Bellway P.l.c. · LSE:BWY
Bellway P.l.c — FY2011 Earnings Presentation
52 slides from Bellway P.l.c's earnings presentation, Oct 18, 2011
Slide 1: Bellway p.l.c. Analyst Presentation
Bellway p.l.c. Analyst Presentation for year ended 31 July 2011
Slide 2: Highlights
Highlights Volumes up 7.1% to 4,922 Average selling prices up 7.6% to £175,613 Turnover up 15.3% to £886.1 m Operating margin increased by 180 bps to 8.5% Profit before tax up 51.2% to £67.2 m Net asset value – 888 p 5,406 plots added to land bank Net cash of £3.4 m Forward order b
Slide 3: Notes
Notes Results presentation 18 October 2011 -3-
Slide 4: Turnover
Turnover for the year ended 31 July 2011 2010 % change Homes Sold 4,922 4,595 7.1% Average Sales Price £175,613 £163,175 7.6% Housing Turnover £864.4m £749.8m 15.3% Other Turnover £21.7m £18.5m 17.3% Total Turnover £886.1m £768.3m 15.3% Results presentation 18 October 2011 -4-
Slide 5: Notes
Notes Results presentation 18 October 2011 -5-
Slide 6: Sales Statistics
Sales Statistics for the year ended 31 July 2011 2010 % change Private Sales 3,843 3,652 5.2% Average SP £191,492 £173,273 10.5% Social Housing 1,079 943 14.4% Average SP £119,057 £124,068 -4.0% Houses 66% 61% Apartments 34% 39% Results presentation 18 October 2011 -6-
Slide 7: Notes
Notes Results presentation 18 October 2011 -7-
Slide 8: Sales Statistics
Sales Statistics for year ended 31 July Selling price 2011 2010 Up to £100,000 15% 16% £100,001 to £150,000 36% 37% £150,001 to £200,000 21% 26% £200,001 to £250,000 13% 10% Over £250,000 15% 11% Average Sq. feet per home 931 912 Average Selling Price per Sq foot £189 £179 Results presentation 18 Oc
Slide 9: Notes
Notes Results presentation 18 October 2011 -9-
Slide 10: Operating Performance
Operating Performance for the year ended 31 July 2011 2010 Gross Margin 13.5% 11.7% Admin Expenses 5.0% 5.0% Operating Margin 8.5% 6.7% Operating Profit £75.2m £51.3m Results presentation 18 October 2011 - 10 -
Slide 11: Notes
Notes Results presentation 18 October 2011 - 11 -
Slide 12: Finance Expense
Finance Expense for the year ended 31 July 2011 2010 Net Interest Payable (inc. fees) £2.8m £0.8m Other (£0.2m) (£0.8m) Employee Benefits £0.4m £0.4m Land Creditors £3.1m £4.5m Preference Dividend £1.9m £1.9m Finance Cost £8.0m £6.8m Average borrowings / (cash) £5.7m (£42.1m) Results presentation 18
Slide 13: Notes
Notes Results presentation 18 October 2011 - 13 -
Slide 14: Earnings and Dividends
Earnings and Dividends for the year ended 31 July 2011 2010 Profit before tax £67.2m £44.4m Earnings per share 41.5p 29.7p Dividend per ordinary share 12.5p 10.0p Average no. of Ordinary Shares 120.7m 120.6m Effective Taxation Rate 25.3% 19.4% Results presentation 18 October 2011 - 14 -
Slide 15: Notes
Notes Results presentation 18 October 2011 - 15 -
Slide 16: Capital Employed
Capital Employed as at 31 July 2011 2010 £m £m Fixed Assets 17.9 15.9 Stocks 1,270.3 1,148.7 Shared equity 33.5 32.7 Debtors 65.9 49.5 Net Cash 3.4 65.7 Creditors (214.5) (195.8) Land Creditors (83.2) (61.9) CAPITAL EMPLOYED 1,093.3 1,054.8 NAV 888p 856p ROACE 7.0% 4.9% Results presentation 18 Octob
Slide 17: Notes
Notes Results presentation 18 October 2011 - 17 -
Slide 18: Stocks
Stocks as at 31 July 2011 2010 £m £m Land with Planning 646.9 619.5 Land pending Planning 114.8 105.5 Work in Progress 439.7 370.9 Showhomes 45.6 37.8 Part Exchange Stock 23.3 15.0 TOTAL 1,270.3 1,148.7 * Results presentation 18 October 2011 - 18 -
Slide 19: Notes
Notes Results presentation 18 October 2011 - 19 -
Slide 20: Land with Planning
Land with Planning Plots Cost Average Plot Cost £m £k B/f August 2010 17,602 619.5 35.2 Sold (4,922) (216.4) 44.0 12,680 403.1 31.8 Bought 5,406 243.8 45.1 C/f July 2011 18,086 646.9 35.8 Results presentation 18 October 2011 - 20 -
Slide 21: Notes
Notes Results presentation 18 October 2011 - 21 -
Slide 22: Anticipated completion mix
Anticipated completion mix July 10 c. 54% c. 35% c. 11% July 11 c. 27% c. 46% c. 27% July 12 c. 17% c. 35% c. 48% July 13 c. 12% c. 26% c. 38% c. 24% July 14 c. 9% c. 23% c. 15% c. 53% 0% 20% 40% 60% 80% 100% Plots w ith provision (c. 5.5%) Plots w ithout provision (> 5.5%) New ly acquired plots (>
Slide 23: Notes
Notes Results presentation 18 October 2011 - 23 -
Slide 24: Growing profitability
Growing profitability Three pronged attack:- Higher volumes Higher average selling prices Improving operating margins Results presentation 18 October 2011 - 24 -
Slide 25: Notes
Notes Results presentation 18 October 2011 - 25 -
Slide 26: Higher volumes
Higher volumes 45 new outlets opened during the year Average outlets during the year 195 vs 183 last year Completed stock units increased to 768 from 500 Show homes increased to 252 units from 222 Results presentation 18 October 2011 - 26 -
Slide 27: Notes
Notes Results presentation 18 October 2011 - 27 -
Slide 28: Sales statistics
Sales statistics for the year ended 31 July 2011 2010 % change North Homes sold 2,345 1,985 18.1% Average SP £144,447 £140,690 2.7% South Homes sold 2,577 2,610 -1.3% Average SP £203,973 £180,277 13.1% Results presentation 18 October 2011 - 28 -
Slide 29: Notes
Notes Results presentation 18 October 2011 - 29 -
Slide 30: Capacity to grow
Capacity to grow 7 divisions producing less than 350 units Capacity to increase output to around 6,000 homes without significant increase in overhead Outlets set to increase by 5% in 2011/12 to 215 Results presentation 18 October 2011 - 30 -
Slide 31: Notes
Notes Results presentation 18 October 2011 - 31 -
Slide 32: Higher average selling prices
Higher average selling prices Increased by 7.6% due to change in mix Demand for apartments in and around London remains strong Upmarket units in prime locations will deliver units this year Less apartments in the north Results presentation 18 October 2011 - 32 -
Slide 33: Notes
Notes Results presentation 18 October 2011 - 33 -
Slide 34: Incentives
Incentives Incentive levels similar to last year Reliance on shared equity sales has fallen to 10% from 18% in the previous year Attracted 800 buyers by making a contribution towards their deposit Results presentation 18 October 2011 - 34 -
Slide 35: Notes
Notes Results presentation 18 October 2011 - 35 -
Slide 36: Completion Analysis
Completion Analysis for the year ended 31 July 2011 2010 1079, 943, 22% 591, 21% 13% 791, 16% 436, 9% 630, 543, 14% 12% 337, 630, 7% 13% 199, 149, 493, 4% 3% 11% 1196, 1500, 25% 30% Results presentation 18 October 2011 - 36 -
Slide 37: Notes
Notes Results presentation 18 October 2011 - 37 -
Slide 38: Improving operating margins
Improving operating margins Growing percentage of production from newly acquired land 40% of land with planning acquired post autumn 2008 Over a quarter of completions from newly acquired plots Results presentation 18 October 2011 - 38 -
Slide 39: Notes
Notes Results presentation 18 October 2011 - 39 -
Slide 40: Cost base
Cost base Build cost down 8% compared to 3 years ago No labour rate increases at present Majority of materials on a fixed price basis for 12 months or more New technology creates cost pressure New cost pressures addressed at land acquisition stage Results presentation 18 October 2011 - 40
Slide 41: Notes
Notes Results presentation 18 October 2011 - 41 -
Slide 42: Land Buying
Land Buying Land spend £250m spend on land and land creditors Plots owned with planning Increased to 18,086 plots 5,406 plots added to the land bank:- 1,370 new additions 4,036 plots promoted from pipeline where planning permission obtained in the period Results presentation 18 October 201
Slide 43: Notes
Notes Results presentation 18 October 2011 - 43 -
Slide 44: Land Buying
Land Buying “Oven ready” site at Radcliffe School, Milton Keynes Planned elevation at Canal View South, Stepney Results presentation 18 October 2011 - 44 -
Slide 45: Notes
Notes Results presentation 18 October 2011 - 45 -
Slide 46: Land Bank
Land Bank 3 levels to our land bank 2011 2010 Plots owned with planning 18,086 17,602 Plots pending planning 13,000 15,000 Total plots 31,086 32,602 Long term potential plots > 3,600 > 2,800 Heads of terms agreed on further 3,500 plots * Results presentation 18 October 2011 - 46 -
Slide 47: Notes
Notes Results presentation 18 October 2011 - 47 -
Slide 48: Market place
Market place In first 9 weeks:- - Sales volumes up 11% - Sales value up 21% Consumer confidence remains fragile Order book up by 6% to £418.8 m representing 2,364 plots at end of September Results presentation 18 October 2011 - 48 -
Slide 49: Notes
Notes Results presentation 18 October 2011 - 49 -
Slide 50: Summary
Summary Balance sheet strength will allow further investment in sales outlets We can continue 3 pronged attack:- - Volume growth - Average selling price growth - Margin growth Results presentation 18 October 2011 - 50 -
Slide 51: Notes
Notes Results presentation 18 October 2011 - 51 -
Slide 52: Forward-looking statements
Certain statements in this presentation are forward-looking statements which are based on Bellway p.l.c.’s expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. Such forward-looking statements can be i