The Assembly, Hounslow - Countryside Properties
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The Assembly, Hounslow
GROUP PERFORMANCE
• Group completions up 14% driven by private homes
• Good demand for all tenures of homes, over 90%
forward sold for the year
• Continued investment to support future Partnerships
growth
• Retained HBF five-star rating for customer satisfaction
• Good progress on internal reorganisation to facilitate
separation
• Capital allocation policy under review, no interim
dividend proposed
Havenswood, Greater Manchester
2 HALF YEAR RESULTS MAY 2021
Financials
Mike Scott, Group CFO
St. Michael’s Hurst, Bishop’s Stortford
GROUP FINANCIAL HIGHLIGHTS
• More balanced phasing of delivery Units Operating profit £m
2,591 £78.6m
• Operating profit up 42%
2,591 89.4
• Operating margin in line with guidance for FY21 2,362 2,271 78.6
• ROCE impacted by H2 2020 performance and 55.3
recent investment in Partnerships
HY19 HY20 HY21 HY19 HY20 HY21
Operating margin % ROCE %
10.4% 8.9%
15.9 32.9
25.8
10.4 10.4
8.9
Note: Group financials are shown on an adjusted basis to include the proportional contribution of HY19 HY20 HY21 HY19 HY20 HY21
the joint ventures and associate and exclude non-underlying items
4 HALF YEAR RESULTS MAY 2021
SUMMARY OF GROUP INCOME
Adjusted measures £m HY 2021 HY 2020 change
Revenue 755.0 530.9 +42%
Operating profit 78.6 55.3 +42%
Operating margin 10.4% 10.4% 0bps
Net interest (6.3) (6.1) +3%
Profit before tax 72.3 49.2 +47%
Tax (14.0) (8.5) +65%
Profit after tax 58.3 40.7 +43%
EPS (pence per share) 11.1p 9.1p +22%
Note: Group financials are shown on an adjusted basis to include the proportional contribution of
the joint ventures and associate and exclude non-underlying items
5 HALF YEAR RESULTS MAY 2021
LEASEHOLD AND BUILDING REMEDIATION £25m Building Remediation provision • Third party fire risk assessment completed • Remedial works required to allow EWS1 certificate to be issued • 20 historical developments • Provision excludes possible recoveries Leasehold inquiry ongoing • Constructive engagement with the CMA • Consultation period ended on 29 April 6 HALF YEAR RESULTS MAY 2021
SUMMARY BALANCE SHEET
£m HY 2021 FY 2020 Change
Intangibles 140.3 143.1 (2.8)
Investment in JVs and associate1 85.9 111.3 (25.4)
Stock and WIP 1,084.1 1,059.1 +25.0
Land debtors 45.2 13.5 +31.7
Land creditors (216.3) (192.8) (23.5)
Overage (24.9) (31.3) +6.4
Other (100.8) (115.1) +14.3
Net cash 105.9 98.2 +7.7
Net assets 1,119.4 1,086.0 +33.4
TNAV 2 987.2 951.7 +35.5
1 Includes loans to joint ventures
2 Tangible net asset value is calculated as net assets less intangible assets net of deferred tax
7 HALF YEAR RESULTS MAY 2021
LAND SPEND FOR FUTURE DELIVERY
HY21 land spend
Partnerships
• 7 sites secured through public procurement,
12 through direct negotiation in H1 £108.8m £41.2m
Partnerships £150.0m Housebuilding
• Capital intensity of new Partnerships regions higher in
investment phase
• Land creditors broadly stable expected to increase by
FY2021
Land creditors (£m)
Housebuilding 114.1
102.2
97.4
• Land creditor payment of £58m in April as part of
97.4 95.4
separation restructuring 68.5
59.1 60.9
FY FY FY HY FY FY FY HY
2018 2019 2020 2021 2018 2019 2020 2021
Partnerships Housebuilding
8 HALF YEAR RESULTS MAY 2021
NET CASH £106M AT 31 MARCH 2021
• Significant working capital
investment into Partnerships to 51
support the expansion
• Gearing of (9.5)%
Housebuilding
(HY 2020: 14.4%) 62 working (3) (5)
capital decrease 2
• Adjusted gearing of 9.9% 4
27 Capital
(109) Lease (15)
(HY 2020: 38.9%) expenditure
payments
Partnerships Other Tax and net £m
£m Cash from working capital receipts interest
operating 106
98 profit 1
increase 2 from JVs 3
FY20 HY21
closing closing
1 Represents Group statutory EBITDA excluding non-cash items
2 Net impact of changes in working capital and changes in loans to joint ventures and associate
3 Other receipts from joint venture operations include dividends and repayment of capital
4 Adjusted gearing includes land creditors within net debt
9 HALF YEAR RESULTS MAY 2021
Partnerships
PARTNERSHIPS FINANCIALS
HY 2021 HY 2020 change
756 £310k
Private completions Private ASP Total completions 1,938 1,791 +8%
Revenue £420.6m £343.8m +22%
HY 2020: 462 HY 2020: £297k
Operating profit £36.6m £36.3m +1%
827 £151k Operating margin 8.7% 10.6% -190bps
Affordable completions Affordable ASP
TNAV £295.5m £111.0m +166%
HY 2020: 763 HY 2020: £152k
ROCE 9.3% 47.1% -3,780bps
355 £143k
PRS completions PRS ASP
HY 2020: 566 HY 2020: £141k
Note: Group financials are shown on an adjusted basis to include the proportional contribution of
the joint ventures and associate and exclude non-underlying items
10 HALF YEAR RESULTS MAY 2021Housebuilding
HOUSEBUILDING FINANCIALS
HY 2021 HY 2020 change
533 £501k
Private completions Private ASP Total completions 653 480 +36%
Revenue £334.4m £187.1m +79%
HY 2020: 291 HY 2020: £481k
Operating profit £44.7m £20.6m +117%
105 £171k Operating margin 13.4% 11.0% +240bps
Affordable completions Affordable ASP
TNAV £691.7m £621.8m +11%
HY 2020: 178 HY 2020: £169k
ROCE 9.5% 16.6% -710bps
15 £286k
PRS completions PRS ASP
HY 2020: 11 HY 2020: £325k
Note: Group financials are shown on an adjusted basis to include the proportional contribution of
the joint ventures and associate and exclude non-underlying items
11 HALF YEAR RESULTS MAY 2021CURRENT TRADING SUPPORTS FY2021
Net Reservation Rate over time
1.60
• Net reservation rate improved through the first half
1.20
• Cancellation rates have normalised
HY20
• Selling beyond end of Stamp Duty holiday 0.80
• Pricing remains positive 0.40
HY21
• Including Affordable and PRS, over 90% forward sold -
OCT NOV JAN
for FY2021 2020
DEC
2021
FEB MAR
1,506.1
Group Forward
1,202.6
Order Book £m 1,037.1 Private
Affordable
PRS
HY HY HY
12 HALF YEAR RESULTS MAY 2021
2019 2020 2021ON TRACK FOR MEDIUM TERM TARGETS
Partnerships 2020 HY 2021 2023
Completions 3,213 1,938 c.8,000
Adjusted operating margin 5.2% 8.7% 15%
Return on Capital Employed 13.0% 9.3% >40%
Housebuilding 2020 HY 2021 2023
Completions 840 653 c.1,500
Adjusted operating margin 7.0% 13.4% 18%
Return on Capital Employed 4.9% 9.5% >25%
13 HALF YEAR RESULTS MAY 2021Operational
performance
Iain McPherson
Group CEO
Abington Place, NorthamptonPROGRESS ON STRATEGY
Priorities
• Investment in Partnerships
– New regions established
– Second MMC factory progressing well
• Delivering on visibility of work in Partnerships
– Forward order book
– Secured plots and bid pipeline continue to grow
– 8+ years in landbank plus preferred bidder
– Progressing framework agreement plans and build
• Return to achieve Partnerships target ROCE
• Launching new sustainability approach
• Good progress on internal reorganisation
15 HALF YEAR RESULTS MAY 2021INVESTMENT IN GROWTH
£109m net investment in Partnerships in the first half; further net Insert picture of new avenue
investment of £100m expected in second half, executing our
growth plans
Partnerships
• All three new regions now operational with management and
offices established
• First sites secured in new regions New Avenue, Enfield
• Good progress on accelerating projects – progressing through
planning
• Second MMC factory, Bardon, Leicester, now in fit out phase.
Investment of £20m on completion
Bardon Modular Panel Factory, Leicester
16 HALF YEAR RESULTS MAY 2021Partnerships
ORDER BOOK PROVIDES GOOD VISIBILITY
Forward Order Book1 £m • Total forward order book of £787.3m
1,043.4 • Affordable/PRS reduction reflects some delays to
starting on new sites
787.3 • Private forward sales of £205.8m
684.3
Private – HPI +4.8%
Affordable
• Private ASP of forward sales £318k
(HY 2020: £312k)
PRS
HY HY HY
2019 2020 2021
1 As at 31 March 2021
17 HALF YEAR RESULTS MAY 2021Partnerships
PARTNERSHIPS LAND BANK AND PIPELINE
Secured plots Land bank Preferred bidder
• Total landbank plus preferred plus preferred bidder
13%
bidder of 40,805 plots South
28% 11,323 9,854 24% 39% 4,394 1,533
£0.3bn GDV
• 3,133 plots secured in Preferred Owned Midlands
Partnerships in H1 Bidder
40,805 £0.8bn GDV
11,323
plots plots
8+ years in the land bank
£10.1bn £2.0bn
• £10.1bn GDV GDV GDV
48% 19,628 5,396
Pipeline Controlled
48%
• Bid pipeline of a further 103,000 plots North
£0.9bn GDV
18 HALF YEAR RESULTS MAY 2021DELIVERING OUR FRAMEWORK AGREEMENTS • Commitment to working with partners • Frameworks support our future delivery • Not reflected in current forward order book or pipeline • Facilitates growth in new regions • Opportunity for delivery of over 16,000 homes 19 HALF YEAR RESULTS MAY 2021
Partnerships
CASE STUDY: NEW SOUTH LONDON REGION
Places for People framework – Lower Herne
• Lower Herne Village development, 800 homes
delivered in partnership with Places for People
• Includes 240 affordable homes for rent and
shared ownership
• First homes planned for 2023
• This represents the first development
from a framework agreement to deliver
10,000 mixed-tenure homes over 10 years
20 HALF YEAR RESULTS MAY 2021STRENGTHENING OUR
LONG STANDING RELATIONSHIPS
• Trusted partner of choice
• Over 40-year track record
• Collaborative relationships with housing associations
and Local Authorities
• Deepening and broadening our relationships in new and
existing geographies
• MMC capability supporting partners ambitions
• Partner of Homes England
– Four new sites in H1
– Delivery of 701 homes all in new growth regions
21 HALF YEAR RESULTS MAY 2021Partnerships
RETURN TO TARGET ROCE
• New regions are expected to take 5 years to reach maturity Historical example of new region
• Significant investment in early years ROCE (%)
• Target ROCE of >40% within 5 years 40+
• Of 12 Partnerships regions, 5 at scale 30
• New modular panel factory reaches capacity in 2023 20
10
0
1-2 2-5 >5
Maturity (years)
22 HALF YEAR RESULTS MAY 2021Housebuilding
HOUSEBUILDING ON TRACK FOR DELIVERY
• Strategic land bank gives significant visibility Forward Order Book £m 1
• Embedded total GDV of £7.2bn
462.7
• 25,583 plots owned or controlled 415.3
352.8
• Total forward order book of £415.3m
Private
• Affordable reduction reflects some delays to
starting on new sites
Affordable
• Private forward sales of £184.8m
– HPI +4.0%
• Private ASP of forward sales £493k PRS
HY HY HY
(HY 2020: £495k) 2019 2020 2021
• Good progress on internal separation
1 As at 31 March 2021
23 HALF YEAR RESULTS MAY 2021CONTINUED FOCUS ON QUALITY & SAFETY
• Customer satisfaction
– Achieved HBF 5 star rating for the second
consecutive year
– HBF customer satisfaction score of 91.2%
• Build quality
– NHBC reportable items1 0.28
– Industry benchmark 0.24
• Health & Safety
– Accident incident injury rate2 at 180
– Industry benchmark 263
As at 31 March 2021
1 Number of reportable items per property upon inspection at key build stages
2 Injury rate per year per 100,000 employees
24 HALF YEAR RESULTS MAY 2021LAUNCH OF NEW SUSTAINABILITY APPROACH
We are launching a new sustainability approach,
focusing on three critical areas:
1) The homes we build and our operations
2) Creating sustainable communities and leaving a lasting Rochester Riverside
positive legacy ‘Winner of Winners’
and ‘Building for a
3) Supporting our people so they can continue to deliver Healthy Life’ Awards at
beautiful places that people love the 2020 Housing
Design Awards
Pathway to net zero to launch in later in 2021:
• Commitment to the Science Based Target Initiative (SBTi)
• Future Homes Task Force
• Supply Chain Sustainability School
• Social impact measured on all developments
• Building for a Healthy Life
• Launched the Countryside Way, a new set of values
• Communities Fund supported by employee volunteering
25 HALF YEAR RESULTS MAY 2021RESULTS SUMMARY
• Mixed tenure business model is attractive
• Executing on the growth in Partnerships
• Continued strong visibility of future work
• Focused on quality and safety
• Launching new sustainability approach
• Good progress on internal reorganisation to
facilitate separation
• On track for medium term targets
Meadow Rise, Braintree
26 HALF YEAR RESULTS MAY 2021Q&A
Dutton Fields, DeesideAppendix
Beaulieu Heath, ChelmsfordRECONCILIATION OF REPORTED TO
ADJUSTED MEASURES
£m HY 2021 HY 2020
Revenue 661.0 481.2
Add: share of revenue from joint ventures and associate 94.0 49.7
Adjusted revenue 755.0 530.9
Operating profit 24.7 41.0
Add: non-underlying items 32.2 5.3
Add: share of operating profit from
joint ventures and associate 21.7 9.0
Adjusted operating profit 78.6 55.3
Adjusted operating profit margin 10.4% 10.4%
29 HALF YEAR RESULTS MAY 2021JOINT VENTURES AND ASSOCIATE
Our share of HY21 results
£m Partnerships Housebuilding Group
Revenue 24.8 69.2 94.0
Expenses (20.4) (51.9) (72.3)
Operating profit 4.4 17.3 21.7
Finance costs (0.2) (0.1) (0.3)
Income tax (0.0) (1.3) (1.3)
Profit for the period 4.2 15.9 20.1
30 HALF YEAR RESULTS MAY 2021ADJUSTED NET FINANCE COSTS BREAKDOWN
£m HY 2021 HY 2020 change
Cash items
Interest on bank debt 1.3 1.9 -32%
Interest receivable (0.1) (0.1) 0%
1.2 1.8 -33%
Non-cash items
Net unwind of discount 3.7 3.5 +6%
Amortisation of debt finance fees 0.4 0.3 +33%
Unwind of lease liabilities 0.7 0.6 +17%
4.8 4.4 +9%
Associate and JV interest 0.3 (0.1) n/a
Adjusted net finance costs 6.3 6.1 +3%
31 HALF YEAR RESULTS MAY 2021DISCLAIMER
Cautionary statement regarding forward-looking statements
Some of the information in this document may contain projections or other forward-looking statements
regarding future events or the future financial performance of Countryside Properties PLC and its
subsidiaries (the Group). You can identify forward-looking statements by terms such as “expect”, “believe”,
“anticipate”, “estimate”, “intend”, “will”, “could”, “may” or “might”, the negative of such terms or other similar
expressions. Countryside Properties PLC (the Company) wishes to caution you that these statements are
only predictions and that actual events or results may differ materially and as such undue reliance should not
be placed on these statements. The Company does not intend to update these statements to reflect events
and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many
factors could cause the actual results to differ materially from those contained in projections or forward-
looking statements of the Group, including among others, general economic conditions, the competitive
environment as well as many other risks specifically related to the Group and its operations. Past
performance of the Group cannot be relied on as a guide to future performance.
32 HALF YEAR RESULTS MAY 2021Investor Contact Victoria Prior Managing Director, Corporate Affairs Tel: 020 3917 0576 E-mail: victoria.prior@cpplc.com www.countrysideproperties.com 33 HALF YEAR RESULTS MAY 2021
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