george wimpey plc annual general meeting 2006 the royal college of physicians thursday 20 april 2006

George Wimpey PlcAnnual General Meeting 2006

The Royal College of Physicians

Thursday 20 April 2006

Group Overview

Peter Johnson

Group Chief Executive

2005 results

£m

Tax

Profit before tax

Dividend cover

DPS

NAV per share

EPS

366.5 437.6 - 16%

17.6p 16.0p + 10%

3.7x 4.9x -

64.3p 78.4p - 18%

389p 340p + 14%

31% 31% -

3* restated for IFRS and land sales

Interest (71.0) (59.9) + 19%

Operating profit 437.5 497.5 - 12%

Turnover 3,003.2 2,976.0 + 1%

2005 2004* Change

2005 completions and prices

10,678 - 5% £188,600 - 2%UK private

1,422 + 48% £98,600 + 10%UK affordable

12,100 - 1% £178,000 - 4%UK total

4,921 + 11% $312,700 + 8%US total

17,021 + 2%GROUP TOTAL

No Change £ / $ Change

Completions Ave selling price

4

Turnover

£m

Operating profit

Operating margin*

Change £m Change 2005 2004

UK

US

Other

TOTAL

2,157.6 - 5% 278.0 - 32% 12.9%

845.5 + 21% 169.4 + 65%

18.0%

14.7%20.0%

0.1 - (9.9) - 33%

3,003.2 + 1% 437.5 - 12%

Segmental analysis

*Exchange rate in 2005 $/£=1.82, 2004 $/£=1.83

*UK operating profits stated after charging £5m of restructuring costs 5

Balance sheetfinancing

6

Shareholders’ funds £m

Net debt £m

Capital employed £m

Gearing

Interest cover - reported

Interest cover - underlying

ROACE

1,544.4 1,331.4

521.9 520.9

2,066.3 1,852.3

34% 39%

6.2x 8.3x

8.8x 10.4x

22.3% 28.9%

Dec2005

Dec2004

* restated for IFRS

US Business Review

5 year review: Morrison Homes

CompletionsOperatingmargin %

Operatingprofit* $m

Turnover*$m

ASP$

2004

2005

2001

2002

2003

1,277.3 188.3 14.7% 4,422 289,000

1,538.8 308.3 20.0% 4,921 313,000

687.7 66.4 9.7% 2,900 238,000

804.7 80.7 10.0% 3,197 252,000

988.3 118.6 12.0% 3,661 270,000

CAGR 22.3% 46.8% - - 7.1%

8* restated for IFRS and land sales

Some industry comparisons

:

Company Est PBT margins 2005 asp 2005 increase % US GAAP $000 %

Toll Brothers 21.6 654 13 NVR 21.0 376 13Morrison 18.5 313 8Standard Pacific 17.6 352 -6DR Horton 17.0 263 9 Hovnanian 16.7 319 14 Pulte 15.8 316 10 Ryland 15.6 274 9 Centex 14.4 297 10

Beazer 12.2 271 17

Estimates from broker reports

9

Successful growth strategy

Focus on growth markets

Morrison markets account for 45% of job growth, 49% of population growth and 38% of 2005 H2 SF permits

Growth through satellites

3 satellites started in 2001 produced >20% 2005 completions

Growth through product development

Townhomes 12% Florida completions

Addressing underperforming businesses

Atlanta exited

Texas completions +47%, order book +55%

Strong landbank

10

Landbank in place to deliver growth

0

5,000

10,000

15,000

20,000

25,000

2001 2002 2003 2004 2005

controlled owned/optioned total

11

UK Business Review

2005 financial summary

* restated for IFRS and land sales

13

Total completions

Private completions

Affordable completions

Private ASP

Total turnover £m

Gross margin %

Operating profit £m

Operating margin %

12,100

10,678

12,232

11,274

1,422 958

£188,600 £193,400

2,157.6 2,277.9

21.5% 26.1%

278.0 409.4

12.9% 18.0%

2005 2004*

Causes of margin reduction

Selling pricestough market: total transactions down 17%, 28% H1change in mix: affordable housing, smaller homes/more flatsweak southern marketshort order book

Short land bank: rapid unwinding of “stock profits”

Rising costs: esp energy related materials

Underperforming businesses and sites

Heavy second half volume weighting

14

Actions to improve margins

Strengthen sales position, processes and management

order book + 33% at 1 January,

southern markets first to recover

Acquisition of larger sites on better terms

Programme to drive down build and overhead costs £20m cost savings achieved in 2005

organisation structure rationalised: two brands retained

plan for ongoing reduction in build costs in 2006+

Underperformers addressed: withdrawal from high-rise

Better H1/H2 volume balance

15

Landbank

North

Midlands

16,447

13,878

5,112

4,662

2005 2004 2005 2004

Owned andcontrolled plots

Strategic acres

18,615

11,882

4,934

5,529

TOTAL 50,985 14,16951,119 17,571

16

South 20,660 20,622 7,1084,395

Summary and Outlook

5 year review

18

Group completions

PBT £m

Net worth £m

Dividends per share

Gearing

17,021 16,654 16,654 16,570 16,917 14,437

366.5 437.6

1,544.4 1,331.4

17.6p 16.0p

34% 39%

450.7 378.2 285.9 152.0

1,439.1 1,168.4 944.6 783.3

16.0p

36%

12.25p

45%

9.1p

40%

8.25p

49%

2005 2004 2004 2003 2002 2001

IAS UK GAAP

Profits increased by 141%Dividends annual growth rate 21%Balance sheet strengthened

Group outlook

US

economy projected to remain healthy

strong forward order book at start of year

total market projected to be down ~8%

return to use of incentives in most markets

Morrison located in markets with continuing employment growth

UK

market recovery has continued, esp in south

further cost saving opportunities identified and in place

strong forward order book starting to reduce use of incentives

prices moving up on selected sites

19

Summary

US growth strategy paid off in 2005

Morrison Homes outperformed in a strong market

But is facing tougher market conditions in 2006

UK results in 2005 affected by short land bank, weak market (esp in south) and some underperforming businesses

Weaknesses have been addressed, the forward land position is stronger and the market is improving, esp in the south

UK soundly based to rebalance volumes in H1 and begin to rebuild margins in stable and improved market in H2

20

Presentation title / Audience / Location / Date / © George Wimpey 2002

Outcome of Proxy Voting

John Robinson

Chairman

Proxy vote for Resolution 1

Resolution 1:

TO RECEIVE THE DIRECTORS’ REPORT AND ACCOUNTS

Total votes 275,763,846

Votes in favour 272,133,325

Against 548,880

Abstentions 3,081,641

23


Resolution 2:

TO APPROVE A DIVIDEND



Against 0

Abstentions 270,614

24


Resolution 3:

TO REAPPOINT JOHN ROBINSON



Against 2,166,111

Abstentions 397,749

25


Resolution 4:

TO REAPPOINT DAVID WILLIAMS



Against 21,258

Abstentions 397,174

26


Resolution 5:

TO REAPPOINT ANTHONY READING



Against 20,591

Abstentions 398,376

27


Resolution 6:

TO REAPPOINT ROBERT SHARPE



Against 29,092

Abstentions 396,126

28


Resolution 7:

TO REAPPOINT STEVE PARKER



Against 180,892

Abstentions 276,755

29


Resolution 8:

TO REAPPOINT PRICEWATERHOUSECOOPERS LLP AS AUDITORS



Against 383,644

Abstentions 274,355

30


Resolution 9:

TO GIVE THE DIRECTORS AUTHORITY TO ALLOT SHARES



Against 5,335,313

Abstentions 279,842

31


Resolution 10:

TO DISAPPLY PRE-EMPTION RIGHTS



Against 1,713,196

Abstentions 23,898

32


Resolution 11:

TO EMPOWER THE COMPANY TO MAKE MARKET PURCHASES

OF ITS SHARES



Against 207,538

Abstentions 281,081

33


Resolution 12:

TO APPROVE THE REMUNERATION REPORT OF THE COMPANY



Against 1,200,082

Abstentions 6,253,486

34


Resolution 13:

TO AMEND THE ARTICLES OF ASSOCIATION CONCERNING

DIRECTORS’ INDEMNITIES



Against 53,154

Abstentions 311,572

35

george wimpey plc annual general meeting 2006 the royal college of physicians thursday 20 april 2006

Documents

uk operating profits

land salesinterest71

job growth

population growth

uk private1

uk affordable12

uk total4

overhead costs