REG - Glenveagh Properties - H1 Trading Statement 2024

Glenveagh PropertiesAnnouncement

04/07/2024 07:00

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RNS Number : 0697V  Glenveagh Properties plc  04 July 2024

4 July 2024

Glenveagh Properties plc

H1 Trading Statement 2024

Strong progress made with over 800 completions and 22% growth in closed and
forward order book; on track to deliver full year EPS guidance

Glenveagh Properties plc ("Glenveagh" or the "Group") is today issuing a
trading update for the six months ended 30 June 2024 ahead of the publication
of its H1 2024 results on 5 September 2024.

H1 2024 Performance Summary

·    Over 800 units of the 2,700 full year target completed in H1 2024 (H1
2023: 333)

·    Strong closed and forward order book of €1172m across our three
business segments, increasing by 22% from €963m as at our AGM Trading Update
on 2 May 2024. The closed and forward order book in the Suburban business of
€710m, comprising 2,057 units, gives strong visibility on deliveries and
revenue in H2 2024

·    H1 revenue of approximately €150m (H1 2023: €172m). Urban
performance reflected the completion of 510 units from existing forward fund
transactions, where approximately 90% of revenue has already been recognised
in prior periods. Suburban completions of 294 units (H1 2023: 333) were
impacted by the scheduling of closings, which are now occurring early in the
third quarter. Partnerships segment revenue was in line with expectations

·    Suburban gross margin now expected to be in excess of 20% in FY 2024,
compared to an underlying margin of 19.3% in FY 2023, driven by our enlarged
scale, increased standardisation of product and processes, and continued
integration of manufacturing

·    Partnership sites comprising over 2,000 units now operating at scale,
with revenue and profit to accelerate in H2 due to strong construction
progress. A third Partnerships contract is now subject to final legal
agreement, and we are in advanced negotiations on a fourth agreement, which
combined will add approximately 1,000 units to our Partnerships pipeline

·    Placed on the LDA framework panel to accelerate the delivery of mixed
tenure homes. In advanced negotiations with LDA to commence the activation of
our Urban portfolio in Cork Docklands via a forward fund transaction, with
additional LDA partnership opportunities possible over time

·    Progressing with forward fund transactions on two urban developments
totalling 260 units, including the transaction noted in our AGM Trading Update
in May

·    Strong planning momentum with permissions granted for approximately
1,300 units in H1 with over 95% of units targeted for FY 2025 now with
planning permissions granted

·    Net debt increase as anticipated to approximately €250m (H1 2023:
€182m), driven by increased WIP investment which will unwind as unit
deliveries accelerate in H2

Outlook

·    FY 2024 is a milestone year of growth for Glenveagh. Our strong
forward order book, operational momentum, and continued progress in
manufacturing underpins our full year EPS guidance which anticipates a more
than doubling of EPS to approximately 17 cent (FY 2023: 8 cent), and Return on
Equity target of approximately 15%

·    We continue to invest in accordance with our capital allocation
priorities, notably in land where we are now seen as the partner of choice for
landowners in attractive Suburban and Partnership led locations. A number of
significant land transactions are now being explored in this regard

·    These acquisition opportunities, should they materialise, are in
highly attractive locations that are fully aligned with the ambitions of
national and regional planning policy. These will also underpin long-term
operational growth and optimal returns for shareholders, supported by our
resolute focus on enhancing Return on Equity and our commitment to manage the
size of the landbank to below €400m over the long term. Once our capital
allocation priorities are satisfied, we remain committed to returning any
excess cash identified to shareholders

CEO Stephen Garvey commented:

"We continue to make excellent progress across our business and are firmly on
track to meet our objectives for the year.

Our performance provides further evidence of our key strengths and
capabilities - our planning and design expertise; our skilled and motivated
workforce; our state-of-the-art vertically integrated manufacturing operation;
and our ability to enhance and accelerate housing delivery at scale through
greater standardisation while optimising modern methods of construction.

The targeted industry initiatives implemented by the Government via Housing
For All has provided much momentum to new home output across the market
delivering approximately 35,000 units per annum and strong commencement growth
in 2024. Yet as we continue to scale up our activities and deliver more homes
at pace, it is more important than ever that we build on the initiatives
already in place and implement the structures required for the market to
deliver over 50,000 units per annum. We know the enormous potential there is
for advancing quality housing delivery through collaborative State and private
sector projects, working in tandem with shared objectives, and the collective
deployment of resources and capital.

Glenveagh's ability to deliver great value, high-quality, sustainable homes at
scale via our innovative and proven vertically integrated operation positions
the business at the forefront of meeting the needs of a growing economy and
rapidly expanding population, supported by motivated legislators and a strong
fiscal position."

 

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                           glenveagh@gordonmrm.ie

 

Notes to Editors

About Glenveagh Properties plc

Glenveagh Properties plc, listed on Euronext Dublin and the London Stock
Exchange, is a leading Irish homebuilder.

Supported by innovation and supply chain integration, Glenveagh is committed
to opening access to sustainable high-quality homes to as many people as
possible in flourishing communities across Ireland. We are focused on three
core markets - suburban housing, urban apartments and partnerships with local
authorities and state agencies.

www.glenveagh.ie (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 (the "Company" or "Glenveagh").

This announcement contains statements that are, or may be deemed to be,
forward-looking statements. Forward-looking statements include, but are not
limited to, information concerning the Company's possible or assumed future
results of operations, plans and expectations regarding demand outlook,
business strategies, financing plans, competitive position, potential growth
opportunities, potential operating performance improvements, expectations
regarding inflation, macroeconomic uncertainty, geopolitical tensions, weather
patterns, the effects of competition and the effects of future legislation or
regulations. Forward-looking statements include all statements that are not
historical facts and can be identified by the use of forward-looking
terminology such as "may", "will", "should", "expect", "anticipate",
"project", "estimate", "intend", "continue", "target", "ensure", "arrive",
"achieve", "develop" or "believe" (or the negatives thereof) or other
variations thereon or comparable terminology. Forward-looking statements are
prospective in nature and are based on current expectations of the Company
about future events, and involve risks and uncertainties because they relate
to events and depend on circumstances that will occur in the future. Although
the Company believes that current expectations and assumptions with respect to
these forward-looking statements are reasonable, it can give no assurance that
these expectations will prove to be correct. Due to various risks and
uncertainties, actual events or results or actual performance of the Company
may differ materially from those reflected or contemplated in such
forward-looking statements. You are cautioned not to place undue reliance on
any forward-looking statements.

These forward-looking statements are made as of the date of this document. The
Company expressly disclaims any obligation to update these forward-looking
statements other than as required by law.

The forward-looking statements in this announcement do not constitute reports
or statements published in compliance with any of Regulations 6 to 8 of the
Transparency (Directive 2004/109/EC) Regulations 2007 (as amended).

 

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