Barratt Redrow Plc · LSE:BTRW
Barratt Redrow — Barratt Developments — H1 2006-07 Earnings Presentation
29 slides from Barratt Redrow's earnings presentation, Feb 28, 2007
Slide 1: Barratt Developments PLC Interim Results to 31st December 2006
BARRATT DEVELOPMENTS PLC Interim Results to 31st December 2006 28th February 2007
Slide 2: Charles Toner, Chairman
__(@)__ BARRATT Britain's Premier House Builder Charles Toner Chairman
Slide 3: Agenda
AGENDA Welcome Charles Toner Highlights & Business Review Mark Clare Financial Review Mark Pain Outlook Mark Clare
Slide 4: Highlights & Business Review
HIGHLIGHTS & BUSINESS REVIEW Mark Clare Group Chief Executive
Slide 5: Highlights
HIGHLIGHTS 2006 2005 CHANGE TURNOVER £1,194.4m £1,172.0m 2% HOUSEBUILD MARGIN 16.3% 14.8% 1.5% PRE-TAX PROFIT £180.2m £163.9m 10% EPS 52.6p 48.2p 9% ROACE 26.9% 30.1% (3.2%) DIVIDEND 11.38p 10.34p 10%
Slide 6: Traditional Strengths
TRADITIONAL STRENGTHS •Geographic Spread •Product Diversity •Growing Land Bank •People & Organisation
Slide 7: Geographic Spread
GEOGRAPHIC SPREAD 44 120 98 109 88
Slide 8: Product Diversity
| i - : ae | | So ASS ad eg S i N A ism } oa PRODUCT DIVERSITY - | a yy . \ Lt Ld | | aS
Slide 9: Growing Land Bank
GROWING LAND BANK Land Stock - No. of Years Supply 5.0 (Including Plots Agreed) 4.8 4.5 4.4 4.2 4.2 4.2 4.0 3.5 2002 2003 2004 2005 2006 HALF YEAR ENDED
Slide 10: People & Organisation
PEOPLE & ORGANISATION •Local accountability through 33 divisions •Full P&L responsibility •Strong cost control and performance culture •Outstanding house building expertise
Slide 11: Traditional Strengths
TRADITIONAL STRENGTHS •Geographic Spread •Product Diversity •Growing Land Bank •People & Organisation STRONG ORGANIC GROWTH
Slide 12: Housing Market
HOUSING MARKET •Demand still substantially ahead of supply •Planning process still constraining land supply •Industry consolidation continues •Government agenda increasing •Affordability •Urban regeneration •Zero carbon •Interest rate uncertainty
Slide 13: Management Agenda
MANAGEMENT AGENDA •Increase investment in people •Relentless focus on cost and efficiency •Accelerate land investment (inc. strategic) •Extend participation in all market segments •Focus on larger developments •Rejuvenate the brand
Slide 14: Strategic Fit - Wilson Bowden
STRATEGIC FIT - WILSON BOWDEN •Delivers upmarket acceleration •Provides commercial development capability •Substantially enhances land position •Provides even better geographic coverage •Opportunity to create the strongest team
Slide 15: Financial Review
FINANCIAL REVIEW Mark Pain Finance Director
Slide 16: H1 2006-07 Turnover Analysis
H1 2006-07 TURNOVER ANALYSIS INCREASE/ 2006 2005 DECREASE £M £M £M % HOUSEBUILD 1,190.8 1,166.8 24.0 2.1 OTHER 3.6 5.2 (1.6) (30.8) TOTAL 1,194.4 1,172.0 22.4 1.9
Slide 17: H1 2006-07 Completions
H1 2006-07 COMPLETIONS COMPLETIONS AVGE SELLING PRICE 2006 2005 CHANGE 2006 2005 CHANGE No. No. No. £000 £000 % Private 5,791 5,569 222 184.2 182.1 1.2 Social 1,415 1,434 (19) 86.6 88.4 (2.0) Total 7,206 7,003 203 165.0 162.9 1.3
Slide 18: H1 2006-07 Operating Profit
H1 2006-07 OPERATING PROFIT INCREASE/ 2006 2005 (DECREASE) £M £M £M % HOUSEBUILD 194.2 173.1 21.1 12.2 OTHER (2.0) (1.9) (0.1) 5.2 TOTAL 192.2 171.2 21.0 12.3 % % % HOUSEBUILD MARGIN 16.3 14.8 1.5
Slide 19: H1 2006-07 Financing Costs
H1 2006-07 FINANCING COSTS INCREASE/ 2006 2005 (DECREASE) £M £M £M % REAL 8.7 2.2 6.5 295.5 NOTIONAL 3.3 5.1 (1.8) (35.3) TOTAL 12.0 7.3 4.7 64.4 AVERAGE FUNDING 272.7 54.0 218.7 405.0 AVERAGE GEARING 17% 4% 13%
Slide 20: H1 2006-07 Earnings Per Share
H1 2006-07 EARNINGS PER SHARE INCREASE/ 2006 2005 (DECREASE) £M £M £M % PROFIT BEFORE TAX 180.2 163.9 16.3 9.9 TAX EXPENSE (54.1) (49.1) (5.0) 10.1 EARNINGS 126.1 114.8 11.3 9.8 EPS - BASIC 52.6p 48.2p 4.4p 9.1 EPS – ADJUSTED 51.6p 47.5p 4.1p 8.4
Slide 21: H1 2006-07 Balance Sheet
H1 2006-07 BALANCE SHEET 2006 2005 INCREASE/DECREASE £M £M £M % NON-CURRENT ASSETS 85.6 50.8 34.8 68.5 CURRENT ASSETS 3,069.0 2,757.0 312.0 11.3 TOTAL ASSETS 3,154.6 2,807.8 346.8 12.4 CURRENT LIABILITIES 1,312.2 1,191.0 121.2 10.2 NON-CURRENT LIABILITIES 217.4 211.5 5.9 2.8 TOTAL LIABILITIES 1,529.
Slide 22: H1 2006-07 Stocks
H1 2006-07 STOCKS 2006 2005 INCREASE/(DECREASE) £M £M £M % LAND 2,109.1 1,957.1 152.0 7.8 IFRS ADJUSTMENT (30.4) (31.6) 1.2 3.8 LAND NET OF IFRS ADJ. 2,078.7 1,925.5 153.2 8.0 WORK IN PROGRESS 841.2 601.6 239.6 39.8 2,919.9 2,527.1 392.8 15.5 PART EXCHANGE 37.5 40.1 (2.6) (6.5) PROPERTIES FOR SALE 7
Slide 23: H1 2006-07 Liabilities
H1 2006-07 LIABILITIES 2006 2005 INCREASE/(DECREASE) £M £M £M % LAND CREDITORS DUE WITHIN 1 YEAR 365.6 477.9 (112.3) (23.5) DUE AFTER 1 YEAR 122.1 116.0 6.1 5.3 TOTAL 487.7 593.9 (106.2) (17.9) OTHER CREDITORS TRADE CREDITORS AND ACCRUALS 957.6 719.1 238.5 33.2 PENSION OBLIGATIONS 84.3 89.5 (5.2) (5
Slide 24: H1 2006-07 Cash Flow Analysis
H1 2006-07 CASH FLOW ANALYSIS 300 200 £190.4m 100 £34.9m £6.5m £m 0 (£58.7m) -100 -200 (£226.7m) -300 (£399.8m) -400 -500 OPENING NET INFLOW FROM WORKING FINANCING FINANCING CLOSING NET CASH/DEBT OPERATIONS CAPITAL COSTS (DEBT INFLOW CASH/DEBT MOVEMENT & EQUITY)
Slide 25: Financial Overview
FINANCIAL OVERVIEW Strong financial performance Completions, margins & profit growth Balance sheet growth Still more to do…
Slide 26: Outlook
OUTLOOK Mark Clare Group Chief Executive
Slide 27: Wilson Bowden Acquisition
WILSON BOWDEN ACQUISITION •Timetable and process on track •Target organisation plans advanced •Integration teams populated •Retention programme in place •Communication ongoing
Slide 28: Outlook
OUTLOOK •Strong forward sales •At December c.£1,030m •Now at c.£1,368m •Visitor and sales levels remain strong •Uncertainty remains over interest rate impact •Focus on delivering ‘Business as Usual’ •Complete acquisition by May
Slide 29: Barratt Developments PLC Interim Results to 31st December 2006
BARRATT DEVELOPMENTS PLC Interim Results to 31st December 2006 28th February 2007
Barratt Developments — H1 2006-07 Earnings Presentation on 6ix