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Laing Homes

Laing Homes. Integration and future strategy. David Livingstone. Disclaimer.

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Laing Homes

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  1. Laing Homes Integration and future strategy David Livingstone

  2. Disclaimer This presentation is being made only to and is directed at (a) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the "Order") or (b) any other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1)of the Order (all such persons being referred to as "relevant persons"). Any person who is not a relevant person should not act or rely on this presentation or any of its comments. The financial information set out in this document does not constitute the Company's statutory accounts. Statutory accounts for 2003, which received an auditors' report that was unqualified and did not contain any statement concerning accounting records or failure to obtain necessary information and explanations, have been filed with the Registrar of Companies.

  3. Integration into GWUK November 2002 Acquired by GWUK Paul Healey appointed DMD at MK January – Dec 2003 Six regions contributing to overall business January 2003 Laing introduced to procurement processes Benchmarking introduced March 2003 MK overhead reduced June 2003 PQA introduced EDG devolved into regions December 2003 975 PD units delivered to profit

  4. Integration into GWUK January 2004 Six regions reduced to five: North Thames South East Thames South West Thames Thames Valley Midlands March 2004 Paul Healey retires April 2004 David Livingstone becomes DMD – joined George Wimpey in 1973 Confirmation of price points to remove high end exposure July 2004 Laing HQ closure announced September 2004 Full integration of bench marking and best practice

  5. Shared Values • Safety • Customer satisfaction • Referral cultivation • Performance delivery • Value from scale • procurement • sharing knowledge • common processes

  6. Laing Homes • A premium product, driven by local management • Higher average selling price than George Wimpey • better locations with larger plots • higher specification but not radically different • greater emphasis on design • Like Audi and VW

  7. Laing Homes • However • Had moved into high end premium market • Strategy has been to • significantly reduce exposure to products over £750,000 • plan new product over £500,000 carefully

  8. Opportunities for the Future • Working out poor historical sites • Margin improvement through ‘sweating’ overheads and build cost efficiency • Continued improvement through sharing of best practice • Laing learning from GW benchmarking and build cost reduction programmes • GW learning from Laing land consultation and PR • Improving land bank • opportunities to share large sites • better cash management - increased opportunities • Capacity to grow business across the country

  9. Existing businesses -focus on margin improvement • Reduction in build costs • benchmarking • value engineering • Improving land purchase terms • Volume growth within existing businesses

  10. New businesses - growth potential • First steps on geographical growth underway • model defined • target markets identified • Liaison with existing George Wimpey businesses can assist growth and use of assets • Introduce three new businesses • Eastern - Essex • Western - Bristol • Scotland - Edinburgh • Limited overheads

  11. Laing Homes Current Businesses

  12. Laing Homes potential - first steps

  13. Scale of volume opportunity • Long term potential is for a business to compete in size with GW, however • Speed of growth within our own control • Dependent on • general market conditions • land market • Not pushing for volume growth at any cost

  14. Conclusions • Laing Homes is now well positioned • restructuring successfully complete • moving away from high priced markets • further programme of cost reductions in hand • improving landbank to support growth of existing businesses • sensible strategy of volume growth as market conditions allow

  15. Laing Homes SW Thames Gerry McCormackManaging Director

  16. Introduction • Structure • Area of operation • Current and future outlets • Business performance • Cost excesses • Laing Homes within George Wimpey UK • PQA • Staff • Customers

  17. Gerry McCormack Jim Dennis Technical Paul Hogarth Sales & Marketing Bruce Heffer Production & construction Gordon Patterson Finance Steve Andrews Commercial Steve Collins Land Structure • Total monthly paid staff 67 • Weekly paid staff 14

  18. Area Map

  19. Current outlets Avg Selling Price £’000’s Barnes – Creek Bridge Road 600 Ewell 356 Guildford – Creek Bridge Road 950 Guildford – Queen Elizabeth Park Ph6 408 Ph8 335 Reigate 393 Current Outlets

  20. Future outlets Avg Selling Price £’000’s Ewell 356 Guildford – Queen Elizabeth Park Ph6 408 Ph8 335 Hindhead 303 Kingsworthy 416 Reigate 393 Winchester 298 Future Outlets

  21. T/over PBIT Units Outlets PBIT% 2002 45 7.0 157 6 10.5% 2003 47 3.6 142 4 7.6% 2004 76 11.0 213 6 14.4% Business Performance

  22. Build/ Sales Overhead 2002 £4.6m £5.0m 2003 £0.9m £4.3m 2004 £0.2m £4.3m Cost Excesses

  23. Laing Homes within GWUK • Culture • Commitment to growth • Specialist meetings • Benchmarking and cost control • Improved margins • PQA

  24. Production Quality Awards (PQA) • Tours throughout the UK • PQA panel • 50 sites visited • What was learned?

  25. Staff (South West Thames) • Monthly and weekly paid staff • Building in Service Excellence (Core Values) • Business Change Team (B.C.T.) • Investors in People • Staff Communication • Induction programme • Newsletters • Welcome days • Staff conference • Employees satisfaction survey

  26. Customers • Customer satisfaction monitoring • Growing Wiser • Quality and service • Clean and ready

  27. The Future • Outlet growth 2007/8 10-15 outlets • Turnover growth 2008 £120m • PBIT growth 90% • People growth 10% • Overhead efficiency

  28. A Clear Strategy of Margin Improvement and Growth

  29. GuildfordQueen Elizabeth Park

  30. Guildford – Queen Elizabeth Park History • Former use • Acquired in March 2001- £46m • Planning Trail • Consultation process/ community planning week • Secure planning • Continued liaison with public • Sales launch April 2002 • Output per year - 50 units • Laing Homes – consortium leader

  31. The Community • Total site residential 525 • 35% Affordable Housing • Key Worker/ Shared Ownership and Housing for rent • Commercial – 100,000 sqft • Office accommodation • Current facilities • Nursing Homes • Health and Fitness (Esporta) • Community Hall • Doctors Surgery • Café/ restaurant and food store (Budgens)

  32. The Community • Section 106 benefits • Environmental/ Infrastructure improvements to local area - £800,000 • Park and Ride - £1.6m • Bus route - £700,000 • Travel vouchers - £105,000 • Green Travel Plan • Recycling materials • Demolition materials retained on site • 17 acres of woodland retained and improved

  33. The Product Types Price Point 5 Bedroom £740,000 4 Bedroom £600,000 3 & 4 Bedroom £450,000 3 Bedroom £350,000 3 Bedroom £295,000

  34. Awards

  35. £ per ft 2002 81 2003 70 2004 62 Cost Trail

  36. The Site Team • 4 teams • Team Leaders • Dave Livingstone • Gerry McCormack • Paul Hogarth • Bruce Heffer

  37. Laing Homes SW Thames Gerry McCormackManaging Director

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