Glenveagh makes huge progress since IPO last year

Irish housebuilder Glenveagh Properties updated the market on its trading and outlook on Friday, reporting that its first year as a public company had been marked by “strong achievements” and progress across all its objectives.

The Dublin and London-listed firm, which was holding its annual general meeting during the day, said it was ahead of schedule in delivering its key initial public offering targets - namely acquiring land for residential building, constructing and selling houses and apartments, and scaling its business as a public limited company.

On the subject of land acquisitions, Glenveagh noted that €404m of capital had now been deployed in land assets since October's IPO, and announced four further substantial land acquisitions.

It confirmed it was purchasing three sites for its ‘Homes’ division and one site for its ‘Living’ unit, with a combined acquisition cost of €120m, capable of delivering 2,780 units.

The group said its land bank was now 10,120 units, 31% of which were described as “shovel-ready”, with 97% zoned residential.

Its land bank in Homes comprised 8,270 units across 38 sites, while Living's land bank consisted of 1,850 units across four sites.

On the construction front, Glenveagh said it had now commenced on 12 sites for Homes with around 700 residential units currently under construction and 800 expected to be under construction by the end of 2018.

In sales, the company said activity had been “strong”, with 234 units signed or reserved since 1 January, through a combination of show home villages and marketing suites.

The group said it was currently selling from six sites, which would rise to eight during 2018.

It said its Homes division was continuing to evaluate its sales options for its Herbert Hill, Dundrum site following reverse enquiries from institutional investors seeking “yielding product in a scarce environment” for quality, new build rental stock.

Since becoming a plc, Glenveagh said headcount had increased from 85 permanent employees to 148 employees at the March interims, and then to 204 permanent employees as of Friday, with more than 80% of recruitment in the construction, health and safety and commercial departments.

Looking ahead, Glenveagh said the market backdrop remained “very favourable”, with significant demand for housing - particularly starter homes - clearly evident across its selling sites.

It said its Homes unit remained on target to deliver 250 completed and sold units by year-end, and retained its principal focus going forward in constructing “well-built and value for money” houses for the starter home market.

The speed and skill at which the board said Homes opened its construction sites post-IPO, and use of off-site construction methodologies including timber frames, also reportedly de-risked the delivery of the group's unit delivery targets of 725 and 1,000 in 2019 and 2020 respectively.

Land acquisition conditions remained “attractive” for the group given the nature of the sellers, favourable creation values when purchasing sites of scale, and the ability to achieve gross margins in line with projections, the board added.

It said a number of “significant” land opportunities were expected to be brought to market by various parties over the summer months.

“I am delighted to report that we are ahead of schedule in meeting each of our IPO goals,” said Glenveagh founder and chief executive officer Justin Bickle.

“We continue to enjoy significant structural advantages as a plc including a strong balance sheet, construction operations of scale, and an attractive pipeline of residential land opportunities.

“Since last October when we created Glenveagh, we have made a fast start in turning land into built stock in a very favourable selling market.”

Bickle explained that using timber frames to construct houses, benefiting from a “strong and growing” network of subcontractors, and having assembled a “sector-leading” management team with a “culture of innovation” and capital discipline, the company was on its way to becoming a volume homebuilder.

“While we expect the current favourable market conditions to continue for our core Homes business, in parallel through our Living division we are seeking to deliver mixed-tenure solutions, to address the public housing crisis, and other PRS solutions, having regard to the structural shift to rental in Dublin and other key cities.

“We believe that the combination of our Homes and Living divisions allow us to access both consumer and institutional demand for modern, well-built residential product in Ireland, and help diversify risk across the cycle,” Bickle said.

“We look forward to reporting on our further progress in the coming months.”