Glenveagh Propeties PLC announces Interim Results23 Aug 2019
Glenveagh Properties PLC Interim Results 2019
Glenveagh Properties PLC (“Glenveagh” or the “Group”) a leading Irish homebuilder listed on Euronext Dublin and the London Stock Exchange announces its Interim Results for the period ended 30 June 2019.
• Revenue of €45.5m (H1 2018: €1.3 million);
• 158 units sales (H1 2018: 6 (six)) driven by starter-home developments at an ASP of €287k
(H1 2018: €199k);
• Gross profit of €7.5m (H1 2018: €0.3 million). The corresponding gross margin of 16.5% (H1
2018: 16.7%1) is impacted by a significant investment in the marketing of sites where sales have yet to complete. Pro-forma gross margin is 17.6% for the period when these costs are excluded;
• Net loss after tax of €3.5 million (H1 2018 loss: €7.2 million);
• Inventory of €903 million inclusive of €710m in land (13,350 units) and €193 million investment
• Total site acquisition investment of c. €1062 million in the period (2,050 units) following six
strategic additions to the Group’s development land portfolio; and
• Net debt of €42.1 million at 30 June (31 December 2018: Net cash €130.7 million) reflecting
the significant construction growth during the period.
• The Group is currently selling from 13 sites with 800 units sold, signed or reserved (including Herbert Hill where exclusive discussions are on-going) at 19 August. Of these, 490 units were sold or have a signed binding contract in place at 19 August (excluding Herbert Hill);
• Consistent with the Group’s strategy of maximising the number of open outlets Glenveagh has been actively constructing on 17 sites in the period. In excess of 455 units which are due for delivery in 2019 are now through practical completion3, substantially underpinning the Group’s delivery target for 2019 of 725. Furthermore, existing open sites are capable of delivering in excess of 4,000 units;
• Construction Price Inflation (“CPI”) remains in line with expectations with over 65% of costs associated with 2020 deliveries now agreed. CPI on housing schemes is less than 3% on current tendering; and
• 16 applications at various stages of the planning process totalling in excess of 6,500 units.
1 Underlying, excluding rental income 2 Excl. stamp duty and fees
3 At 19 August 2019
Glenveagh’s Executive Chairman John Mulcahy commented:
“Positive momentum has been maintained during the first six months of the current financial year, customer demand has been solid and costs were also well managed. Notably, the starter home market remained strong during the period and we saw no evidence of change to first-time buyer behaviour. We have made good progress in the current period and we are pleased with the levels of output and the investments we are making which will further enhance our position in the market. The Glenveagh management team remains focussed on delivering profitable growth and cash conversion in the medium term while building scale and continuing to develop out the platform.
A functioning and sustainable housing market requires the orderly supply of the right product attractive to owner-occupiers as well as institutional investors and the rental market. Accordingly, our core product of starter homes, building quality rental product and placemaking with local authorities through mixed-tenure schemes, holds the best potential proposition for the Irish residential market.
I want to thank all of our employees, shareholders and industry partners for supporting our business.”
The Company is well-positioned to deliver a successful outcome for the year and the Board remains confident that results will be in line with its expectations.
Glenveagh has delivered on its IPO objectives to date and the Group has good visibility on achieving its medium-term volume targets. As the proceeds from our IPO and follow-on placing have now been substantially invested in the growth of the business, and our full operational infrastructure is now in place, management intend to present an updated business plan (the “Updated Business Plan”) to shareholders as part of a Capital Markets Day (“CMD”) to be held during Q1 2020. The Board is confident that the Group will achieve its current volume guidance. The timing of the CMD will ensure that the Updated Business Plan has the benefit of increased visibility on both, the impact of Brexit, and the forthcoming Irish Government Budget with the potential implications for the Help to Buy (HTB) incentive.
Furthermore, to ensure the Group has the flexibility to return value to shareholders in the future, we intend to commence the process for increasing the Group’s distributable reserves. This process will take place over the coming months in conjunction with the establishment of a longer-term capital returns policy aligned to the Updated Business Plan. Further communication to shareholders will follow in due course.
Principal risks and uncertainties
The directors consider the principal risks and uncertainties to which the Group is exposed which may impact performance in the financial year and coming six months. The Group proactively identifies, assesses, monitors and manages these risks. The principal risks and uncertainties have not changed significantly since the publication of the 2018 Annual Report