george wimpey plc annual general meeting 2007 thursday 26 april 2007

George Wimpey PlcAnnual General Meeting 2007

Thursday 26 April 2007

Group OverviewPete Redfern (Chief Executive)

2006Full year results

£m 2006before

exceptional items

2006exceptional

items

2006total

2005total

Change

Revenue 3,147.4 - 3,147.4 3,003.2 + 5%

Operating profit 422.8 (60.7) 362.1 437.5 - 17%

Interest (51.9) - (51.9) (71.0) - 27%

Profit before tax 370.9 (60.7) 310.2 366.5 - 15%

Tax (114.9) 22.7 (92.2) (113.7)

EPS 64.4 (9.6) 54.8 64.3

NAV per share 426p 389p

DPS 19.4p 17.6p

Dividend cover 2.8x 3.7x

Completions and pricesFull year results

Completions Ave selling price

No Change £ / $ Change

UK private 11,982 + 12% 186.4 - 1%

UK affordable 1,634 + 15% 94.9 - 4%

UK total 13,616 + 13% 175.4 - 2%

US 4,347 - 12% 319.6 + 1%

GROUP TOTAL 17,963 + 6%

Segmental analysisFull year 2006

Turnover Operating profit* Operating margin**

£m Change £m Change 2006 2005

UK 2,391.2 + 11% 317.6 + 14% 13.0% 12.9%

US 756.2 - 11% 116.9 - 31% 15.5% 20.0%

Corporate - (11.7)

TOTAL 3,147.4 + 5% 422.8 - 3%

* Before exceptional items

** Operating margin before JVs and exceptional items

Exchange rate in 2006 £:1.84$ 2005 £:1.82$

Balance sheetFinancing

31 Dec 2006 31 Dec 2005

Shareholders’ funds £m 1,707.1 1,544.4

Net debt £m 387.1 521.9

Capital employed £m 2,094.2 2,066.3

Gearing 23% 34%

Interest cover last 12 months 7.0x 6.2x

Cash interest cover last 12 months 8.3x 8.8x

ROACE 20.3%* 22.3%

* before exceptional costs of £60.7 million

US housing review

US housingFinancial summary

2006 2005 Change 2004

Legal completions 4,347 4,921 - 12% 4,422

Ave selling price $319,600 $312,700 + 2% $288,900

Revenue $m 1,389.1 1,538.8 - 10% 1,277.3

Operating profit $m 214.7 308.3 - 30% 188.3

Operating margin 15.5% 20.0% - 4.5pp 14.7%

• 2006 started with soft market conditions, steadily worsened through to Q4

• Tough market conditions caused by– increased interest rates– affordability– investors cancelling homes under contract– overstocking of inventory– incentives/discounting by US competitors

• Consistently weak across Arizona, Florida and Northern California

US housing2006 market conditions

US housingIndustry comparisons 2006

Company PBIT margins ROACE Land stocks (years)

Morrison Homes 15.5% 24.6% 3.5

Centex 11.7% 11.6% 6.4

DR Horton 14.6% 12.9% 6.1

Hovnanian 5.4% 5.3% 5.3

KB Homes 13.8% 15.8% 5.1

Lennar 14.2% 18.4% 6.8

Pulte 12.7% 13.7% 6.6

Ryland 14.9% 19.4% 4.1

Standard Pacific 17.2% 11.8% 6.0

Toll Brothers 20.4% 14.9% 8.6

Estimates from Credit Suisse, pre-exceptional figures based on latest full year

US housingPerformance initiatives

• Land– renegotiation of existing land contracts– land buying process

• $20 million targeted cost savings– 5% initial reduction in build costs– initiatives across all areas of the business– outsource second year warranty programme

• Overhead reductions – 20% across the business– ‘right-sizing the business’

• Sales– clear strategy – focus on opening outlets on time– achieve and maintain a consistent sales rate– re-build backlog levels

UK housing review

UK housing Financial summary

2006 2005 Change

Legal completions – total 13,616 12,100 + 13%

Private 11,982 10,678 + 12%

Affordable 1,634 1,422 + 15%

Ave selling price – total £175,400 £178,000 - 1%

Private £186,400 £188,600 - 1%

Affordable £94,900 £98,600 - 4%

Revenue £m 2,391.2 2,157.6 + 11%

Operating profit £m 317.6 278.0 + 14%

Operating margin* 13.0% 12.9% + 0.1pp

*Excluding JV results

UK housing Delivery on promises

H1 2006 low point of margin Gross margin in H2 2.2% ahead

Better H1/2 balancing H1 2006 compared to H1 2005 over 25% improvement

Impact of strong order book Real benefits of stronger negotiating position delivered in H2 2006

Develop our good cost saving performance Significant savings underpinned margins in 2006. New target for 2007

Deal with underperforming businesses The 6 lowest performing businesses in 2005 have increased margins by over 4%

UK housing Performance initiatives

• Costs– appointed UK Head of Procurement, Peter Williams– over 80 cost reduction initiatives underway or identified– cost savings of £25m targeted for 2007

• Land– 14% growth in UK landbank in 2006– focusing on acquiring more long and medium term sites– building and maintaining a balanced landbank is key to our strategy

• Sales – review of marketing spend effectiveness identified new initiatives to improve brand image– new and improved UK website introduced early 2007– aim to set industry leading standards providing excellence in sales presentation,

management and customer service

• People– aim to attract and retain the very best people in the industry– talent management is the key focus of our people strategy

UK housing Margin commitments firmed up

H2

2006

H1

2006

H2

2005

H1

2005

Gross margin % 21.5 19.3 20.3 23.5

• Commitment to improvement from H1 2006 ‘low point’ delivered

• Clear statement of future operating margin targets:

– 14% in 2007

– ongoing growth to 16% over 2-3 years

– longer term target of 18%

Sustainable developmentTaking a proactive stance

• Recently listed as one of the Global 100 Most Sustainable Companies

• Appointed as the house building and construction representative on theCBI Task Force on Climate Change

• Established an internal team to meet the Government’s recently publishedvoluntary ‘Code for Sustainable Homes’ which includes the target to build all new homes as ‘Zero Carbon’ by 2016

• Working in partnership with Building Research Establishment (BRE), and other industry experts, to beat this target and lead the industry to deliver fully sustainable new homes and communities

The merger

• Improves margin growth in the UK– George Wimpey’s cost efficiency and business structure

– Taylor Woodrow’s strategic land development skills

– the ability to adjust the business model focus to a lower sales rate per outlet

• Provides for economies of scale in the UK– better procurement terms and supply chain efficiencies

– overhead efficiency

– improved land management

• Creates a truly leading business in the US– enhanced strength in target states

– broader brand and product offering

– improved position from which to benefit from a US recovery

• Offers the opportunity to extract material annual synergies in the short term

Taylor Wimpey plc Business benefits

• Taylor Woodrow shareholders will own 51% of the combined entity, George Wimpey shareholders will own the remaining 49%

• Recommended share for share merger to be effected via a scheme of arrangement of George Wimpey

– posting of documentation – by early May 2007

– court meeting and EGM – by end May 2007

– completion – Summer 2007

• George Wimpey shareholders on the register on the dividend record date (2 March 2007) to receive George Wimpey final dividend of 13.10p per share

• Taylor Woodrow shareholders on the register on the dividend record date (25 May 2007) to receive Taylor Woodrow final dividend of 9.75p per share

• Combined business to be re-named - Taylor Wimpey plc

Taylor Wimpey plc The merger terms

• An enhanced UK business with an improved margin growth profile

• An enhanced US business, with critical mass and a broader brand and product offering

• Strong land position with attractive strategic landbank

• Scope for operational efficiencies and ongoing cost saving programmes

• Strong financial position, allowing for improved growth in the UK and US

Taylor Wimpey plc Summary

Outcome of Proxy VotingJohn Robinson (Chairman)

Proxy vote for Resolution 1

Resolution 1:

To Receive the Directors’ Report and Accounts

Total Votes 294,506,307

Votes in favour 290,984,963

Votes against 912,786

Abstentions 2,608,558

In the case of all resolutions, votes in favour include votes exercisable at the Chairman’s discretion


Resolution 2:

To Approve a Dividend



Votes against 152

Abstentions 335,738


Resolution 3:

To Reappoint Andrew Carr-Locke




Abstentions 9,197


Resolution 4:

To Reappoint Christine Cross




Abstentions 11,127


Resolution 5:

To Reappoint Baroness Dean of Thornton-le-Fylde



Votes against 2,139,918

Abstentions 15,206


Resolution 6:

To Reappoint Ian Sutcliffe




Abstentions 259,407


Resolution 7:

To Reappoint Price WaterhouseCoopers LLP as Auditors




Abstentions 56,727


Resolution 8:

To Give the Directors Authority to Allot Shares




Abstentions 9,207


Resolution 9:

To Disapply Pre-Emption Rights




Abstentions 40,113


Resolution 10:

To Empower the Company to Make Market Purchases of its Shares




Abstentions 5,566


Resolution 11:

To Approve the New Three Year Morrison Homes Long Term Incentive Plan for the President of Morrison Homes






Resolution 12:

To Approve the Remuneration Report of the Company






Resolution 13:

To Authorise the Company to use E-Communications




Abstentions 395,098

George Wimpey PlcAnnual General Meeting 2007

Thursday 26 April 2007

george wimpey plc annual general meeting 2007 thursday 26 april 2007

Documents

year slide

us housing review slide

uk housing review slide

uk housing financial

exceptional costs

operating profit m317

operating profit422

operating margin15