Iain McPherson, Group CEO

Our response to Covid-19
As the impact of the Covid-19 pandemic became clear, our Executive Committee met daily to make key operational and financial decisions as the situation rapidly developed.
We also held weekly Board briefings to ensure the Non-Executive Directors were kept informed of developments.
To ensure we had good two-way communication between the Executive Committee and the business, we set up a Covid-19 working group involving key employees from across the business with representatives from employee, customer and supplier-facing functions to health and safety, finance, IT and facilities. This allowed us to focus on the immediate priorities in dealing with the impact of Covid-19 on our business.
We have continued to refine our contingency plans to plan our response to a range of developments such as further local or national lockdowns. These will ensure our business remains agile and that we are well placed to adapt to changing conditions.
Highlights
Trading performance
- Significant impact of Covid-19 lockdown on volumes, profit and margin
- On track to deliver at the upper end of consensus adjusted operating profit expectations for Financial Year 2021
- Good progress on executing accelerated Partnerships growth
- Announcing new 2023 targets for Partnerships and Housebuilding on completions, operating margins and ROCE
- Rothschild & Co now appointed to advise the Board on the separation of Housebuilding from the Group
- Significant new framework agreements signed which underpin mixed tenure delivery
- Record forward order book up 23% to £1,432m (2019: £1,166m) including £528m in private order book (2019: £241m)
- Net private reservation rate of 0.78 (2019: 0.84) despite closure of sales offices during first lockdown
- Average of 63 open sales outlets (2019: 56) up 13%
- Achieved HBF 5-star builder status for the first time
- Non-Executive Chairman David Howell to step down in 2021
Completions (homes)
4,053
Adjusted operating profit
£54.2m
Net cash
£98.2m
Forward order book
£1,432m
Key financials
|
2020 |
2019 |
Change
|
Completions1 |
4,053 |
5,733 |
-29% |
Adjusted revenue2 |
£988.8m |
£1,422.8m |
-31% |
Adjusted operating profit3 |
£54.2m |
£234.4m |
-77% |
Adjusted operating margin4 |
5.5% |
16.5% |
-1,100bps |
Adjusted basic earnings per share5 |
7.4p |
40.8p |
-82% |
Return on capital employed6 |
7.1% |
37.8% |
-3,070bps |
Group total forward order book |
£1,432m |
£1,166m |
+23% |
|
|
|
|
Dividend per share |
nil |
16.3p |
-100% |
Reported revenue |
£892.0m |
£1,237.1m |
-28% |
Reported operating (loss)/profit |
£(5.4)m |
£170.4m |
-103% |
Net cash7 |
£98.2m |
£73.4m |
34% |
Reported basic (loss)/earnings per share |
(0.8)p |
37.7p |
-102% |
Mike Scott, Group CFO

Financing, current trading and outlook
We have started the new financial year in a strong position to recover from the impacts of the pandemic and the resulting economic uncertainty. We have a robust balance sheet and excellent visibility of future work through our record order book across all tenures. We are 70% forward sold for 2021 and due to our strong forward sales position, our net reservation rate for the first nine weeks of the year is lower than the same period last year. As a result, subject to no material changes in market conditions, we are on track to deliver at the upper end of consensus operating profit expectations for 2021. After two years in which our weighting of delivery was skewed heavily to Q4, we expect to return towards a more balanced profile this year.