INTERIM RESULTS PRESENTATION Six months to 31 December 2015 MARCH - - PowerPoint PPT Presentation

DELIVERING VALUE THROUGH CREATIVE BROWNFIELD DEVELOPMENT

MARCH 2016 INTERIM RESULTS PRESENTATION

Six months to 31 December 2015

Our business 01 Who we are Strategy Business

• bjectives

Drayton Garden Village, West Drayton

• AIM listed with market cap of £168m
• Land regeneration and residential development business in

Southern England

• 100% track record in obtaining planning consents
• Identify brownfield land opportunities with strategic angles
• Acquire sites unconditionally
• Add value by navigating through complex planning system
• Sell consented plots; develop lower cost homes; control

substantial land bank; generate rental income

• Increase net land bank and underlying NAV
• Expand housebuilding operations
• Increase rental income
• Joint ventures with major landowners and financial partners

Alexandra Gardens, Iver

01

St Johns, Chelmsford

Clear business model 02

Church Road, Ashford Brownfield land acquisition process Navigation

• f complex

planning system Land bank Sale of consented plots House building programme* Investment portfolio Carter’s Quay, Poole

“Creating value through planning expertise”

Operational

• Gross margin from the sale of private homes increased

to 24.1% (2014*: 22.0%)

• Disposal of 244 plots for a total consideration of £21.5

million

• Net increase in land bank to 5,672 plots, of which 1,146

have planning consent

• Consents secured on 583 plots and 7,114 sq ft of

commercial

• 2,929 plots awaiting planning decisions or are the

subject of pre-application discussions with local authorities

• Southampton City Council is development partner for

8.9 acre site, with potential for 380 residential units and GDV in excess of £90 million

• Construction underway on 208 units. A further 111 units

expected to commence shortly Group highlights: another record performance 03

*restated as a result of the application of IFRS10 and the change in accounting policy for investment properties

Financial

• EPRA net asset value of 84.4p per share
• Record increase in profit before tax (including £14.0

million revaluation surplus), up 274.4% to £21.5 million (2014: £5.7 million)

• 314.9% increase in earnings per share to 10.04 pence

(2014*: 2.42 pence)

• 25.4% increase in overheads reflects strategy to grow

in-house building expertise

• 33.3% rise in interim dividend to 0.4 pence per share,

reflecting strength of earnings performance and Board’s confidence in outlook

• Committed £20 million revolving credit facility, with

‘accordion facility’ of £10 million to finance housebuilding activities

Financial highlights: strong results delivered across all operating metrics 04

Revenue £55.1m £52.6m +5% Gross profit £14.6m £13.3m +10% Improved gross margin Profit before tax (including valuation gain) £21.5m £5.7m +274% Profit before tax (excluding revaluation gain) £7.5m £5.7m +31% Earnings per share 10.04p 2.42p +315% Higher effective tax charge in previous period Investment properties £48.1m £14.7m +227% Revaluation of residential properties at Wilton park Inventories £129.7m £131.7m

• 2%

Other financial liabilities £17.2m £34.4m

• 50%

Payment of deferred consideration Net debt £54.6m £43.3m +26% Housebuilding increased; payment of deferred consideration Net gearing 51% 67%

• 24%

Reduction due to increased net assets NAV per share 53.1p 32.0p +66% Impact of revaluation of investment properties EPRA NAV per share 84.4p N/A N/A Reflection of unrealised value within projects H1 2016 H1 2015* Change Comments

*restated as a result of the application of IFRS10 and the change in accounting policy for investment properties

Revenue & gross profit analysis 05

21.61 48.15 30.25 3.93 2.22 0.49 1.07 10 20 30 40 50 60

H1 2015 H1 2016

Revenue £m

Financial period

Segmental Analysis of Revenue Rental and other Contract Housebuilding Land sales 6.3 10.57 7.29 2.65 0.11 0.1 0.89 2 4 6 8 10 12 14 16

H1 2015 H1 2016

Gross profit £m

Financial period

Segmental Analysis of Gross Profit Rental and other Contract Housebuilding Land sales

• 93 private units sold (2014: 199 units)
• Average selling price of £325,000 (2014: £242,000)
• 58% of units sold were houses (2014: 16%)
• Current reservation rate of 0.73 units per site per

week

• Overall gross margin increased to 26.5% (2014:

25.3%)

• Gross margin of 24.1% (2014: 22.0%) on

housebuilding

• Forward sales of £20.9m
• 244 building plots sold for £21.5m (2014: nil)
• Significant increase in rental income with current

annualised amount of £2.3m

Summarised balance sheet 06

H1 2016 (£m) H1 2015 (£m) Comments Investment properties 48.1 14.7 Revaluation uplift on residential properties at Wilton Park Joint ventures 7.3 4.3 Increased activity with CPC JV Associate 0.8

• 25% interest in Troy Homes Ltd

Inventories 129.7 131.7 Other assets 7.9 9.8 Cash & cash equivalents 16.6 9.8 Borrowings < 1 year (57.0) (41.1) Borrowings > 1 year (14.2) (12.0) Deferred consideration (17.2) (34.4) Non recourse amount re: Wilton Park Other liabilities (14.9) (18.1) Equity attributable to shareholders 107.1 64.7 NAV 53.1p 32.0p EPRA NAV 84.4p N/A

170.3 (7.1) (1.5) (2.0) 89.1 6.3 7.3 14.0 1.0 63.2 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 Jun-15 Land sales Housebuilding Revaluation of investment properties Interest and

• verheads

Tax Dividends Other movements Unrealised value within projects Dec-15

EPRA NAV £m Fall Rise

Main drivers of EPRA NAV Growth 07

08 Land Portfolio

• Strategic focus on South East commuter and high growth locations
• Strong and visible pipeline of opportunities, both within land bank and housing developments
• Delivery of first time buyer and mid-tier price range homes into high-demand areas
• £75m GDV currently under construction

09 Land Portfolio

1,215 1,057 1,318 1,086 983

380 307 605 1,344 1,283 1,329 1,580 347 942 1,811 1,303 1,663 1,942 2,306 3,734 5,176 5,672

1,000 2,000 3,000 4,000 5,000 6,000 FY 2012 FY 2013 FY 2014 FY 2015 H1 2016 Number of plots

Land Bank

Plots controlled or terms agreed without consent (including strategic options) Plots controlled or terms agreed with consent or resolution to grant planning consent Managed or held within joint ventures without consent Owned or contracted without planning consent Owned or contracted with planning consent or resolution to grant planning consent 727 1249 2,416 3,976 4,526 1,215 1,057 1,318 1,200 1,146

1,942 2,306 3,734 5,176 5,672

1,000 2,000 3,000 4,000 5,000 6,000 FY 2012 FY 2013 FY 2014 FY 2015 H1 2016 Number of plots

Plots owned / managed (number)

Plots With Planning Permission Plots Without Planning Permission

“Significant brownfield and strategic land bank with visible pipeline of opportunities”

10 Planning status of sites

Ownership status

• No. of sites
• No. of plots
• No. of sites
• No. of plots
• No. of sites
• No. of plots
• No. of sites
• No. of plots

Planning applications submitted Pre-application discussions To be progressed Strategic Target plots for consent by 30 June 2016

Planning status of residential plots Ownership status

• No. of sites

Sq ft

• No. of sites

Sq ft Planning application submitted Pre-application discussions

Planning status of commercial space Managed or held in joint ventures 2 120,255 3 73,400 Owned or contracted 2 5,350 5 106,340 Plots controlled or terms agreed 1 53,820

• Grand Total

3 70,234 9 300,380 Managed or held in joint ventures 639 2 639 4 941

• Owned or contracted

298 5 298 9 748 3 192 2 48 Plots controlled or terms agreed 62 1 62 2 241 1 70 16 1,287 Grand Total 999 8 999 15 1,930 4 262 18 1,335

Planning applications submitted, 999 Pre-application discussions, 1,930 To be progressed, 262 Strategic, 1,335

Planning status of plots in land bank

Housebuilding activity 11

• Sale of 93 units legally

completed in first half of financial year

• Construction underway
• n 214 units and further

105 units about to start

• Construction cost

inflation over last couple

• f years; self help

measures being taken where possible

• New managing director

appointed with intention to grow in-house development capabilities

• Medium term target of

500 units p.a.

• Well placed to benefit

from house price rises expected over next 5 years

12 Wilton Park, Beaconsfield, Buckinghamshire

• 114 acres
• Estimated GDV in excess
• f £250m
• Development Brief

adopted in 2015

• Scope for 350 houses
• Access land purchased

in advance to put Inland in ‘special purchaser’ position with MOD

• Major highway works

underway

• Short term rental income

in excess of £1.1m p.a.

• Planning application

expected to be submitted in current financial year

13 Lily’s Walk, High Wycombe, Buckinghamshire

• First site in joint venture

with Christian Candy’s CPC Group

• Planning application

submitted for 239 apartments and approximately 16,000 sq ft

• f commercial space
• Resolution to grant

planning consent expected shortly with zero affordable housing

• Adjacent site with scope

for further 80 plots acquired in December 2015

• Combined estimated GDV

in excess of £83m

14 Church Road, Ashford, Middlesex

• Second site in joint

venture with Christian Candy’s CPC Group

• Former Brooklands

College campus in Ashford, Middlesex totalling 10 acres

• Planning application for

370 apartments to be submitted shortly

• Local community fully

supportive of the scheme due to extensive public consultation exercise

• Estimated GDV in excess
• f £100m

Chapel Riverside, Southampton, Hampshire 15

• Development partner of

Southampton City Council on high profile site

• Scope for up to 500

apartments and extensive employment space

• 8.9 acre former depot site
• First phase of the River

Itchen regeneration project

• Complex remediation and

heritage issues to tackle

• Estimated GDV in excess
• f £90m

16 Market analysis: supportive operating environment

• Lack of supply of homes is main driver of house and land prices
• Annual requirement of 250,000 homes nationally
• Government policies may help stabilise house price growth but unlikely to increase supply significantly, leaving expected

annual shortfall of 100,000 homes Government initiatives Demand for homes

• Help to Buy (30% of Inland sales used HTB)
• Help to Buy ISA & Lifetime ISA
• Starter Homes
• Restrictions on pension savings by higher earners will

support Buy to Let market, even with increase in Buy to Let levies Supply of homes

• Permitted development of offices to residential
• Relaxation of building constraints on green belt and

green field sites

• Planning reform
• Local Growth Fund – unlock large housing sites
• Local Authority land release

Source: Office for National Statistics Figure 2: House prices to 29 February 2016 Figure 1: Seasonally adjusted trends in quarterly housing starts and completions, England

17 Market outlook The Financial Times asked 88 economists… House price forecast

Source: Savills Source: Jones Lang LaSalle

Annual requirement for 250,000 new homes

17 Outlook

Continued strong demand for consented land & homes in

• ur areas

Strong, visible pipeline of short-medium term

• pportunities

Active investment in Group construction capability to support housebuilding activity Continued expansion of land bank to underpin future growth

Lily’s Walk, High Wycombe The Vale, Acton Carter’s Quay, Poole

“Favourable outlook to deliver capital and earnings growth”

Decimal Place, Chiltern Avenue Amersham, Buckinghamshire HP6 5FG Telephone: 01494 762450 Email: info@inlandplc.com www.inlandhomes.co.uk