HALF-YEAR RESULTS PRESENTATION Six months ended 31 December 2018 - - PowerPoint PPT Presentation

HALF-YEAR RESULTS PRESENTATION Six months ended 31 December 2018 BREATHING LIFE INTO LAND

Business Model

2

Inland Homes plc – Half year results December 2018

▪ Identify and acquire high quality brownfield land in South and South-East of England ▪ Add value by securing planning permission – 100% track record ▪ Generate value from land holdings through these activities

Land Sales

3

Inland Homes plc – Half year results December 2018

▪ Focus on brownfield and strategic sites

▪ Purchases of brownfield sites unconditionally and without planning consent ▪ Strategic sites secured by way of discount to market value options

▪ Focus on South and South-East in areas of high housing demand ▪ Balanced risk/reward returns profile:

▪ Disposal of land to other developers ▪ Deals with Housing Associations for Partnership Housing ▪ Disposal of land to investors and provision of planning and development services for management fees

Private Housebuilding

4

Inland Homes plc – Half year results December 2018

▪ Objective is to construct a balanced mix of Houses and Apartments ▪ Target market: first-time buyers and first movers

▪ Help to Buy used widely

▪ Direct delivery provides greater control over pressurised construction supply chain ▪ Excellent in-house construction team ▪ Selected developments carried out through joint ventures ▪ Vertically integrated model enables monetisation of greater proportion of development value

Centre Square (formerly Lily’s Walk), High Wycombe

Partnership Housing

5

Inland Homes plc – Half year results December 2018

▪ Housing Associations and PRS operators attracted to Inland’s ability to provide land and construction of homes ▪ Partnering with industry-leading players ▪ Crystallise value and cashflow on land disposal ▪ Construction working capital provided by partner ▪ De-risks market exposure

Abbey Wharf, Alperton

Medium-term objective

6

Inland Homes plc – Half year results December 2018

6

20% 28% 48% 4%

Revenue by segment

Land sales Partnership Housing land sales and construction Private Housebuilding Other 15% 40% 40% 5%

June 2018 Medium- term

Medium-term strategy to re-balance revenue contribution across operating activities by growing private housebuilding and Partnership Housing businesses

Financials

Chapel Riverside, Southampton

Progress in first half and positive start to the year

8

Inland Homes plc – Half year results December 2018

Revenue 2018: £51.0m

(H1 2017: £61.2m)

Persuing significant Partnership Housing contracts; Order book up 326% to £140m2

Strategic & Operational overview

Private homes under construction 2018: 1,057 +88.8%

(H1 2017: 560)

High quality site acquisitions; both

• utright and under
• ption

Plots +6.1% to 7,291 Private housing units sold 2018: 81

(H1 2017: 96)

PBT 2018: £5.5m

(H1 2017: £5.4m)

EPRA NAV1 2018: 103.57p +6.1%

(H1 2017: 97.63p)

Interim dividend per share 2018: 0.85p +30.8%

(H1 2017: 0.65p)

Successfully extended debt facilities at improved terms

1 On an undiluted basis 2 Including Dagenham transaction (see slide 27)

Financial overview

Gross margin 2018: 28.6%

(H1 2017: 18.6%)

Segmental results

9 Revenue £m Gross Profit £m Profit before tax £m Net Assets £m Land 4.8 0.5 (0.7) 33.3 Private Housebuilding 20.2 2.5 1.7 89.1 Partnership Housing 15.0 1.7 1.4 5.6 Other1 11.0 9.9 2.8 19.4 Total 51.0 14.6 5.5 147.4 28.6%

Inland Homes plc – Half year results December 2018

9

9% 40% 29% 22%

Revenue by segment

3% 17% 12% 68%

Gross profit by segment

Land sales Housebuilding Contract income Mngt fees/Other

1 Includes management fees and income/assets from investment property

Net debt

10 December 2018 £m December 2017 £m June 2018 £m Net debt 96.6 69.8 79.7 Cash + headroom 54.8 61.8 72.5 Gearing - IFRS 65.5% 51.8% 56.0%

• EPRA

45.4% 35.6% 38.6%

Inland Homes plc – Half year results December 2018

▪ Agreed new four-year £65m RCF with HSBC (including £20m accordion) on improved terms

10 20 30 40 50 60 2019 2020 2021 2022 2023 2024 2025

Debt maturity – facilities1 (£m)

1 Following refinancing of RCF facility

Generating value for shareholders

11

0.6 1.0 1.3 1.7 2.2

• 0.3

0.4 0.5 0.65 0.85 0.0 0.5 1.0 1.5 2.0 2.5

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Dividend growth p

Total Interim

Inland Homes plc – Half year results December 2018 See slides 29 and 30 for income statement and balance sheet

43.92 92.34 96.22 102.28 103.57 20 40 60 80 100 120

June 2015 June 2016 June 2017 June 2018 Dec 2018

EPRA NAV per share p

7.3 20.3 15.7 18.1 19.3 3.0 6.1 7.5 4.6 5.4 5.5 0.0 5.0 10.0 15.0 20.0 25.0

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Recurring profit before tax £m

FY HY

Land

Cheshunt Lakeside, Hertfordshire

Land

13

With planning 28% Planning applications submitted 26% Pre-application discussions 5% To be progressed 7% Strategic sites 34%

Status of planning

Inland Homes plc – Half year results December 2018

5,044 4,386 5,243 4,583 2,328 2,042 2,048 1,939 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 7,372 6,428 7,291 6,522

▪ Land bank increased by 6% to 7,291 plots ▪ Planning received for 60 unit site at Meppershall, Beds ▪ Planning permission on Cheshunt Lakeside and Wilton Park expected shortly ▪ Acquisition of site at Dagenham (see slide 27 for detail) ▪ Acquired options over two strategic sites during the period with potential for 170 homes

Planning update: Wilton Park

Inland Homes plc – Half year results December 2018

▪ Revised proposal submitted to Council in January 2019 including 79 affordable units – 30% of 264 net increase in unit numbers ▪ Planning decision expected in the current financial year ▪ GDV estimated at £350m with potential for further uplift ▪ New relief road currently being constructed to our boundary ▪ Formal adoption of new Local Plan for “East of Beaconsfield (1,700 homes – including 40% affordable) expected 2020 (see slide 26 for plan)

Relief road under construction Additional landholding Current planning application

14

Planning update: Cheshunt Lakeside

Inland Homes plc – Half year results December 2018

 Resolution to grant planning permission expected to be received during current financial year for the 28 acre site comprising 1,853 apartment-led mixed-use development  We have 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

Cheshunt Lakeside, Hertfordshire

15

Strategic land

 522 acres across 35 sites with potential for 3,079 homes  Strategic landholdings held in capital efficient manner  86% of sites held under discount to market value options

 30 sites of 469 acres and 2,763 plots  Eight sites in planning process

16

Inland Homes plc – Half year results December 2018 Holmer Green, Buckinghamshire

Other activities

Inland Homes plc – Half year results December 2018

Managed sites Aston Clinton, Buckinghamshire ▪ £9.2m net management fees for planning and development services Master Brewer, Hillingdon ▪ Facilitated purchase on behalf of investor ▪ Major residentially led mixed-use scheme New initiatives1 ▪ Rosewood Housing (registered provider)

▪ - first affordable unit now let

▪ Hugg Homes (modular housing)

▪ 22 units in situ and fully let ▪ 32 units pre-let and being manufactured ▪ Annual rent by year end: £500k

17

1 See slide 28 for more detail on Rosewood Housing and Hugg Homes

Aston Clinton, Buckinghamshire

Housebuilding

• St. John’s, Chelmsford

Housebuilding in progress

19 H1 2017/18 H1 2018/19 H2 2018/19 2019/ 2020 Completions Homes for sale - Group 96 79 35 371

• 50% JVs
• 2

45 150 96 81 80 521 Partnership equivalent units 32 63 163 313 Total homes delivered 128 144 243 834 +12.5% Private ASP (£'000) 322 238 n/a n/a Help to Buy contribution 58% 64% n/a n/a

Inland Homes plc – Half year results December 2018

Housebuilding in progress - continued

20 December 2018 December 2017 Change % Units under construction Homes for sale - Group 864 517

• 50% JVs

193 43 1,057 560

88.8

Partnership equivalent units 496 220 Total homes under construction 1,553 780 99.1

Inland Homes plc – Half year results December 2018

Houses 46% Flats 54%

Total land holdings split by type

Partnership Housing

Witley Gardens, Southall

Partnering with Industry leading players

Inland Homes plc – Half year results December 2018

Clarion Housing ▪ Largest social landlord in the country ▪ Property portfolio: £7.5bn (cost) ▪ Development pipeline: 15,000 houses ▪ Loans and grants/Undrawn facilities : £5.8bn/£540m

22 Sites Partner H2 2018/19 £m 2019/20 £m 2020/21 £m > 3 years £m Order book £m Total contract1 £m Church Road, Ashford A2 Dominion 6.5 14.0 14.1 23.2 57.8 64.5 Abbey Wharf, Alperton Clarion 7.5 10.7 1.2

• 19.4

30.0 Dagenham2 Clarion 2.0 22.0 22.0 20.0 66.0 66.0 Total 16.0 46.7 37.3 43.2 143.2 160.5

A2 Dominion ▪ Top 10 Housing Association in the South-East ▪ Property portfolio: £8.8bn (market value) ▪ Development pipeline: 7,800 houses ▪ Loans and grants/Undrawn facilities: £2.6bn/£330m

1 Including revenue to date 2 Estimated split

Market and Outlook

Farrier’s Wood, Garston

Market and outlook

▪ Continuing to see good demand for properties under £400k outside Central London ▪ Cross-party support for housing supply ▪ Partnership Housing market is robust with discussions ongoing on a number of new sites ▪ Strong appetite from housebuilders and Housing Associations for consented land in prime locations

24

Wessex Hotel, Bournemouth Inland Homes plc – Half year results December 2018

24

Appendices

Church Road, Ashford

Wilton Park – East of Beaconsfield Local Plan

Inland Homes plc – Half year results December 2018

Relief road under construction Current Inland planning application Additional landholding

East of Beaconsfield Local Plan

26

Acquisition: Dagenham, East London

Inland Homes plc – Half year results December 2018

▪ Four acre brownfield site - existing planning consent for 325 homes and 1,600 sqm of commercial space ▪ Gross development value of circa £95m ▪ Located within the London Riverside Opportunity Area ▪ Advance discussions with major Housing Association for a Partnership Housing deal

27 27

New initiatives

Hugg Homes  First development completed at Chapel Riverside

 22 units let to Southampton City Council and private tenants for £168k pa

 32 units being manufactured for Cheshunt Lakeside

 Broxbourne Council has signed a three-year lease for £319.5k pa

Rosewood Housing  First acquisition into Rosewood completed and let  Further pipeline of opportunities

 Mix of shared ownership, social and discounted market rent units

28

Inland Homes plc – Half year results December 2018

Income statement

December 2018 December 2017 Change % Revenue1 (£m) 51.0 61.2 (16.7) Gross profit1 (£m) 14.6 11.4 28.1 Net interest cost (£m) 2.9 1.6 81.3 Profit before tax (£m) 5.5 5.4 1.9 Earnings per share (p) 2.25 2.19 2.7 Dividend (p) 0.85 0.65 30.8

Inland Homes plc – Half year results December 2018

29

Balance sheet

30 December 2018 December 2017 Change % Investment property 55.6 53.6 3.7 Loans & Invts in JVs & associate 29.9 27.7 7.9 Inventories 162.5 137.1 18.5 Cash 30.2 24.8 21.8 Borrowings 126.8 94.6 34.0 IFRS NAV - £m 147.4 134.7 9.4

• per share (undiluted)

71.71p 67.02p 7.0 EPRA NAV - £m 212.9 196.2 8.5

• per share (undiluted)

103.57p 97.63p 6.1

23% 60% 4% 4% 9%

Assets by segment

Land sales Housebuilding Contract income Investment property Other

Inland Homes plc – Half year results December 2018

Net debt and borrowings

31 December 20181 £m June 2018 £m December 2017 £m Borrowings 126.8 120.1 94.6 Net debt 96.6 79.7 69.8 Cash + headroom 54.8 72.5 61.8 Gearing - IFRS 65.5% 56.0% 51.8%

• EPRA

45.4% 38.6% 35.6% Average maturity - facilities 3.2 years 1.7 years 2.7 years

• borrowings

2.8 years 1.9 years 2.7 years

1 Proforma figures include RCF refinancing in March 2019 2 Excludes ZDP

Inland Homes plc – Half year results December 2018

Directors’ Biographies

32

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.

Inland Homes plc – Half year results December 2018

Disclaimer

33

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.

This presentation is not intended to provide the basis for any credit or other evaluation of any securities of the Company and should not be considered as a recommendation, invitation or inducement that any investor should subscribe for, dispose of or purchase any such securities or enter into any other transaction with the Company or any other person. The merits and suitability of any investment action in relation to securities should be considered carefully and involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of such securities. This presentation is being communicated or distributed within the UK only to persons to whom it may lawfully be communicated, and has not been approved for the purposes of section 21 of the Financial Services and Markets Act 2000. It may not be reproduced (in whole or in part), distributed or transmitted to any

• ther person without the prior written consent of the Company. In particular this

presentation is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Any recipients of this presentation outside the UK should inform themselves of and observe any applicable legal or regulatory requirements in their jurisdiction, and are treated as having represented that they are able to receive this presentation without contravention of any law or regulation in the jurisdiction in which they reside or conduct business.

Inland Homes plc – Half year results December 2018