Download ppt - Interim Results Presentation 2005 February 2005 Investor Relations Presentation

Interim Results Presentation 2005

February 2005

Investor Relations Presentation


This presentation is being made only to and is directed at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) or (b) any other persons to who it may otherwise lawfully be communicated, falling within Article 49(1) of the Order (all such persons being referred to as “relevant persons”).

Any person who is not a relevant person should not act or rely on this presentation or any of its comments.

The financial information set out in this document does not constitute the Company’s statutory accounts. Statutory accounts for 2004, which received an auditors’ report that was unqualified and did not contain any statement concerning accounting records or failure to obtain necessary information and explanations, have been filed with the Registrar of Companies.

Disclaimer

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• Record results again driven by operational performance

• Construction• Generated good cash flow

• Margins up to 1.2%

• Order book up to £957m

• Housebuilding• Margins up to 13.3%

• Expansion going to plan

• Encouraging level of sales since Christmas

• Management succession

• Good growth opportunities

Introduction

Overview


• Turnover steady at £347 million

• Profit before tax up 22% at £11.7 million

• Earnings per share up 19% at 3.7p

• Interim dividend up 9% at 0.60p per share

• Net debt of £10.3 million represents gearing of 13%

Financial Review

Highlights


Financial ReviewSummary Profit & Loss Account

(£m)

Dec 2003

(£m)

Dec 2004

Profit before interest 12.8 11.4

Interest (1.1) (1.8)

Turnover (including joint ventures) 347.6 356.4

Profit before tax 11.7 9.6

Diluted earnings per share 3.5p 2.9p

Dividend per share 0.60p 0.55p

For the half year ended 31 December 2004


Financial Review

Dec 2003 Dec 2004

Construction 256.1 268.7 3.0 2.0

Dec 2003 Dec 2004

Group Turnover (£m)(including joint ventures)

Profit/(loss) (£m)

Housebuilding 91.1 87.6 12.1 11.2

Group 0.3 0.1 (2.3) (1.8)

347.5 356.4 12.8 11.4

Less net interest payable (1.1) (1.8)

Profit before tax 11.7 9.6


Segmental Analysis


Cash Flow Summary

Financial Review

Dec 2004 (£m)

Increase in stock and developments (10.0) (6.1)

(Decrease)/increase in land creditors (3.7) 1.9

(Decrease)/increase in other creditors (10.6) 2.3

Net inflow 2.0 6.2

Decrease in debtors 21.1 1.7

Interest, tax, dividends, share capital & othermovements (7.5) (4.6)

Net debt brought forward (12.3) (17.8)

Group operating profit 12.7 11.0

Dec 2003 (£m)

Net debt carried forward (10.3) (11.6)



Financial Review

Dec 2003 (£m) Dec 2004 (£m)

Net debt 10.3 11.6

Shareholders’ funds 79.4 65.5

Total capital employed 89.7 77.1

Gearing 13% 18%

Interest cover 11.6 6.3

Balance Sheet, Financing


• United Utilities AMP4

• Three LIFT schemes closed

• Caludon Castle, Coventry PFI on site

• Scottish Water

• Regeneration Contractor of the Year

• Wimbledon redevelopment

Construction

Key Highlights


-1

-0.5

0

0.5

1

1.5

Dec-02 Jun-03 Dec-03 Jun-04 Dec-04

% Net Margin

-0.9%

0.6%

0.8%

Construction

0.9%

1.2%

Profitability


• General market set for 2% - 3% in growth medium term

• Health & Education remain strong

• Rail opportunities increasing

• Affordable Housing

• Some signs of recovery in commercial market

• Water - AMP 4 revenues maintained

Construction

Market Overview


Construction

• United Utilities - AMP 4

• Scottish Water performing to expectations

• Welsh Water - Holyhead

• Activity levels unchanged AMP 3 - AMP 4

Water


Construction

• Three LIFTS now closed

• Seven projects on site

• Next tranche about to commence

• Significant opportunities emerging

• Government announce next LIFT schemes

Health


Construction

• Acknowledged as education specialists

• Northampton Schools – Preferred Bidder

• Both Rochdale & Bromsgrove at ITN stage

• Building Schools for the Future

Education


Construction

• Significantly increased forward order book

• Strengthened senior management team

• Further potential in strategic alliances

• Regeneration Contractor of the Year

Affordable Housing


Construction

• Recent contract awards

• Prestigious client base

• Technically challenging

• Mixed use schemes more common

• Selectivity still essential

Commercial


Construction

19.1 Infrastructure 53.7 50.6

38.2 Education 134.6 119.2

54.5 Water 334.0 334.0

52.2 Commercial 120.1 75.5

23.8 Interiors 22.4 20.8

9.0 Health 126.6 123.3

13.3 Telecommunications 6.1 6.1

22.8 Affordable Housing 103.7 101.7

15.6 Rail 52.3 52.3

7.6 Ground Engineering 3.1 2.4

Market SectorsTurnover (£m)

Half Year to Dec 04

256.1 956.6 885.9

Total Work In HandNon Price Competitive

93%

Work In Hand (£m)

Non Price CompetitiveTotal

Forward Order Book


• Profit progression maintained

• Quality of order book across chosen markets

• Preferred bidder opportunities

• All business units performing to expectation

• Growth in profits set to continue

Construction

Summary and Outlook


Housing Highlights

• Record profits and improved margins

• Cost reductions achieved

• Land bank increased

• Excellent customer satisfaction results

• Strong “in-hand” position

• Expansion going to plan

Housebuilding


2004

Housebuilding

6 months to December

2003 Increase %

Units 387 367 5.4

ASP £000 228 228 -

Turnover £m 91.1 87.6 4.0

Margin % 13.3 12.8 3.9

ROCE % 22.5 21.6 4.2

Sales in hand February 05 £m 165.6 171.1 (3.2)

Operating Profit £m 12.1 11.2 8.0

Income per Sq. Ft. £ 220 197 11.7

Landbank February 05 units 2,464 2,342 5.2

Strategic land February 05 acres 666 676 (1.5)

Key Statistics


Market Conditions and Focus

• Minimal house price inflation

• Increased use of sales incentives

• Sub-contractors becoming more competitive

• Shortage in supply continues to underpin market

• Encouraging sales rate since Christmas

• Good opportunities in affordable housing

• Individually designed schemes and conversion

Housebuilding


Housebuilding

Try Homes Thames Valley

• Units 60

• Average selling price £000 268

• Brownfield and conversion 100%

• Customer satisfaction 98%

• Achieved planned performance


Housebuilding

Try Homes Southern

• Units 76




• Exceeded planned performance


Housebuilding

Stamford Homes

• Units 130


• Brownfield and conversion

58%



• New management team performing well


Housebuilding

Midas & Gerald Wood Homes

• Units 121





• Geographic expansion proceeding to plan


Housebuilding

Affordable Housing

• Large growth area

• Important part of business

• Expertise in collaborative developments

• Market leader in Southwest


Housebuilding

Summary & Outlook

• Expect to achieve full year planned performance

• All business units performing well

• Current market conditions sustainable

• Stringent land buying criteria with market more realistic

• Well placed to maximise opportunities from affordable housing

• Confident of achieving expansion plan


David Calverley - Chief Executive

Summary and Outlook


• Construction prospects underpinned by:

• Improving profit margins

• Balanced workload

• Housebuilding:

• Current market conditions sustainable

• Development led affordable housing a growth area

• Strength and depth of management team

• Business well positioned for further growth

Summary and Outlook