Glenveagh Properties PLC trading statement for 201807 Jan 2019
Glenveagh Properties PLC Trading Statement
Glenveagh Properties PLC (“Glenveagh” or the “Group”) a leading Irish homebuilder listed on Euronext Dublin and the London Stock Exchange today issues a trading update for the year ending 31 December 2018. The Group will report its full year results on Wednesday 6 March 2019.
Glenveagh continues to be ahead of schedule in delivering our key IPO targets, namely acquiring land for residential building, constructing and selling houses and apartments and scaling the business as a PLC.
- 2018 trading performance
o Revenues for the period of approximately €84m:
- ➢ Sales activity has been strong with 275 completed sales during 2018 (10% ahead of guidance);
- ➢ Unit Average Selling Price (“ASP”) of €287k is reflective of sales mix and the strong performance from the Group’s starter-home schemes;
- 2019 ASP guidance €340k-€370k; ➢ Land sales of €5m
o Gross margin for the period is expected to be approximately 18%.
- Land Acquisitions
o Further substantial land acquisition in Cork on lands secured to the National Asset Management
Agency (“NAMA”) announced today:
➢ The Group has acquired a site totalling 43 acres (the “Site”) in Douglas, Co. Cork (the
“Acquisition”). The Site is capable of delivering approximately 500 units for a consideration
of €25m, a portion of which is deferred until units are delivered.
➢ Douglas is one of Cork’s most desirable residential addresses. It is located approximately
4km south of Cork City Centre. Douglas is easily accessible via the N40 South Ring Road.
The Group’s total landbank in Cork now has capacity for approximately 2,000 units.
o With today’s announced acquisition, the Group benefits from a strategically located 11,850 unit
landbank, which was acquired largely off-market at attractive rates (18% of NDV1):
- ➢ Homes’s landbank comprises 10,000 units across 42 sites in the Greater Dublin Area, Cork,
Galway and Limerick;
- ➢ Living’s landbank comprises 1,850 units across four sites in Central Dublin and in Galway:
- A Strategic Housing Development (“SHD”) fast-track planning application was recently lodged on our East Road site in Dublin’s North Docklands totalling 560 units.
o Construction has commenced on 14 sites for Homes with approximately 900 units under construction. o All sites necessary to deliver the Group’s units guidance of 725 for 2019 are now open.
o In excess of 75% of 2019 costs are locked-in.
o The Group is now selling from eight sites:
➢ 202 units signed or reserved for 2019; 1 Spot Net Development Value
➢ Further starter-home schemes (Ledwill Park, Knightsgate and Semplewoods) will commence sales in H1 2019;
o Institutional bulk sale now the preferred exit option for Herbert Hill. The practical completion date for this development is Q2 2019.
The land buying opportunity remains attractive and the Group continue to evaluate opportunities which are accretive to our delivery, gross margin and ROCE objectives. The Group has substantially de-risked its 2019 construction targets with costs now largely fixed for 2019. The Group’s market backdrop remains very favourable with significant demand for housing, particularly starter homes where the Group will continue to focus, clearly evident across the Group’s selling sites. Glenveagh will provide a further progress update to investors at the time of our full year results on Wednesday 6 March 2019.
Glenveagh’s Co-Founder and CEO Justin Bickle commented:
“The past 12 months have been very productive as we set out to create a volume homebuilder for the Irish market. We have carefully assembled a multi-year land bank for building, got off to a strong start in opening our sites and constructing houses and apartments, and grown our operations consistent with our business plan and longer- term financial targets. I would like to pay tribute to all our staff and industry partners for their hard work and dedication in helping us deliver on our IPO promises and thank each of our customers in helping us achieve 275 sales during 2018.
We are delighted to announce today the acquisition of a further attractive site in Cork with the potential to accommodate up to 500 residential units in an area of high demand. We will immediately begin work to commence development on site. More broadly, the acquisition delivers on a key Group IPO objective to deliver residential housing on NAMA secured lands in a partnership structure.
The fundamentals of our sector remain strong with continued chronic under-supply of housing in Ireland (both private and public) and a dearth of scale homebuilders. We have cash on hand, a strong balance sheet, and market leading construction capability. We will continue to deliver the right type of housing to the starter-home market based on attractive residential locations, quality built product and value for money.
We wish to thank our shareholders and our Board for their ongoing support and look forward to 2019 with confidence.”