REG - Glenveagh Properties - Final Results 2023
28/02/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240228:nRSb6941Ea&default-theme=true
RNS Number : 6941E Glenveagh Properties plc 28 February 2024
28 February 2024
Glenveagh Properties plc
Final Results 2023
Glenveagh Properties plc ("Glenveagh" or the "Group") a leading Irish
homebuilder announces its Final Results for the period ended 31 December 2023.
Financial Highlights
FY 2023 FY 2022 Change
€m €m
Revenue 607.9 644.7 -6%
- Suburban 470.8 454.5 +4%
- Urban 120.1 190.2 -37%
- Partnerships 17.0 - n/a
Gross profit 112.7 108.1 +4%
- Suburban 95.1 83.6 +14%
- Urban 15.4 24.5 -37%
- Partnerships 2.2 - n/a
Gross margin (%) 18.5% 16.8% +170 bps
- Suburban (%) 20.2% 18.4% +180 bps
- Urban (%) 12.8% 12.9% -10 bps
- Partnerships (%) 12.9% - n/a
Operating profit 70.9 70.1 +1%
Profit before tax 55.1 63.0 -13%
Earnings Per Share (EPS) (cent) 8.0 7.6 +5%
Land(1) 403.8 455.3 -11%
Work in Progress 274.6 227.2 +21%
Operating cash flow 50.9 140.9 -64%
Net Debt 48.8 13.8 +€35m
Total Equity 678.2 693.1 -2%
Suburban Completions (units) 1,328 1,354 -2%
Suburban: Closed & forward order book (units)(2) 1,106 841 +32%
Group: Closed & forward order book (value)(2) 805 473 +70%
(1) Excluding development rights
(2) As at 27 February 2024. Prior year data as at 1 March 2023
FY 2023 Performance
· In FY 2023 we increased suburban revenue and margin, our
Partnerships business segment started to generate revenue and profits, and we
benefitted from strong planning momentum
· We delivered EPS of 8.0 cent, a 5.3% advance in the year and at the
top end of our guided range
· During FY 2023 we were granted permissions for approximately 4,600
units, approximately 400 of which are currently in post-grant appeal periods.
We also lodged planning applications for approximately 2,900 units
· Standardisation played an increasingly significant part in our
momentum, driving greater efficiencies at every part of our value chain and
incorporating standardised house types into the manufacturing and delivery
process, while enhancing build quality and customer service. We more than
doubled the number of standardised housing types we supplied, and this year
only a small percentage of homes will be non-standardised. As a result, we can
plan, design, and build houses more effectively, with greater efficiency and
speed, and in greater numbers than ever before
· We launched NUA as our off-site manufacturing business with the
capacity to deliver product for over 2,000 homes from three strategically
located sites. NUA gives us greater control over our supply chain, allows for
faster, more consistent construction in a sustainable manner, and enables us
to get products to market faster. We are committed to embedding innovation and
modern methods of construction into our product offering, and ongoing projects
are focused on enhancing the premanufactured value of these products and also
on driving further operational efficiencies in our manufacturing processes
· We also progressed with our sustainability agenda, launching our Net
Zero transition plan in March 2023. This is an important milestone for our
investors and customers as the focus increases on energy efficiency. Our Scope
3 emissions have now decreased by 7% against our 2021 baseline, measured on an
intensity basis (tCO2e/100sqm). In early 2024 we also published both our
Biodiversity and Circular Economy strategies and have had our science-based
targets (SBTs) verified by the Science Based Targets initiative (SBTi)
· Net Debt was maintained at prudent levels as we continued to generate
efficiencies from our landbank while also investing in our work-in-progress
('WIP') for FY 2024 and completing our significant investment in NUA
· We also returned approximately €63 million to shareholders,
bringing the overall returns over a three-year period to over €300 million
Outlook
· The long-term demand outlook for the Irish residential housing market
remains very positive. A resilient domestic economy is coupled with a
fast-growing population and reinforced by supportive State initiatives. Our
proven operational capability and established expertise in partnership and
urban development models mean that we are ideally positioned to grow as a
scale operator in the Irish market
· We are actively working with the multiple state agencies that the
Government is using to stimulate and accelerate housing supply. We are
transacting with approved housing bodies and local authorities to supply
increasing numbers of cost rental, social and affordable housing through this
year and next. We are engaging closely with the Land Development Agency
('LDA') on projects that can potentially activate our urban portfolio, with
additional opportunities possible over time to partner on projects on State
land. We also have a project approved in the Croí Cónaithe scheme. We will
direct resources and investment as appropriate as these partnering
opportunities materialise
· 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
· The further advance in our forward suburban order book for FY 2024
of 1,106 units closed or contracted gives us increased confidence on the
outlook for our Suburban business segment. A further improvement in the
underlying suburban margin is expected in FY 2024
· Urban revenue is expected to comprise contributions from projects
already contracted as well as from new revenue opportunities. Construction of
our Croí Cónaithe development in Cork will begin in mid-year
· We anticipate that revenue from our Partnerships segment will
exceed €100 million in FY 2024, with a gross margin of approximately 15%. We
expect to commence the construction of almost 1,300 homes under our
partnership schemes this year
· In FY 2024 we anticipate making further efficiencies in our land
investment, while WIP is expected to increase modestly as the unwinding of
current urban developments is more than offset by increased suburban activity
and new urban investment. Net debt is expected to be approximately 10-15% of
net assets at the end of FY 2024
· Our focus remains on enhancing the capital efficiency of the business
and increasing cash generation. Once our capital allocation priorities are
satisfied, we remain committed to returning any excess cash identified to
shareholders
· Our stronger forward order book, operational momentum, and continued
progress in manufacturing means that we have increased confidence with current
consensus EPS expectations for FY 2024 of approximately 17 cent
CEO Stephen Garvey commented:
"We achieved our objectives in 2023 and this sets us up very well to operate
at scale in 2024 and beyond.
Our business is performing effectively, delivering at pace and at scale the
new homes that Irish people badly need - energy-efficient and high-quality
homes designed for value and affordability, that work well with government
initiatives. In 2024 we will see families, couples and individuals move into
over 2,700 new homes that we have delivered.
Our greater scale is underpinned by the increased control we have taken over
our supply chain in recent years. We are already seeing the benefits of
investing in our NUA manufacturing business, to give us significant advantages
in off-site manufacturing, innovative design, more sustainable processes,
standardisation of our product range and greater efficiency and cost
management.
NUA has also allowed us to develop a clear leadership position in modern
methods of construction in the Irish market.
We are operating in a more favourable planning environment that is
unrecognisable from two years ago. However, while the planning system is
catching up with the backlog successfully, prospective homebuyers need to see
ongoing investment by the State in additional planning and infrastructure
resources to prevent a recurrence of backlogs, as output levels across the
housebuilding industry continue to rise sharply to meet the supply shortage.
Notwithstanding this we remain confident about the outlook, not least because
the State has cemented its position as a key driver of boosting supply and
ultimately meeting the high level of demand that remains evident. We are
engaging with the State across multiple initiatives that are working and
making a real difference - our Partnerships business is delivering thousands
of new homes in conjunction with local authorities and approved housing
bodies; homebuyers are benefiting from Help to Buy and the First Home Scheme;
and we are seeing significant scope for the LDA and other initiatives to
accelerate supply."
Results Presentation
A webcast presentation of the results for analysts and institutional investors
will take place at 8.30am on 28 February 2024. The presentation slides will be
available on the Investor Relations section on www.glenveagh.ie from 7.00am on
28 February 2024.
This presentation can also be accessed live from the Investor Relations
section on www.glenveagh.ie or alternatively via conference call.
Conference call: Click here to register for conference call
(https://protect-eu.mimecast.com/s/OcHTCKL6wh2JXAXCMfiig?domain=event.loopup.com)
Audio webcast: Click here for webcast
(https://protect-eu.mimecast.com/s/j8wYCLvPxhRvGoGfqCy0q?domain=channel.royalcast.com)
Registration and access details are also available at Glenveagh Corporate |
Investors news and events
(https://glenveagh.ie/corporate/investor-centre/investors-events)
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 Affairs) David Clerkin 087 830 1779
investors@glenveagh.ie (mailto:investors@glenveagh.ie) glenveagh@gordonmrm.ie (mailto:glenveagh@gordonmrm.ie)
Note to Editors
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 are 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 (http://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 ("Glenveagh" or "the Group").
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 Group'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 Group about
future events, and involve risks and uncertainties because they relate to
events and depend on circumstances that will occur in the future. Although
Glenveagh 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 Group 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.
Glenveagh 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) Regulations 2007 (as amended).
GLENVEAGH PROPERTIES PLC: BUSINESS AND FINANCIAL REVIEW
1. BUSINESS REVIEW
i. Group Sales
a. Overview
The Group had total revenue of €607.9 million (FY 2022: €644.7 million),
primarily relating to the completion of 1,328 suburban units (FY 2022: 1,354)
in the period and including a first-time contribution from our Partnerships
business segment. Excluding the FY 2022 disposal of the East Road site for
approximately €63m, that did not recur in FY 2023, there was a modest
increase in Group revenue.
b. Suburban
The Group reported suburban revenue of €470.8 million, an increase of 3.6%
on the FY 2022 revenue of €454.5 million.
In FY 2023, 1,328 suburban units were closed which was broadly in line with
1,354 units closed in FY 2022. All sites required to deliver the FY 2024
targets have planning in place and are active, with a focus on delivering
higher volume from bigger sites.
ASP in FY 2023 was approximately €336k (FY 2022: €330k), reflecting
underlying House Price Inflation ("HPI"), changes in product and site mix, and
our commitment to delivering homes that are affordable for our customers.
Underlying market demand for new homes continued to be very strong during the
year, driven by a robust economic environment, ongoing increases in population
and a range of demand-side initiatives from the Government.
The Group delivered almost 700 units (approximately 52% of our suburban units)
as part of these Government support initiatives to provide social, cost rental
and affordable housing.
During FY 2023 the scope of the First Home Scheme was significantly extended
to an additional cohort of buyers by increasing the price ceilings that apply
in Ireland's local authority areas. The scheme is designed to bridge the gap
between a first-time buyer's deposit and mortgage and the price of the new
home, providing up to 30% of the price of the home and supporting
affordability for first-time buyers, a key target market for Glenveagh. Along
with the Help To Buy Scheme, these initiatives provide more first-time buyers
with enhanced access to new housing developments and approximately 80% of our
customers availed of at least one of these schemes in FY 2023.
Customer affordability was further supported by the change in the Central Bank
of Ireland's macroprudential rules, that became effective from 1 January 2023.
This increased borrowing capacity materially among the first-time buyer
cohort, up to 4x income compared to a 3.5x limit previously in place.
c. Urban
Urban revenue decreased by 36.8% to €120.1 million in FY 2023 (FY 2022:
€190.2 million). This primarily reflects a FY 2022 comparative that included
approximately €63m from the disposal of the East Road site.
In FY 2023 two of our key contracted urban projects, Marina Village and
Premier Inn, were completed. All of the remaining contracted projects - at
Cluain Mhuire, Citywest and Castleknock - are anticipated to complete in FY
2024 and to deliver approximately 650 units. Revenue of approximately €80
million is expected to be recognised this year from these projects, bringing
the total revenue from the Group's urban asset monetisation activities to
approximately €600 million.
Our remaining urban assets comprise almost 14% of our overall land investment
and principally comprise assets in Cork and the Greater Dublin Area. There is
significant potential to activate much of this portfolio by partnering with
multiple state agencies as part of the Government's supply-side housing
initiatives.
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. Development is anticipated to begin mid-year and first
revenue and profits from this development are expected in FY 2026.
In addition, significant increased funding has been proposed for the LDA and a
number of our urban portfolio sites are currently being evaluated by the
agency for prospective selection and activation in FY 2024.
Urban revenue is expected to comprise the contribution from projects already
contracted as well as new revenue opportunities that include emerging
partnership projects with state agencies. These additional opportunities
provide the flexibility to generate new revenue in FY 2024 and to offset any
potential transaction risk associated with our commercial office development,
the residual non-core asset in the Docklands portfolio.
d. Partnerships
FY 2023 was a milestone year for our Partnerships business segment. 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 €17.0
million.
We expect, by the end of this year, to have commenced the construction of
almost 1,300 homes under our partnership schemes. We also anticipate lodging
a planning application in FY 2024 for the next phase of the Ballymastone
development, comprising approximately 400 mixed tenure units.
As noted above, new resources and funding are now being provided by the
Government for supply-side housing initiatives, the most significant recent
initiative of which is proposed further funding to the LDA.
Our scale, operational capability and proven expertise in partnership models
leave us ideally positioned to advance such opportunities as they relate to
both our Urban and Partnerships business segments. These have the potential to
generate significant incremental revenue and profits for the Group over the
medium term.
ii. Forward Order Book
The continued strength of the Irish market is demonstrated through our strong
forward order book which totals €805 million.
The closed and forward order book in the suburban business for FY 2024 is
€377 million, comprising 1,106 units, and gives good visibility on FY 2024
performance. Strong reservation rates in our Suburban business segment
reflects strong underlying private market demand that is supported by the
resilience of the domestic economy, the range of Housing for All initiatives,
and the change to the Central Bank of Ireland's macroprudential rules.
Customer demand is further underpinned by the structural undersupply across
the market of high-quality, affordable housing in Ireland.
In addition, the Group's overall forward order book includes revenue in FY
2024 to be recognised from the three remaining executed transactions within
the Urban business segment, as well as the contracted element of the
Partnerships business segment.
We are currently active on 20 suburban and urban sites, with a focus on
delivering higher output from larger sites to further enhance operational
efficiencies.
iii. Planning Progress and Policy
We made significant progress in what was an improving planning environment,
increasing confidence on unit delivery in FY 2024 and beyond.
In FY 2023 the Group was granted permissions for approximately 4,600 units
across over twenty applications, some 400 of which are currently in post-grant
appeal periods.
Overall, we are strongly positioned for longer term growth. The Group has
planning permission for all of its expected deliveries in FY 2024. This
improved visibility, when combined with our planning applications lodged
during FY 2023, mean that approximately 80% of our current landbank could be
fully planned and available for development by the end of this year.
There were some encouraging improvements in the planning policy and system in
FY 2023. Additional resourcing has been provided to An Bord Pleanála and the
efficiency of its applications processing is improving.
The Large-scale Residential Development (LRD) process is functioning well to
date, with successful grants received within or ahead of guided timelines.
The Planning and Development Bill 2023 was published following extensive
review and consultation. We welcome such policy reform in general but are
mindful that such an extensive piece of legislation, combined with the
prospective amendments that are ongoing, will take some time to assimilate in
practice and is unlikely to have a significant impact in FY 2024.
We welcomed the Government's Sustainable Residential Development and Compact
Settlements Guidelines that were published in January 2024. Its effective
implementation will enable greater flexibility in residential design standards
that will support the delivery of compact 'own door' housing that are more
viable for developers and more affordable for purchasers.
The review of the National Planning Framework is also underway. We would urge
that this review accurately reflects present and future population
requirements, designed for viable and appropriately located homes and offering
increased opportunities for home ownership.
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.
As the largest source of landbank for the development of new homes and with
the scale of its potential funding capacity, the State will continue to be the
major driver in resolving Ireland's accommodation shortage, in partnership
with the housebuilding industry.
To sustainably deliver increased housing supply and opportunities for home
ownership also 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.
iv. Development Land Portfolio Management
We continue to take a disciplined and strategic approach to land acquisitions
and portfolio management, focused on managing to a 4-5 year land portfolio at
scale.
The Group's land investment, excluding development rights, was €403.8
million at 31 December 2023 (31 December 2022: €455.3 million). We have
continued to drive further capital efficiencies by reducing this net
investment in land and we anticipate driving more efficiencies from the
landbank in FY 2024.
Development rights increased from €3.2 million in FY 2022 to €29.3m in FY
2023 reflecting the acquisition of certain development rights associated with
our partnership agreements for Ballymastone and Oscar Traynor Road.
The Group's land portfolio currently comprises just over 13,100 units with an
average plot cost of approximately €33k. By number of units, the Suburban
segment accounts for 68% of the portfolio, with the remainder comprising the
Urban segment (16)% and Partnerships segment (16%). Approximately two-thirds
of the overall portfolio is located in the Greater Dublin Area.
The Group spent or contracted to spend a total of approximately €38 million
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.
The introduction of a Residential Zoned Land Tax, originally scheduled for FY
2024, has been deferred until FY 2025. This tax is designed to incentivise
landowners to use inactive zoned land for housing. Its impending introduction
has already been a positive development in providing additional land
investment opportunities for the Group. The Group is also actively managing
and reviewing its existing portfolio to determine the extent of, and to
mitigate against, any relevant tax liability that it may incur.
v. Input Cost Inflation
The construction sector continued to face inflationary pressures across its
raw material and labour costs base in FY 2023 and we anticipate that this will
continue into FY 2024.
We continue to employ several strategies to mitigate the impact of this
inflationary environment. We collaborate with supply chain partners to secure
sustainable, competitive pricing while maintaining supply security. We also
benefit from our scale and purchasing power in negotiating competitive terms
and pricing with suppliers, while ensuring greater control over input costs
through the Group's supply chain integration strategy. In addition, the
Government announced in April 2023 that development levies would be removed
for a limited time subject to certain criteria being met, a measure that has
partly mitigated against cost pressures across the industry.
These mitigation strategies enabled us to manage build cost inflation to a
4-5% level in FY 2023. As levels of HPI in the new homes market were at
similar levels, the overall impact on margin was broadly neutral.
vi. Supply Chain Integration - NUA
In June we launched NUA, the innovative manufacturing and new technology arm
of the business that operates from our three off-site manufacturing facilities
in Carlow town, Arklow, Co. Wicklow and Dundalk, Co. Louth. The sites are
strategically located to service all our sites effectively as a nationwide
home builder.
Significant investment is now largely completed so the focus is on maximising
the value from NUA and building the capability to deliver our own housing
requirements. NUA has the capacity to deliver frames for over 2,000 homes per
year, focusing on the off-site panellised manufacture using timber frame and
light gauge steel.
This innovation in off-site manufacturing is becoming increasingly important
as standardised house types in Glenveagh designed planning units become a much
larger component of our output. We anticipate that approximately 70% of our
output in FY 2024 will use our standardised housing typologies. As a result,
we can plan, design, and build houses more effectively, with greater
efficiency and speed, and in greater numbers than ever before. Standardising
process and product across the business supports an improved margin and return
profile for the Group overall.
vii. Sustainability Agenda Progress
In FY 2023 the Group's main sustainability focus was on launching the Net Zero
Transition Plan, developing our Biodiversity and Circular Economy strategies,
and implementing our Equity, Diversity & Inclusion (ED&I) strategy.
The key milestone in H1 2023 was the launch of the Group's Net Zero Transition
Plan in March 2023, outlining our near-term and long-term GHG emissions
reduction targets for scopes 1, 2 and 3. These targets call for a 46.2%
reduction in absolute Scopes 1 & 2 emissions by 2031 and a 55% reduction
in Scope 3 emissions intensity (tCO2e/100sqm) by 2031, using 2021 as the
baseline year. Longer term net zero targets have been set for scopes 1,2&3
by 2050. All targets have been validated by the Science Based Targets
initiative (SBTi).
In FY 2023 we reduced absolute Scope 1 & 2 emissions by 11% compared to FY
2022. This is an encouraging first step, which can be attributed to the roll
out of HVO (hydrotreated vegetable oil) to replace diesel across sites during
the year. While scope 1 & 2 emissions are still tracking above our 2021
baseline, we are confident that the work we have completed has a solid
foundation and that we are on the right track to see a reduction in FY 2024
with a full year of HVO use. Meanwhile, our Scope 3 emissions have now
decreased by 7% against our FY 2021 baseline, measured on an intensity basis
(tCO2e/100sqm). This is primarily due to our focus on the energy efficiency of
our homes. In FY 2023, we saw the proportion of A1 rated homes increase from
55% to 85% which has a positive impact on the carbon emissions associated with
the occupant energy of the home.
Our biodiversity strategy, 'Building a Better Habitat', was launched in
January 2024 and integrates biodiversity conservation into the core of our
'Building Better' strategy. The strategy is a step towards better
understanding how we as a business impact on and depend upon biodiversity. We
have developed a biodiversity framework that will allow us to manage our
impacts, risks, and opportunities across our value chain.
We are today launching our Circular Economy strategy, which sets out the
actions we will take to move towards circular design, reduce resource use and
the waste associated with it. We have set a target to prepare 70% of our
construction and demolition (non-hazardous) waste for reuse, recycling and
other material recovery. We have also set out commitments in relation to
circular design, supply chain engagement and data. Our three strategies
complement each other as we seek to address the issues of climate change,
biodiversity loss and resource depletion in a coordinated way. They are
supported by a supplier engagement programme, initiated in 2023. We are also
proud to be a founding member of the Supply Chain Sustainability School
Ireland which launched in January 2024.
We also began to implement our ED&I strategy, 'Building a Better
Workplace', that was launched in December 2022. We established an ED&I
Steering Group and launched five Employee Network Groups each sponsored by an
Executive Committee member. In May we retained the Investors in Diversity
Silver Mark and achieved an overall result of 'Building Momentum'.
Elsewhere across the business, we agreed a new sustainability linked finance
facility in February 2023 that incorporates four specific sustainability Key
Performance Indicators ("KPIs"). We continued our preparation to disclose
under the Corporate Sustainability Reporting Directive. We have also continued
to maintain and improve our ESG ratings. Our Sustainalytics rating improved
from 19.3 to 16.4 and is denoted as 'Low-risk'. Our CDP rating is B and our
MSCI rating is AA.
2. FINANCIAL REVIEW
i. Group Performance
Total Group revenue was €608 million (FY 2022: €645 million). The Group's
gross profit for the year increased modestly to €112.7 million (FY 2022:
€108.1 million) with an overall gross margin of 18.5% (FY 2022: 16.8%).
In the Suburban business segment, revenue of €471m represents steady growth
and equates to a 4% increase in revenue versus 2022. The Group delivered 1,328
core units in the year at an Average Selling Price of approximately €336k
(FY 2022: €330k) reflecting the Group's strong operational performance. ASP
increased by 2% as a result of portfolio mix and house price inflation in the
period.
The most significant margin improvement came in the Suburban business with a
gross margin of 20.2% (FY 2022: 18.4%) and an underlying suburban housing
margin of 19.3% (FY 2022: 18.4%). The business benefitted from a number of
operational improvements including but not limited to increased product
standardisation, our pricing power in the market and the early signs of cost
benefits from our manufacturing capabilities. The margin was also augmented by
the impact of land sales. We would expect further progression in the
underlying suburban margin in FY 2024 as we deliver a higher percentage of our
product from our standardised house types and our manufacturing facilities.
Our Urban business segment generated revenue of €120 million. This includes
the completion of our forward fund on the Premier Inn hotel in the Docklands
and our apartment development in Marina Village, Greystones along with the
continuation of the development phase in our apartment schemes in Citywest and
Castleknock. Urban gross margin was 12.8% in FY 2023, broadly consistent with
the 2022 margin of 12.9%.
We generated €17 million of revenue from our Partnerships business segment,
the first time this segment has contributed revenue, reflecting significant
progress made on both Partnership sites during the year. Given the structure
of the Partnership transactions, we recognise revenue and profits on a
percentage of completion basis and therefore the revenue and profits
recognised in FY 2023 reflect the early stages of construction rather than any
units being completed. The Partnership gross margin was 12.9%, reflecting very
low activity levels and the early stage of development on both sites. For FY
2024 and future years, the margin on both sites will be consistent with our
15% guidance for that business segment.
Group operating profit was €70.9 million (FY 2022: €70.1 million). The
Group's central costs for the year were €39.4 million (FY 2022: €36.0
million), which along with €2.4 million (FY 2022: €1.9 million) of
depreciation and amortisation gives total administrative expenses of €41.8
million (FY 2022: €38.0 million).
Net finance costs for the year increased significantly to €15.8 million (FY
2022: €7.1 million), primarily impacted by the increased European Central
Bank interest rates which have impacted the overall market and a higher level
of average debt during the year to support the growth trajectory of the
business.
Overall, the Group delivered an improved Earnings Per Share of 8.0 cent (FY
2022: 7.6 cent), which was at the higher end of the range management had
provided as market guidance.
ii. Balance Sheet
The business has continued to improve our balance sheet efficiency during FY
2023 and has reduced the Group's net assets modestly to €678.2 million at 31
December 2023 (FY 2022: €693.1 million). There are a number of elements
within this net reduction, some of which relate to increased investment for
future efficiencies and benefits while some relate to capital reductions in
the year.
In line with our manufacturing strategy, we continued to invest in our
off-site facilities and equipment, totalling €18.1m in the year. This is
included in our increased Property, Plant & Equipment balance of €64.2
million (FY 2022: €51.8 million).
The business has again seen significant progress in the reduction of our land
portfolio, with a year-end balance of €403.8 million (2022: €455.3
million), excluding development rights. We believe that further reductions can
be made in our land portfolio, with the carrying value of land reducing below
€400 million in FY 2024.
To facilitate the significant growth trajectory into FY 2024, the business has
invested in work-in progress with an overall year end balance of €274.6
million (FY 2022: €227.4 million), an increase of nearly €50 million. This
increase is primarily attributable to the increase in our urban business and
two sites in particular, the Docklands office development and our apartment
scheme in Cluain Mhuire which has been forward sold and will deliver in FY
2024. Combined these two assets have approximately €70 million of work in
progress at year end, an increase of €40 million year on year.
The reduced equity figure at 31 December 2023 reflects the reduced number of
shares in the business following the successful completion of the Group's
fourth share buyback programme. In FY 2023, a total of 63.8 million shares
were repurchased at a total cost of €62.9 million. The Group has now
returned over €300 million to shareholders since the beginning of our first
share buyback programme in May 2021.
iii. Cash Flow
The business continued to generate substantial operating cash inflow, albeit
not at the same levels as in previous years. We generated €50.9 million (FY
2022: €140.9 million) cash from operating activities, the reduction
reflecting our investment in inventory.
This cash generation allowed the business to invest in line with our capital
allocation priorities, predominantly focussed on our manufacturing
capabilities of €17.9 million and our fourth share buyback programme of
€62.9 million.
Reflecting the investment in work in progress, which will deliver in FY 2024,
the Group had an increased net debt position at year end of €48.8 million
(2022: €13.8 million). This remains a prudently managed debt level in the
context of the overall scale of the business, the investments that have been
made in FY 2023 and the opportunities available to the business in FY 2024.
Glenveagh Properties plc
Consolidated statement of profit or loss and other comprehensive income
2023 2022
Note €'000 €'000
Revenue 10 607,938 644,706
Cost of sales (495,207) (536,655)
Gross profit 112,731 108,051
Administrative expenses (41,782) (37,956)
Operating profit 70,949 70,095
Finance expense 11 (15,839) (7,094)
Profit before tax 12 55,110 63,001
Income tax 16 (8,002) (10,434)
Profit after tax attributable to the owners of the Company
47,108 52,567
Items that are or may be reclassified subsequently to profit or loss:
Fair value movement on cashflow hedges (1,240) -
Cashflow hedges reclassified to profit or loss (383) -
Total other comprehensive loss (1,623) -
Total comprehensive profit for the year attributable of the owners of the
Company
45,485 52,567
Basic earnings per share (cent) 15 8.0 7.6
Diluted earnings per share (cent) 15 8.0 7.6
For the financial year ended 31 December 2023
Glenveagh Properties plc
Consolidated balance sheet
as at 31 December 2023
Note
2023 2022
€'000 €'000
Assets
Non-current assets
Goodwill 18 5,697 5,697
Property, plant and equipment 17 64,184 51,750
Intangible assets 18 2,781 1,770
Deferred tax asset 16 884 619
73,546 59,836
Current assets
Inventory 19 707,600 685,751
Trade and other receivables 20 77,974 58,671
Income tax receivable 3,901 -
Restricted cash 23 458 458
Cash and cash equivalents 27 71,863 71,085
861,796 815,965
Total assets 935,342 875,801
Equity
Share capital 26 659 719
Share premium 26 179,719 179,416
Undenominated capital 26 399 335
Retained earnings 450,103 465,680
Cashflow hedge reserve 24 (1,623) -
Share-based payment reserve 48,899 46,968
Total equity 678,156 693,118
Liabilities
Non-current liabilities
Loans and borrowings 22 112,083 71,221
Lease liabilities 22 4,230 4,216
Derivative contracts 24 1,623 -
Trade and other payables 21 1,750 3,500
119,686 78,937
Current liabilities
Trade and other payables 21 132,719 93,234
Income tax payable - 565
Loans and borrowings 22 3,562 9,419
Lease liabilities 22 1,219 528
137,500 103,746
Total liabilities 257,186 182,683
Total liabilities and equity 935,342 875,801
Michael
Rice
Stephen
Garvey 27
February 2024
Director
Director
Glenveagh Properties plc
Consolidated statement of changes in equity
for the financial year ended 31 December 2023
Share Capital
Share-based payment
Ordinary Deferred Undenominated Share Cashflow Retained Total
shares Shares capital premium reserve hedge reserve earnings equity
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Balance as at 1 January 2023 638 81 335 179,416 46,968 - 465,680 693,118
Total comprehensive profit for the year
Income for the year - - - - - - 47,108 47,108
Fair value movement on cashflow hedges - - - - - (1,240) - (1,240)
Cashflow hedges reclassified to profit and loss
- - - - - (383) - (383)
638 81 335 179,416 46,968 (1,623) 512,788 738,603
Transactions with owners of the Company
Equity-settled share-based payments - - - - 2,137 - - 2,137
Lapsed share options (Note 14) - - - - (206) - 206 -
Cancellation of deferred shares (Note 26) - - - - - - - -
Exercise of options 4 - - 303 - - - 307
Purchase of own shares (Note 26) (64) - 64 - - - (62,891) (62,891)
(60) - 64 303 1,931 - (62,685) (60,447)
Balance as at 31 December 2023 578 81 399 179,719 48,899 (1,623) 450,103 678,156
Glenveagh Properties plc
Consolidated statement of changes in equity
for the financial year ended 31 December 2022
Share Capital
Share-based
Ordinary Founder Deferred Undenominated Share payment Retained Total
shares shares Shares capital premium reserve earnings equity
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Balance as at 1 January 2022 771 181 - 100 179,310 45,251 558,468 784,081
Total comprehensive profit for the year
Income for the year - - - - - - 52,567 52,567
771 181 - 100 179,310 45,251 611,035 836,648
Transactions with owners of the Company
Equity-settled share-based payments - - - - - 1,717 - 1,717
Lapsed share options (Note 14) - - - - - - - -
Conversion of founder shares to deferred shares (Note 26)
- (181) 181 - - - - -
Cancellation of deferred shares (Note 26) - - (100) 100 - - - -
Exercise of options 2 - - - 106 - - 108
Purchase of own shares (Note 26) (135) - - 135 - - (145,355) (145,355)
(133) (181) 81 235 106 1,717 (145,355) (143,530)
Balance as at 31 December 2022 638 - 81 335 179,416 46,968 465,680 693,118
Glenveagh Properties plc
Consolidated statement of cash flows
For the financial year ended 31 December 2023
2023 2022
Note €'000 €'000
Cash flows from operating activities
Profit for the financial year 47,108 52,567
Adjustments for:
Depreciation and amortisation 2,373 2,081
Finance costs 11 15,839 7,094
Equity-settled share-based payment expense 14 2,137 1,717
Tax expense 16 8,002 10,434
Profit on disposal of property, plant and equipment 12 (214) (1,501)
75,245 72,392
Changes in:
Inventories (18,529) 83,360
Trade and other receivables (19,217) (26,290)
Trade and other payables 38,100 35,662
Cash from operating activities 75,599 165,124
Interest paid (12,009) (6,490)
Tax paid (12,732) (17,778)
Net cash from operating activities 50,858 140,856
Cash flows from investing activities
Acquisition of property, plant and equipment 17 (16,361) (19,278)
Acquisition of intangible assets 18 (1,477) (1,055)
Acquisition of subsidiary undertakings - (6,875)
Cash acquired on acquisition - 847
Proceeds from the sale of property, plant and equipment 959 2,036
Net cash used in investing activities (16,879) (24,325)
Cash flows from financing activities
Proceeds from loans and borrowings 22 381,667 110,000
Repayment of loans and borrowings 22 (347,500) (150,000)
Transaction costs related to loans and borrowings 22 (4,318) -
Purchase of own shares 26 (62,891) (146,260)
Proceeds from exercise of share options 26 307 108
Proceeds from derivative settlements 24 295 -
Payment of lease liabilities 28 (761) (470)
Net cash used in financing activities (33,201) (186,622)
Net increase / (decrease) in cash and cash equivalents 778 (70,091)
Cash and cash equivalents at the beginning of the year 71,085 141,176
Cash and cash equivalents at the end of the year 71,863 71,085
Glenveagh Properties plc
Notes to the consolidated financial statements
For the financial year ended 31 December 2023
1 Reporting entity
Glenveagh Properties plc ("the Company) is domiciled in the Republic of
Ireland. The Company's registered office is Block C, Maynooth Business Campus,
Maynooth Co. Kildare. These consolidated financial statements comprise the
Company and its subsidiaries (together referred to as "the Group") and cover
the financial year ended 31 December 2023. The Group's principal activities
are the construction and sale of houses and apartments for the private buyer,
local authorities and the private rental sector.
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS's) as adopted by the
European Union which comprise standards and interpretations approved by the
International Accounting Standards Board (IASB), and those parts of the
Companies Act 2014, including the Commission Delegated Regulation 2018/815
regarding the single electronic reporting format (ESEF), applicable to
companies reporting under IFRS and Article 4 of the IAS regulation.
2 Statement of compliance
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS's) as adopted by the
European Union which comprise standards and interpretations approved by the
International Accounting Standards Board (IASB), and those parts of the
Companies Act 2014 applicable to companies reporting under IFRS and Article 4
of the IAS regulation.
3 Functional and presentation currency
These consolidated financial statements are presented in Euro which is the
Company's functional currency. All amounts have been rounded to the nearest
thousand unless otherwise indicated.
4 Use of judgements and estimates
The preparation of the Group's financial statements under International
Financial Reporting Standards ("IFRS"), as adopted by the European Union,
requires the Directors to make judgments and estimates that affect the
application of policies and the reported amounts of assets, liabilities,
income, expenses and related disclosures. Actual results may differ from these
estimates.
Critical accounting judgements
Management applies the Group's accounting policies as described in Note 8 when
making critical accounting judgements, of which no individual judgement is
deemed to have a significant impact upon the financial statements.
Key sources of estimation uncertainty
The key source of significant estimation uncertainty impacting these financial
statements involves assessing the carrying value of inventories as detailed
below.
(a) Carrying value of work-in-progress, estimation of costs to complete
and impact on profit recognition
The Group holds inventories stated at the lower of cost and net realisable
value. Such inventories include land and development rights, work-in-progress
and completed units. As residential development is largely speculative by
nature, not all inventories are covered by forward sales contracts.
Furthermore, due to the nature of the Group's activity and, in particular the
scale of its developments and the length of the development cycle, the Group
has to allocate site-wide development costs between units being built and/or
completed in the current year and those for future years. It also has to
forecast the costs to complete on such developments.
These estimates impact management's assessment of the net realisable value of
the Group's inventory balance and also determine the extent of profit or loss
that should be recognised in respect of each development in each reporting
period.
In making such assessments and allocations there is a degree of inherent
estimation uncertainty. The Group has established internal controls designed
to effectively assess and centrally review inventory carrying values and
ensure the appropriateness of the estimates made. These assessments and
allocations evolve over the life of the development in line with the risk
profile, and
accordingly, the margin recognised reflects these evolving assessments,
particularly in relation to the Group's long-term developments. The impact of
sustainability and other macroeconomic factors have been considered in the
Group's assessment of the carrying value of its inventories at 31 December
2023, particularly with regard to the potential implications for future
selling prices, development expenditure and construction programming.
Management has considered a number of scenarios on each of its active
developments and the consequential impact on future profitability based on
current facts and circumstances together with any implications for future
projects in undertaking its net realisable value calculations.
As part of the assessment, the Group has re-evaluated its most likely exit
strategies on all developments in the context of the current market
environment and reflected these in revenue assumptions within the forecast
models. The results of this exercise determined that the net impairment charge
or reversal required for the period was €Nil (2022: Nil).
Management have performed a sensitivity analysis to assess the impact of a
change in estimated costs for developments on which sales were recognised in
the year. A 1%-4% increase in estimated costs recognised in the year, which is
considered to be reasonably possible, would reduce the Group's gross margin by
approximately 118-333bps (2022: 58-174bps).
5 Measurement of fair values
A number of the Group's accounting policies and disclosures require the
measurement of fair values, both for financial and non-financial assets and
liabilities.
The Group has an established control framework with respect to the measurement
of fair values. This includes a valuation team that has overall responsibility
for overseeing all significant fair value measurements, including Level 3 fair
values and reports directly to the chief financial officer.
The valuation team regularly reviews significant unobservable inputs and
valuation adjustments. If third party information, such as broker quotes or
pricing services, is used to measure fair values, then the valuation team
assess the evidence obtained from the third parties to support the conclusion
that these valuations meet the requirements of the Standards, including the
level in the fair value hierarchy in which the valuations should be
classified.
Significant valuation issues are reported to the Group's Audit and Risk
committee.
Fair value is defined in IFRS 13, Fair Value Measurement, as the price that
would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. When
measuring the fair value of an asset or liability, the Group uses market
observable data as far as possible. Fair values are categorised into different
levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
Further information about the assumptions made in measuring fair values is
included in the following notes:
· Note 14 Share-based payments arrangements;
· Note 21 Trade and other payables;
· Note 24 Derivatives and cashflow hedge reserve; and
· Note 27 Financial instruments and financial risk management.
6 Changes in material accounting policies
Amendments to standard IAS 12 Income taxes: International Tax Reform - Pillar
Two Model Rules; Deferred Tax Related to Assets and Liabilities Arising From a
Single Transaction, IFRS 17 Insurance Contracts: amendments to IFRS 17
insurance contracts; Initial Application of IFRS 17 and IFRS 9 - Comparative
Information and IAS 8 Accounting policies, Changes In Accounting Estimates And
Errors: Definition of accounting estimates and errors, are effective from 1
January 2023 but they do not have a material effect on the Group's financial
statements.
(i) New material accounting policies
a) Derivative contracts and hedge accounting
The Group has transacted derivatives relating to an interest rate swap to
manage the interest rate risk arising from floating rate borrowings.
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into, and they are subsequently remeasured to their fair
value at the end of each reporting period. The accounting for subsequent
changes in fair value depends on whether the derivative is designated as a
hedging instrument and, if so, the nature of the item being hedged.
The group designates certain derivatives as hedges of a particular risk
associated with the cash flows of recognised assets and liabilities and highly
probable forecast transactions (cash flow hedges).
Changes in the fair value of derivative hedging instruments designated as cash
flow hedges are recognised in other comprehensive income to the extent that
the hedge is effective. The gain or loss relating to the ineffective portion
is recognised immediately in profit or loss.
Amounts accumulated in other comprehensive income are reclassified to profit
or loss in the same periods that the hedged items affect profit or loss. The
reclassified gain or loss relating to the effective portion of interest rate
swaps hedging variable rate borrowings is recognised in profit or loss within
finance income or costs respectively.
If the hedging instrument no longer meets the criteria for hedge accounting,
expires or is sold, terminated or exercised, then hedge accounting is
discontinued prospectively. The cumulative gain or loss previously recognised
in other comprehensive income remains there until the forecast transaction
occurs, unless the hedged transaction is no longer expected to occur, in which
case the cumulative
gain or loss that was previously recognised in other comprehensive income is
transferred to profit and loss.
At inception of the hedge relationship, the group documents the economic
relationship between hedging instruments and hedged items, including whether
changes in the cash flows of the hedging instruments are expected to offset
changes in the cash flows of hedged items. The group documents its risk
management objective and strategy for undertaking its hedge transactions.
The full fair value of a hedging derivative is classified as a non-current
asset or liability when the remaining maturity of the hedged item is more than
12 months; it is classified as a current asset or liability when the remaining
maturity of the hedged item is less than 12 months.
b) Research and development costs
Expenditure on research activities is recognised in profit or loss as
incurred.
Development expenditure is capitalised only if the expenditure can be measured
reliably, the product or process is technically and commercially feasible,
future economic benefits are probable and the Group intends to and has
sufficient resources to complete development and to use or sell the asset.
Otherwise, it is recognised in profit or loss as incurred. Subsequent to
initial recognition, development expenditure is measured at cost less
accumulated amortisation and any accumulated impairment losses.
c) Disclosure of accounting policies (amendments to IAS 1 and IFRS Practice
Statement 2)
The Group adopted Disclosure of Accounting Policies (amendments to IAS 1 and
IFRS Practice Statement 2) from 1 January 2023. The amendments did not result
in any material changes to the accounting policies and accounting policy
information disclosed in the financial statements.
The amendments require the disclosure of material rather than significant
accounting policies. The amendments also provide guidance on the application
of materiality to disclosure of accounting policies, assisting entities to
provide useful, entity specific accounting policy information that users need
to understand other information in the financial statements.
There have been no other changes to material accounting policies during the
financial year ended to 31 December 2023.
(ii) Other standards
The Group has not adopted the following new and amended standards early, and
instead intends to apply them from their effective date as determined by the
date of EU endorsement. The potential impact of these amendments to standards
on the Group is under review:
- IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Disclosures: Supplier Finance Arrangements (amendment) (effective 01/01/2024)
- IAS 1 Presentation of Financial Statements:
o Classification of Liabilities as Current or Non-current Date (amendment)
(effective 01/01/2024)
o Classification of Liabilities as Current or Non-current - Deferral of
Effective Date (amendment) (not yet effective)
o Non-current Liabilities with Covenants (amendment) (effective 01/01/2024)
- IFRS 16 Leases: Lease Liability in a Sale and Leaseback (amendment)
(not yet effective)
- IAS 21 The Effects of Changes in Foreign Exchange Rates - Lack of
Exchangeability (amendment) (effective 01/01/2024)
- ESRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information (not yet effective)
- ESRS S2 Climate-related Disclosures (not yet effective)
7 Going Concern
The Group has recorded a profit before tax of €55.1 million (2022: €63.0
million. The Group has an unrestricted cash balance of €46.9 million (31
December 2022: €46.1 million) exclusive of the minimum cash balance of
€25.0 million which the Group is required to maintain under the terms of its
debt facilities. The Group has committed undrawn funds available of €233.3
million (31 December 2022: €150.0 million).
Management has prepared a detailed cash flow forecast to assess the Group's
ability to continue as a going concern for at least a period of twelve months
from the signing of these financial statements. The preparation of this
forecast considered the principal risks facing the Group, including those
risks that could threaten the Group's business model, future performance,
solvency or liquidity over the forecast period. These principal risks and
uncertainties and the steps taken by the Group to mitigate them are detailed
in the Risk Management Report of the Annual Report. The Group's business
activities, together with the factors likely to affect its future development
are outlined in the Strategic Report of the Annual Report. Further disclosures
regarding the Group's loans and borrowings are provided in note 22.
The Group is forecasting compliance with all covenant requirements under the
current facilities including the interest cover covenant which is based on
earnings before interest, tax, depreciation and amortisation (EBITDA)
excluding any non-cash impairment charges or reversals. Total debt must not
exceed adjusted EBITDA by a minimum of 4 times, this is calculated on both a
forward and trailing twelve-month basis. Other assumptions within the forecast
include the Group's expected selling prices and sales strategies as well as
its investment in work in progress which reflect updated development
programmes.
Based on the forecasts modelled, the Directors have assessed the Group's going
concern status for the foreseeable future. Having considered the Group's cash
flow forecasts, the Directors are satisfied that the Group has the appropriate
working capital management strategy, operational flexibility, and resources in
place to continue in operational existence for the foreseeable future.
Accordingly, these consolidated financial statements have been prepared on a
going concern basis.
8 Material accounting policies
The Group has consistently applied the following accounting policies to all
periods presented in these consolidated financial statements, except if
mentioned otherwise.
The Group adopted Disclosure of accounting policies (amendments to IAS 1 and
IFRS Practice Statement 2) from 1 January 2023. The amendments require the
disclosure of material rather than significant accounting policies. Although
the amendments did not result in any material changes to the accounting
policies themselves, they impacted the accounting policy information disclosed
in the financial statements in certain instances.
8.1 Basis of consolidation
(i) Business combinations
The Group accounts for business combinations using the acquisition method when
control is transferred to the Group. The consideration transferred in the
acquisition is generally measured at fair value, as are the identifiable net
assets acquired. Any goodwill that arises is tested annually for impairment.
Any gain on a bargain purchase is recognised in profit or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of
debt or equity securities.
The consideration transferred does not include amounts related to the
settlement of pre-existing relationships. Such amounts are generally
recognised in profit or loss. Any contingent consideration is measured at fair
value at the date of acquisition. If an obligation to pay contingent
consideration that meets the definition of a financial instrument is
classified as equity, then it is not remeasured, and settlement is accounted
for within equity. Otherwise, other contingent consideration is remeasured at
fair value each reporting date and subsequent changes in the fair value of the
contingent consideration are recognised in profit or loss.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries
are included in the consolidated financial statements from the date on which
control commences until the date on which control ceases.
(iii) Joint operations
Joint operations arise where the Group has joint control of an operation with
other parties, in which the parties have direct rights to the assets and
obligations of the operation. The Group accounts for its share of the jointly
controlled assets and liabilities and income and expenditure on a line by line
basis in the consolidated financial statements.
(iv) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated.
8.2 Revenue
The Group develops and sells residential properties and non-core land in
addition to developing land under development agreements with third parties.
(i) Housing and land sales
Revenue is recognised at the point in time when control over the property has
been transferred to the customer, which occurs at legal completion.
(ii) Development revenue
Revenue arising on contracts under a development agreement which give the
customer control over properties as they are constructed, and for which the
Group has a right to payments for work performed, is recognised over time.
Revenue and costs are recognised over time with reference to the stage of
completion of the contract activity at the balance sheet date where the
outcome of a contract can be estimated reliably. This is measured by surveys
of work performed to date. Variations in contract work, claims and incentive
payments are included to the extent that it is probable that they will result
in revenue, and they are capable of being reliably measured. When land is
transferred at the start of a contract, revenue is not recognised until
control has been transferred to the customer which includes legal title being
passed to them. Where the outcome of a contract cannot be estimated reliably,
contract revenue where recoverability is probable is recognised to the extent
of contract costs incurred. The costs associated with fulfilling a contract
are recognised as expenses in the period in which they are incurred. When it
is probable that total contract costs will exceed total contract revenue, the
expected loss is recognised as an expense immediately.
8.3 Expenditure
Expenditure recorded in inventory is expensed through cost of sales at the
time of the related property sale. The amount of cost related to each property
includes its share of the overall site costs. Expenditure related to revenue
recognised over time is expensed through cost of sales on an inputs basis.
Administration expense is recognised in respect of goods and services received
when supplied in accordance with contractual terms.
Expenditure on research activities is recognised in profit or loss as
incurred.
8.4 Taxation
Income tax expense comprises current and deferred tax. It is recognised in
profit or loss except to the extent that it relates to a business combination,
or items recognised directly in equity or in OCI.
The Group has determined that the global minimum top-up tax is an income tax
in the scope of IAS 12.
(i) Current tax
Current tax comprises the expected tax payable or receivable on the taxable
income or loss for the year and any adjustment to the tax payable or
receivable in respect of previous years. The amount of
current tax payable or receivable is the best estimate of the tax amount
expected to be paid or received that reflects uncertainty related to income
taxes, if any. It is measured using tax rates
enacted or substantively enacted at the reporting date. Current tax also
includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are
met.
(ii) Deferred tax
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes.
Deferred tax is not recognised for:
- temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences;
- temporary differences related to investments in subsidiaries,
associates and joint arrangements to the extent that the Group is able to
control the timing of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable future; and
- taxable temporary differences arising on the initial recognition
of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits
and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant
taxable temporary differences. If the amount of taxable temporary differences
is insufficient to recognise a deferred tax asset in full, then future taxable
profits, adjusted for reversals of existing temporary differences, are
considered, based on the business plans for individual subsidiaries in the
Group. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future
taxable profits improves. Once changes to the tax laws in any jurisdiction in
which the Group operates are enacted or substantively enacted, the Group may
be subject to the top-up tax. Currently, the Group operates solely in the
Republic of Ireland, based on current criteria there is no current tax impact
Unrecognised deferred tax assets are reassessed at each reporting date and
recognised to the extent that it has become probable that future taxable
profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to
temporary difference when they reverse, using tax rates enacted or
substantively enacted at the reporting date, and reflects uncertainty related
to income taxes, if any.
The measurement of deferred tax reflects the tax consequences that would
follow from the manner in which the Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
8.5 Share-based payment arrangements
The grant date fair value of equity-settled share-based payment arrangements
granted to employees is generally recognised as an expense, with a
corresponding increase in equity, over the vesting period of the awards. The
amount recognised as an expense is adjusted to reflect the number of awards
for which the related service and non-market performance conditions are
expected to be met, such that the amount ultimately recognised is based on the
number of awards that meet the related service and non-market performance
conditions at the vesting date. For share-based payment awards with
non-vesting conditions or market conditions, the grant date fair value of the
share-based payment is measured to reflect such conditions and there is no
true-up for differences between expected and actual outcomes.
8.6 Exceptional items
Exceptional items are those that are separately disclosed by virtue of their
nature or amount in order to highlight such items within the consolidated
statement of profit or loss for the financial year. Group management exercises
judgement in assessing each particular item which, by virtue of its scale or
nature, should be highlighted as an exceptional item. Exceptional items are
included within the profit or loss caption to which they relate.
During the financial year, there were no income or costs considered
exceptional items.
8.7 Property, plant and equipment
Property, plant and equipment is carried at historic purchase cost less
accumulated depreciation. Cost includes the original purchase price of the
asset and the costs attributable to bringing the asset to its working
condition for its intended use. Depreciation is provided to write off the cost
of the assets on a straight-line basis to their residual value over their
estimated useful lives at the following annual rates:
·
Buildings
2.5%
· Plant and machinery 14-20%
· Fixtures and
fittings 20%
· Computer Equipment 33%
The assets' residual values, carrying values and useful lives are reviewed on
an annual basis and adjusted if appropriate at each reporting date.
Where an impairment is identified, the recoverable amount of the asset is
identified and an impairment loss, where appropriate, is recognised in the
statement of profit or loss and other comprehensive income.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised within administration expenses in the
statement of profit or loss and other comprehensive income.
Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with the expenditure will flow to the Group.
8.8 Intangible assets
Goodwill arising on the acquisition of subsidiaries is measured at cost less
accumulated impairment losses. Goodwill impairments are not reversed. Goodwill
is not amortised but is subject to impairment testing on an annual basis and
at any time during the year if an indicator of impairment is considered
to exist. The annual goodwill impairment tests are undertaken at a consistent
time in each annual period.
Development expenditure is capitalised only if the expenditure can be measured
reliably, the product or process is technically and commercially feasible,
future economic benefits are probable and the Group intends to and has
sufficient resources to complete development and to use or sell the asset.
Otherwise, it is recognised in profit or loss as incurred. Subsequent to
initial recognition, development expenditure is measured at cost less
accumulated amortisation and any accumulated impairment losses. Capitalised
development expenditure has an indefinite useful life.
Indefinite life intangible assets are those for which there is no foreseeable
limit to their expected useful life. The classification of intangible assets
as indefinite is assessed annually.
Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with the expenditure will flow to the Group.
Computer software is capitalised as intangible assets as acquired and
amortised on a straight-line basis over its estimated useful life of 3 years,
in line with the period over which economic benefit from the software is
expected to be derived.
Licence costs are capitalised as intangible assets as acquired and amortised
on a straight-line basis over their estimated useful life in line with the
period over which economic benefit from the software is expected to be
derived.
The assets' useful lives and residual values are reviewed and adjusted, if
appropriate, at each reporting date.
8.9 Inventory
Inventory comprises property in the course of development, completed units,
land and land development rights. Inventories are valued at the lower of cost
and net realisable value. Direct cost comprises the cost of land, raw
materials and development costs but excludes indirect overheads. Land
purchased for development, including land in the course of development, is
initially recorded at cost. Where such land is purchased on deferred
settlement terms, and the cost differs from the amount that will subsequently
be paid in settling the liability, this difference is charged as a finance
cost in the statement of profit or loss and other comprehensive income over
the period to settlement. A provision is made, where appropriate, to reduce
the value of inventories and work-in-progress to their net realisable value.
Raw material and finished good stock are valued at the lower of cost and net
realisable value. Stocks are determined on a first-in first-out basis. Cost
comprises expenditure incurred in the normal course of business in bringing
stocks to their present location and condition. Full provision is made for
obsolete and slow-moving items. Net realisable value comprises actual or
estimated selling price (net of trade discounts) less all further costs to
completion or to be incurred in marketing and selling.
8.10 Financial instruments
Financial assets and financial liabilities
Under IFRS 9, financial assets and financial liabilities are initially
recognised at fair value and are subsequently measured based on their
classification as described below. Their classification depends on the purpose
for which the financial instruments were acquired or issued, their
characteristics and the Group's designation of such instruments. The standards
require that all financial assets and financial liabilities be classified as
fair value through profit or loss ("FVTPL"), amortised cost, or fair value
through other comprehensive income ("FVOCI").
Classification of financial instruments
The following summarises the classification and measurement the Group has
elected to apply to each of its significant categories of financial
instruments:
IFRS 9
Type Classification
Financial assets
Cash and cash equivalents Amortised cost
Trade receivables Amortised cost
Contract assets Amortised cost
Other receivables Amortised cost
Amounts recoverable on construction contracts Amortised cost
Restricted cash Amortised cost
Deposits for sites Amortised cost
Construction bonds Amortised cost
Financial liabilities
Lease liabilities Amortised cost
Trade payables Amortised cost
Inventory accruals Amortised cost
Other accruals Amortised cost
Loans and borrowings Amortised cost
Derivative contracts Fair value (cash flow
hedge accounting)
Contingent consideration Fair value
through profit or loss
Cash and cash equivalents
Cash and cash equivalents include cash, short-term investments with an
original maturity of three months or less and minimum cash balances required
under the terms of the debt facilities. Interest earned or accrued on these
financial assets is included in finance income.
Trade and other receivables
Such receivables are included in current assets, except for those with
maturities more than 12 months after the reporting date, which are classified
as non-current assets. Loans and other receivables are included in trade and
other receivables on the statement of financial position and are
accounted for at amortised cost. These assets are subsequently measured at
amortised cost. The amortised cost is reduced by impairment losses. The Group
recognises impairment losses on an 'expected credit loss' model (ECL model)
basis in line with the requirements of IFRS 9. Interest income and impairment
are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Amounts recoverable on construction contracts
Amounts recoverable on construction contracts includes recoverable revenue
recognised over time with reference to the stage of completion arising on
contracts under a development agreement which are receivable within 12 months
of the reporting date.
Contract assets
Contract assets are amounts recoverable on long-term contracts where revenue
is recognised over time.
Deposits for sites
Deposits for sites includes a percentage amount paid of the total purchase
price for the acquisition of land intended for development.
Restricted cash
Restricted cash includes cash amounts which are classified as current assets
and held in escrow until the completion of certain criteria.
Construction bonds
Construction bonds includes amounts receivable in relation to the completion
of construction activities on sites. These assets are included in trade and
other receivables on the consolidated balance sheets and are accounted for at
amortised cost.
Derivative contracts
Derivative contracts are contracts for interest rate swaps to manage the
interest rate risk arising from floating rate borrowings. Derivatives are
initially recognised at fair value on the date a derivative contract is
entered into, and they are subsequently remeasured to their fair value at the
end of each reporting period.
Financial liabilities
Financial liabilities such as inventory and other accruals are recorded at
amortised cost and include all liabilities.
Loans and borrowings
Loans and borrowings include debt facilities, interest accrued and borrowing
costs classified as current and non-current liabilities.
Contingent consideration
Contingent consideration includes amounts payable if conditions pertaining to
the business combination are satisfied.
8.11 Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events and it is probable that an outflow of
resources will be required to settle that obligation, and the amount has been
reliably estimated.
Provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the liability, where the effect of discounting
is considered significant. The unwinding of the discount is recognised as a
finance cost.
8.12 Pensions
The Group operates a defined contribution scheme. The assets of the scheme are
held separately from those of the Group in a separate fund. Obligations for
contributions to defined contribution plans are expensed as the related
service is provided.
8.13 Leases
At the inception of a contract, the Group assess whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration.
i. As a lessee
At commencement or on modification of a contract that contains a lease
component, the Group allocates the consideration in the contract to each lease
component and non-lease component on the basis of its relative stand-alone
prices. However, for the leases of property the Group has elected not to
separate non-lease components and account for the lease and non-lease
components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the end of the lease term, unless the
lease transfers ownership of the
underlying asset to the Group by the end of the lease term or the cost of the
right-of-use asset reflects that the Group will exercise a purchase option. In
that case the right-of-use asset will be depreciated over the useful life of
the underlying asset, which is determined on the same basis as those of
property and motor vehicles. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease, or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. Generally, the Group uses
its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate with reference to its
current financing sources and makes certain adjustments to reflect the terms
of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise
fixed payments, including in-substance fixed payments;
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in the future lease payments
arising from a change in an index or rate, if there is a change in the Group's
estimate of the amount expected to be payable under a residual value
guarantee, if the Group changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised
in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment
is made to the carrying amount of the right-of-use asset or is recorded in
profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The Group presents right-of-use assets that do not meet the definition of
investment property in 'property, plant and equipment' and lease liabilities
in 'lease liability' in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for leases of low-value assets and short-term lease. The Group
recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term in the income statement.
8.14 Share capital
(i) Ordinary shares
Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity (retained earnings).
(ii) Founder Shares
Founder Shares were initially issued as ordinary shares and subsequently
re-designated as Founder Shares. Following re-designation, the instruments are
accounted for as equity-settled share-based payments as set out at Note 8.5
above.
8.15 Finance income and costs
The Group's finance income and finance costs include:
· Interest income
· Finance income
· Interest expense
· Lease interest
Interest income and expense is recognised using the effective interest
method.
8.16 Derivative contracts and hedge accounting
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into, and they are subsequently remeasured to their fair
value at the end of each reporting period. The accounting for subsequent
changes in fair value depends on whether the derivative is designated as a
hedging instrument and, if so, the nature of the item being hedged.
The group designates certain derivatives as hedges of a particular risk
associated with the cash flows of recognised assets and liabilities and highly
probable forecast transactions (cash flow hedges).
Changes in the fair value of derivative hedging instruments designated as cash
flow hedges are recognised in other comprehensive income to the extent that
the hedge is effective. The gain or loss relating to the ineffective portion
is recognised immediately in profit or loss.
Amounts accumulated in other comprehensive income are reclassified to profit
or loss in the same periods that the hedged items affect profit or loss. The
reclassified gain or loss relating to the effective portion of interest rate
swaps hedging variable rate borrowings is recognised in profit or loss within
finance income or costs respectively.
If the hedging instrument no longer meets the criteria for hedge accounting,
expires or is sold, terminated or exercised, then hedge accounting is
discontinued prospectively. The cumulative gain or loss previously recognised
in other comprehensive income remains there until the forecast transaction
occurs, unless the hedged transaction is no longer expected to occur, in which
case the cumulative gain or loss that was previously recognised in other
comprehensive income is transferred to profit and loss.
At inception of the hedge relationship, the group documents the economic
relationship between hedging instruments and hedged items, including whether
changes in the cash flows of the hedging instruments are expected to offset
changes in the cash flows of hedged items. The group documents its risk
management objective and strategy for undertaking its hedge transactions.
The full fair value of a hedging derivative is classified as a non-current
asset or liability when the remaining maturity of the hedged item is more than
12 months; it is classified as a current asset or liability when the remaining
maturity of the hedged item is less than 12 months.
9 Segmental information
The Group has considered the requirements of IFRS 8 Operating Segments in the
context of how the business is managed and resources are allocated.
The Group is organised into three key reportable segments, being Suburban,
Urban and Partnerships. Internal reporting to the Chief Operating Decision
Maker ("CODM") is provided on this basis. The CODM has been identified as the
Executive Committee.
The Group currently operates solely in the Republic of Ireland and therefore
no geographically segmented financial information is provided.
Suburban
The Suburban segment is focussed primarily on high quality housing (with some
low rise apartments) with demand coming from private buyers and institutions.
Our core Suburban product is affordable and located in well serviced
communities predominantly in the Greater Dublin Area and Cork.
Urban
Urban's strategic focus is developing apartments to deliver to institutional
investors. The apartments are located primarily in Dublin and Cork, but also
on sites adjacent to significant rail transportation hubs. Urban's strategy is
to deliver the product to institutional investors through a forward sale, or
forward fund transaction providing longer term earnings visibility.
Partnerships
A Partnership will typically involve the Government, local authorities, or
state agencies contributing their land on a reduced cost, or phased basis into
a development agreement with Glenveagh. Approximately 50% of the product is
delivered back to the government or local authority via social and
affordable homes. This provides longer term access to both land and unit
deliveries for the business and provides financial incentive by reducing risk
from a sales perspective.
Segmental financial results
2023 2022
€'000 €'000
Revenue
Suburban 470,820 454,540
Urban 120,122 190,166
Partnerships 16,996 -
Revenue for reportable segments 607,938 644,706
2023 2022
€'000 €'000
Operating profit/(loss)
Suburban 79,872 70,353
Urban 12,367 21,532
Partnerships 513 (1,565)
Operating profit for reportable segments 92,752 90,320
Reconciliation to results for the financial year
Segment results - operating profit 92,752 90,320
Finance expense (15,839) (7,094)
Directors' remuneration (3,488) (3,402)
Corporate function payroll costs (5,871) (6,081)
Depreciation and amortisation (2,449) (2,081)
Professional fees (3,075) (4,992)
IT costs (2,060) (1,673)
Share-based payment expense (2,137) (1,717)
Profit on sale of property, plant and equipment 214 1,501
Other corporate costs (2,937) (1,780)
Profit before tax 55,110 63,001
Excluding profit on the sale of property, plant and equipment, there are no
individual costs included within other corporate costs that is greater than
the amounts listed in the above table.
31 December 2023 31 December 2022
Suburban Urban Partnerships Total Suburban Urban Partnerships Total
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Segment assets 555,329 185,525 49,865 790,719 590,321 153,018 6,452 749,791
Reconciliation to Consolidated Balance Sheet
Deferred tax asset 884 620
Trade and other receivables 1,010 785
Cash and cash equivalents 71,863 71,085
Property, plant and equipment 64,184 51,750
Income tax receivable 3,901 -
Intangible 2,781 1,770
assets
935,342 875,801
Segment liabilities 92,520 15,191 19,395 127,106 69,138 9,876 159 79,173
Reconciliation to Consolidated Balance Sheet
Trade and other payables 7,363 17,561
Loans and Borrowings 115,645 80,640
Derivative contracts 1,623 -
Lease liabilities 5,449 4,744
Income tax payable - 565
257,186 182,683
10 Revenue
2023 2022
€'000 €'000
Suburban
Core 470,820 451,930
Non-core - 2,610
470,820 454,540
Urban
Core 95,561 176,570
Non-core 24,561 13,596
120,122 190,166
Partnerships
Core 16,996 -
16,996 -
Total Revenue 607,938 644,706
The Group has presented revenue as a split between core and non-core by
business segment. This split is consistent with internal reporting to the
Chief Operating Decision Maker ("CODM").
Core suburban product relates to affordable starter homes for first time
buyers. Core urban product relates primarily to apartments suitable for
institutional investors. Non-core suburban and urban product relates to
high-end, private developments and sites. Core and non-core suburban and urban
revenue is recognised at a point in time. Non-core suburban and urban cost of
sales is mostly attributable to land and development expenditure costs for
high end, private developments and sites.
Urban core revenue includes income from the sale of land and development
revenue from construction contracts that are recognised over time by reference
to the stage of completion of the contract with the customer. Development
revenue recognised in the financial year related to the development of the
sites at Barn Oaks Apartments, Castleforbes and Carpenterstown and amounted to
€95.6 million (2022: €82.1 million) with €25.5 million (2022: €32.1
million) outstanding in contract receivables (note 20) at the year end. The
payment terms for these contracts are between 30 and 90 days.
Partnerships revenue includes income from the sale of units recognised at a
point in time and development revenue from construction contracts that are
recognised over time by reference to the stage of completion of the contract
with the customer. Development revenue recognised in the financial year
related to the development of the sites at Ballymastone and Oscar Traynor Road
and amounted to €17.0 million (2022: €Nil) with the full amount (2022:
€Nil) outstanding in contract assets (note 20) at the year end. No units
were sold during the current year.
All revenue is earned in the Republic of Ireland.
11 Finance Expense
2023 2022
€'000 €'000
Interest on secured bank loans 16,084 7,049
Cahflow hedges-reclassified from other comprehensive income (383) -
Finance cost on lease liabilities 138 45
15,839 7,094
12 Statutory and other information
2023 2022
€'000 €'000
Amortisation of intangible assets (Note 18) 534 487
Depreciation of property, plant and equipment (Note 17)* 5,159 3,509
Employment costs (Note 13) 46,264 40,337
Profit on disposal of property, plant and equipment (214) (1,501)
Audit of Group, Company and subsidiary financial statements 280 255
Other assurance services 20 20
Tax advisory services 67 30
Tax compliance services 36 43
Other non-audit services 25 20
428 368
Directors' remuneration
Salaries, fees and other emoluments 3,438 3,252
Pension contributions 50 150
3,488 3,402
*Includes €3.3 million (2022: €2.1 million) capitalised in inventory
during the year ended 31 December 2023
**Included in the auditor's remuneration for the Group is an amount of
€0.025million (2022: €0.020 million) that relates to the Company's
financial statements.
13 Employment costs
The average number of persons employed by the Group (including executive
directors) during the financial year was 513 (Executive Committee: 6;
Non-executive Directors: 5; Construction:301; and Other: 201). (2022:423
(Executive Committee: 6; Non-executive Directors: 5; Construction: 227; and
Other: 185))
The aggregate payroll costs of these employees for the financial year were:
2023 2022
Total Total
€'000 €'000
Wages and salaries 38,550 33,734
Social welfare costs 4,126 3,540
Pension costs - defined contribution 1,451 1,346
Share-based payment expense (Note 14) 2,137 1,717
46,264 40,337
€18.9 million (2022: €15.4 million) of employment costs were capitalised
in inventory during the financial year.
14 Share-based payment arrangements
The Group operates two equity-settled share-based payment arrangements being
the Long-Term Incentive Plan ("LTIP") and the Savings Related Share Option
Scheme (known as the Save As You Earn or "SAYE" scheme). As described below,
options were granted under the terms of the LTIP and SAYE schemes during the
financial year.
(a) LTIP
In February 2023, the Remuneration Committee approved the grant of 5,515,311
options to certain members of the management team in accordance with the terms
of the Company's LTIP. These options will vest on completion of a three-year
service period from grant date subject to the achievement of certain
performance condition hurdles based on the Company's Return on Equity (ROE)
and Earnings per Share (EPS) across the vesting period. 50% of the awards will
vest based on the Group's ROE for the financial year ended 31 December 2025.
The EPS based options will vest based on the Group's EPS* for the financial
year ended 31 December 2025. 25% of ROE based options vest should the Group
achieve ROE of 11.0% with the remaining options vesting on a pro rata basis up
to 100% if ROE of 16.2% is achieved. 25% of EPS based options will vest should
the Group achieve Group EPS* of 14.0 cents per share with the remaining
options vesting on a pro rata basis up to 100% if Group EPS* of 22.0 cents per
share is achieved. In line with the Group's remuneration policy, LTIP awards
granted to Executive Directors from 2020 onwards include a holding period of
at least two years post exercise.
Number of Number of
Options Options
2023 2022
LTIP options in issue at 1 January 13,022,830 10,583,497
Granted during the financial year 5,515,311 4,568,698
Forfeited during the financial year (284,403) (264,729)
Lapsed during the financial year (1,067,076) -
Exercised during the financial year (3,226,235) (1,864,636)
LTIP options in issue at 31 December 13,960,427 13,022,830
Exercisable at 31 December 388,859 461,395
LTIP options were exercised during the financial year with the average share
price being €1.00 (2022: €1.00). The options outstanding at 31 December
2023 had an exercise price €0.001 (2022: €0.001) and a weighted-average
contractual life of 7 years (2022: 7 years).
The EPS and ROE related performance conditions are non-market conditions and
do not impact the fair value of the EPS or ROE based awards at grant date
which is equivalent to the share price at grant date. The fair value of LTIP
options granted in the prior periods which were based on market conditions
were measured using a Monte Carlo simulation. There is no Total Shareholder
Return (TSR) linked performance condition for options granted in the period
and therefore no fair value exercise was performed related to this performance
condition. Service and non-market conditions attached to the arrangements were
not taken into account when measuring fair value. The inputs used in measuring
fair value at grant date were as follows:
2023 2022
Fair value at grant date €1.12 €1.16
Share price at grant date €1.12 €1.16
The exercise price of all options granted under the LTIP to date is €0.001
and all options have a 7- year contractual life.
The Group recognised an expense of €2.1 million (2022: €1.7million) in the
consolidated statement of profit or loss in respect of options granted under
the LTIP.
(*Group EPS is defined as Basic Earnings Per Share as
calculated in accordance with IAS 33 Earnings Per Share subject to adjustment
by the Remuneration Committee at its discretion, for items deemed not
reflective of the Group's underlying performance for the financial year.)
(b) SAYE Scheme
Under the terms of the scheme, employees may save up to €500 per month from
their net salaries for a fixed term of three or five years and at the end of
the savings period they have the option to buy shares in the Company at a
fixed exercise price. No options were granted in the current year or prior
period and therefore no fair value exercise was performed.
Details of options outstanding and grant date fair value assumptions
2023 2022
Number of Number of Number of Number of
Options Options Options Options
3 Year 5 Year 3 Year 5 Year
SAYE options in issue at 1 January 590,220 165,000 799,740 165,000
Granted during the financial year - - - -
Forfeited during the financial year (19,167) - (32,520) -
Lapsed during the financial year (720) - - -
Exercised during the financial year (504,333) - (177,000) -
SAYE options in issue at 31 December 66,000 165,000 590,220 165,000
The weighted average exercise price of all options granted under the SAYE to
date is €0.99 (2022: €0.97).
The expected share price and TSR volatility was based on the historical
volatility of a comparator group of peer companies over the expected life of
the equity instruments granted together with consideration of the Group's
actual trading volatility to date.
The Group recognised an expense of €0.03 million (2022: €0.06 million) in
the consolidated statement of profit or loss in respect of options granted
under the SAYE scheme.
15 Earnings per share
a) Basic earnings per share
The calculation of basic earnings per share has been based on the profit
attributable to ordinary shareholders and the weighted average numbers of
shares outstanding for the financial year. There were 578,049,118 ordinary
shares in issue at 31 December 2023 (2022: 638,131,722).
2023 2022
Profit for the financial year attributable to ordinary shareholders (€'000)
47,108 52,567
Weighted average number of shares for the financial year 588,951,593 693,872,004
Basic earnings per share (cent) 8.0 7.6
2023 2022*
No. of shares No. of shares
Reconciliation of weighted average number of shares
Number of ordinary shares at beginning of financial year 638,131,722 771,770,694
Effect of share buyback (52,032,676) (78,865,173)
Effect of SAYE maturity 255,980 29,487
Effect of LTIP maturity 2,596,567 936,996
588,951,593 693,872,004
b) Dilutive earnings per share
Diluted earnings per share
2023 2022
Profit for the financial year attributable to ordinary shareholders (€'000)
47,108 52,567
Weighted average number of shares for the financial year 590,114,076 695,970,940
Diluted earnings per share (cent) 8.0 7.6
2023 2022
No. of shares No. of shares
Reconciliation of weighted average number of shares (diluted)
Weighted average number of ordinary shares (basic) 588,951,593 693,872,004
Effect of potentially dilutive shares 1,162,483 2,098,936
590,114,076 695,970,940
*The number of potentially issuable shares in the Group held under option
arrangements at 31 December 2023 is 13,960,427 (2022: 13,022,830).
**Under IAS 33, LTIP arrangements have an assumed test period ending on 31
December 2023. Based on the assumed test period only the TSR performance
condition was met related to LTIP options and therefore only ordinary shares
related to this condition would be issued through the conversion of LTIP
options. SAYE options matured in the year with ordinary shares related to this
being issued through the conversation of the SAYE options.
At 31 December 2023 Nil options (2022: Nil options) were excluded from the
diluted weighted average number of ordinary shares because their effect would
have been anti-dilutive.
16 Income tax
2023 2022
€'000 €'000
Current tax charge for the financial year 8,148 10,650
Deferred tax credit for the financial year (146) (216)
Total income tax charge 8,002 10,434
The tax assessed for the financial year differs from the standard rate of tax
in Ireland for the financial year. The differences are explained below.
2023 2022
€'000 €'000
Profit before tax for the financial year 55,110 63,001
Tax charge at standard Irish income tax rate of 12.5% 6,889 7,875
Tax effect of:
Income taxed at the higher rate of corporation tax 949 2,424
Non-deductible expenses - other 30 97
Adjustment in respect of prior year under accrual 134 38
Total income tax charge 8,002 10,434
Movement in deferred tax balances
Balance at Balance at
1 January Recognised in 31 December
2023 profit or loss 2023
€'000 €'000 €'000
Expenses deductible in future periods 619 265 884
619 265 884
The expenses deductible in future periods arise in Ireland and have no expiry
date. Based on profitability achieved in the period, the continued forecast
profitability in the Group's strategic plan and the sensitivities that have
been applied therein, management has considered it probable that future
profits will be available against which the above tax expenses can be
recovered and, therefore, the related deferred tax asset can be realised.
Global minimum tax
To address concerns about uneven profit distribution and tax contributions of
large multinational corporations, various agreements have been reached at a
global level, including an agreement by over 135 jurisdictions to introduce a
global minimum tax rate of 15%. In December 2022, the Organisation for
Economic Co-operation and Development ("OCED") released a draft legislative
framework that is expected to be used by individual jurisdictions that signed
the agreement to amend their local tax laws. The Republic of Ireland has
enacted the new legislation, however, based on the current criteria there is
no current tax impact in the financial year as the Group is not in scope of
the legislation (2022: €Nil).
17 Property, plant and equipment Land & Fixtures Plant & Computer
buildings & fittings machinery equipment Total
€'000 €'000 €'000 €'000 €'000
Cost
At 1 January 2023 36,322 2,096 22,495 950 61,863
Additions 12,584 - 5,015 550 18,149
Disposals (2,351) - (1,850) - (4,201)
At 31 December 2023 46,555 2,096 25,660 1,500 75,811
Accumulated depreciation
At 1 January 2023 (2,964) (654) (5,868) (627) (10,113)
Charge for the financial year (1,592) (242) (3,127) (198) (5,159)
Disposals 2,351 - 1,294 - 3,645
At 31 December 2023 (2,205) (896) (7,701) (825) (11,627)
Net book value
At 31 December 2023 44,350 1,200 17,959 675 64,184
Land & Fixtures Plant & Computer
buildings & fittings machinery equipment Total
€'000 €'000 €'000 €'000 €'000
Cost
At 1 January 2022 18,239 945 14,699 717 34,600
Acquisitions through business combinations
3,313 56 714 - 4,083
Additions 15,315 1,095 7,874 308 24,592
Disposals (545) - (792) (75) (1,412)
At 31 December 2022 36,322 2,096 22,495 950 61,863
Accumulated depreciation
At 1 January 2022 (2,216) (438) (4,121) (595) (7,370)
Charge for the financial year (748) (216) (2,447) (98) (3,509)
Disposals - - 700 66 766
At 31 December 2022 (2,964) (654) (5,868) (627) (10,113)
Net book value
At 31 December 2022 33,358 1,442 16,627 323 51,750
The depreciation charge for the year includes €3.3 million (2022: €2.1
million) which was capitalised in inventory at 31 December 2023.
Property plant and equipment includes right of use assets of €4.9 million
(2022: €4.5 million) related to leased properties and motor vehicles.
In the prior financial year, the Group entered into new lease agreements for
the use of land and buildings as its head office facility in Maynooth, Co.
Kildare. The land and buildings lease commenced in September 2022 for a
duration of seven years. On lease commencement, the Group recognised €4.7
million of right-of-use assets and lease liabilities.
18 Intangible assets
Capitalised
Development Computer
Goodwill Expenditure Licence Software Total
€'000 €'000 €'000 €'000 €'000
Cost
At 1 January 2023 5,697 - 300 3,133 9,130
Additions - 719 500 326 1,545
At 31 December 2023 5,697 719 800 3,459 10,675
Accumulated amortisation
At 1 January 2023 - - - (1,663) (1,663)
Charge for the year - - (40) (494) (534)
At 31 December 2023 - - (40) (2,157) (2,197)
Net book value
At 31 December 2023 5,697 719 760 1,302 8,478
Computer
Goodwill Licence Software Total
€'000 €'000 €'000 €'000
Cost
At 1 January 2022 - - 2,390 2,390
Additions 5,697 300 743 6,740
At 31 December 2022 5,697 300 3,133 9,130
Accumulated amortisation
At 1 January 2022 - - (1,176) (1,176)
Charge for the year - - (487) (487)
At 31 December 2022 - - (1,663) (1,663)
Net book value
At 31 December 2022 5,697 300 1,470 7,467
(i) Impairment of goodwill
Goodwill acquired in business combinations are allocated to the Group's cash
generating units ("CGUs") that are expected to benefit from the business
acquisition, rather than where the assets are owned. The CGUs represent the
lowest level within the Group at which the associated goodwill is monitored
for internal management purposes and are not larger than the operating
segments determined in accordance with IFRS 8 'Operating Segments'. CGUs are
kept under review to ensure that they reflect changing interdependencies of
cash inflows within the Group and how management monitors operations. The
goodwill carrying amount is allocated to the suburban segment with the
recoverable amount of this CGU being based on value in use. The value in use
was determined by the cash flows to be generated from the continuing use of
the CGU over a three year period.
a) Key assumptions
The Group has established internal controls designed to effectively assess and
centrally review future cash flows generated from CGUs. The key assumptions on
which management has based its cash flows are revenue and construction costs.
Revenue assumptions relate to unit sales prices for sites delivering over the
period based on prices achieved to date, current market prices, historic
prices, and sales agent reports. Construction cost assumptions are based on
contracted/procured package pricing or where packages are not procured,
historic pricing achieved, or pricing achieved on similar packages in
reference to other sites.
The impact of sustainability and other macroeconomic factors have been
considered in the Group's assessment of these cash flows, particularly with
regard to the potential implications for future selling prices, development
expenditure and construction programming. Management has considered scenarios
on each of its active developments and the consequential impact on future
profitability based on current facts and circumstances together with any
implications for future projects in undertaking its impairment analysis.
As part of the assessment, the Group has re-evaluated its most likely exit
strategies on all developments in the context of the current market
environment and reflected these in revenue assumptions within the forecast
models. The results of this exercise determined that the no impairment was
required at the reporting date.
The cash flow projections used to determine the value in use of the CGU are
based on three years of cash flows from the Group's Strategic Plan.
A discount rate based on the Group's incremental borrowing rate and a growth
rate into perpetuity was applied to these cash flows.
A sensitivity analysis has been conducted in respect of the value in use of
the CGU. There were no CGU impairments as a result of the applied sensitivity
analysis in the financial year.
19 Inventory
2023 2022
€'000 €'000
Land 403,756 455,280
Development expenditure work in progress 274,592 227,240
Development rights 29,252 3,231
707,600 685,751
€488.4 million (2022: €530.4 million) of inventory was recognised in 'cost
of sales' during the year ended 31 December 2023. Sustainable materials such
as heat pumps, PV panels, timber frames, light gauge steel frames and building
expenditure necessary to deliver A1/A2 Building Energy Rating ("BER") homes
are included within development expenditure work in progress.
(i) Impairment of inventories
During the financial year the Group carried out a net realisable value
assessment of its inventories at the reporting date. This assessment
determined that the net impairment charge or reversal required for the period
was €Nil (2022: €Nil).
(ii) Employment cost capitalised
€18.9 million of employment costs incurred in the financial year have been
capitalised in inventory (2022: €15.4 million).
(iii) Development right
Oscar Traynor Road, Coolock, Dublin 5
In December 2022, the Group entered into a Development Agreement ("DA") with
Dublin City Council ("DCC"). Under the terms of the DA and following planning
permission being granted in February 2023, the Group acquired certain
development rights in respect of the site at Oscar Traynor Road, Coolock,
Dublin 5 for consideration of approximately €14.0m exclusive of stamp duty
and acquisition costs. Under the granted planning permission for the site, the
development rights will entitle the Group to develop approximately 850
residential units alongside commercial elements in accordance with the terms
of the DA.
Ballymastone, Donabate, Dublin
In December 2021, the Group entered into a Development Agreement ("DA") with
Fingal County Council ("FCC"). Under the terms of the DA and following
planning permission being granted in March 2023, the Group acquired certain
development rights in respect of the site at Ballymastone, Donabate, Dublin
for consideration of approximately €11.0m exclusive of stamp duty and
acquisition costs. The development rights will (subject to planning
permission) entitle the Group to develop approximately 1,200 residential units
in accordance with the terms of the DA.
Gateway Retail Park, Co. Galway
In March 2018, the Group entered into an Acquisition and Profit Share
Agreement ("APSA") with Targeted Investment Opportunities ICAV ("TIO"), a
wholly owned subsidiary of OCM Luxembourg EPF III S.a.r.l. Under the terms of
the APSA, the Group acquired certain development rights in respect of the site
at Gateway Retail Park, Knocknacarra, Co. Galway for consideration of
approximately €3.2 million (including stamp duty and acquisition costs). The
development rights will (subject to planning) entitle the Group to develop at
least 250 residential units under a joint business plan to be undertaken with
Sigma Retail Partners (on behalf of TIO) which will also entitle TIO to
control and benefit from any retail development at the site. The Directors
have determined that joint control of the site exists and the arrangement has
been accounted for as a joint operation in accordance with IFRS 11 Joint
Arrangements. For further information regarding the APSA, see Note 29 of these
financial statements.
20 Trade and other receivables
2023 2022
€'000 €'000
Trade receivables 9,765 9,224
Contract receivables 25,540 32,113
Contract assets 16,996 -
Other receivables 3,475 2,283
Prepayments 1,106 862
Construction bonds 15,924 12,140
Deposits for sites 5,168 2,049
77,974 58,671
The carrying value of all financial assets and trade and other receivables is
approximate to their fair value and are short term in nature with the
exception of construction bonds.
21 Trade and other payables
2023 2022
€'000 €'000
Current
Trade payables 7,875 7,132
Payroll and other taxes 5,741 4,897
Inventory accruals 64,921 33,600
Contingent consideration 1,750 1,500
Other accruals 26,651 16,372
VAT payable 25,781 29,733
132,719 93,234
The carrying value of all financial liabilities and trade and other payables
is approximate to their fair value and are repayable under the normal credit
cycle.
2023 2022
Non-current €'000 €'000
Contingent consideration 1,750 3,500
Non-current 1,750 3,500
Current 132,719 93,234
134,469 96,734
22 Loans and Borrowings
(a) Loans and borrowings
In February 2023, the Group entered into a new five-year sustainability linked
finance facility of €350.0 million (Term loan: €116.7m, Revolving Credit
Facility: €233.3m), with a syndicate of domestic and international financial
institutions, at an interest rate of one-month EURIBOR (subject to a floor of
0 per cent) plus a margin of 2.7-2.8%. The debt facility interest rates are
linked to the Group meeting certain sustainability performance targets aligned
to its sustainability strategy. The sustainability performance targets are in
respect of decarbonisation and the Group's Equity, Diversity and Inclusion
strategy. The term loan is repayable in full at the end of the five years. The
prior period debt facilities were fully repaid by the Group during the year
and at 31 December 2023, €116.7 million has been drawn on the term loan
element of the new debt facility (31 December 2022: €82.5 million). Pursuant
to the debt facility agreement, there is fixed and floating charges and
assignments in place over all the assets of the Group as continuing security
for the discharge of any amounts drawn down. The assets carrying value at 31
December 2023 is €935.3 million (31 December 2022: €875.8 million).
31 December 31 December
2023 2022
€'000 €'000
Debt facilities 116,667 82,500
Unamortised borrowing costs (3,697) (1,877)
Interest accrued 2,675 17
Total loans and borrowings 115,645 80,640
Loans and borrowings are payable as follows: 31 December 31 December
2023 2022
€'000 €'000
Less than one year 3,562 9,419
Between one and two years 888 9,401
More than two years 111,195 61,820
Total loans and borrowings 115,645 80,640
The Group's debt facilities were entered into with AIB, Bank of Ireland,
Barclays and Home Building Ireland Finance and are subject to primary
financial covenants calculated on a bi-annual basis:
- A maximum total debt to gross asset value ratio of 40%;
- Loans to eligible assets value does not equal or exceed 65%;
- The Group is required to maintain a minimum cash balance of
€25.0 million throughout the term of the debt facility;
- EBITDA must exceed net interest costs by a minimum of 3 times
and is calculated on a trailing twelve-month basis.
- Total debt must not exceed adjusted EBITDA by a minimum of 4
times, this is calculated on a trailing twelve-month basis, and;
- Total debt must not exceed projected adjusted EBITDA by a
minimum of 4 times, this is calculated on a forward twelve-month basis.
All covenants have been complied with in 2023 and 2022.
Debt facilities are secured by a debenture incorporating fixed and floating
charges and assignments over all the assets of the Group. The carrying value
of the total assets of the Group as at 31 December 2023 is €935.3 million
(31 December 2022: €875.8 million).
(b) Reconciliation of movements of liabilities to cash flows arising from
financing activities
2023 Cash flows Non-cash changes
Opening 2023 Credit facility drawdown Credit facility repayment Transaction costs related to loans and borrowings Share Proceeds from share option exercise Payment of lease liability Interest received / (paid) Amortisation of transaction costs Interest New hedging instrument New leases Closing 2023
buyback payments
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Liabilities:
Loans and
borrowings 82,500 381,667 (347,500) - - - - - - - - - 116,667
Unamortised transaction costs
(1,877) - - (4,318) - - - - 2,498 - - - (3,697)
Derivative contracts
- - - - - - - - - - 1,623 - 1,623
Lease
liability 4,744 - - - - - (761) - - 138 - 1,328 5,449
Interest accrual
17 - - - - - - (12,009) - 14,667 - - 2,675
Equity:
Share buyback
(253,726) - - - (62,891) - - - - - - - (316,617)
Share option exercise
137 - - - - 307 - - - - - - 444
(168,205) 381,667 (347,500) (4,318) (62,891) 307 (761) (12,009) 2,498 14,805 1,623 1,328 (193,456)
2022 Cash flows Non-cash changes
Opening 2022 Credit facility drawdown Credit facility repayment Transaction costs related to loans and borrowings Share Proceeds from share option exercise Payment of lease liability Interest Paid Amortisation of transaction costs Interest on debt facilities Interest on lease liability New leases Closing 2022
buyback payments
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Liabilities:
Loans and
borrowings 122,500 110,000 (150,000) - - - - - - - - - 82,500
Unamortised transaction costs
(2,476) - - - - - - - 599 - - - (1,877)
Lease
liability 547 - - - - - (470) - - - 45 4,622 4,744
Interest accrual
223 - - - - - - (6,490) - 6,284 - - 17
Equity:
Share buyback
(107,466) - - - (146,260) - - - - - - - (253,726)
Share option exercise
29 - - - - 108 - - - - - - 137
13,357 110,000 (150,000) - (146,260) 108 (470) (6,490) 599 6,284 45 4,622 (168,205)
(c) Net debt reconciliation
2023 2022
€'000 €'000
Restricted Cash 458 458
Cash and cash equivalents 71,863 71,085
Loans and borrowings (115,645) (80,640)
Lease liabilities (5,449) (4,744)
Total net debt (48,773) (13,841)
(d) Lease Liabilities
Lease liabilities are payable as follows:
31 December 2023
Present value Future value
of minimum of minimum
lease lease
payments Interest payments
€'000 €'000 €'000
Less than one year 1,219 96 1,315
Between one and two years 1,205 98 1,303
More than two years 3,025 362 3,387
5,449 556 6,005
23 Restricted cash
2023 2022
€'000 €'000
Current 458 458
458 458
The restricted cash balance relates to €0.5 million held in escrow for the
completion of certain infrastructural works relating to the Group's
residential development at Balbriggan, Co. Dublin.
24 Derivatives and cashflow hedge reserve
a) Interest rate swap
On 28 February 2023, the Group entered into an interest rate swap to hedge the
interest rate risk associated with €100.0 million of the term loan element
of our new debt facilities. The interest rate swap is in place for the 5-year
period of the facility agreement. The nominal amount hedged for years one and
two is €100.0 million with this stepping down to €50.0 million for the
remaining three years of the facility agreement. The interest rate swap has a
fixed interest rate of 3.035%.
Derivative Financial Instruments 2023 2022
€'000 €'000
Interest rate swaps - cash flow hedges (1,623) -
Included in other comprehensive income 2023 2022
€'000 €'000
Fair value movement on cashflow hedges (1,240) -
Cashflow hedges reclassified to profit or loss (383) -
(1,623) -
b) Cashflow hedge reserve
The cashflow hedge reserve reflects the effective portion of the cumulative
net change in the fair value of derivatives that are designated and qualify as
cash flow hedges. Amounts accumulated in the hedging reserve are recycled to
the income statement in the periods when the hedged item affects income or
expense, or are included in the initial cost of a hedged non-financial item,
depending on the hedged item.
25 Subsidiaries
The principal subsidiary companies and the percentage shareholdings held by
Glenveagh Properties PLC, either directly or indirectly, pursuant to Section
314 of the Companies Act 2014 at 31 December 2023 are as follows:
Company Principal activity % Reg. office
Glenveagh Properties (Holdings) Limited Holding company 100% 1
Glenveagh Treasury DAC Financing activities 100% 1
Glenveagh Contracting Limited Property development 100% 1
Glenveagh Homes Limited Property development 100% 1
Greystones Devco Limited Property development 100% 1
Marina Quarter Limited Property development 100% 1
GLV Bay Lane Limited Property development 100% 1
Glenveagh Living Limited Property development 100% 1
GL Partnership Opportunities DAC Property development 100% 1
Castleforbes Development Company DAC Property development 100% 1
Nua Manufacturing MMC Limited Manufacturing operations 100% 1
GMP Developments Limited Holding company 100% 1
1 Block C, Maynooth Business Campus, Maynooth, Co. Kildare
Pursuant to section 316 of the Companies Act 2014, a full list of subsidiaries
will be annexed to the Company's Annual Return to be filed in the Companies
Registration Office in Ireland.
26 Capital and reserves
(a) Authorised share capital
2023 2022
Number of Number of
shares €'000 shares €'000
Ordinary Shares of €0.001 each 1,000,000,000 1,000 1,000,000,000 1,000
Deferred Shares of €0.001 each 200,000,000 200 200,000,000 200
1,200,000,000 1,200 1,200,000,000 1,200
(b) Issued and fully paid share capital and share premium
At 31 December 2023 Share Share
Number of capital premium
shares €'000 €'000
Ordinary Shares of €0.001 each 578,049,119 578 179,719
Founder Shares of €0.001 each - - -
Deferred Shares of €0.001 each 81,453,077 81 -
659,502,196 659 179,719
At 31 December 2022 Share Share
Number of Capital premium
shares €'000 €'000
Ordinary Shares of €0.001 each 638,131,722 638 179,416
Founder Shares of €0.001 each - - -
Deferred Shares of €0.001 each 81,453,077 81 -
719,584,799 719 179,416
(c) Reconciliation of shares in issue
In respect of current year Ordinary Founder Deferred Undenominated Share Share
shares shares shares capital capital premium
'000 '000 '000 €000 €'000 €'000
In issue at 1 January 2023 638,132 - 81,453 335 719 179,416
Purchase of own shares (63,813) - - 64 (64) -
Conversion of founder shares to deferred shares
- - - - - -
Cancellation of deferred shares - - - - - -
Exercise of options 3,730 - - - 4 303
578,049 - 81,453 399 659 179,719
In respect of prior year Ordinary Founder Deferred Undenominated Share Share
shares shares shares capital capital premium
'000 '000 '000 €000 €'000 €'000
In issue at 1 January 2022 771,771 181,007 - 100 952 179,310
Purchase of own shares (135,680) - - 135 (135) -
Conversion of founder shares to deferred shares
- (181,007) 181,007 - - -
Cancellation of deferred shares - - (99,554) 100 (100) -
Exercise of options 2,041 - - - 2 106
638,132 - 81,453 335 719 179,416
(d) Rights of shares in issue
Ordinary Shares
The holders of Ordinary Shares are entitled to one vote per Ordinary Share at
general meetings of the Company and are entitled to receive dividends as
declared by the Company.
(e) Nature and purpose of reserves
Share based payment reserve
The share-based payment reserve comprises amounts equivalent to the cumulative
cost of awards by the Group under equity settled share-based payment
arrangements being the Group's Long Term Incentive Plan and the SAYE scheme.
Details of the share awards, in addition to awards which lapsed in the year,
are disclosed in Note 14.
(f) Share buyback programme
On 16 November 2021, the Group announced a second share buyback programme,
which completed on 28 April 2022. The total number of shares purchased was
92,950,510 at a total cost of €111.0 million. The total number of shares
purchased in the period 1 January to 28 April 2022 was 64,929,549 at a total
cost of €77.9m. All repurchased shares were cancelled in accordance with the
share buyback programme in the year ended 31 December 2022.
On 1 June 2022, a third share buyback programme commenced up to a further
€75.0 million, which completed on 1 November 2022. As at 31 December 2022
the total number of shares purchased under the third buyback programme was
70,750,810 at a total cost of €67.5 million. All repurchased shares were
cancelled in the year ended 31 December 2022.
On 6 January 2023, a fourth share buyback programme commenced to repurchase up
to 10% of the Group's issued share capital such that the maximum number of
shares which can be repurchased under this buyback is 63,813,172. On 2 August
2023, the Group completed the fourth share buyback programme repurchasing
63,813,172 shares for a cost of €62.9 million. All repurchased shares were
cancelled.
27 Financial instruments and financial risk management
(a) Accounting classification and fair value
The Group classifies and discloses the fair value for each class of financial
instrument based on the fair value hierarchy in accordance with IFRS 13. The
fair value hierarchy distinguishes between market value data obtained from
independent sources and the Group's own assumptions about market value. The
hierarchy levels are defined below:
- Level 1 - Inputs based on quoted prices in active markets
for identical assets or liabilities;
- Level 2 - Inputs based on factors other than quoted prices
included in Level 1 and may include quoted prices for similar assets and
liabilities in active markets, as well as inputs that are observable for the
asset or liability (other than quoted prices), such as interest rates and
yield curves that are observable at commonly quoted intervals; and
- Level 3 - Inputs which are unobservable for the asset or
liability and are typically based on the Group's own assumptions as there is
little, if any, related market activity. The Group's assessment of the
significance of a particular input to the fair value measurement in its
entirety requires judgement and considers factors specific to the asset or
liability.
The Group's assessment of the significance of a particular input to the fair
value measurement in its entirety requires judgement and considers factors
specific to the asset or liability.
The following table presents the Group's estimates of fair value on a
recurring basis based on information available at 31 December 2023, aggregated
by the level in the fair value hierarchy within which those measurements fall.
31 December 2023* Level 1 Level 2 Level 3
Quoted prices in
active markets for Significant
identical assets & Significant other unobservable
liabilities observable inputs inputs Total
€'000 €'000 €'000 €'000
Recurring Measurement
Liabilities
Contingent consideration - - 3,500 3,500
Derivative contracts - 1,623 - 1,623
Total - 1,623 3,500 5,123
*The period ended 31 December 2023 is the first period the
Group has transacted in derivative contracts, see note 6.
The consolidated financial assets and financial liabilities are set out below.
While all financial assets and liabilities are measured at amortised cost, the
carrying amounts of the consolidated financial assets and financial
liabilities approximate to fair value. Trade and other receivables and trade
and other payables approximate to their fair value as the transactions which
give rise to these balances arise in the normal course of trade and, where
relevant, with industry standard payment terms and have a short period to
maturity (less than one year).
Financial instruments: financial assets
2023 2022
The consolidated financial assets can be summarised as follows: €'000 €'000
Trade receivables 9,765 9,224
Amounts recoverable on construction contracts 25,540 32,113
Contract assets 16,996 -
Other receivables 3,475 2,282
Construction bonds 15,924 12,140
Deposits for sites 5,168 2,049
Cash and cash equivalents 71,863 71,085
Restricted cash (current) 458 458
Total financial assets 149,189 129,351
Cash and cash equivalents are short-term deposits held at variable rates.
Financial instruments: financial liabilities
2023 2022
€'000 €'000
Trade payables 7,875 7,132
Lease liabilities 5,449 4,744
Inventory accruals 64,921 33,600
Other accruals 26,651 16,372
Contingent consideration 3,500 5,000
Loans & borrowings 119,617 80,640
Total financial liabilities 228,013 147,488
Trade payables and other current liabilities are non-interest bearing.
(b) Financial risk management objectives and policies
As all of the operations carried out by the Group are in Euro there is no
direct currency risk, and therefore the Group's main financial risks are
primarily:
- liquidity risk - the risk that suitable funding for the Group's
activities may not be available;
- credit risk - the risk that a counter-party will default on their
contractual obligations resulting in a financial loss to the Group; and
- market risk - the risk that changes in market prices, such as
interest rates and equity prices will affect the Group's income or the value
of its holdings of financial instruments.
- interest rate risk - the risk that changes in interest rates will
affect the Group's income or the value of its holdings of financial
instruments.
This note presents information and quantitative disclosures about the Group's
exposure to each of the above risks, its objectives, policies and processes
for measuring and managing risk, and the Group's management of capital.
Liquidity risk
Liquidity risk is the risk that the Group may not be able to generate
sufficient cash reserves to settle its obligations in full as they fall due or
can only do so on terms that are materially disadvantageous. The Group's
approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring, unacceptable losses or
risking damage to the Group's reputation. The Group's liquidity forecasts
consider all planned development expenditure.
In February 2023, the Group entered into a new five-year sustainability linked
finance facility of €350.0 million, with a syndicate of domestic and
international financial institutions, at an interest rate of one-month EURIBOR
(subject to a floor of 0 per cent) plus a margin of 2.7%-2.8%. The debt
facility interest rates are linked to the Group meeting certain sustainability
performance targets aligned to its sustainability strategy. The sustainability
performance targets are in respect of decarbonisation and the Group's Equity,
Diversity and Inclusion strategy. The prior period debt facilities were fully
repaid by the Group during the year ended 31 December 2023. €116.7 million
has been drawn on the new debt facility (2022: €82.5 million). The Group has
an exposure to cash flow interest rate risk where there are changes in the
EURIBOR rates.
Management monitors the adequacy of the Group's liquidity reserves against
rolling cash flow forecasts. In addition, the Group's liquidity risk
management policy involves monitoring short-term and long-term cash flow
forecasts. Set out below are details of the Group's contractual cash flows
arising from its financial liabilities and funds available to meet these
liabilities.
31 December 2023
Carrying Contractual Less than 1 year More than
amount cash flows 1 year to 2 years 2 years
€'000 €'000 €'000 €'000 €'000
Lease liabilities 5,499 6,005 1,314 1,303 3,388
Trade payables 7,875 7,875 7,875 - -
Inventory accruals 64,921 64,921 64,921 - -
Other accruals 26,651 26,651 26,651 - -
Contingent consideration 3,500 3,500 1,750 1,750 -
Derivative contracts 1,623 1,623 (362) 569 1,416
Loans and borrowings 115,645 134,725 13,018 10,343 111,364
225,714 245,300 115,167 13,965 116,168
31 December 2022
Carrying Contractual Less than 1 year More than
amount cash flows 1 year to 2 years 2 years
€'000 €'000 €'000 €'000 €'000
Lease liabilities 4,744 5,057 84 16 4,957
Trade payables 7,132 7,132 7,132 - -
Inventory accruals 33,600 33,600 33,600 - -
Other accruals 16,372 16,372 16,372 - -
Contingent consideration 5,000 5,000 1,500 1,750 1,750
Loans and borrowings 80,640 89,488 11,563 11,546 66,379
147,488 156,649 70,251 13,312 73,086
Funds available
2023 2022
€'000 €'000
Debt facilities (undrawn committed) 233,333 150,000
Cash and cash equivalents* 71,863 71,085
Restricted cash 458 458
305,654 221,543
*Includes €25 million (2022: €25 million) of restricted cash
The Group's RCF is subject to primary financial covenants calculated on a
bi-annual basis:
- A maximum total debt to gross asset value ratio of 40%;
- Loans to eligible assets value does not equal or exceed 65%;
- The Group is required to maintain a minimum cash balance of
€25.0 million throughout the term of the debt facility;
- EBITDA must exceed net interest costs by a minimum of 3 times
and is calculated on a trailing twelve-month basis.
- Total debt must not exceed adjusted EBITDA by a minimum of 4
times, this is calculated on a trailing twelve-month basis, and;
- Total debt must not exceed projected adjusted EBITDA by a
minimum of 4 times, this is calculated on a forward twelve-month basis.
Credit risk
The Group's exposure to credit risk encompasses the financial assets being:
trade and receivables, contract assets and cash and cash equivalents. Credit
risk is managed by regularly monitoring the Group's credit exposure to each
counter-party to ensure credit quality of customers and financial institutions
in line with internal limits approved by the Board.
There has been no impairment of trade receivables in the year presented. The
impairment loss allowance allocated against trade receivables, contract
assets, cash and cash equivalents and restricted cash is not material. The
credit risk on cash and cash equivalents is limited because counter-parties
are leading international banks with minimum long-term BBB+ credit-ratings
assigned by international credit agencies. The maximum amount of credit
exposure is the financial assets in this note.
Market risk
The Group's exposure to market risk relates to changes to interest rates and
stems predominately from its debt obligations. Interest rate risk reflects the
Group's exposure to fluctuations in interest rates in the market. This risk
arises from bank loans that are drawn under the Group's debt facilities with
variable interest rates based upon EURIBOR. At the year ended 31 December 2023
it is estimated that an increase of 100 basis points to EURIBOR would have
decreased the Group's profit before tax by €2.9 million (2022: €2.5
million) assuming all other variables remain constant, and the rate change is
only applied to the loans that are exposed to movements in EURIBOR.
As part of the Group's strategy to manage our interest rate risk, the Group
entered into an interest rate swap on 28 February 2023 to hedge the interest
rate risk associated with €100.0 million of the term loan element of our new
debt facilities. The interest rate swap is in place for the 5-year period of
the facility agreement. The nominal amount hedged for years one and two is
€100.0 million with this stepping down to €50.0 million for the remaining
three years of the facility agreement.
The Group is also exposed to interest rate risk on its cash and cash
equivalents. These balances attract low interest rates and therefore a
relative increase or decrease in their interest rates would not have a
material effect on the Group's profit.
A fundamental review and reform of major interest rate benchmarks is being
undertaken globally, including the replacement of some interbank offered rates
(IBORs) with alternative nearly risk-free rates (referred to as 'IBOR
reform'). The Group has no exposure to these changes as it only has exposure
to EURIBOR interest rates which is outside the scope of the current IBOR
reform.
The amounts relating to items designated as hedging instruments and hedge
ineffectiveness were as follows:
As at 31 December 2023 For the year ended 31 December 2023
Carrying amount Amount reclassed from hedging reserve to profit or loss
Changes in the value of hedging instruments recognised in OCI
Line items in profit or loss that includes hedge ineffectiveness
Hedge ineffectiveness recognised in profit or loss
Nominal amount
Assets Liability
(€'000) (€'000) (€'000) (€'000) (€'000) (€'000) (€'000) (€'000)
Interest rate swap 100,000 - (1,623) (1,240) - Loss on derivative financial instruments (383) Financing costs
The Group held the following instruments to hedge exposures to changes in
interest rates:
Interest rate swaps 2023 2022
Net exposure (€'000) 1,535 -
Average fixed interest rate 3.035% -
The amounts at the reporting date relating to items designated as hedged items
were as follows:
As at 31 December 2023
Change in
value used for
calculating Cashflow
hedge hedge
ineffectiveness Reserve
€'000 €'000
Interest rate swap - (1,623)
- (1,623)
Capital management
The Group finances its operations through a combination of shareholders'
funds, long term borrowings and working capital. The Group's objective when
managing capital is to maintain an appropriate capital structure in the
business to allow management to focus on creating sustainable long-term value
for its shareholders, with flexibility to take advantage of opportunities as
they arise in the short and medium term. The Group's capital allocation policy
is to invest in supply chain, land, and work-in-progress. Once the business
has invested sufficiently in each of these priorities, excess capital is
returned to shareholders.
28 Leases
A. Leases as lessee (IFRS 16)
The Group leases a property and motor vehicles. Motor vehicle leases typically
run for a period of 1-3 years, with an option to renew the lease after that
date. Lease payments are renegotiated every 1-3 years to reflect market
rentals. The property lease is for 15 years with a break clause after 7 years.
The Group leases certain motor vehicles with contract terms of one year. These
leases are short term and leases of low-value items. The Group has elected not
to recognise right-of-use assets and lease liabilities for these leases.
Information about leases for which the Group is a lessee is presented below.
i. Right-of-use assets
Right-of-use assets related to leased properties (that do not meet the
definition of investment property) and motor vehicles are presented as
property, plant and equipment (see Note 17).
Motor
Property Vehicles Total
€'000 €'000 €'000
2023
Balance at 1 January 4,385 86 4,471
Additions to right-of-use assets - 1,328 1,328
Depreciation charge for the year (658) (224) (882)
Balance at 31 December 3,727 1,190 4,917
Motor
Property Vehicles Total
€'000 €'000 €'000
2022
Balance at 1 January 286 261 547
Additions to right-of-use assets 4,605 - 4,605
Depreciation charge for the year (506) (175) (681)
Balance at 31 December 4,385 86 4,471
ii. Amounts recognised in profit or loss
2023 2022
€'000 €'000
2023 - Leases under IFRS 16
Interest on lease liabilities 138 45
Expenses relating to short-term leases 151 97
iii. Amounts recognised in statement of cash flows
2023 2022
€'000 €'000
Total cash outflow on leases 761 470
B. Leases as lessor
In certain instances, the Group acts as a lessor in relation to certain
property assets. These arrangements are not material to the Group's
consolidated financial statements.
29 Related party transactions
(i) Key Management Personnel remuneration
Key management personnel comprise the Non-Executive Directors and the
Executive Committee. The aggregate compensation paid or payable to key
management personnel in respect of the financial year was the following:
2023 2022
€'000 €'000
Short-term employee benefits 4,746 4,864
Post-employment benefits 214 294
LTIP and SAYE share-based payment expense 996 670
5,956 5,828
Compensation of the Group's key management personnel includes salaries,
non-cash benefits and contributions to a post-employment defined contribution
plan.
(ii) Other related party transactions
Acquisition of development rights
The Group entered into the Acquisition and Profit Share Agreement (APSA) with
Targeted Investment Opportunities ICAV (TIO), a wholly owned subsidiary of OCM
Luxembourg EPF III S.a.r.l. (OCM) (and an entity in which John Mulcahy is a
director) on 12 March 2018. Under the terms of the APSA, the Group acquired
certain development rights in respect the site at Gateway Retail Park,
Knocknacarra, Co. Galway for consideration of approximately €3.2 million
(including stamp duty and transaction costs). The development rights will
(subject to planning) entitle the Group to develop at least 250 residential
units under the joint business plan to be undertaken with Sigma Retail
Partners (on behalf of TIO) which will also entitle TIO to control and benefit
from any retail development at the site.
The Directors have determined that joint control over the site exists, and the
arrangements have been accounted for as joint operations in accordance with
IFRS 11 Joint Arrangements. This accounting treatment was re-assessed at the
end of the reporting period and the Directors concluded that it remains
appropriate.
The APSA also stipulates that TIO would be entitled to share, on a 50/50
basis, any residual profit remaining after the Group's purchase consideration
plus interest and residential development cost plus 20% has been deducted from
sales revenue in relation to the residential development opportunity at
Gateway Retail Park, Knocknacarra, Co. Galway and Bray Retail Park, Bray, Co.
Wicklow.
The agreement defines certain default events including TIO not possessing good
and marketable title over the development sites and TIO not transferring good
and marketable title over the development sites. On the occurrence of a
default event, the Group shall be entitled to recover the aggregate purchase
consideration in respect of the development rights. OCM has agreed to
guarantee this obligation of TIO.
30 Commitments and contingent liabilities
(a) Commitments arising from development land acquisitions
The Group had no contingent liabilities at 31 December 2023. The Group had the
following commitments at 31 December 2023 relating to Development Land
Acquisitions.
Hollystown Golf and Leisure Limited ("HGL")
During 2018, the Group acquired 100 per cent of the share capital of HGL.
Under the terms of an overage covenant signed in connection with the
acquisition, the Group has committed to paying the vendor an amount equal to
an agreed percentage of the uplift in market value of the property should any
lands owned by HGL, that are not currently zoned for residential development
be awarded a residential zoning. This commitment has been treated as
contingent consideration and the fair value of the contingent consideration at
the acquisition date was initially recognised at €nil. At the reporting
date, the fair value of this contingent consideration was considered
insignificant.
Contracted acquisitions
At 31 December 2023, the Group had contracted to acquire 5 development sites;
two in County Dublin, one in Co. Kildare, one in County Meath and one in
County Galway for aggregate
consideration of approximately €24 million (excluding stamp duty and legal
fees). Deposits totalling €5.2 million were paid pre-year end and are
included within trade and other receivables at 31 December 2023.
31 Subsequent events
There were no significant subsequent events that warrant disclosure in the
financial statements.
32 Profit of the Parent Company
The parent company is Glenveagh Properties PLC. In accordance with section 304
of the Companies Act 2014, the Company is availing of the exemption from
presenting its individual statement of profit or loss and other comprehensive
income to the Annual General Meeting and from filing it at the Companies
Registration Office. The Company's loss after tax for the financial year was
€0.001 million (for the year ended 31 December 2022: profit of
€7.7million).
33 Approved financial statements
The Board of Directors approved the financial statements on 27 February 2024.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR PPUAUPUPCPGMRecent news on Glenveagh Properties
See all newsREG - Glenveagh Properties - Awards under the Glenveagh Properties plc LTIP
AnnouncementREG - Glenveagh Properties - Holding(s) in Company
AnnouncementREG - Glenveagh Properties - Result of AGM
AnnouncementREG - Glenveagh Properties - Trading Statement
AnnouncementREG - Glenveagh Properties - Total Voting Rights
Announcement