george wimpey plc 2000 preliminary results wednesday 21 february 2001
TRANSCRIPT
2000 Results - Headlines
• A strong foundation…° PBT up 30% to £146.1m ° Dividend up 14% - covered 4.0 times
• …in both businesses° UK operating profit up 40% to £142.5m° US operating profit up 29% to $53m
• restructuring ahead of plan° forecast savings up to £20m
Agenda
• 2000 Financial Review Richard Saville
• UK Business Review Keith Cushen
• US Business Review Stu Cline
• Summary and Outlook Peter Johnson
2000 Results
2000 1999 %
change
Revenue £ m 1702 1527 + 11
Operating profit £ m 170 119 + 43
Profit before tax £ m 146 113 + 30
Tax % 24 22 n/a
Earnings per share p 30.0 24.5 + 22
Dividend per share p 7.5 6.6 + 14
Segmental Analysis
Revenue OperatingProfit
OperatingMargin
£m%Change £m
%Change %
%Increase
UK 1254 + 8 142.5 + 40 11.4 + 2.6
USA 405 + 22 34.9 + 29 8.6 + 0.5
Corp. 43 n.a. (7.2) n.a. - -
Group 1702 + 10 170.2 + 37 10.0 + 2.0
2000 Completions
Completions Ave Price
%Change £/$ 000
%Change
UK: PD 10823 -7 £112 +16
Social 614 -19 £50 +6
UK: Total 11437 -8 £109 +16
USA: 2638 +2 $227 +15
Group Total 14175 -5 £116 +16
Cash Flow Highlights
£m 2000 1999Operating profit 170 119
Net investment in land (132) (104)
Working capital (14) (4)
Discontinued operations 12 45
Tax/other (20) (21)
Funding costs (51) (39)
Net cash outflow (35) (4)
Balance Sheet
2000 1999Shareholders Funds £m 673 584Net Debt £m 220 179Capital Employed £m 893 763Shareholders Funds p 182 158Gearing % 33 31Interest Cover 7.1 7.4
2000 Financial Summary
• Record profits and good 2nd half growth
• Strong balance sheet
• Group margin increased to 10%
• ROCE of 20.5%
• ROE of 17.7%
• Solid position on which to build
Regional Landbank
1000
2000
3000
4000
5000
6000
7000
Scotland North SouthWest
Midlands South London
1998 1999 2000
Pl o
ts
Foundations for Success
• Build quality
• Customer satisfaction
• Improved product mix
• Urban redevelopment
• Innovative use of modern technology
Objectives
• To use scale to maximise purchasing benefits
• To share best practice
• To increase added value per unit
• To streamline decision making
Action Taken
• Closed 9 business units° selling outlets remain unchanged
• Opening new London office• Reviewed staffing levels across regions• Reduced senior management team • Closed central design• Closed central procurement• Integrated Strategic Land into business units
Results of Action
• New UK management team in place
• New regional structure operational by2 April 2001
• Staff head count reduced by over 400
• Estimated cost of restructuring unchanged at £15m
• Cost savings increased to £20m per annum
2000 Summary Performance
2000 % change
Revenue $m 615 + 22
Operating profit $m 53 + 29
Operating margins % 8.6 + 0.5
Legal completions 2638 + 2.5
Ave selling price $000 227 + 15
Land bank plots 9968 + 17
Growth in Added Value Products
• Décor Centers
• Financial Services
• Use of web-based technology° www.morrisonhomes.com° web-linked sales offices° MH2 Build
Morrison Markets
2000 2000 2000Net Job Annual SF permits
Growth Growth Rate Rate
California 443,100 + 3.1% 103,693
Florida 262,300 + 3.7% 105,163
Texas 253,300 + 2.7% 106,601
Georgia 86,900 + 2.2% 68,282
Arizona 82,600 + 3.8% 47,909
US Average Job Growth Rate : 2.05%
Morrison Markets
Current Markets
Atlanta
Jacksonville
Orlando
Tampa
Sarasota
Austin
San Antonio
Dallas/Ft Worth
Houston
Phoenix
Sacramento
East Bay Area
San Joaquin Valley
Strong Foundations for Success
• Generally stable market conditions
• High standards of build quality
• Much improved product base
• Experienced management team
• US experience to learn from
UK Restructuring Plan
• Rapid progress in just 8 working weeks
• Benefits of £20m well ahead of plan
Next steps• Major focus is to ensure restructuring
programme delivers on promises made• Seek opportunities to improve margins
° gain further benefits from our scale° increase sales of options and extras° increase exposure to higher margin markets
Outlook
• Stable UK market° market indicators positive° modest price inflation expected
• Local US markets remain healthy
• Encouraging start to the new year ° strong sales proceeding from last year° new year sales activity robust° will partly offset impact of H1 planning delays
• Restructuring will begin to benefit 2001 results