Half Year Results Presentation for the period ended 29 June 2014 30 - - PowerPoint PPT Presentation

Half Year Results Presentation for the period ended 29 June 2014 30 July 2014

Disclaimer

This presentation is not intended to, and does not constitute or form part of, any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell

• r otherwise dispose of, any securities in Taylor Wimpey plc or any other invitation or

inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. Past performance of Taylor Wimpey plc cannot be relied upon as a guide to its future performance. Certain statements made in this presentation are forward looking statements. Such statements are based on Taylor Wimpey’s current expectations and beliefs concerning future events and are subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements. Such statements are also based on numerous assumptions regarding Taylor Wimpey plc’s present and future strategy and the environment in which it operates, which may not be accurate. Taylor Wimpey plc will not release any updates or revisions to forward looking statements contained in this presentation except as required by law or regulation.

2

Agenda

3

Operational review Pete Redfern Financial review Ryan Mangold 2015-17 targets and outlook Pete Redfern

Operational review

Pete Redfern Chief Executive

4

Group performance – financial highlights

• Operating margin* increased to 16.1% (H1 2013: 13.1%)
• Return on net operating assets* of 17.8% (H1 2013: 14.3%)
• Tangible net asset value* per share up 9.5% to 73.6p (H1

2013: 67.2p)

• 2015 cash return increased to £250m

5

* See definitions slide in the appendix

UK performance – operational highlights

6

£45.3k

Contribution per completion

0.71

Private net sales rate (per outlet per week)

7.2k

Plots converted from strategic pipeline

£224k

Private average selling price on completions

11.5k

Total plots added to short term landbank

21%

Increase in ASP in private order book to 29 June 2014

2012 2013 2014

Customer interest Sales rate Number of outlets

Taylor Wimpey market performance

7

H1 2014 H2 2013 H1 2013 H2 2012 H1 2012 Average outlets open 307 318 312 317 305 Private sales rate (net) 0.71 0.59 0.67 0.56 0.60 Private sales price £000 238 227 211 197 195 Cancellation rate (private) 11% 13% 14% 15% 15%

Our UK market performance

8

• c.39% of total H1 2014 sales using Help to Buy
• 54 new outlets opened in H1 2014 (H1 2013: 67)

Data based on reservations excluding JVs

Land and planning environment

• Land market remains most competitive in regions where

national / regional competitors have opened new offices

– No meaningful new entrants or trends – Overall level of competition remains unchanged

• Short term land prices are broadly following the trend of house

prices

– Returns at point of acquisition remain at same high level as 2013

• Planning environment remains better than previous cycle
• Election creates some uncertainty but relatively benign at this

point

– Await outcome of Lyons Review

9

North Division operating area

10

As at 29 June 2014 Scotland & North East Yorkshire & North West West Midlands North Division H1 2014 North Division FY 2013

Short term owned and controlled land portfolio plots 8,523 10,950 7,767 27,240 27,365 Land portfolio years 5.8 5.9 5.5 5.7 6.1 Land portfolio years, three-year view*** 5.3 5.4 4.8 5.2 5.3 Cost per plot £000** 24.9 28.3 28.8 27.2 27.4 ASP in short term

• wned land portfolio

£000 198 177 169 183 175 Average cost as a %

• f ASP

12.6% 16.0% 17.0% 14.9% 15.7% Strategic land plots (> 50% probability) 20,169 23,453 12,874 56,496 54,466

980 completions 0.63 sales rate* 715 completions 0.67 sales rate* 745 completions 0.64 sales rate*

* Private sales rate (net) ** Based on short term owned plots. NRV is wholly allocated to land, comparable basis to peers *** Based on a three-year forward looking average

South Division operating area

11

As at 29 June 2014 Eastern South West & Wales South East & London South Division H1 2014 South Division FY 2013 London market†

Short term owned and controlled land portfolio plots 12,637 16,910 18,354 47,901 43,263 4,467 Land portfolio years 6.8 8.8 5.9 6.9 6.1 4.5 Land portfolio years, three-year view*** 6.3 7.9 4.7 6.0 5.4 4.5 Cost per plot £000** 42.1 30.7 54.2 40.6 41.6 104.5 ASP in short term

• wned land portfolio

£000 208 208 264 229 220 410.5 Average cost as a % of ASP 20.2% 14.8% 20.5% 17.7% 18.9% 25.5% Strategic land plots (> 50% probability) 15,718 15,560 19,856 51,134 55,508 936

* Private sales rate (net) ** Based on short term owned plots. NRV is wholly allocated to land, comparable basis to peers *** Based on a three-year forward looking average

† London market information shown separately in addition to being included in South East & London. The London market includes the area inside the M25

947 completions 0.73 sales rate* 827 completions 0.75 sales rate* 824 completions 0.73 sales rate* 657 completions 1.04 sales rate*

Short term landbank

12

Planning status 29 June 2014 31 December 2013 Detailed planning 43,220 42,640 Outline planning 22,212 20,178 Resolution to grant 9,709 7,810 Total 75,141 70,628 Movements in half year to 29 June 2014 31 December 2013 70,628 + Plots acquired 4,336 + Strategic land conversion 7,195

• Completions

(5,766)

• Land sales

(229)

• Scope changes

(1,023) 29 June 2014 75,141

• At 75k plots we have reached the steady state level to achieve

strategic goals

• Equates to approximately a 5.3 year landbank for 14k completions
• Level of strategic success means landbank may continue to grow

slightly – but without adverse balance sheet impact

Converting our strategic pipeline

13

• Record year for strategic conversions

– 7,195 plots in H1, 88% in the South – Conversion rate expected to average 6k per annum

• Confident in sourcing 40% of completions from strategic pipeline

Movements in half year to 29 June 2014 31 December 2013 109,974 + Plots acquired 9,704

• Strategic land conversion

(7,195)

• Land sales
• Scope changes

(4,853) 29 June 2014 107,630

UK cost and construction environment

14

• National deals and central procurement

– Average increase of c.4.5% over last 12 months

• We estimate 4-5% like for like inflation (1 Jan 2014 – 31 Dec 2014)
• Security of supply key

– Brick supply secured around 18 months ahead of build schedule

• Internal logistics business helps both price negotiations and managing

supply

H1 2014 H2 2013 H1 2013 Total build cost per sq ft (£/sq ft) 110 107 103 Private build cost per sq ft (£/sq ft) 111 109 104 % apartments of private completions 18% 20% 19% Private average sq ft per unit 1,039 1,035 1,043

Financial review

Ryan Mangold Group Finance Director

15

Summary Group results

16

Continuing Group £m H1 2014 H1 2013 Change FY 2013 Revenue 1,190.1 1,007.1 18.2% 2,295.5 Gross profit 259.4 197.0 31.7% 449.3 Gross margin % 21.8% 19.6% 2.2ppt 19.6% Operating profit* 192.1 132.4 45.1% 312.9 Operating margin* % 16.1% 13.1% 3.0ppt 13.6% Profit before tax and exceptional items 178.4 109.0 63.7% 268.4 Adjusted basic earnings per share 4.3p 2.7p 59.3% 6.7p Tangible NAV per share* 73.6p 67.2p 9.5% 69.6p Return on net operating assets* 17.8% 14.3% 3.5ppt 16.8%

* See definitions slide in the appendix

UK performance summary

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H1 2014 H1 2013 Change FY 2013 Legal completions – total 5,766 5,191 11.1% 11,696 Private 4,755 4,229 12.4% 9,423 Affordable 940 930 1.1% 2,124 JVs 71 32 121.9% 149 Ave selling price – total £000 206 188 9.6% 191 Private £000 224 205 9.3% 210 Affordable £000 112 108 3.7% 110 Operating profit £m* 194.0 134.8 43.9% 312.8 Operating margin %* 16.4% 13.5% 2.9ppt 13.8%

* See definitions slide in the appendix

Indicative movements in UK operating margin

Annual change Impact on 2014 profit from 30 June 2013 and loss account to 29 June 2014 Market inflation 8% 4.8% Build cost 4% (1.8)% Net economic benefit captured 3.0% NRV provision release (1.3)% Net market impact 1.7%

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Improvement in land mix 2.6% Reduced NRV utilisation (1.7)% Net land improvement 0.9% Affordable housing price 0.7% Other income and overheads (0.4)% Total margin movement 2.9% H1 2013 to H1 2014

Growth in Group net assets

19

£m H1 2014 H2 2013 12 month rolling Annual change Opening net assets 2,251.8 2,172.5 2,172.5 Pre-exceptional net earnings 140.2 127.4 267.6 12.3% Net impact of exceptional items 14.8 (1.1) 13.7 0.6% Profit from discontinued operations

• 8.7

8.7 0.4% Profit for the period 155.0 135.0 290.0 13.3% Actuarial gains / (losses) after tax 11.0 (39.8) (28.8) (1.3)% Net share scheme and other movements (2.2) (9.0) (11.2) (0.5)% Closing net assets pre cash return 2,415.6 2,258.7 2,422.5 11.5% Dividends – accrued and paid (64.9) (6.9) (71.8) (3.3)% Closing net assets post cash return 2,350.7 2,251.8 2,350.7 8.2%

UK return on net operating assets – investment in landbank

20

Current land cost on balance sheet - £m Of which: net land creditor - £m Number of plots 29 June 2014 Number of plots 30 June 2013 Short term owned 2,059 391 56,648 50,179 Short term controlled 64 31 18,493 14,905 Total short term 2,123 422 75,141 65,084 Strategic owned 192 27 32,635 32,795 Strategic controlled 51 6 74,995 68,771 Total strategic 243 33 107,630 101,566 Total landbank 2,366 455 182,771 166,650

• Return on capital employed on land approvals short term year to date c.30%
• UK asset turn* 1.20x (H1 2013: 1.19x)

£m < 1 yr 1-2 yrs 2-5 yrs 5+ yrs Land creditor unwind 202 155 82 16

* See definitions slide in the appendix

0% 20% 40% 60% 80% 100% H1 2013 FY 2013 H1 2014

Quality of short term owned and controlled landbank

21 Post 2009 short term land Post 2009 strategic land Pre 2009 strategic land Pre 2009 unimpaired land Pre 2009 impaired land

• Revenue in short term landbank – c.£15bn
• Revenue in strategic pipeline – c.£20bn

18.8% 16.5% 17.8%

Land cost in

• wned

landbank as % of ASP

• 2014 a transitional year, operating cash generation improving, still

historic land payments to make

• Landbank approaching ‘optimal scale’
• Focused on delivering strategy

Turning profit into cash*

22

* Based on a rolling 12 month period ** See definitions slide in the appendix Operating profit** WIP Land & land creditors Other working capital Pension Interest Other Dividends ESOT purchases Net debt movement £m

Summary

• Medium term targets 2015 - 2017:

– Average 20% operating margin – At least 20% return on net operating assets each year – Average 15% pa increase in net asset value (inc. returns to shareholders) – Operating profit conversion into operating cash of an average of 65%

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FY 2011 FY 2012 FY 2013 H1 2014 Operating margin* % 8.8 11.2 13.6 16.1 Net operating asset turns*† 1.11 1.19 1.23 1.18 Return on net operating assets*† % 9.8 13.3 16.8 17.8 Net asset annual growth NAV (pre- cash return) % 0.7 8.4 13.2 11.5

† Based on a rolling 12 month period

* See definitions slide in the appendix

Medium term targets 2015 - 2017

Pete Redfern Chief Executive

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Indicative short term land replacement

4,000 8,000 12,000 16,000

2014 2015 2016 2017 2018 Plots To be identified Strategic pipeline (without planning) Short term owned and controlled - strategically sourced (with planning) Short term owned and controlled - purchased (with planning)

100% 87% 71% 65% 57% 100% 84% 58% 49% 42% 25 NB % relate to proportion of land with detailed planning

Average selling prices in short term owned and controlled landbank

26

Average selling price £174k + 3% Average selling price £198k + 12% Average selling price £238k + 20% Average selling price £200k + 15% Average selling price £201k + 12% Average selling price £391k + 77%

North South

North: Average selling price £180k +6% South: Average selling price £229k +19% UK: Average selling price £211k +16%

% change in ASP from 30 June 2013 to 29 June 2014

Average selling price £169k + 4%

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Post 2009 acquisitions H1 2014 H2 2013 H1 2013 Completions* 3,033 2,722 2,250 % of total completions 53% 42% 43% Acquisition contribution margin** 23% 22% 21% Achieved contribution margin** 26% 23% 23% Variance to acquisition margin 3.3% 1.9% 1.6%

* Data based on completions excluding JVs ** See definitions slide in the appendix

Disciplined approach to capturing value

Turning profit into cash

• 3 year average objective to convert at least 65% of operating profit into
• perating cash flow

– Timing driven by land strategy and cycle timing – Embedded in local objectives from 1/1/15 – Allows replacement plus flexibility around larger sites and strategic pipeline – Cash requirement for short term purchases reduced

• Ongoing strategic outperformance creates additional future options

– Reduce short term purchases further particularly if local markets heat up – Active and tactical land seller to competitors

• Dividend strategy progressed

– Interim dividend of £7.8m declared, to be paid September 2014 – £49.7m cash return paid July 2014 – Cash return for July 2015 increased to £250m due to confidence in performance

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Outlook

Pete Redfern Chief Executive

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Housing market steady

• TW ‘average customer’

– Average loan to value of c.80% – 3.75x - 4.25x income multiple

• Affordability reasonable compared to previous cycle

– Rates for typical 2 year fixed rate mortgage

• Lending market broader based and more competitive than

2008 - 2012

30

2 year fixed rates January 2014 July 2014 Average change HTB equity loan 2.34% – 3.24% 2.94% – 3.64% 0.50% HTB mortgage guarantee 5.19% – 5.59% 5.19% – 5.59% 0.00% 85% LTV (new build) 3.24% – 3.59% 3.24% – 3.49% 0.06%

2014 sales performance

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H2 2014 (w/e 27/07/2014) H1 2014 H2 2013 H1 2013 Private sales rate (net) 0.54 0.71 0.59 0.67 Private sales price £000 248 238 227 211 Cancellation rate (private) 15% 11% 13% 14%

Data based on reservations excluding JVs

As at H2 2014 (w/e 27/07/2014) 29 Jun 2014 31 Dec 2013 30 Jun 2013 31 Dec 2012 Private order book value £m 1,340 1,283 954 948 636 Private order book units 5,053 4,885 3,927 4,370 3,138 ASP in private order book 265 263 243 217 203

• c.90% forward sold for private completions as at w/e 27/07/2014

Conclusions

32

• As expected, housing market performance is stable after a

very strong H1

• Landbank and pipeline is in an unprecedented position –

excellent quality and the right quantity with ongoing

• ptimisation to our portfolio
• Operational performance is strong – capturing value and

staying disciplined

• Business strategy remains correct – outperformance gives

us good options

• Confident of medium term targets and particularly will see

significant cash generation

Questions and answers

33

Future investor communications

• 11 November 2014

IMS

• 3 March 2015

Full year results

• 23 April 2015

IMS and AGM

• 29 July 2015 Half year results

34

Taylor Wimpey plc

Half Year Results Presentation for the period ended 29 June 2014

Appendices

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Summary income statement*

36

Continuing Group £m H1 2014 H1 2013 Change FY 2013 Revenue 1,190.1 1,007.1 18.2% 2,295.5 Cost of sales (930.7) (810.1) 14.9% (1,846.2) Gross profit 259.4 197.0 31.7% 449.3 Net operating expenses (68.1) (64.6) 5.4% (139.6) Profit on ordinary activities before finance costs and tax 191.3 132.4 44.5% 309.7 Net finance cost (13.7) (23.4) (41.5)% (44.5) Share of results of JVs 0.8

• 3.2

Profit before tax 178.4 109.0 63.7% 268.4 Tax charge (38.2) (21.7) 76.0% (53.7) Profit for the period 140.2 87.3 60.6% 214.7

* Before exceptional items

Summarised Group balance sheet

37

£m 29 June 2014 30 June 2013 Change 31 Dec 2013 Long term assets and JVs 46.6 44.5 4.7% 47.2 Land 2,446.3 2,064.2 18.5% 2,180.1 WIP 857.4 792.1 8.2% 748.7 Debtors 251.9 212.1 18.8% 229.3 Land creditors (463.7) (322.7) 43.7% (349.0) Other creditors (722.7) (595.2) 21.4% (638.6) Pensions and post retirement benefits (147.6) (175.4) (15.8)% (183.8) Provisions (31.1) (61.4) (49.3)% (34.3) Net operating assets 2,237.1 1,958.2 14.2% 1,999.6 Accrued dividends (49.7)

• 100%
• Tax

199.5 282.7 (29.4)% 246.8 Net cash / (debt) (36.2) (68.4) (47.1)% 5.4 Net assets 2,350.7 2,172.5 8.2% 2,251.8 Tangible NAV per share 73.6p 67.2p 9.5% 69.6p

£m H1 2014 FY 2013 H2 2013 H1 2013

Profit from ordinary activities before finance costs* 210.2 355.3 188.8 166.5

• discontinued
• 31.3

8.7 22.6 Other non-cash items (16.3) (98.0) (36.2) (61.8) Increase in inventories (244.1) (92.8) (63.2) (29.6) Increase in receivables (20.1) (27.3) (14.4) (12.9) Increase/(decrease) in payables 79.8 12.0 66.5 (54.5) Pension contributions in excess

• f charge

(25.3) (48.1) (35.4) (12.7) Cash (used in) / generated by

• perations

(15.8) 132.4 114.8 17.6

H1 2014 cash flow summary

38

* Profit on ordinary activities before finance costs and tax, before share of results of joint ventures.

£m H1 2014 FY 2013 H2 2013 H1 2013

Cash (used in) / generated by

• perations

(15.8) 132.4 114.8 17.6 Tax 0.1 0.9 1.2 (0.3) Interest paid (6.2) (35.2) (21.4) (13.8) Net cash (used in) / from

• perating activities

(21.9) 98.1 94.6 3.5 Investing activities

• (2.4)

(0.5) (1.9) Financing activities (20.5) (29.6) (19.5) (10.1) Cash flow for the period (42.4) 66.1 74.6 (8.5) Net cash / (debt) b/f 5.4 (59.0) (68.4) (59.0) Movement in net debt (before fx) (42.4) 66.1 74.6 (8.5) FX and fair values adjustments 0.8 (1.7) (0.8) (0.9) Closing (net debt) / cash (36.2) 5.4 5.4 (68.4)

H1 2014 cash flow summary – continued

39

Pensions

40

* Includes £1.3 million paid through the PFP structure ** Following the merger of the TWGP&LAF and the GWSPS to create the new TWPS certain liabilities were extinguished resulting in a settlement gain

Movement in present value of defined benefit

• bligations

H1 2014 FY 2013 FY 2012 Restated** £m Total UK Total UK Total UK Brought forward 182.1 242.5 208.2 Employer contributions (25.3) (48.1) (52.4) Settlement gain*

• (4.1)
• Administration cost

1.3 3.2 4.0 Interest cost 3.9 9.7 9.4 Measurement changes (15.9) (21.1) 73.3 Carried forward 146.1 182.1 242.5

Number of residential units approved

41

England Wales Scotland Great Britain North of England Midlands Southern England All 2007 65,645 37,613 109,209 212,467 10,765 29,109 252,341 2008 40,892 25,290 102,377 168,559 6,894 22,541 197,994 2009 27,598 19,334 79,078 126,010 3,894 17,800 147, 704 2010 33,714 21,389 79,040 134,143 4,134 15,836 154,113 2011 27,137 21,730 66,545 115,412 5,366 11,400 132,178 2012 38,872 19,282 82,401 140,555 4,330 12,828 157,713 2013 46,304 30,529 97,605 174,438 6,127 11,342 191,907 2014 Q1 11,767 6,963 25,196 43,926 2,482 4,117 50,525 Change on a year earlier 2007

• 3%

3%

• 9%
• 5%

14%

• 5%
• 4%

2008

• 38%
• 33%
• 6%
• 21%
• 36%
• 23%
• 22%

2009

• 33%
• 24%
• 23%
• 25%
• 44%
• 21%
• 25%

2010 22% 11% 0% 6% 6%

• 11%

4% 2011

• 20%

2%

• 16%
• 14%

30%

• 28%
• 14%

2012 43%

• 11%

24% 22%

• 19%

13% 19% 2013 19% 58% 18% 24% 42%

• 12%

22% 2014 H1

• 5%
• 8%

22% 8% 36% 67% 12%

Source: HBF N.B. Projects involving 10 or more residential units

£m 29 June 2014 30 June 2013 31 Dec 2013 Fixed assets 12 11 12 Investment in JVs 33 32 34 Land 2,402 2,013 2,141 WIP 818 760 721 Total inventories 3,220 2,773 2,862 Debtors 247 211 227 Land (456) (319) (347) Other (691) (576) (617) Total creditors (1,147) (895) (964) Pension liability and PRMA (146) (174) (182) Provisions (31) (61) (34) Net operating assets 2,188 1,897 1,955

UK net operating assets

42

29 June 2014 31 Dec 2013 Owned Controlled Pipeline Total Total Detailed planning 38,877 4,343 205 43,425 42,939 Outline planning 13,750 8,462 1,572 23,784 22,182 Resolution to grant 4,021 5,688 142 9,851 8,265 Sub-total 56,648 18,493 1,919 77,060 73,386 Allocated strategic 6,110 13,604 422 20,136 15,440 Non-allocated strategic 26,525 61,391 1,423 89,339 97,015 Total 89,283 93,488 3,764 186,535 185,841

UK land portfolio ‒ plots

43

29 June 2014 31 Dec 2013 £m Owned Controlled Total Total Detailed planning 1,509 34 1,543 1,517 Outline planning 448 15 463 305 Resolution to grant 102 15 117 28 Sub-total 2,059 64 2,123 1,850

plots 56,648 18,493 75,141 70,628

Strategic 192 51 243 257

plots 32,635 74,995 107,630 109,974

Total 2,251 115 2,366 2,107

UK land portfolio ‒ net cost

44

Of the short term owned and controlled land portfolio:

• 9% - pre 2009 impaired land
• 7% - pre 2009 unimpaired land
• 38% - post 2009 strategic land
• 16% - pre 2009 strategic land
• 30% - post 2009 short term land

Net cost is stated after H1 NRV adjusted NRV is wholly allocated to land – comparable basis to peers

UK cost per plot analysis

45

PD sq ft per unit 1,024 1,002 999 1,025 1,043 1,035 1,039 % PD apartments 26% 26% 25% 23% 19% 20% 18% Average outlets 303 305 305 317 312 318 307 Completions 4,679 5,445 5,030 5,758 5,159 6,388 5,695 Contribution margin Selling expenses Build cost Land cost

Key

Data is excluding JVs

30 60 90 120 150 180 210 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014

30.0 17.8% 34.2 18.3% 27.6 15.9% 39.6 21.1% 45.3 22.0% 33.6 19.1% 38.1 19.6%

Private development product mix

46

2014 2013 2012 Completions % H1 FY H2 H1 FY H2 H1 Apartments 18% 20% 20% 19% 24% 23% 25% 1 / 2 / 3 bed houses 46% 43% 43% 42% 42% 41% 43% 4 / 5 bed houses 36% 37% 37% 39% 34% 36% 32% Total 100% 100% 100% 100% 100% 100% 100%

UK product mix

2014 sales performance

47

H2 2014 (w/e 27/07/2014) H1 2014 H2 2013 H1 2013 Average outlets open 306 307 318 312 Average sales rate (net) 0.63 0.83 0.73 0.78 Average selling price £000 230 221 200 200

Data based on reservations excluding JVs

As at H2 2014 (w/e 27/07/2014) 29 Jun 2014 31 Dec 2013 30 Jun 2013 31 Dec 2012 Total Order book value £m 1,644 1,584 1,246 1,255 948 Order book units 7,772 7,587 6,627 7,101 5,966 ASP in order book 212 209 188 177 159 Outlets at end of period 306 304 314 320 327 Order book value £m per outlet 5.4 5.2 4.0 3.9 2.9

£m H1 2014 H1 2013 Change Average number of active sites 18 15 20.0% Legal completions 20 27 (25.9)% Mainland Spain 11 13 (15.4)% Mallorca 9 14 (35.7)% Average selling price (£000) 208 184 13.0% Average selling price (€000) 254 216 17.6% Revenue £m 4.8 5.6 (14.3)% Operating profit £m* (1.9) (2.4) 20.8% Operating margin %* (39.6)% (42.9)% (3.3)ppt Order book £m 65.4 37.1 76.3% Net operating assets £m 49.2 61.5 (20.0)% Total landbank plots 1,739 1,789 (2.8)%

Spain financial summary

48

* Pre-exceptional

Definitions

49

• Operating profit is defined as profit on ordinary activities before finance costs and

exceptional items and tax, after share of results of joint ventures

• Return on net operating assets is defined as 12 month rolling operating profit

divided by the average of the opening and closing net operating assets, which is defined as capital employed plus intangibles less tax balances

• Tangible net assets per share is defined as net assets before any accrued

dividends excluding goodwill and intangible assets divided by the number of shares in issue at the period end

• Asset turn is total revenue divided by the average of opening and closing net
• perating assets. Based on rolling 12 months
• Contribution margin defined as net revenue less total build cost less total land cost

less direct selling expenses