Glenveagh Properties Full year Trading statement 202006 Jan 2021
Glenveagh Properties PLC, a leading Irish homebuilder, is today issuing a trading update for the year ended 31 December 2020 ahead of the publication of its full year results on Friday 26 February 2021.
31 December 2020 2019 Core Non-Core Total Total Revenue €208m €24m €232m €284m Completions 665 35 700 844 Units Contracted or Reserved 544 143 687 240
• Strong performance on revenue and completions notwithstanding COVID-19 restrictions. • Core unit sales gross margin of 14% (2019: 18%). • Robust operational delivery has resulted in a net-cash position of approximately €37m (2019: €53m). • Visibility on 1,150 unit completions in 2021 underpinned by private reservations and institutional PRS transactions at core and non-core sites.
GLENVEAGH’S CEO STEPHEN GARVEY COMMENTED:
“In what started out as a challenging year we are pleased to conclude 2020 with considerable momentum and strong visibility on our target unit deliveries of 1,150 units1 for 2021. Our focus on prioritising our people, customers and the communities in which we operate, leaves the Group well placed to deliver on our ambitious medium-term growth objectives.”
Total revenue for the year was approximately €232 million (2019: €284 million) as the Group delivered another strong sales performance in a demanding operational environment with 700 unit sales completed (2019: 844). The Group generated core revenue of €208 million, primarily from 665 unit sales, marginally ahead of management expectations of 650 units at the time of the interim results in September. The Average Selling Price was €311k (2019: €321k) reflecting the Group’s focus on Suburban starter-home schemes. Glenveagh delivered the 665 core units from 15 selling sites (2019: 13) and finished the year with 544 core units contracted or reserved for 2021 (2019: 240) providing further evidence of the strong demand and maturing sales profile within the business. Underlying core gross margin of 14% is in line with management’s expectations and reflects costs associated with our COVID-19 safety measures and operating protocols, in addition to negative mix effects as units at the Group's new higher margin sites were delayed due to COVID-19. A significant portion of the mix effect and the impact of increased COVID-19 costs are expected to abate from 2021.
As outlined at the time of our interim results, the Group is accelerating sales of our remaining non-core, high-end, private customer developments to maximise cash generation while maintaining our focus on starter homes, delivering more than €100 million of net cash flow by the end of Q3 2021.
Of the Group’s target net realisation of more than €100 million, €24 million has been received to date with a further €70 million contracted for 2021 and additional reservations in place. The selling prices achieved across the Group’s non-core disposals have been in line with management expectations.
URBAN / INSTITUTIONAL PRS PROGRESS
On 22 December, the Group exchanged contracts for the sale of 132 units across two developments: • 71 Urban apartment units in Bray, Co. Wicklow; • 61 Suburban duplex and housing units in Leixlip, Co. Kildare The transaction is a further demonstration of Glenveagh’s ability to partner with institutions and government bodies to deliver sustainable rental product in attractive locations. Furthermore, as part of the Group’s wider masterplan in Dublin Docklands, a Strategic Housing Development (“SHD”) fast-track planning application was lodged on 4 December in respect of our Castleforbes site totalling 702 units. Once the planning process is completed, this will bring the total planned residential units at our mixed-use Docklands campus to 1,256. Given the planning progress at the Castleforbes site and the attractive planning achieved at the campus to date, which includes a pre-let hotel and 554 residential units, the Group expects to make demonstrable progress at this location over the course of 2021.
The Group continues to make significant progress towards optimising the use of capital within the business. As a result of strong operational delivery, good cash management, and a continued reduction in our net investment in land in line with our stated targets, the Group ended the period with net cash of approximately €37 million. To further position the business for growth and ensure the Group has an appropriate mix of funding, Glenveagh is in the process of delivering a five-year refinancing comprising a term component and an RCF with a syndicate of banks which will facilitate Glenveagh’s medium-term growth objective of 3,000 units per annum.
The Group’s 2021 delivery target is underpinned by having all necessary sites operational, costs largely fixed and strong forward sales in place, as well as a robust balance sheet to further position the Group for growth. The market backdrop remains favourable with continued significant institutional and private demand for housing, particularly starter homes, evident across the Group’s selling sites. Glenveagh will provide a further progress update on the current period to investors at the time of our full year results on Friday 26 February 2021.Back to all