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Construction & Housebuilding Presentation - Growth Strategies & Performance Analysis

Learn how Construction Market Alignment and Housebuilding's Unique Approach in Affordable Housing drive growth. Detailed insights on Kingsdale School Project, Market Conditions, Regional Brands, and Expansion Plans.

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Construction & Housebuilding Presentation - Growth Strategies & Performance Analysis

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  1. Institutional Fund Managers’ Presentation Kingsdale School – 17th May 2005

  2. Construction Andy Sturgess – Managing Director

  3. Construction Market Alignment • Strength in sector focus approach • Aligned to strong investment public & regulated sectors • Education • Health • Affordable Housing • Water • Rail • Well placed to maximise opportunities within changing government procurement initiatives • Order book approaching £1 billion

  4. Construction Education Capabilities • Acknowledged as education specialists • Award winning PFI expertise • Northampton Schools – Preferred Bidder • Norwich - ITN stage • Building Schools for the Future

  5. Construction Kingsdale School

  6. Construction Kingsdale School – Technical Challenges • Early contractor involvement • Aligning logistics and planning with school • Development of design solutions • PTFE roof • Timber geodesic auditorium • Special finishes • Safety & Environmental issues - live school

  7. Construction Education Outlook • Growth in education market - public sector investment • Building Schools for the Future • Procurement initiative for secondary education • Total government spend £2.2 billion per year • Plans for primary schools investment • £1.9 billion per year • Rebuild / refurbish over 8,900 primary schools • Real opportunity

  8. Construction Summary • Sector focused • Quality of order book across chosen sectors • Culture aligned to collaboration and partnering • Significant sustainable opportunities • Growth in profits set to continue

  9. Housebuilding Greg Fitzgerald – Managing Director

  10. Housebuilding Why Are We Different? • Develop individually designed schemes • Expertise in conversion/restoration • High levels of customer focus • Strong management teams • Excellent record on planning • Knowledge and focus on affordable housing

  11. Housebuilding Strong Regional Brands Results for 6 months to 31st December 04

  12. Housebuilding Key Statistics 6 months to 31st December 04 2004 2003 Increase % Units 387 367 5.4 ASP £000 228 228 - Income per Sq. Ft. £ 220 197 11.7 Turnover £m 91.1 87.6 4.0 Operating Profit £m 12.1 11.2 8.0 Margin % 13.3 12.8 3.9 ROCE % 22.5 21.6 4.2 Sales in hand February 05 £m 165.6 171.1 (3.2) Landbank February 05 units 2,464 2,342 5.2 Strategic land February 05 acres 666 676 (1.5)

  13. Housebuilding Current Trading Conditions - Sales • More challenging market • Increased use of incentives • Interest rates close to peak • New homes the attractive option • Market fundamentals remain sound

  14. Housebuilding Current Trading Position - Land • Hurdle rates for acquisition raised • High level of competition • 60% acquired on ‘one-to-one’ basis • No sales inflation included in appraisals

  15. Housebuilding Current Trading Position - Planning • Government involvement • Higher proportion of schemes going to appeal - Try Homes 40% - Midas Homes 10% - Stamford Homes nil% • Appeal process taking up to 52 weeks • High success rate 85%

  16. Housebuilding Current Trading Position - Production • Traditional build 96% • Timber frame 4% • Safety record better than industry average • Sub-contractor buying gains being achieved

  17. Housebuilding Affordable Housing Capability • Track record of success with mixed tenure development • Planning changes require different perspective • Partnership approach • Strong regional market presence

  18. Housebuilding Affordable Housing Procurement • Three main forms: • Contracting ~ working with 16 affordable housing providers • Enabling ~ generally 25% to 50% requirement on schemes above 14 units • Collaboration ~ Market leader in Southwest ~ Deferred land payment terms

  19. Housebuilding Expansion Plan • 1300 units by 2008 • Management structure in place • Business plan implemented - Increased market share - Geographic expansion • Bolt-on acquisitions (opportunistic)

  20. Housebuilding Summary and Outlook • Expect to achieve full year planned performance • Well placed to capitalise on growth in affordable housing • Prepared for tougher market conditions • Enhance efficiency through additional cost reductions • Good position for 05/06 • Confident of achieving expansion plan

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