Celebrating 60 Years of Celebrating
Total Page:16
File Type:pdf, Size:1020Kb
CELEBRATING 60 YEARS OF COUNTRYSIDE PROPERTIES PLC // ANNUAL REPORT 2018 REPORT // ANNUAL PLC PROPERTIES COUNTRYSIDE ANNUAL REPORT 2018 PLACES PEOPLE LOVE COUNTRYSIDE WAS FOUNDED IN 1958 BY ALAN CHERRY, WITH THE VISION TO CREATE PLACES PEOPLE LOVE THROUGH DESIGN-LED MASTER PLANNING. CELEBRATING YEARS OF PLACES PEOPLE LOVE 1960s Small residential developments in Essex and East London were carried out. 1970s Residential developments continued to expand with our first involvement in commercial property. 1980s Chelmer Village Our first large-scale residential development at Chelmer Village, Chelmsford formed the start of our master planning expertise. Beaulieu Park 1988–2026 1990s Beaulieu Park delivered 615 new homes, parks and open spaces including playing fields and a sports pavilion. Five Estates Peckham Partnership 1995–2008 It was an early phase of what has become a much larger 13 year regeneration programme in London Borough of Beaulieu development that will deliver an additional Southwark including 2,000 new mixed-tenure homes. 3,600 homes. Great Notley Village 1993 The development of Great Notley Village commenced in 1993 with a masterplan for 2,000 mixed-tenure homes, of which 10% was affordable, a 500,000 sq ft employment park and extensive community and leisure facilities. 2000s Greenwich Millennium Village 2000–2029 Built through a joint venture with Taylor Wimpey, Greenwich Millennium Village will provide over 2,000 homes alongside the Thames on the Greenwich Peninsula. 2010s Norris Green Village 2010–2018 The mixed-tenure development of Norris Green Village, Liverpool was completed in 2018 providing a total of 839 new affordable, PRS and private for sale homes. Accordia 2002 Accordia in Cambridge is widely regarded as setting a new benchmark for housing in the UK and was the first ever residential scheme to receive the most prestigious architectural accolade – the RIBA Stirling Prize. Crossways Estate, Bow 2006–2012 Refurbishment of two 24 storey tower blocks in Tower Hamlets and construction of 360 new, mixed-tenure homes. Acton Gardens 2010–2026 Acton Gardens will deliver up to 3,000 new homes, of which 50% will be affordable, and will provide over 500,000 sq ft of open space. Contents We have continued our trajectory Strategic report 2 Group at a glance of strong growth and improving returns 4 2018 performance and highlights 5 Chairman’s statement from our differentiated business model. 6 Group Chief Executive’s review 10 Our business model Ian Sutcliffe 12 Stakeholder engagement Group Chief Executive 14 Market trends 16 Our strategy 18 Our key performance indicators 20 Operational review 20 Partnerships 24 Housebuilding 28 Group Chief Financial Officer’s review 32 Our people 34 Sustainability report 38 Risk management Governance 42 Chairman’s introduction to governance 44 Board of Directors 46 Executive Committee What we do 48 Corporate governance report In Partnerships, we work with local authorities 54 Report of the Audit Committee 58 Report of the Nomination Committee and housing associations to provide estate 59 Directors’ remuneration report regeneration and development of brownfield 61 Remuneration policy report land. In Housebuilding we use our expertise 69 Annual report on remuneration 76 Directors’ report to develop larger scale communities. 79 Statement of Directors’ responsibilities Financial statements Why we do it 80 Independent auditor’s report We believe in delivering enduring value by 86 Consolidated statement of comprehensive income creating Places People Love. Placemaking is more 87 Consolidated statement of financial position than geography – it is a practice and a philosophy, 88 Consolidated statement of changes in equity 89 Consolidated cash flow statement as much about the feeling people experience in 90 Notes to the consolidated financial statements their homes as the physical buildings. Parent company financial statements How we create value 124 Parent company statement of financial position 125 Parent company statement of changes in equity We create a strong sense of community and a 126 Notes to the parent company common vision of identity on our developments. financial statements Our low capital and mixed-tenure Partnerships IBC Shareholder information model, together with our high quality strategic land bank in Housebuilding, enable us to lock in strong returns. Read more about our business model on pages 10 and 11 Countryside Properties PLC // Annual report 2018 1 Group at a glance CREATING PLACES PEOPLE LOVE The continued success of our mixed-tenure model together with our acquisition of Westleigh has delivered another year of sector-leading growth. Group Partnerships Housebuilding Adjusted revenue1 Adjusted revenue Adjusted revenue £1,229.5m £634.8m £594.7m 2017: £1,028.8m 2017: £476.7m 2017: £552.1m Adjusted operating profit1,2 Adjusted operating profit Adjusted operating profit £211.4m £110.6m £109.6m 2017: £165.3m 2017: £79.4m 2017: £91.5m 2018 has been a year of strong growth driven Our Partnerships division specialises in urban Our Housebuilding division delivers high quality by the success of our mixed-tenure model and regeneration of public sector land, delivering private, homes aimed at local owner occupiers. It develops the acquisition of Westleigh Group (“Westleigh”) affordable and PRS homes in partnership with local private and affordable homes on land owned or in April 2018. authorities and housing associations. It operates controlled by the Group, located in outer London in and around London, the Midlands and North and the Home Counties. It operates under Fewer than half of our completions in the year West England. We expanded into the East Midlands the Countryside and Millgate brands. were private homes, with affordable home and Yorkshire with the acquisition of Westleigh. delivery and Private Rental Sector (“PRS”) • Over ten years’ supply of strategic land allowing us to increase build rates and • Public sector land-led regeneration • Focused on outer London and the accelerate our growth. • Relationships with local authorities South East We grew our pipeline of Partnerships work and established over 30 years • Flexibility and balance sheet efficiency from maintained our Housebuilding land bank which • Reputation for placemaking controlled and optioned land gives us confidence in our medium term growth and urban regeneration targets of 10 to 15 per cent per annum. • Strong average selling prices from placemaking • Low-risk/low-capital model • Operating efficiency from increasing scale • Ten years of visibility of future work • Continued political support from both central and local government % 19 % S 3 R 7% 3 P 2 P le r b S iv a R a t d P P e r r o i 3 v f 8 a A % t e 4 6 3,019 1,276 4,295 % 1 A homes homes homes f % o 7 rd 6 a e b A at le f iv 3 o Pr 5% rda ble 35% Read more about Group performance on Read more about our Partnerships division on Read more about our Housebuilding division on 46pages 28 to 31 +3519 38pages 20 to 23 +3527 67pages 24 to 27 +33 1. Results presented here represent adjusted measures, with a full reconciliation to statutory results presented on page 4, and in Note 6 to the Group financial statements. 2. Prior year comparative has been restated, as described in Note 3 to the financial statements. 2 Annual report 2018 // Countryside Properties PLC Strategic report Business overview Our investment case We have a balanced business with two differentiated, complementary divisions and a clear strategy for growth Countryside has a strong track record of placemaking over the medium term. Our low-capital Partnerships division and benefits from long-term relationships in both the is aligned to government policy, delivering mixed-tenure Partnerships and Housebuilding divisions. homes through estate regeneration and brownfield land. In Housebuilding, we combine our 60 years of placemaking expertise with a leading strategic land bank, embedding strong margins. INCREASING SCALE 4,295 WITH FURTHER homes completed PLATFORM FOR in the year Partnerships active sites at September 2018 74 GROWTH 2017: 46 EXCELLENT Housebuilding active sites at September 2018 29,878 VISIBILITY THROUGH plots of land giving 41 PARTNERSHIPS PIPELINE us ten years’ visibility 2017: 42 IMPRESSIVE 9,646 TRACK RECORD new plots won OF WINNING NEW in the year PARTNERSHIPS BUSINESS BALANCED BUSINESS £1,229.5m MODEL DELIVERING adjusted revenue MIXED-TENURE HOMES SIGNIFICANT 37.1% IMPROVEMENT ROCE, a 650bps IN RETURNS increase STRONG BALANCE £45m SHEET WITH CAPACITY net cash at year end FOR GROWTH Areas of operation INCREASED 1,818 GEOGRAPHIC directly employed REACH WITH 13 staf REGIONAL TEAMS Countryside Properties PLC // Annual report 2018 3 2018 performance and highlights • Completions up 27 per cent to 4,295 homes • Reported revenue up 20 per cent to £1,018.6m (2017: 3,389 homes) (2017: £845.8m) • Private average selling price (“ASP”) down 7 per cent • Reported operating profit up 16 per cent to £149.3m to £402,000 (2017: £430,000) (2017: £128.9m) • Net reservation rate upper end of target range • Net cash of £45.0m (2017: £77.4m) at 0.80 (2017: 0.84) • Basic earnings per share of 33.1 pence (2017: 27.2 pence)5 • Open sales outlets up 28 per cent at 60 (2017: 47) • Accident Injury Incident Rate (“AIIR”)6 of 162 (2017: 220) • Total order book up 40 per cent to £899.7m • NHBC Recommend a Friend score of 84.6 per cent (2017: £643.7m) (2017: 88.6 per cent) • Total land bank increased to 43,523 plots (2017: 34,581 plots) • Adjusted earnings per share of 36.0 pence (2017: 27.7 pence)5