Glenveagh Properties PLC

So, hello and welcome to the Glenvee full-year results 2025 results conference call. Please note, this conference is being recorded, and for the duration of the call, your lines will be on listen-only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing pound key 5 on your telephone keypad to enter the queue. I will now hand you over to your host, Stephen Garvey, CEO of Glenvee, to begin today's conference. Please go ahead.

Good morning, everyone, and thank you, Zach. I'm Stephen Garvey, CEO of Glenvale Properties. I'm joined today by my colleagues, Conor Merkter, our CFO, and Kate Halliday in Investor Relations. Thank you for joining our full year 2025 results call. This morning, firstly, I'll walk you through our full year's strategic and operational highlights, the market, the policy context, and how our strategy is performing in home building, partnerships, land, and innovation. After that, Conor will take you through the financials and capital allocation, and I'll return to the outlook on closing remarks. As always, we'll leave plenty of time for any of your questions at the end. To begin, let's turn to slide four with the headline numbers for the full year. 2025 was another strong year for Glenveig, with record revenue of €926 million, strong completions growth at 2,568 units, which was delivered, which was up 11% year on year, and earnings per share ahead of guidance at 20 cents, an increase of 18%. We completed our €105 million share buyback programme and continue to expand our margins across the business. What gives us real satisfaction is not just the numbers, it's what they reflect. The investments we have made over the past number of years in our land bank, in our manufacturing, in our partnerships are all coming true in the results now. The strategy we set out is working and the business is performing at a level that we can sustain and further growth opportunities we can build on this. Turning to slide five, before we get into the detail, it's worth taking a moment to frame the opportunity in front of us. Glenveig is in a strong position. Ireland has a genuine long-run housing shortage, and we've built a platform that is designed to address this at scale. Our land bank, our manufacturing capability, our partnership relationships, these give us an opportunity that isn't easily replicated. We're not just benefiting from favourable conditions, we're actively shaping how homes get built in this country. Glenveigh is uniquely positioned to deliver on the compelling market opportunity in front of us, with a sector-leading platform and a track record of delivering strong outcomes, reliable cash generation, effective capital management, balance sheet strength, all focusing on delivering long-term value creation and returns for our shareholders. Slide 6 sets out the underlying fundamentals, and the picture remains a positive one. All of the drivers remain for the demand of new homes, such as population growth, employment levels, and wage growth continues to strengthen. Ireland's population is growing faster than anywhere else in Europe, and the employment is at all-time highs. That's the environment we're operating in. Notwithstanding potential global economic risks, it underpins the confidence we have in the business at this very moment. At the same time, national completions, while at the highest level in over a decade, remain well below what is needed each year to meet demand. The structural shortfall is real, but government policy changes have set out a clear roadmap to meet the required demand. Moving to slide 7, the policy backdrop has continued to improve and is now meaningfully supportive of housing delivery, with government targeting over 300,000 new homes by the end of this decade. the National Development Plan, which provides long-term infrastructure visibility of over €275 billion. This is Ireland's largest ever capital programme, which will sustain infrastructure investment through to the year 2040. Help to buy has been extended. VAT on apartments has been reduced from 13.5% to 9%. Planning reform is beginning to deliver greater certainty. These are real practical changes that make it easier to build homes in Ireland today. We welcome all of this. There is more to do on zoning, infrastructure and enabling capacity, but the direction of travel is clearly right, and we continue to engage closely with government and state agency to help turn policy intent into homes on the ground. The large government presence at Mipham this week reaffirmed its commitment to attracting new institutional and capital investment into the sector to deliver much-needed homes in Ireland. On slide 8, I want to highlight what perhaps is the most important structural asset, our land bank. We've now completed the current phase of our land assembly strategy. The result is a large, fully invested land bank with no further material land investments now required. The vast majority is in the Greater Dublin area and focus on owned or product, which is the deepest segment and most resilient demand segment in the market. This land bank supports strong delivery capacity all the way through to 2030. It was secured at an attractive cost with embedded spot margins that gives us confidence in the return profile within our portfolio. We've also completed a meaningful level of land disposals in 2025 and remain well on track to deliver the stated sales across 2026. In a market where deliverable zone land is constrained, we have assembled probably the best land bank in the country today. Turning to slide 9, planning is one of the areas where our in-house capability gives us a real edge. Our planning's approval rate over the last five years is well above the national average, with only one refusal across a large number of applications, demonstrating our strong relationships with local authorities and the planning and product quality of what we deliver. All 2026 deliveries have already commenced, and the 2027 programme is either planned or progressing through active planning applications. The recent planning reforms, the most significant in a generation, are improving timelines, removing delay mechanisms and increasing certainty for applicants. These changes are good for the sector, good for buyers and practically good for well-resourced operations like Glenveig. Let's now move to the home building on slide 10. This was another strong year for the segment. We delivered just shy of 1,500 units, with margins expanding and the forward order book material ahead of where it was this time last year, now standing at over 1,250 units. The pace of sales was strong across the year, with multiple phases selling out quickly, including Hereford Park, Kilmarnock and Grove, Rathrua, Greville Park and Ifrnock. The performance reflects the choices we've made in standardization, scalable sites, and vertical integration. These aren't just teams showing up in our results today. And with a strong order book and four new launches in Q1 and more planned across existing developments, the pipeline is well positioned going into the year ahead. Turning to partnerships on slide 11, this was another strong year for this segment, which is now operating at a scale and maturity that really sets Glenveig apart. Revenue was up significantly year on year at 60%. Margins were ahead of target at 18.2%. And we continue to build the pipeline, closing out the year strongly with a new mandate for 350 units secured in H2 2025. And in advanced discussions across three further opportunities, totaling approximately 500 units. Construction also advanced well at Ballymastone and Oscar Trenner Road, while we closed the transaction at Marina Depot with the Land Development Agency in Cork. Glenfeig is firmly established as the state's partner of choice for large-scale affordable delivery, and that's a position built on consistent, reliable execution over a number of years. It's a hard-won reputation, and one we are very proud of. On slide 12, we give you more detail on the partnership pipeline, which continues to deepen. The pipeline now stands at approximately 8,000 units, with a total estimated net development value of about €3 billion. It's substantial and well-balanced across commenced timing, contract status, and land source, giving us strong visibility on future delivery. We don't need to convert the full pipeline to deliver our targets, and this gives us an ability to be selective and to progress schemes where our platform and scale add the greatest value for both the authorities and Glenveig. Moving now to slide 14 and our home of the future section. There are six principles that guide our innovation programme, and it's worth spending a moment on these because they explain why investing in the area and what we expect to get. The first principle is time. We are targeting a significant shift, evolving less on-site labour and maximising efficiency, which will bring homes to customers faster and allow us to cycle our capital quicker through the business as we move through each phase. The second principle is quality. Over 95% customer satisfaction score reflects the higher standards and the more controlled manufacturing approach can support. Greater precision and less variability give customers more confidence in the product and in the quality on what we deliver. The third and fourth principles are labour and value. Moving more actively into offsite manufacturing reduces the reliance on skilled trades onsite and creates a more resilient, scalable delivery model. That in turn supports value by improving delivery certainty and strengthening the proposition for our customers and our apartments. The fifth and sixth principles are standardisation and infrastructure resilience. Standardization helps simplify the delivery and support scale, while infrastructure resilience is about reducing resilience on public infrastructure and increasing energy independence together. Together, they give us greater control over program delivery and strengthen the long-term resilience of our model. Then moving to slide 15, where we present the challenge and how our response. Ireland needs over 50,000 new homes a year. Traditional construction is slow, fragmented and labour intensive. It cannot get us there. That's the gap that Glenveig has built its model to close. Our response is vertically integrated housing system. Glenveig, combined with NUA, our in-house manufacturing arm, creates a platform that connects standardised design directly to off-site production. Our three factories in Carlow, Arclough and Dundalk have the capacity to produce 2,500 units per year based on one operating shift. The outcome is faster delivery, reduced programme risk, guaranteed supply and improved quality. And we're aligned with government policy. Our new facility in Carlow received ministerial endorsements as a milestone for housing delivery and we are well positioned to scale this to 4,000 units per year by the year 2030. Slide 16 shows the roadmap for what comes next. Workstream 1, timber frame and light gauge steel, is already fully embedded across the platform. And that is the foundation for everything else that is built on. We're now moving through to four further workstreams, each which increases the pre-manufactured value or the PMV. Workstream 2 is the external wall system. It replaces heavily wet trade dependent construction with an engineered wall system, taking PMV from our current base to 55%. Workstream 3 moves to insulated raft foundation system, reducing concrete usage and lowering embodied carbon on site and bringing PMV to 60%. Workstreams 4 and 5, roof cladding and energy water systems, are the final stages, each targeting 70% of PMV. Roof cladding substitutes heavier finishes with modular off-site friendly systems, while energy and water workstreams incorporates technologies that reduces peak consumption and reduces the reliance on public infrastructure connections that can delay site starts. We have 400,000 square foot of manufacturing capacity already in place to support this journey. The direction of travel is clear as more and more of the build process moves to more predictable and more resilient. Together, it all compounds over time. On slide 17, delivering at scale is only meaningful if you're delivering quality. Our customer satisfaction rating reached a new high in 2025, and repeat mandates from sector-state partners tell the same story. Our home buyer portal is now fully integrated across the customer journey, which is a reflection of the care we put into the experience on the other side of the transaction. With that, I'll hand you over to Conor to talk you through the financials.

Thanks, Stephen, and good morning, everyone. I'll start with the income statement for 2025 on slide 19. As Stephen outlined, 2025 was another year of strong financial progress for Glenveig, which delivered continued revenue growth, margin expansion across both operating segments and EPS ahead of guidance. The quality and sustainability of the earnings profile continue to improve, and the results reflect the compounding benefit of investments and strategic decisions made over the past number of years. In the year, group revenue increased to £926 million, up 7% year-on-year, with home building contributing £545 million from 1,490 closed units, with partnerships delivering £381 million in revenue, representing as the segment continued to scale. Gross profit increased to £198 million, with gross margin expanding by 20 basis points to 21.4%, despite changes in business mix. Home building gross margin was 23.6%, up 110 basis points, underpinned by standardisation, scale and vertical integration, alongside a continued contribution from land sets. Partnerships gross margin was 18.2%, which included a positive land contribution of approximately 190 basis points. Excluding land, the underlying partnerships margin was approximately 16.3%. ahead of expectations and reflecting continued strong on-site execution. Central costs were 50 million, including a non-cash share-based payment expense of approximately 8 million. Total administration expenses were 54 million, including depreciation and amortization. While absolute costs rose modestly as we continue to invest in systems, innovation and talent, overheads reduced as a proportion of revenue, evidencing the improving operational leverage as the business scales. This dynamic is expected to persist, with overhead growth expected to lag revenue over the medium term. Net finance costs increased marginally to 19 million, driven by higher average debt balances earlier in the year. Profit before tax was 125 million, up 114 million from 2024. Earnings per share increased to 20 cent, up 18%, and ahead of guidance, with a return on equity of 14.4%, up from 14.2% in 2024. Turning to the balance sheet on slide 20. The balance sheet reflects a robust and increasingly efficient financial position. Following the completion of the current phase of our land assembly strategy, the year-end land balance reduced to approximately £534 million, excluding development rights, down from £556 million at the end of 2024, driven by unit delivery and selective land disposals. Our focus remains on steadily reducing capital employed in land over time while maintaining output and protecting delivery certainty. Work in progress remained broadly stable at £284 million, reflecting discipline, production management and official capital deployment as output scaled. Contract assets increased during the year to £142 million, consistent with the phasing of revenue recognition across partnership projects. Net assets stood at £793 million at 31 December, up from £751 million at year-end 2024, representing continued balance sheet strengthening. Moving to cash flow on slide 21. Operating cash inflow was 100 million for the year, supported by disciplined management of WIP and land investment, with capital turnover improving as output scales and standardisation accelerates delivery. Net debt reduced to approximately 168 million at year end, down from 179 million at the end of 2024, despite increased production activity and continued capital returns to shareholders. Looking ahead, the unwind of the contract asset through 2026, as milestones are achieved, combined with a growing forward-funded component within partnerships, is expected to strengthen structural cash conversion as that platform scales. On slide 22, we provide a bridge on how the land bank is expected to evolve between 2025 and 2027. Land sales of 55 million were completed in 2025, with a further 45 million targeted for 2026. This will take total disposals across the two years to approximately 100 million. The year-end 2025 land balance of 554 million, inclusive of development rights, is expected to reduce to a range of approximately 400 million to 460 million by the end of 2027. driven by unit sale whip releases and land sales, balanced by a modest level of selective land acquisitions. This trajectory reflects a deliberate shift from a period of active land assembly to one of progressive capital release, optimising the portfolio towards larger, scalable developments while supporting improving returns and cash conversion over time. Moving to slide 23, our capital allocation priorities remain clear and consistent. On land, the current phase of our land assembly strategy is now complete and the land bank supports the delivery of between 2,750 and 3,600 units per annum through to 2030, with no further net land investment required. On WIP, we anticipate continued investment to support the 33% home building unit growth from 2025 to 2027, offset by the ongoing focus on expanding the partnerships platforms in a disciplined and sustainable manner, resulting in an unwind of the contract assets. Furthermore, our Grade A office block in Dublin Docklands is expected to deliver a material cash inflow in 2028, following the completion of our lease-up strategy. On supply chain, offsite investment is largely complete with 70 million invested to date and the capability in place to deliver 2,500 timber frame and light gauge steel units per annum on a single shift. A further 20 million investment is planned across 2026 and 2027 to expand timber frame capacity and importantly operationalise our innovative facade production. On returning excess cash, we completed a £105 million share buyback programme in December 2025 and commenced a further £25 million programme on 15 January 2026. On completion of the programme, over £445 million will have been returned to shareholders since 2021, reducing the issued share count by approximately 42%. The group targets an average net debt range of between 15% and 25% of gross assets, and we expect to be highly cash generative in H226, providing capacity for continued reinvestment and further capital returns subject to market conditions. So bringing it all together on slide 24, we're confident in our ability to deliver our guidance for 2026, growth and completions across both segments, continued margin delivery and further progress on land sales. We're guiding to EPS of up to 21 cent for the year, supported by a robust land portfolio, solid order book and ongoing standardisation. We expect approximately 1,600 home building unit deliveries in 2026 and partnerships is expected to deliver the targeted annual average gross profit of 60 million for that segment. The business enters the year with a strong order book, fully invested land bank and clear line of sight on delivery. We'll continue our disciplined and balanced approach to capital allocation, maintaining our focus on value creation and return to shareholders. Thanks again for joining this morning and I'll pass you back to Stephen for his concluding remarks.