George Wimpey PLC 2000 Preliminary Results Wednesday 21 February 2001.

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George Wimpey PLC 2000 Preliminary Results Wednesday 21 February 2001

Transcript of George Wimpey PLC 2000 Preliminary Results Wednesday 21 February 2001.

George Wimpey PLC2000 Preliminary Results

Wednesday 21 February 2001

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

Richard Saville

Group Finance Director

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

UK Business Review

Keith Cushen

Managing Director

Product Mix £000

0

5

10

15

20

25

30

35

0-50 51-75 76-100 101-125 126-150 151+

1998 1999 2000

%

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

US Business Review

Stu Cline

President Morrison Homes

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

Summary and Outlook

Peter Johnson

Group Chief Executive

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

George Wimpey PLC2000 Preliminary Results

Wednesday 21 February 2001