TIDMGLV
RNS Number : 1677Z
Glenveagh Properties plc
10 January 2024
10 January 2024
Glenveagh Properties plc
Full Year Trading Statement 2023
Glenveagh Properties PLC ("Glenveagh" or the "Group") is today
issuing a trading update for the year ended 31 December 2023 ahead
of the publication of its full year results on Wednesday, 28
February 2024.
FY 2023 Performance Summary
Year Ended Year Ended Change
31 December 31 December
2023 2022
----------------------------------------- ------------------------ ------------------------ --------------------
Revenue EUR'm 608 645 -6%
----------------------------------------- ------------------------ ------------------------ --------------------
Gross profit EUR'm 113 108 +5%
----------------------------------------- ------------------------ ------------------------ --------------------
Gross margin 18.5% 16.8% +170 bps
----------------------------------------- ------------------------ ------------------------ --------------------
Operating profit EUR'm 71 70 +1%
----------------------------------------- ------------------------ ------------------------ --------------------
Profit before tax EUR'm 55 63 -13%
----------------------------------------- ------------------------ ------------------------ --------------------
Earnings Per Share (cent) 8.0 7.6 +5%
----------------------------------------- ------------------------ ------------------------ --------------------
Net Debt EUR'm 51 14 +EUR37m
----------------------------------------- ------------------------ ------------------------ --------------------
Suburban Completions 1,328 1,354 -2%
----------------------------------------- ------------------------ ------------------------ --------------------
Suburban: forward order book
- units (1) 680 408 +67%
----------------------------------------- ------------------------ ------------------------ --------------------
Group: forward order book -
EUR'm (1) 641.8 344.6 +86%
----------------------------------------- ------------------------ ------------------------ --------------------
(1) As at 9 January 2024. Prior year data as at 5 January
2023
-- In FY 2023 we increased suburban revenue and margin,
generated revenue from our Partnerships business segment for the
first time, and benefitted from strong planning momentum after the
planning delays experienced in FY 2022. We delivered EPS at the top
end of our guided range
-- During 2023 we were granted permissions for approximately
4,600 units, almost 700 of which are currently in post-grant appeal
periods. We also lodged planning applications for approximately
2,900 units during the year
-- Net Debt was maintained at prudent levels as we continued to
generate efficiencies from our landbank while also investing in our
WIP for FY 2024, completing our significant investment in NUA and
returning approximately EUR63m to shareholders
-- We strongly advanced our operational capabilities in FY 2023,
incorporating standardised house types into the manufacturing and
delivery process, while enhancing build quality and customer
service. We launched NUA as our off-site manufacturing business
with capacity to deliver over 2,000 units, embedding innovation and
modern methods of construction into our product offering
-- We also progressed with our sustainability agenda, launching
our Net Zero transition plan, including science-based targets
(SBTs), in March 2023. Today we have published our Biodiversity
strategy setting out our plan to take action to address the
challenge of biodiversity loss across our value chain
Outlook
-- The long-term demand outlook for the Irish residential
housing market remains very positive, supported by a resilient
domestic economy, a fast-growing population and supportive State
initiatives. Given our proven operational capability and our
established expertise in partnership and urban development models,
we are very well placed to grow as a scale operator in the
market
-- We expect to generate strong revenue and profit growth across
each of our Suburban, Urban and Partnerships business segments in
FY 2024. This growth is underpinned by our healthy land portfolio
and forward order book, continued planning momentum and strong
operational and manufacturing capability. We are comfortable with
current consensus EPS expectations for FY 2024 of approximately 17
cent
-- Our forward suburban order book of 680 units contracted or
reserved for FY 2024 provides good visibility on deliveries in
early FY 2024. Strong reservation rates reflect robust private
demand and supportive State initiatives in the market
-- In addition to urban revenue from already contracted
projects, we anticipate a renewed focus on urban development
activity in FY 2024 as new opportunities emerge to partner with
multiple state agencies as part of the Government's supply-side
housing initiatives. Significant additional funding has been
proposed for the Land Development Agency (LDA) and we have been
successfully shortlisted to participate in its development
programme that will be advanced in early FY 2024
-- We expect to deliver revenue from our Partnerships segment of
over EUR100m in FY 2024, with an anticipated gross margin of
approximately 15%. We expect to commence the construction of almost
1,300 homes under our partnership schemes this year
-- We continue to remain focused on enhancing capital efficiency
and cash generation across the business. Once our capital
allocation priorities are satisfied, we remain committed to
returning any excess cash identified to shareholders
-- Further guidance will be provided in the Full Year Results announcement on 28 February 2024
CEO Stephen Garvey commented:
"Glenveagh is strongly positioned for a pivotal year in 2024. We
effectively responded to the challenges at the start of 2023 by
delivering on key strategic priorities and this progress provides a
solid platform to deliver at significant scale this year. Our
healthy land portfolio and forward order book means that in 2024 we
will provide the keys to approximately 2,700 new homes across the
business. This is all underpinned by our proven operational and
manufacturing capabilities that embrace sustainability and modern
methods of construction.
The State is also providing a positive backdrop of targeted and
effective input, in the form of supportive initiatives on both the
demand and supply side, which are making a real difference to
increasing supply. This is aided by encouraging improvements in the
planning policy and system. As the biggest source of landbank for
the development of new homes and with the extent of its funding
capacity, the State will continue to be the major driver in
resolving Ireland's accommodation shortage, in partnership with the
housebuilding industry.
The strong performance in our Partnerships business shows how
much can be achieved when public and private entities work together
to deliver what Ireland needs - sustainable, high-quality,
energy-efficient, mixed tenure developments that will alleviate the
supply shortage. That said, there remains plenty to do to ensure
the country can accelerate housing supply and provide an
opportunity for home ownership at the pace Ireland needs. The
industry requires a housing target that accurately reflects current
and future population requirements, designed for viable, desirable
homes in locations where there is demand. To sustainably deliver
increased housing supply requires appropriately aligning resourcing
for planning bodies, local authorities and utility companies and
ensuring the availability of land with critical infrastructure.
Prioritising these actions as a matter of urgency will enhance
industry wide efforts to expedite the delivery of quality homes and
ultimately contribute to building flourishing communities."
TRADING OVERVIEW
The Group reported total revenue for the year of EUR608m (FY
2022: EUR645m), including a first time contribution from our
Partnerships business segment. Excluding the FY 2022 disposal of
the East Road site for approximately EUR63m, that did not recur in
FY 2023, there was a modest increase in Group revenue.
Group gross margin was 18.5%, ahead of the 16.8% margin reported
in FY 2022, reflecting an improved suburban margin of approximately
20% and notwithstanding the continued elevated inflation
experienced by the business of 4-5% during FY 2023.
The Group's operating profit was approximately EUR71m in FY 2023
(FY 2022: EUR70m).
Earnings Per Share increased by 5% to 8.0 cents, at the top end
of Group guidance.
The Group ended the year with net debt of approximately EUR51m.
Further efficiencies were generated in our net investment in land
and the landbank value (excluding development rights) at 31
December 2023 was below EUR410m (31 December 2022: EUR455m). There
was strong underlying cash generation from unit sales in the second
half of the year.
SUBURBAN
The Group reported suburban revenue of approximately EUR471m,
modestly above the FY 2022 revenue of EUR455m. FY 2023 revenue
primarily comprised 1,328 unit sales and the suburban Average
Selling Price ("ASP") of approximately EUR336k (FY 2022: EUR330k)
reflecting the Group's strong operational performance in a
challenging environment. ASP increased by 2% as a result of
portfolio mix and house price inflation in the period.
FY 2023 suburban gross margin was approximately 20% and improved
as the business benefitted from enhanced operational efficiencies
that we achieved through rigorous management of our supply chain,
augmented by an impact from land sales of approximately 70bps.
The Group spent or has contracted to spend a total of
approximately EUR38m on six land sites in FY 2023. These sites have
the capacity to deliver approximately 1,050 new own-door housing in
sustainable communities. The Group is also prioritising structured
land transactions which will enable more efficient standardisation
of the suburban portfolio as well as maintaining an efficient
balance sheet. Four of the six land transactions are structured
deals allowing the group to progress with planning
applications.
Glenveagh finished the year with 680 suburban units contracted
or reserved for FY 2023 (FY 2022: 408).
URBAN
Urban revenue decreased by 36% to approximately EUR121m in FY
2023, reflecting a higher FY 2022 comparative that included
approximately EUR63m from the disposal of the East Road site, that
did not recur in FY 2023.
In FY 2023 two of our key contracted urban projects, Marina
Village and Premier Inn, were completed. All of the remaining
contracted projects - Cluain Mhuire, Citywest and Castleknock - are
on track for delivery in FY 2024.
Urban gross margin was approximately 13% in FY 2023, broadly in
line with the FY 2022 margin.
In November 2023 we were approved under the Croí Cónaithe
(Cities) Scheme to develop 274 owner occupier apartments for sale
on the open market in Blackrock, Cork. Our scale, operational
capability and established expertise in partnership and urban
development models, leave us ideally positioned to participate in
such initiatives. These have the potential to generate significant
incremental revenue and profits for the Group.
PARTNERSHIPS
Both Ballymastone and Oscar Traynor Road received final planning
permissions in H2 2023 and construction works commenced on both
sites in the final quarter. As a result, we reported our first
revenue in this business segment of approximately EUR17m.
The Group expects to deliver revenue of over EUR100m from these
two sites in FY 2024, with an anticipated gross margin of
approximately 15%.
For further information please contact:
Investors: Media:
Glenveagh Properties PLC Gordon MRM
Michael Rice (CFO) Ray Gordon 087 241 7373
Jack Gorman (Head of IR and Corporate David Clerkin 087 830 1779
Affairs) glenveagh@gordonmrm.ie
investors@glenveagh.ie
----------------------------
Notes to Editors
About Glenveagh Properties PLC
Glenveagh Properties plc, listed on Euronext Dublin and the
London Stock Exchange, is a leading Irish homebuilder.
Supported by innovation and supply chain integration, Glenveagh
is committed to opening access to sustainable high-quality homes to
as many people as possible in flourishing communities across
Ireland. We are focused on three core markets - suburban housing,
urban apartments and partnerships with local authorities and state
agencies.
www.glenveagh.ie
Forward-looking statements
This announcement does not constitute or form any part of an
invitation to underwrite, subscribe for or otherwise acquire or
dispose of any shares of Glenveagh Properties plc (the "Company" or
"Glenveagh").
This announcement contains statements that are, or may be deemed
to be, forward-looking statements. Forward-looking statements
include, but are not limited to, information concerning the
Company's possible or assumed future results of operations, plans
and expectations regarding demand outlook, business strategies,
financing plans, competitive position, potential growth
opportunities, potential operating performance improvements,
expectations regarding inflation, macroeconomic uncertainty,
geopolitical tensions, weather patterns, the effects of competition
and the effects of future legislation or regulations.
Forward-looking statements include all statements that are not
historical facts and can be identified by the use of
forward-looking terminology such as "may", "will", "should",
"expect", "anticipate", "project", "estimate", "intend",
"continue", "target", "ensure", "arrive", "achieve", "develop" or
"believe" (or the negatives thereof) or other variations thereon or
comparable terminology. Forward-looking statements are prospective
in nature and are based on current expectations of the Company
about future events, and involve risks and uncertainties because
they relate to events and depend on circumstances that will occur
in the future. Although the Company believes that current
expectations and assumptions with respect to these forward-looking
statements are reasonable, it can give no assurance that these
expectations will prove to be correct. Due to various risks and
uncertainties, actual events or results or actual performance of
the Company may differ materially from those reflected or
contemplated in such forward-looking statements. You are cautioned
not to place undue reliance on any forward-looking statements.
These forward-looking statements are made as of the date of this
document. The Company expressly disclaims any obligation to update
these forward-looking statements other than as required by law.
The forward-looking statements in this announcement do not
constitute reports or statements published in compliance with any
of Regulations 6 to 8 of the Transparency (Directive 2004/109/EC)
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