Results presentation for the year ended 30 June 2011 14 September - PowerPoint PPT Presentation

1 Full Year 2011 Results presentation for the year ended 30 June 2011 14 September 2011

2 Full Year 2011 Image to come Bob Lawson Chairman 14 September 2011 The Glade, Leeds

3 Full Year 2011 Mark Clare Group Chief Executive 14 September 2011 Spencer Place, Basingstoke The Maythorns, Biggleswade

4 Full Year 2011 Overview • Market trends • Sales performance • Key priorities • Product development • Planning • Partnerships • Wilson Bowden Developments • Current trading and outlook

5 Full Year 2011 Key highlights for FY 2010/11 (1) Pre-tax profits £m (2) Private ASP £k Operating margin 200 7% 50 190 42.7 6% 0 5% (33.0) 180 4% -50 170 3% 185.2 198.9 2% 160 166.5 -100 6.6% (144.1) 4.4% 1% 1.5% 150 0% -150 FY 2008/09 FY 2009/10 FY 2010/11 FY 2008/09 FY 2009/10 FY 2010/11 FY 2008/09 FY 2009/10 FY 2010/11 Net debt £m (3) Active sites Land approvals £m 500 1,350 380 360 400 1,100 340 300 850 320 339 200 600 376 377 300 489.8 454.1 100 350 280 1,276.9 366.9 322.6 37.4 100 260 0 FY 2008/09 FY 2009/10 FY 2010/11 FY 2008/09 FY 2009/10 FY 2010/11 FY 2008/09 FY 2009/10 FY 2010/11 Notes: (1) Group profit from operations before exceptional items divided by Group revenue (2) Pre exceptional cost of FY 2010/11 £54.2m (FY 2009/10 £129.9m, FY 2008/09 £534.8m) (3) Active site defined as a site with one unit available for sale. Active site number as at 30 June

6 Full Year 2011 Market trends • Difficult selling season in autumn 2010 • Greater stability in sales rates since January 2011 • Modest increase in underlying selling prices • Mortgage availability remains key constraint

7 Full Year 2011 House prices & mortgage approvals 140k 110 120k 100 100k Mortgage approvals (000s) House price index 80k 90 60k 40k 80 20k 0k 70 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Mortgage approvals (LHS) Halifax HPI data (RHS) Nationwide HPI data (RHS) Source: Halifax, Nationwide, Bank of England Note: House price data rebased to 100 as at Jan 2007

8 Full Year 2011 Mortgage availability Lender (1) Normal max LTV New build house LTV New build flat LTV Halifax / Lloyds 90% 80% 80% Nationwide 90% 90%** *** 75%** Abbey / Santander 90% 90%*(80%) 80%*(70%) RBS 90% 80% 75% Woolwich 85% 85% 85% Northern Rock 90% 85% 70% NAB / Clydesdale 90% 90% 70% HSBC 90% 75% 75% *FTBs only **Second hand valuations *** 90% for existing customers moving house Note: (1) Lenders are ranked by market share of Barratt Developments product

9 Full Year 2011 Sales performance Net private reservation rate (1) 10/11 09/10 Average Net private reservations per month H1 0.39 0.49 1,400 H2 0.48 0.52 FY 0.44 0.50 1,200 1,000 800 600 400 200 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY 09/10 FY 10/11 FY 11/12 Note: (1) Net private reservations per active site per week. An active site is defined by the Group as a site with one unit available for sale.

10 Full Year 2011 (1) by buyer type Sales – completions FY 2009/10 FY 2010/11 8% 10% 31% 36% 17% 24% 10% 15% 22% 27% Social Shared Equity Part Exchange Investor Other Private Note: (1) Completions excluding joint ventures

11 Full Year 2011 Shared equity FY 2009/10 FY 2010/11 18% 43% 7% 55% 75% 2% Total Units : 3,060 Total Units : 2,432 (1) : 27% (1) : 22% Percentage of total completions Percentage of total completions HBD Original HBD Kickstart Barratt Shared Equity products Note: (1) Completions excluding joint ventures

12 Full Year 2011 Part-exchange • PX volumes increasing • Relatively low cost tool • Closely managing the balance sheet

13 Full Year 2011 Investors - rental yields Barratt development (1) July 10 July 11 5.4% (2) Dalston Square, London, E8 5.6% 6.1% (3) St Andrews, London, E3 5.9% 6.7% (4) New Central, Woking 5.3% 6.0% 5.2% (4) Spencer Place, Basingstoke 5.8% 6.6% Average rental yields 5.0% 4.8% 4.6% 4.4% 4.2% Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 UK London South East England Source: FindaProperty.com Rental Index. Figures are based on average gross yields Notes: (1) Illustrative examples based on average rental yields achieved at specific Barratt Development sites (2) Based on a 1 bed apartment (3) Based on a 3 bed apartment (4) Based on a 2 bed apartment

14 Full Year 2011 Key priorities • Price optimisation • Operational efficiency • Securing new higher margin land Re-building profitability

15 Full Year 2011 Price optimisation Cumulative % variance in selling prices achieved on private completions vs 1 July prices (1) 1.2 1.0 0.8 % 0.6 0.4 0.2 0.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Cumulative % variance FY 2010/11 Note: (1) Cumulative variance versus expected prices as at 1 July 2010

16 Full Year 2011 Operational efficiency Centralised procurement • Approx. 80% of Group materials purchased centrally (excluding London flats) • Targeting increased level through additional Group and regional deals • Re-negotiating existing deals and forward buying Build costs • Increasing the use of standard product across the Group • Costs benchmarked across all divisions every 6 months • Build costs reduced by 1.4% per sq ft in FY 2010/11 (c. £17m) Replanning • Continue to replan sites where potential upside • 60 sites replanned in FY 10/11 • Improved profit by c. £20m over the life of sites Admin expenses (1) reduced by c. £4m in FY 2010/11 • Admin expenses Note: (1) Pre sundry income and exceptional admin costs

17 Full Year 2011 Securing new higher margin land FY Total since mid 2010/11 2009 Approved land purchases £454.1m £981.3m Total number of plots 8,861 22,220 Location South : North (by value) 49% : 51% 58% : 42% South : North (by plots) 41% : 59% 47% : 53% Type Houses : Flats 86% : 14% 81% : 19% Note: Unless stated otherwise, information as at 30.06.2011 and % splits are by plots

18 Full Year 2011 New land analysis Owned Conditional Proceeding Total 107 63 14 184 Total sites 13,986 6,733 1,501 22,220 Total plots 131 107 107 121 Average plots/site 79 Sites in production 74% % of total 10,277 Plots on sites in production (1) 73% % of total c.24% Forecast trading margin Note: (1) Represents total plots on sites in production

19 Full Year 2011 Landbank delivery (1) ASP £K 163 189 215 189 201 188 Average trading c.3.5% c.14% c.24% c.24% c.24% margin (2) 70,000 1,501 60,000 12,166 50,000 Number of plots 14,935 40,000 61,584 30,000 22,690 20,000 10,000 10,292 - (3) Impaired Non-impaired old Non-impaired Conditional Approved new Total new Category of Land Notes: (1) Analysis is based on landbank as at 30 June 2011 and on current selling prices (2) Trading margin is pre selling, admin and finance costs (3) Old land owned prior to re-entry into land market in mid 2009

20 Full Year 2011 Illustrative landbank delivery profile (1) 1% 100% 9% 32% 34% 80% 44% 60% 34% 40% 40% 31% 22% 20% 25% 16% 12% 0% FY 11/12 FY 12/13 FY 13/14 (2) Impaired Non impaired - old Conditional/new Unidentified Notes: (1) Analysis is for illustrative purposes only and is based on landbank as at 30 June 2011. Assumes planning granted on all land (2) Old land owned prior to re-entry into land market in mid 2009

21 Full Year 2011 Active sites (1) 440 420 400 380 360 New site openings product mix (excluding London) 340 Homes : 84% 320 Flats : 16% 300 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sept 11(f) Dec 11 (f) Mar 12(f) Jun 12(f) Note: (1) An active site is defined by the Group as a site with one remaining unit available for sale. Based on end of period active site numbers

22 Full Year 2011 The Limes Location Lindfield, West Sussex Land acquired Dec 09 Site open Jul 10 First completion Sept 10 Total units 120 % sold 65% (1) Private ASP £337k (2) Net private res per week 0.8 (1) ‘Traditional high value development in excellent location’ Notes: (1) As at 30 June 2011 (2) Forecast private ASP for site

23 Full Year 2011 Shard End Location Birmingham Land acquired Sept 10 Site open Dec 10 First completion May 11 Total units 191 % sold 45% (1) Private ASP £135k (2) Net private res per week 0.5 (1) ‘Partnership with Birmingham City Council creating a truly mixed-use and sustainable community’ Notes: (1) As at 30 June 2011 (2) Forecast private ASP for site

24 Full Year 2011 Renaissance Location Lewisham Land acquired April 10 Site open June 10 First completion June 11 Total units 788 % sold 27% (1) Private ASP £227k (2) Net private res per week 1.2 (1) ‘This development leads the regeneration of Lewisham as the heart of a new urban quarter’ Notes: (1) As at 30 June 2011 (2) Forecast private ASP for site