Pence per share 23.0 23.0 15.0 17.5 ➢ Dividend cover increased to between 3 and 5 times 10.0 Final 11.5 ➢ Final dividend e
Slide 13: Business Highlights and Review
Business Highlights and Review 13
Slide 14: Business Model
Business Model 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 Land We promote land, enhancing its value by securing mainly residential planning consent. 14
Slide 15: Gleeson Land
Gleeson Land gleeson
Slide 16: Our Mission: promoting land
Our Mission: We promote land through the complex planning system. Unlocking value for landowners and delivering sustainable and attractive sites for new homes. 16 Promoting Land. Unlocking Value.
Slide 17: Promoting Land. Unlocking Value.
Promoting Land. Unlocking Value. Return on capital employed ➢ Gleeson Land a top 4 promoter (ROCE) ➢ Land promoters deliver 2 out of every 5 large consented sites to 34.2% 33.7% housebuilders 29.0% 28.7% ➢ High planning success rate high, but planning can take time 25.4% 26.6% 25.9% 21.4% ➢ Selectiv
Slide 18: Pipeline ripening
Pipeline ripening Planning applications submitted ➢ Number of sites awaiting a planning decision has increased 10 No. of Sites to 15 (2020: 7, 2019: 6) 6 6 ➢ Covid still impacting timing on planning decisions 5 5 ➢ 10 planning applications submitted (2020: 6, 2019: 5) 2017 2018 2019 2020 2021 ➢ 2 si
Slide 19: Pipeline Overview
Pipeline Overview • Charts and ➢ 71 sites (2020: 68 sites) graphs 32pt ➢ 22,315 plots (2020: 23,314 plots) ➢ 2,210 plots on 6 sites consented (2020: 3,855 plots on 11 sites) As at 30 June As at 30 June 2021 2020 No. Sites Plots No. Sites Plots Planning consented / 6 2,210 11 3,855 resolution to gran
Slide 20: Gleeson Homes
20 Gleeson Homes gleeson
Slide 21: Our Mission: Building Homes. Changing Lives.
Our Mission: Changing lives by building affordable, quality homes. Where they are needed, for the people who need them most. 21 Building Homes. Changing Lives.
Slide 22: Profit growth
Profit growth Margins 32.2% 32.7% 30.1% ➢ Homes sold up 69% to 1,812 (2020: 1,072, 2019: 1,529) 27.8% 28.5% Gross margin % ➢ ASP up 11.4% to £145,800 (2020: £130,900, 2019: £128,900) 17.4% 17.1% ➢ Underlying selling prices up 9.3% 15.3% 14.1% ➢ Revenue up 88.6% to £265.8m (2020: £140.9m, 2019: 6.4%
Slide 23: Number of sites
Strong demand, growing footprint Build sites ➢ Demand strong - FOB of 841 homes (2020: 1,033, 2019: 677) 81 Build sites ➢ 14 homes forward sold per active sales site (2020: 16, 2019: 10) 71 69 20 ➢ Build sites 65 6 Build sites not yet 59 actively ➢ 27 sites opened selling ➢ 81 sites at year end Numb
Slide 24: Healthy and growing pipeline
Healthy and growing pipeline Land pipeline ➢ Pipeline up 14.9% to 15,863 plots on 152 sites 15,863 ➢ 81 active build sites 13,575 13,801 12,852 ➢ 71 pipeline sites (conditionally purchased or owned but not 11,588 7,933 yet active) Number of plots 7,050 6,952 Awaiting ➢ 65 conditionally purchased sit
Slide 25: Strong platform for growth
Strong platform for growth ➢ 3 Divisions: Yorkshire and Midlands, North Eastern, North West ➢ 8 Regions ➢ Capacity to deliver 500 home sales p.a. ➢ Build rate can increase to support strong demand ➢ From 25 homes per site p.a. - still low by industry standards ➢ Ambitious site opening plans ➢ Open 2
Slide 26: Industry headwinds
Industry headwinds ➢ Cost pressures UK Construction PMI Input Prices Index ➢ Material availability ➢ Taxation Brick stocks (million) 500 400 300 200 100 Aug-19 Nov-19 Mar-20 May-20 Aug-20 Nov-20 Mar-21 May-21 Jul-19 Jun-20 Jul-20 Jun-21 Jul-21 Sep-19 Dec-19 Jan-20 Dec-20 Jan-21 Oct-19 Apr-20 Apr-21
Slide 27: Home ownership improves wealth, health and wellbeing
Home ownership improves wealth, health and wellbeing Home ownership Renting (private) ➢ Home ownership benefits individuals and society ➢ Owners save/create £326,000 value over 30 years £209,000 Wealth created through home Value of No asset ownership ➢ Less housing support when owners retire home af
Slide 28: Gleeson Homes model
Gleeson Homes model We build high-quality, low-cost homes for young, first- time buyers ➢ 4 out of 5 sites in deprived areas, in need of regeneration ➢ 3 out of 5 sites are brownfield ➢ Sites well located with good transport links and access to employment ➢ All Gleeson homes are: ➢ Traditional brick
Slide 29: Gleeson Homes – what we don't do
Gleeson Homes – what we don't do 29
Slide 30: Our customers
Our customers ➢ 4 out of 5 first-time buyers ➢ 2 out of 3 key workers ➢ 16% homes bought by a nurse or social/care worker ➢ 7% homes bought by a teacher or teaching assistant ➢ 28 ½ years old - median age ➢ 77% of customers are 35 years old or younger ➢ 3% of customers are retired ➢ 3% of customers
Slide 31: Single, first time buyer
Single, first time buyer Buyer name: Corina, 31 Occupation: Social Worker Year of purchase: 2020 Development: Ransom Court, Nottingham House type: Cork, 2 bedroom semi-detached Purchase price: £136,995 Mortgage cost £370 pcm 30-year Help to Buy Previous rental cost: £550 (one-bedroom flat) Single bu
Slide 32: Couple, second time Gleeson buyers
Couple, second time Gleeson buyers Buyer name: Josh, 28, Tania, 26 Occupation: IT teacher and P.E teacher Year of purchase: 2021 Development: Rainsborough Park, Knottingley House type: Kilkenny, 3 bedroom detached Purchase price: £184,995 Mortgage cost: £500 pcm Previous rental cost: £800 pcm (2-bed
Slide 33: Large, underserved market
Large, underserved market Household tenure (millions of households) North of England & South of England & Midlands East ➢ 1 in 3 households are renting ➢ 4.1 million rented homes in the North of England 7.6 and Midlands 8.2 4.1 4.8 ➢ Housebuilding sector is building largely in affluent areas ➢ Only
Slide 34: Selling prices – further room for growth
Selling prices – further room for growth ➢ Over the last 7 years ➢ Average new build prices have increased by 37% ➢ The governments’ National Living Wage has increased by 37% ➢ Gleeson prices have increased by only 21% Source: New build: ONS/Land Registry - all new build sales in the North of Englan
Slide 35: Selling prices - remain highly affordable
Selling prices - remain highly affordable Number of Average Gleeson Mortgage payments (per week) Rent for equivalent bedrooms price (FY21 sales) 75% LTV, 90% LTV, no. beds (per week) Help to Buy Standard mortgage 2-bed £119,000 £59 £83 £128 3-bed £151,000 £75 £105 £147 4-bed £195,000 £97 £135 £218 A
Slide 36: Sustainability
Sustainability 36 gleeson
Slide 37: Sustainability
Sustainability ➢ Strategy focused on the Environment, Communities and People ➢ Aligned to United Nations Sustainable Development Goals ➢ UNSDG 11: "Sustainable Cities & Communities" ➢ Target 1: "Safe and affordable housing for everyone" ➢ A couple on the Government's minimum wage* can afford to buy
Slide 38: Progress on sustainability targets
Progress on sustainability targets Target Outcome 1. Health and safety incident rate (“AIIR”) will be significantly reduced ✗ AIIR increased to 556 (10 RIDDORS) and above industry average. 2. Staff turnover will be reduced to at least Staff turnover reduced to 32%. Industry average the industry aver
Slide 39: New sustainability targets
New sustainability targets Target Key actions 1. Health and safety incident rate (“AIIR”) will Monthly independent inspections, Apprentice passports, be reduced to industry standard or lower Working at height, supply chain workshops, enhanced tracking and reporting 2. Employee engagement will be mai
Slide 40: 30t CO2e to build a Gleeson home
30t CO2e to build a Gleeson home ➢ 30t CO2e for every Gleeson home built ➢ 2t Scope 1 and 2 ➢ 28t Scope 3 (construction and infrastructure) ➢ Scope 1 and 2 emissions being reduced ➢ Reduced by 18% in 2021 to 2.05t ➢ Targeting 1.75t by 2023 ➢ Scope 3 build/infrastructure emissions ➢ Focus for 2022 40
Slide 41: Summary and Outlook
4 Summary and Outlook gleeson
Slide 42: Summary and outlook
Summary and outlook ➢ Record year with results ahead of pre-Covid numbers ➢ On track to deliver 2,000 homes this financial year ➢ Strong demand and pipelines for both Gleeson Homes and Gleeson Land ➢ Operating structure in place to support controlled growth ➢ Embedded sustainability strategy ➢ Busin
Slide 43: Appendices
Appendices 43
Slide 44: Organisational structure
Organisational structure James Thomson Stefan Allanson CEO CFO Steve Gamble Mark Knight James Pitt Land & Planning Director MD Gleeson Homes MD Gleeson Land Formerly Land Director at Gladedale Formerly Divisional Chairman Formerly Land Director for Barratt Homes. 20+ years land buying Keepmoat Homes
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Slide 46: Thank you
Thank you Gleeson (Head Office) 5 Europa Court, Sheffield Business Park 46 Sheffield S9 1XE