Mj Gleeson Plc · LSE:GLE
Mj Gleeson — FY2017 Earnings Presentation
24 slides from Mj Gleeson's earnings presentation, Sep 25, 2017
Slide 1: MJ Gleeson plc
MJ Gleeson plc 25 September 2017 1
Slide 2: On track to “double” Homes sales
On track to “double” Homes sales Another strong financial performance Pipeline over 11,500 plots (11.4 years development) Occupying a unique and sustainable market segment 2,000 units p.a. within 5 years Developers still buying land – 11 consented sites, 6 progressing to sale Resources a
Slide 3: Financial Review
Financial Review Stefan Allanson Chief Financial Officer MJ Gleeson plc – results for the period ended 30 June 2017 3
Slide 4: Excellent financial performance
Excellent financial performance Operating profit up 17.0% to £33.0m (2016: £28.2m) PBT up 17.0% to £33.0m (2016: £28.2m) Operating cash flow up 41.7% to £19.7m (2016: £13.9m) Cash balance up 47.0% at 30 June 2017 to £34.1m (30 June 2016: £23.2m) Earnings per share up 13.8% at 48.5p (2016:
Slide 5: Firing on all cylinders
Firing on all cylinders Operating Profit (£m) Operating Cash Flow+ (£m) 19.7 £40.0m (excluding group overheads) 20.0 £35.0m £22.8m 15.0 13.9 £30.0m £19.5m £25.0m Gleeson 10.0 8.1 £17.4m 5.6 £20.0m Homes 5.0 £15.0m Gleeson £9.4m Strategic - £10.0m £12.0m Land £10.2m 2013 2014 2015 2016 2017 £5.0m £4.
Slide 6: Income statement
Income statement Jun 17 Jun 16 Change Notes £m £m Revenue Homes 130.5 113.6 +14.9% Includes land sales: 2017 £6.2m, 2016 nil, 2015 £3.1m Strategic Land 29.9 28.4 +5.3% 160.4 142.1 +12.9% Homes 22.8 19.5 +16.9% Includes land sales: 2017 £1.0m, 2016 nil, 2015 £2.7m Strategic Land 12.0 10.2 +17.6% Grou
Slide 7: Balance sheet
Balance sheet 30 June 30 June 2017 2016 £m £m Homes Land 48.4 37.3 WIP 62.5 48.6 Strategic Land Land 15.7 13.2 WIP 15.9 15.1 Total inventories 142.5 114.2 Other assets 39.2 43.2 Other liabilities (44.4) (27.7) Cash & cash equivalents 34.1 23.2 Net assets 171.4 152.9 MJ Gleeson plc – results for the
Slide 8: Cash flow
Cash flow Jun 17 Jun 16 £m £m Profit Before Tax from continuing operations 33.0 28.2 Depreciation, loss from discontinued operations and other operating items 1.1 0.9 Working capital movements (10.0) (11.6) Cash generated in operating activities 24.1 17.5 Tax (4.4) (3.2) Interest (0.1) (0.4) Disposa
Slide 9: Total dividend for the year
Dividend Dividends Final dividend recommended of 17.5 pence 25.0p per share (2016: 10.0 pence per share) 24.0p 20.0p Giving a total ordinary dividend for the year of 24.0 pence per share, up 66% on Total dividend for the year previous year (2016: 14.5 pence per share) 15.0p 14.5p 10.0p 10.0p 5.0
Slide 10: Business Review
Business Review Jolyon Harrison Chief Executive Officer MJ Gleeson plc – results for the period ended 30 June 2017 10
Slide 11: Business model
Business model Gleeson Homes Gleeson Working in challenging Homes communities to provide new homes for sale to people on low incomes Gleeson Strategic Land Key Gleeson Homes Land promotion, Gleeson Strategic Land enhancing the value of land by securing Gleeson residential planning Strategic Land con
Slide 12: Reminder of the Homes model
Reminder of the Homes model Sustainable Strong drivers for business model increasing UK housing stock No part exchange; No buy to let Government home ownership stimulation Limited competition Community regeneration credentials Significant and Acceptable to motivated target planners audience Low cost
Slide 13: Homes: demand remains robust
Homes: demand remains robust Unit completions Unit sales up 12.1% to 1,013 1,200 (2016: 904) 1,013 1,000 ASP reduced 2.4% to £122,700 904 (2016: £125,700) due to completion of 800 final legacy site and mix 751 House sales p.a. ("units") 600 561 FY Sales outlets increased to 59 at June H1 2017
Slide 14: Homes: margin growth continues
Homes: margin growth continues Gross margin Gross profit up 18.9% to £42.1m on unit sales * (2016: £35.4m) 34.0% 33.0% 31.1% including £1.0m on land sales 32.0% 29.8% 29.6% 30.0% 27.8% Gross margin on unit sales up 190 28.0% basis points to 33.0% (2016: 31.1%) 26.0% 24.0% 2013 2014 2015 2016 2
Slide 15: Homes: land available at sensible prices
Homes: land available at sensible prices Land pipeline Pipeline up 25%, net 2,304 plots 11,588 12,000 increase 10,000 11,588 plots at 30 June 2017 9,284 (June 2016: 9,284) 6,268 Number of plots 8,000 7,496 Awaiting completion 141 sites at 30 June 2017 (June 4,927 6,000 2016: 117) 5,065 3,816 3
Slide 16: Roadmap to 2,000 units p.a.
Roadmap to 2,000 units p.a. Acquiring land at sensible prices Pipeline of 11,588 plots Buying land in North Midlands, Cumbria, East Yorkshire Expect average to rise as regional / area mix changes Growing area offices 7 area offices (June 2016: 6 offices), and 2 new “pilot” offices open
Slide 17: Homes: delivering from the pipeline
Homes: delivering from the pipeline We are operating on 59 active sites We own or conditionally own 85 sites not yet started 21 of which have planning permission (starting soon). 32 of which have current planning applications. 32 planning applications are being prepared. MJ Gleeson plc – r
Slide 18: Responsible housebuilding
Responsible housebuilding We don’t sell leasehold We build on all sites as soon as implementable planning permission is received We are an accredited Living Wage housebuilder We roll out the YourWatch® service to all new sites We encourage our mortgage consultants to stay in touch with bor
Slide 19: Homes: Structure to support growth
Homes: Structure to support growth Homes management team of 10 directors with depth CEO & Homes MD – Jolyon Harrison and breadth of experience HEAD OFFICE LAND – Steve Gamble TECHNICAL – Tony Lee OPERATIONS – Sarah Marsden SALES – Louise McCue COMMERCIAL – Arron Passarelli FINANCE – Simon Topliss Re
Slide 20: Strategic Land overview
Strategic Land overview 8 land sales completed (2016: 7 land sales) for 841 plots (2016: 822 plots) Operating profit up 17.6% to £12.0m (2016: £10.2m) 6 new sites plus additional land at an existing site secured during the year 30 June 2017 portfolio of 65 sites with potential for 21,505 plo
Slide 21: Planning status of current portfolio
Planning status of current portfolio Strategic Land sites: an excellent portfolio No. Sites Acres Plots Planning consented 11 437 2,353 Planning submitted 14 670 3,829 Allocated sites 15 1,418 8,345 Not allocated 25 1,318 6,978 Total 65 3,843 21,505 MJ Gleeson plc – results for the period ended 30 J
Slide 22: Current land market
Current land market Prime “A” Guildford, Twickenham, Surrey , inner M25 Hot interest from all major housebuilders Prime “B” Shaftesbury, Farnham, Witney, Tunbridge Wells, Haywards Heath Strategic Very hot interest from builders building less than 2,500 units a year. Major housebuilders will bid but
Slide 23: Summary and outlook
Summary and outlook Deliver 2,000 units p.a. within 5 years Demand strong for both low cost homes and consented greenfield land Occupying a unique and sustainable market segment Uplift in ordinary dividend shows confidence in the future Confident of significant progress this year and beyon
Slide 24: MJ Gleeson plc
gleeson MJ Gleeson plc