ANNUAL RESULTS PRESENTATION Year ended 30 June 2018 Highlights - - PowerPoint PPT Presentation

ANNUAL RESULTS PRESENTATION Year ended 30 June 2018

• Highlights and strategy
• Financial results
• Operational performance
• Outlook
• Q&A

Stephen Wicks – Chief Executive

A strategy focused on growth

Inland Homes PLC - Annual results 2018

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• Unconditional

acquisition of brownfield sites

• Strategic land
• ptions at discount

to market value

• Focus on South &

South-East of England

• Sale of consented

plots

• Bias to parties

where our construction team can build out

• Affordably priced high-

quality homes

• Target 1,000 units pa

within two years

• Target EPRA net

gearing at below 40%

• Balanced profile of

maturity dates Continue the core activity of plot sales to generate cash to fund

• ur operations

Acquire land and add value through planning Maximise the value from our land bank by expanding our house building programmes Maintain borrowings at a manageable level

Why invest in Inland Homes

▪ Strong, well-located land portfolio

▪ South & South East, no exposure to Greater London ▪ 6,780 plots, 1,708 with planning permission ▪ 100% planning success rate on brownfield sites ▪ Large pipeline

▪ Balanced business model

▪ Land sales ▪ Private housebuilding (forward sales of £19.7m) ▪ Partnership housing (contract order book c£100m) ▪ New initiatives (Hugg Homes / Rosewood)

▪ Strong potential return

▪ Share price at 39% discount to EPRA NAV of 102.28p ▪ 29% dividend growth ▪ 3.3% dividend yield

Inland Homes PLC - Annual results 2018

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20 40 60 80 100 June 2018 Share price

Discount to EPRA NAV1 p

102.28 62.38 39% discount 1.2 1.4 2.2 2.8 3.3 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

2014 2015 2016 2017 2018

Dividend yield %

1 On an undiluted basis

South and South-East focused portfolio

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Strategic sites 45% Planning applications submitted 11% Pre-application discussions 36% To be progressed 8%

Status of planning

100% success rate on brownfield planning permissions

Balanced and growing pipeline

Inland Homes PLC - Annual results 2018

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Houses 47% Flats 53%

Total land bank split by type

< 24 Months 17% 2 - 5 Years 28% > 5 Years 55%

Unit completion timescale

4,671 3,813 5,162 4,502 2,105 2,034 1,708 1,606 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Total Group share Total Group share Plots with planning permission Plots without planning permission

2017 2018

Nish Malde – Finance Director

Financial highlights

▪ Revenue1 up 26% driven by record plot and unit sales ▪ Recurring profit up 6.6% to £19.3m ▪ EPRA NAV2 per share up 6.3% to 102.28p ▪ Full year dividend +29% to 2.20p (yield @ 30/06/18: 3.3%)

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1 Revenue includes land sold via corporate disposal in prior year 2 On an undiluted basis

20 40 60 80 100 June 2017 Profit Reval'n Div'ds Other June 2018 Share price

EPRA NAV2 p

96.22 7.62 0.25 (1.83) 102.28 0.02 62.38 39% discount 0.3 0.6 1.0 1.3 1.7 2.2 0.0 0.5 1.0 1.5 2.0 2.5

2013 2014 2015 2016 2017 2018

Dividend growth p

Financial summary

Inland Homes PLC - Annual results 2018

10 June 2018 June 2017 Change % Revenue1 (£m) 148.6 117.7 26.3 Gross profit1 (£m) 31.8 32.5 (2.2) Net interest cost (£m) 4.2 6.5 (35.4) Recurring profit before tax (£m) 19.3 18.1 6.6 Earnings per share (p) 7.64 7.82 (2.3) Dividend (p) 2.20 1.70 29.0

1 Includes revenue and profit from properties and land sold via corporate

• disposal. See appendix for reconciliation

40% 48% 8% 4%

Revenue by segment

58% 24% 6% 13%

Gross profit by segment

Land sales Housebuilding Contract income Mngt fees/Other

Balance sheet

Inland Homes PLC - Annual results 2018

11 June 2018 June 2017 Change % Investment property 52.8 53.6 (1.5) Loans & Invts in JVs & associate 27.3 25.4 7.5 Inventories 136.2 139.9 (2.6) Cash 40.4 26.5 52.5 Borrowings 120.1 94.5 27.1 Net Asset Value - IFRS (£m) 142.4 130.6 9.0

• EPRA (£m)

206.7 194.4 6.3 EPRA NAV per share - diluted 98.03p 91.88p 6.7

• undiluted

102.28p 96.22p 6.3

40% 29% 2% 20% 10%

Assets by segment

Land sales Housebuilding Contract income Investment property Other

Net debt and borrowings

Inland Homes PLC - Annual results 2018

12 Proforma June 20181 £m June 2018 £m June 2017 £m Borrowings 120.1 120.1 94.5 Net debt 79.7 79.7 68.0 Cash + headroom 74.0 72.5 37.7 Gearing - IFRS 56.0% 56.0% 52.1%

• EPRA

38.6% 38.6% 35.0% Average maturity - facilities 2.3 years 1.7 years 2.7 years

• borrowings

2.6 years 1.9 years 2.7 years Weighted average cost of debt2

• Housebuilding

n/a

3.1% 3.5%

• Land & investment property

n/a

5.9% 6.2%

1 Proforma figures include ZDP refinancing in August 2018 2 Excludes ZDP

10 20 30 40 50 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25

Proforma June 2018

Debt maturity (£m)

Gary Skinner – Managing Director

Operational highlights

▪ 275 open market sales - 46% increase ▪ Average selling price of £293,000 ▪ Partnership housing equivalent units up 114% from 37 to 79 ▪ Record planning application submitted: 1,853 homes at Cheshunt, Hertfordshire ▪ Land bank increased to 6,870 despite consumption

• f land through plot sales and homes sold

▪ 682 units under construction at 30 June 2018 ▪ Staff numbers increased from 74 to 105

Inland Homes PLC - Annual results 2018

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2,416 3,976 5,518 4,671 5,162 1,318 1,200 1,163 2,105 1,708

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

2014 2015 2016 2017 2018

Plots without planning permission Plots with planning permission

3,734 5,176 6,681 6,776 6,870

4,671 5,162

2,105 1,708 808 300 275 743 12 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2017 Acq'ns Density increase House Sales Land Sales Other 2018

1 In addition to the 743 plots, 94 were sold into a 50% joint

venture and therefore remain in the year end landbank figure

1

Sites in the pipeline

Wilton Park, Beaconsfield

• Outline planning submitted for 350 homes

and commercial within a parkland setting

• Estimated gross development value of

£350m

• Planning decision expected December

2018 subject to agreement on level of affordable housing

• Potential for further residential and

commercial as included in Local Authority’s Preferred option list Cheshunt Lakeside, Hertfordshire

• Outline planning submitted by Inland for

the 28 acre site comprising 1,853 apartment-led mixed-use development

• Inland has a 50% interest in 20 acres of

the site containing 1,343 apartments

• Regeneration includes commercial, retail,

leisure and education space as well as a new local plaza

• Estimated gross development value of

£650m

• Ability to buy out JV partner

Holmer Green, Buckinghamshire

• 10 acre strategic site located in the a

Greenbelt controlled by way of an option at a discount to market value

• Allocation for housing in emerging local

plan following promotion by Inland

• Outline planning application submitted for

103 homes

Inland Homes PLC - Interim Results 2017

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Developments under construction

Lily’s Walk, High Wycombe

• Former gas works, 3.5 acres site with

planning for 239 residential units and 15,800 sqft of commercial space

• Complex brownfield site
• One and two bedroom apartments with

prices ranging from £250k to £350k

• Forward sales of £5.5m
• Gross development value of £75m
• First completions expected by June 2019

Church Road, Ashford

• Regeneration of former Brooklands College
• Planning permission received in Dec 2017

for 357 homes

• Purchased our JV’s 80% interest in March

2018

• In June 2018, sold the site to A2 Dominion

for £29.7m and simultaneously signed a £64.5m construction contract

• Construction commenced in July 2018 with

phased completions from 2020 to 2023

• Commercial space to be transferred to

Inland at nominal value Chapel Riverside, Southampton

• Development Agreement with

Southampton City Council over nine acres

• f water-front brownfield site
• Planning secured for 457 residential

apartments and 60,000 sqft of commercial

• Complex site which involves major

infrastructure challenges

• Estimated gross development value of

£105m

• Delivery across five phases through to
• 2024. Phase one completes October

2018.

Inland Homes PLC - Interim Results 2017

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Private housebuilding in progress

Inland Homes PLC - Annual results 2018

17 June 2018 June 2017 Change % Net average reservation rate per active outlet 0.90 0.63 n/a Forward order book (£m) 19.7 19.9 (1.0) Private completions (homes) 275 188 46.3 Private ASP (£'000) 293 306 (4.2) Partnership equivalent units (homes) 79 32 146.9 Help to Buy contribution 58% 58% n/a

Partnership housing benefits

▪ Disposal of land with profit with immediate realisation of profit and cash receipt ▪ Steady cash and revenue stream over development period ▪ Lower development margin (10% expected) but with lower risk ▪ Currently, three partnership projects in progress with further two under negotiation ▪ Forward orders secured for c£100m of construction contracts ▪ Housing market risk avoided ▪ No sales and marketing costs ▪ No construction finance costs ▪ Interest saving from earlier receipt of cash

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7.5 7.5 18.2 18.2 2.5 1.8 5.8 5 10 15 20 25 30 35 Partnership housing Housebuilding

Example comparison – Partnership housing vs Housebuilding

Land cost & planning Construction cost S&M costs Interest Land profit Profit Construction profit Land profit Development profit

Stephen Wicks – Chief Executive

New initiatives

Hugg Homes  New modular housing product with an estimated 60 year lifespan for “meanwhile” use  First temporary planning consents have been secured in Southampton and Cheshunt for a total of 76 units  First installation expected to be complete, occupied and income producing by the end of this calendar year  Pre-let to local authorities for a three to five year period in line with local housing allowance  Target of 20% pa cash return

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New initiatives

Rosewood Housing  Registered as a for profit provider of social housing  Opportunity to develop, hold and manage certain section 106 homes  Mix of rented and shared ownership units  First acquisition into Rosewood completed:

 The Pheasant, Amersham  Best offer from external Housing Association - £300k  Estimated value to Rosewood - £450k  Open market value - £625k

 Opportunities for occupiers to “staircase” up to full value

Inland Homes PLC - Annual results 2018

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The Pheasant, Amersham

Market environment

▪ Continuing to see good demand for properties under £400k outside London ▪ Strong net reservation rate in 2018 at an average of 0.9 units per active site ▪ House prices remain firm in areas where our sites are located ▪ Partnership housing market is robust with discussions ongoing on a number of new sites ▪ Strong appetite from housebuilders and housing associations for consented land ▪ Government initiatives continue to support housing delivery

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Wessex Hotel, Bournemouth

Summary and outlook

▪ Residential market for core operating areas remains stable ▪ Transformation into volume private and partnership housebuilding on track ▪ Cross-party political environment remains supportive to housebuilding and to increase housing numbers ▪ Diversified business model and new initiatives to provide additional and stable income streams in uncertain times

Inland Homes PLC - Annual results 2018

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Queensgate, Farnborough

Appendices

Adjusted revenue and gross profit

Inland Homes PLC - Annual results 2018

25 June 2018 £m June 2017 £m Change % Revenue as reported 147.4 90.7 Disposal of subsidiary 1.2 16.0 Disposal of joint venture

• 11.0

Adjusted revenue 148.6 117.7 25.9 Cost of sales (115.6) (71.2) Disposal of subsidiary (1.2) (10.0) Disposal of joint venture

• (4.0)

Adjusted cost of sales (116.8) (85.2) Gross profit as reported 31.8 19.5 Adjusted gross profit 31.8 32.5 (2.2)

Directors’ Biographies

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Stephen Wicks, Chief Executive

Stephen has worked in the construction and housebuilding sector all of his working life and has extensive experience in the acquisition of large-scale development opportunities. He was the founding shareholder and Chief Executive of Country & Metropolitan plc, which floated on the main market of the London Stock Exchange in 1999 with a market capitalisation of £6.9m until its disposal in 2005 to Gladedale Holdings plc for approximately £72m. Holding in Inland Homes plc: 8.2%

Nish Malde, Finance Director

Nish is a chartered accountant and has over 30 years’ experience in the property sector with wide professional knowledge and understanding of both listed and unlisted companies. He was Finance Director and Company Secretary of Country & Metropolitan plc, which floated on the main market of the London Stock Exchange in 1999, until its disposal in 2005 to Gladedale Holdings plc. Holding in Inland Homes plc: 5.5%

Gary Skinner, Managing Director

Gary brings considerable experience to the Board having worked in the housebuilding sector for over 30 years. He joined the Group in February 2016 and was appointed to the Board in May 2018. Previously, he was director of operations at Willmott Dixon Housing and production director at George Wimpey (now part of Taylor Wimpey plc) responsible for constructing over 1,000 homes per annum.

Disclaimer

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This presentation has been prepared by Inland Homes plc (the “Company”). No representation or warranty (express or implied) of any nature is given nor is any responsibility or liability of any kind accepted by the Company or any of its directors, officers, employees, advisers, representatives or other agents, with respect to the truthfulness, completeness or accuracy of any information, projection, representation or warranty (expressed or implied), omissions, errors

• r misstatements in this presentation, or any other written or oral statement

provided. In particular, no responsibility or liability is or will be accepted and no representation or warranty is or is authorised to be given as to the accuracy, reliability or reasonableness of any forward-looking statement, including any future projections, management targets, estimates or assessments of future prospects contained in this presentation, or of any assumption or estimate on the basis of which they have been given (which may be subject to significant business, economic or competitive uncertainties and contingencies beyond the control of the management of the Company). Any such forwardlooking statements have not been independently audited, examined or otherwise reviewed or verified and nothing in this presentation should be construed as a profit forecast. All views expressed in this presentation are based on financial, economic, market and other conditions prevailing as of the date of this presentation. The Company does not undertake to provide access to any additional information or to update any future projections, management targets, estimates or assessment

• f future prospects or any other forward-looking statements to reflect events that
• ccur or circumstances that arise after the date of this presentation, or to correct

any inaccuracies in this presentation which may become apparent. Past performance is not indicative of future results and forward-looking statements are not guarantees of future performance. This presentation is for information purposes only and does not constitute an

• ffering document or an offer of transferable securities to the public in the UK.

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