28 February 2024
Glenveagh Properties
plc
Final Results
2023
Glenveagh Properties plc
("Glenveagh" or the "Group") a leading Irish homebuilder announces
its Final Results for the period ended 31 December 2023.
Financial Highlights
|
FY 2023
€m
|
FY 2022
€m
|
Change
|
Revenue
|
607.9
|
644.7
|
-6%
|
- Suburban
|
470.8
|
454.5
|
+4%
|
- Urban
|
120.1
|
190.2
|
-37%
|
- Partnerships
|
17.0
|
-
|
n/a
|
Gross profit
|
112.7
|
108.1
|
+4%
|
-
Suburban
|
95.1
|
83.6
|
+14%
|
-
Urban
|
15.4
|
24.5
|
-37%
|
- Partnerships
|
2.2
|
-
|
n/a
|
Gross margin (%)
|
18.5%
|
16.8%
|
+170
bps
|
-
Suburban
(%)
|
20.2%
|
18.4%
|
+180
bps
|
-
Urban
(%)
|
12.8%
|
12.9%
|
-10
bps
|
- Partnerships (%)
|
12.9%
|
-
|
n/a
|
Operating profit
|
70.9
|
70.1
|
+1%
|
Profit before tax
|
55.1
|
63.0
|
-13%
|
Earnings Per Share (EPS)
(cent)
|
8.0
|
7.6
|
+5%
|
|
|
|
|
Land1
|
403.8
|
455.3
|
-11%
|
Work in Progress
|
274.6
|
227.2
|
+21%
|
Operating cash flow
|
50.9
|
140.9
|
-64%
|
Net Debt
|
48.8
|
13.8
|
+€35m
|
Total Equity
|
678.2
|
693.1
|
-2%
|
|
|
|
|
Suburban Completions
(units)
|
1,328
|
1,354
|
-2%
|
Suburban: Closed & forward
order book (units)2
|
1,106
|
841
|
+32%
|
Group: Closed & forward order
book (value)2
|
805
|
473
|
+70%
|
|
|
|
|
|
|
|
|
1 Excluding development rights
2 As at 27 February 2024. Prior year data as at 1 March
2023
|
|
FY 2023 Performance
·
In FY 2023 we increased suburban revenue and
margin, our Partnerships business segment started to generate
revenue and profits, and we benefitted from strong planning
momentum
·
We delivered EPS of 8.0 cent, a 5.3% advance in
the year and at the top end of our guided range
· During FY
2023 we were granted permissions for approximately 4,600 units,
approximately 400 of which are currently in post-grant appeal
periods. We also lodged planning applications for approximately
2,900 units
· Standardisation played an increasingly significant part in
our momentum, driving greater efficiencies at every part of our
value chain and incorporating standardised house types into the
manufacturing and delivery process, while enhancing build quality
and customer service. We more than doubled the number of
standardised housing types we supplied, and this year only a small
percentage of homes will be non-standardised. As a result, we can
plan, design, and build houses more effectively, with greater
efficiency and speed, and in greater numbers than ever
before
·
We launched NUA as our off-site manufacturing
business with the capacity to deliver product for over 2,000 homes
from three strategically located sites. NUA gives us greater
control over our supply chain, allows for faster, more consistent
construction in a sustainable manner, and enables us to get
products to market faster. We are committed to embedding innovation
and modern methods of construction into our product offering, and
ongoing projects are focused on enhancing the premanufactured value
of these products and also on driving further operational
efficiencies in our manufacturing processes
· We also
progressed with our sustainability agenda, launching our Net Zero
transition plan in March 2023. This is an important milestone for
our investors and customers as the focus increases on energy
efficiency. Our Scope 3 emissions have now decreased by 7% against
our 2021 baseline, measured on an intensity basis (tCO2e/100sqm).
In early 2024 we also published both our Biodiversity and Circular
Economy strategies and have had our science-based targets (SBTs)
verified by the Science Based Targets initiative (SBTi)
· Net Debt was maintained at prudent levels as we continued to
generate efficiencies from our landbank while also investing in our
work-in-progress ('WIP') for FY 2024 and completing our significant
investment in NUA
·
We also returned approximately €63 million to
shareholders, bringing the overall returns over a three-year period
to over €300 million
Outlook
· The long-term
demand outlook for the Irish residential housing market remains
very positive. A resilient domestic economy is coupled with a
fast-growing population and reinforced by supportive State
initiatives. Our proven operational capability and established
expertise in partnership and urban development models mean that we
are ideally positioned to grow as a scale operator in the Irish
market
· We are
actively working with the multiple state agencies that the
Government is using to stimulate and accelerate housing supply. We
are transacting with approved housing bodies and local authorities
to supply increasing numbers of cost rental, social and affordable
housing through this year and next. We are engaging closely with
the Land Development Agency ('LDA') on projects that can
potentially activate our urban portfolio, with additional
opportunities possible over time to partner on projects on State
land. We also have a project approved in the Croí Cónaithe scheme.
We will direct resources and investment as appropriate as these
partnering opportunities materialise
· We expect
to generate strong revenue and profit growth across each of our
Suburban, Urban and Partnerships business segments in FY 2024. This
growth is underpinned by our healthy land portfolio and forward
order book, continued planning momentum and strong operational and
manufacturing capability
·
The further advance in our forward suburban order
book for FY 2024 of 1,106 units closed or contracted gives us
increased confidence on the outlook for our Suburban business
segment. A further improvement in the underlying suburban margin is
expected in FY 2024
·
Urban revenue is expected to comprise
contributions from projects already contracted as well as from new
revenue opportunities. Construction of our Croí Cónaithe
development in Cork will begin in mid-year
·
We anticipate that revenue from our Partnerships
segment will exceed €100 million in FY 2024, with a gross margin of
approximately 15%. We expect to commence the construction of almost
1,300 homes under our partnership schemes this year
·
In FY 2024 we anticipate making further
efficiencies in our land investment, while WIP is expected to
increase modestly as the unwinding of current urban developments is
more than offset by increased suburban activity and new urban
investment. Net debt is expected to be approximately 10-15% of net
assets at the end of FY 2024
· Our focus remains on enhancing the capital efficiency of the
business and increasing cash generation. Once our capital
allocation priorities are satisfied, we remain committed to
returning any excess cash identified to shareholders
· Our
stronger forward order book, operational momentum, and continued
progress in manufacturing means that we have increased confidence
with current consensus EPS expectations for FY 2024 of
approximately 17 cent
CEO Stephen Garvey commented:
"We achieved our objectives in 2023 and this sets us up very
well to operate at scale in 2024 and beyond.
Our business is performing effectively, delivering at pace
and at scale the new homes that Irish people badly need -
energy-efficient and high-quality homes designed for value and
affordability, that work well with government initiatives. In 2024
we will see families, couples and individuals move into over 2,700
new homes that we have delivered.
Our greater scale is underpinned by the increased control we
have taken over our supply chain in recent years. We are already
seeing the benefits of investing in our NUA manufacturing business,
to give us significant advantages in off-site manufacturing,
innovative design, more sustainable processes, standardisation of
our product range and greater efficiency and cost
management.
NUA has also allowed us to develop a clear leadership
position in modern methods of construction in the Irish
market.
We are operating in a more favourable planning environment
that is unrecognisable from two years ago. However, while the
planning system is catching up with the backlog successfully,
prospective homebuyers need to see ongoing investment by the State
in additional planning and infrastructure resources to prevent a
recurrence of backlogs, as output levels across the housebuilding
industry continue to rise sharply to meet the supply
shortage.
Notwithstanding this we remain confident about the outlook,
not least because the State has cemented its position as a key
driver of boosting supply and ultimately meeting the high level of
demand that remains evident. We are engaging with the State across
multiple initiatives that are working and making a real difference
- our Partnerships business is delivering thousands of new homes in
conjunction with local authorities and approved housing bodies;
homebuyers are benefiting from Help to Buy and the First Home
Scheme; and we are seeing significant scope for the LDA and other
initiatives to accelerate supply."
Results
Presentation
A webcast presentation of the
results for analysts and institutional investors will take place at
8.30am on 28 February 2024. The presentation slides will be
available on the Investor Relations section on www.glenveagh.ie
from 7.00am on 28 February 2024.
This presentation can also be
accessed live from the Investor Relations section on
www.glenveagh.ie or alternatively via conference call.
Conference call:
Click here to register for conference call
Audio
webcast: Click
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Registration and access details
are also available at Glenveagh
Corporate | Investors news and events
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Note to Editors
Glenveagh Properties plc, listed
on Euronext Dublin and the London Stock Exchange, is a leading
Irish homebuilder.
Supported by innovation and supply
chain integration, Glenveagh are committed to opening access to
sustainable high-quality homes to as many people as possible in
flourishing communities across Ireland. We are focused on three
core markets - suburban housing, urban apartments and partnerships
with local authorities and state agencies.
www.glenveagh.ie
Forward-looking statements
This announcement does not
constitute or form any part of an invitation to underwrite,
subscribe for or otherwise acquire or dispose of any shares of
Glenveagh Properties plc ("Glenveagh" or "the Group").
This announcement contains
statements that are, or may be deemed to be, forward-looking
statements. Forward-looking statements include, but are not limited
to, information concerning the Group's possible or assumed future
results of operations, plans and expectations regarding demand
outlook, business strategies, financing plans, competitive
position, potential growth opportunities, potential operating
performance improvements, expectations regarding inflation,
macroeconomic uncertainty, geopolitical tensions, weather patterns,
the effects of competition and the effects of future legislation or
regulations. Forward-looking statements include all statements that
are not historical facts and can be identified by the use of
forward-looking terminology such as "may", "will", "should",
"expect", "anticipate", "project", "estimate", "intend",
"continue", "target", "ensure", "arrive", "achieve", "develop" or
"believe" (or the negatives thereof) or other variations thereon or
comparable terminology. Forward-looking statements are prospective
in nature and are based on current expectations of the Group about
future events, and involve risks and uncertainties because they
relate to events and depend on circumstances that will occur in the
future. Although Glenveagh believes that current expectations and
assumptions with respect to these forward-looking statements are
reasonable, it can give no assurance that these expectations will
prove to be correct. Due to various risks and uncertainties, actual
events or results or actual performance of the Group may differ
materially from those reflected or contemplated in such
forward-looking statements. You are cautioned not to place undue
reliance on any forward-looking statements.
These forward-looking statements
are made as of the date of this document. Glenveagh expressly
disclaims any obligation to update these forward-looking statements
other than as required by law.
The forward-looking statements in
this announcement do not constitute reports or statements published
in compliance with any of Regulations 6 to 8 of the Transparency
(Directive 2004/109/EC) Regulations 2007 (as amended).
GLENVEAGH PROPERTIES PLC:
BUSINESS AND FINANCIAL REVIEW
1. BUSINESS REVIEW
i. Group Sales
a. Overview
The Group had total revenue of
€607.9 million (FY 2022: €644.7 million), primarily relating to the
completion of 1,328 suburban units (FY 2022: 1,354) in the period
and including a first-time contribution from our Partnerships
business segment. Excluding the FY 2022 disposal of the East Road
site for approximately €63m, that did not recur in FY 2023, there
was a modest increase in Group revenue.
b. Suburban
The Group reported suburban
revenue of €470.8 million, an increase of 3.6% on the FY 2022
revenue of €454.5 million.
In FY 2023, 1,328 suburban units
were closed which was broadly in line with 1,354 units closed in FY
2022. All sites required to deliver the FY 2024 targets have
planning in place and are active, with a focus on delivering higher
volume from bigger sites.
ASP in FY 2023 was approximately
€336k (FY 2022: €330k), reflecting underlying House Price Inflation
("HPI"), changes in product and site mix, and our commitment to
delivering homes that are affordable for our customers.
Underlying market demand for new
homes continued to be very strong during the year, driven by a
robust economic environment, ongoing increases in population and a
range of demand-side initiatives from the Government.
The Group delivered almost 700
units (approximately 52% of our suburban units) as part of these
Government support initiatives to provide social, cost rental and
affordable housing.
During FY 2023 the scope of the
First Home Scheme was significantly extended to an additional
cohort of buyers by increasing the price ceilings that apply in
Ireland's local authority areas. The scheme is designed to bridge
the gap between a first-time buyer's deposit and mortgage and the
price of the new home, providing up to 30% of the price of the home
and supporting affordability for first-time buyers, a key target
market for Glenveagh. Along with the Help To Buy Scheme, these
initiatives provide more first-time buyers with enhanced access to
new housing developments and approximately 80% of our customers
availed of at least one of these schemes in FY 2023.
Customer affordability was further
supported by the change in the Central Bank of Ireland's
macroprudential rules, that became effective from 1 January 2023.
This increased borrowing capacity materially among the first-time
buyer cohort, up to 4x income compared to a 3.5x limit previously
in place.
c. Urban
Urban revenue decreased by 36.8%
to €120.1 million in FY 2023 (FY 2022: €190.2 million). This
primarily reflects a FY 2022 comparative that included
approximately €63m from the disposal of the East Road
site.
In FY 2023 two of our key
contracted urban projects, Marina Village and Premier Inn, were
completed. All of the remaining contracted projects - at Cluain
Mhuire, Citywest and Castleknock - are anticipated to complete in
FY 2024 and to deliver approximately 650 units. Revenue of
approximately €80 million is expected to be recognised this year
from these projects, bringing the total revenue from the Group's
urban asset monetisation activities to approximately €600
million.
Our remaining urban assets
comprise almost 14% of our overall land investment and principally
comprise assets in Cork and the Greater Dublin Area. There is
significant potential to activate much of this portfolio by
partnering with multiple state agencies as part of the Government's
supply-side housing initiatives.
In November 2023 we were approved
under the Croí Cónaithe (Cities) Scheme to develop 274 owner
occupier apartments for sale on the open market in Blackrock, Cork.
Development is anticipated to begin mid-year and first revenue and
profits from this development are expected in FY 2026.
In addition, significant increased
funding has been proposed for the LDA and a number of our urban
portfolio sites are currently being evaluated by the agency for
prospective selection and activation in FY 2024.
Urban revenue is expected to
comprise the contribution from projects already contracted as well
as new revenue opportunities that include emerging partnership
projects with state agencies. These additional opportunities
provide the flexibility to generate new revenue in FY 2024 and to
offset any potential transaction risk associated with our
commercial office development, the residual non-core asset in the
Docklands portfolio.
d. Partnerships
FY 2023 was a milestone year for
our Partnerships business segment. Both
Ballymastone and Oscar Traynor Road received final planning
permissions in H2 2023 and construction works commenced on both
sites in the final quarter. As a result, we reported our first
revenue in this business segment of €17.0 million.
We expect, by the end of this
year, to have commenced the construction of almost 1,300 homes
under our partnership schemes. We also anticipate lodging a
planning application in FY 2024 for the next phase of the
Ballymastone development, comprising approximately 400 mixed tenure
units.
As noted above, new resources and
funding are now being provided by the Government for supply-side
housing initiatives, the most significant recent initiative of
which is proposed further funding to the LDA.
Our scale, operational capability
and proven expertise in partnership models leave us ideally
positioned to advance such opportunities as they relate to both our
Urban and Partnerships business segments. These have the potential
to generate significant incremental revenue and profits for the
Group over the medium term.
ii. Forward Order Book
The continued strength of the
Irish market is demonstrated through our strong forward order book
which totals €805 million.
The closed and forward order book
in the suburban business for FY 2024 is €377 million, comprising
1,106 units, and gives good visibility on FY 2024 performance.
Strong reservation rates in our Suburban business segment reflects
strong underlying private market demand that is supported by the
resilience of the domestic economy, the range of Housing for All
initiatives, and the change to the Central Bank of Ireland's
macroprudential rules. Customer demand is further underpinned by
the structural undersupply across the market of high-quality,
affordable housing in Ireland.
In addition, the Group's overall
forward order book includes revenue in FY 2024 to be recognised
from the three remaining executed transactions within the Urban
business segment, as well as the contracted element of the
Partnerships business segment.
We are currently active on 20
suburban and urban sites, with a focus on delivering higher output
from larger sites to further enhance operational
efficiencies.
iii. Planning Progress and Policy
We made significant progress in
what was an improving planning environment, increasing confidence
on unit delivery in FY 2024 and beyond.
In FY 2023 the Group was granted
permissions for approximately 4,600 units across over twenty
applications, some 400 of which are currently in post-grant appeal
periods.
Overall, we are strongly
positioned for longer term growth. The Group has planning
permission for all of its expected deliveries in FY 2024. This
improved visibility, when combined with our planning applications
lodged during FY 2023, mean that approximately 80% of our current
landbank could be fully planned and available for development by
the end of this year.
There were some encouraging
improvements in the planning policy and system in FY 2023.
Additional resourcing has been provided to An Bord Pleanála and the
efficiency of its applications processing is improving.
The Large-scale Residential
Development (LRD) process is functioning well to date, with
successful grants received within or ahead of guided
timelines.
The Planning and Development Bill
2023 was published following extensive review and consultation. We
welcome such policy reform in general but are mindful that such an
extensive piece of legislation, combined with the prospective
amendments that are ongoing, will take some time to assimilate in
practice and is unlikely to have a significant impact in FY
2024.
We welcomed the Government's
Sustainable Residential Development and Compact Settlements
Guidelines that were published in January 2024. Its effective
implementation will enable greater flexibility in residential
design standards that will support the delivery of compact 'own
door' housing that are more viable for developers and more
affordable for purchasers.
The review of the National
Planning Framework is also underway. We would urge that this review
accurately reflects present and future population requirements,
designed for viable and appropriately located homes and offering
increased opportunities for home ownership.
The strong performance in our
Partnerships business shows how much can be achieved when public
and private entities work together to deliver what Ireland needs -
sustainable, high-quality, energy-efficient, mixed tenure
developments that will alleviate the supply shortage.
As the largest source of landbank
for the development of new homes and with the scale of its
potential funding capacity, the State will continue to be the major
driver in resolving Ireland's accommodation shortage, in
partnership with the housebuilding industry.
To sustainably deliver increased
housing supply and opportunities for home ownership also requires
appropriately aligning resourcing for planning bodies, local
authorities and utility companies and ensuring the availability of
land with critical infrastructure. Prioritising these actions as a
matter of urgency will enhance industry wide efforts to expedite
the delivery of quality homes and ultimately contribute to building
flourishing communities.
iv. Development Land Portfolio
Management
We continue to take a disciplined
and strategic approach to land acquisitions and portfolio
management, focused on managing to a 4-5 year land portfolio at
scale.
The Group's land investment,
excluding development rights, was €403.8 million at 31 December
2023 (31 December 2022: €455.3 million). We have continued to drive
further capital efficiencies by reducing this net investment in
land and we anticipate driving more efficiencies from the landbank
in FY 2024.
Development rights increased from
€3.2 million in FY 2022 to €29.3m in FY 2023 reflecting the
acquisition of certain development rights associated with our
partnership agreements for Ballymastone and Oscar Traynor
Road.
The Group's land portfolio
currently comprises just over 13,100 units with an average plot
cost of approximately €33k. By number of units, the Suburban
segment accounts for 68% of the portfolio, with the remainder
comprising the Urban segment (16)% and Partnerships segment (16%).
Approximately two-thirds of the overall portfolio is located in the
Greater Dublin Area.
The Group spent or contracted to
spend a total of approximately €38 million on six land sites in FY
2023. These sites have the capacity to deliver approximately 1,050
new own-door housing in sustainable communities. The Group is also
prioritising structured land transactions which will enable more
efficient standardisation of the suburban portfolio as well as
maintaining an efficient balance sheet. Four of the six land
transactions are structured deals allowing the group to progress
with planning applications.
The introduction of a Residential
Zoned Land Tax, originally scheduled for FY 2024, has been deferred
until FY 2025. This tax is designed to incentivise landowners to
use inactive zoned land for housing. Its impending introduction has
already been a positive development in providing additional land
investment opportunities for the Group. The Group is also actively
managing and reviewing its existing portfolio to determine the
extent of, and to mitigate against, any relevant tax liability that
it may incur.
v. Input Cost Inflation
The construction sector continued
to face inflationary pressures across its raw material and labour
costs base in FY 2023 and we anticipate that this will continue
into FY 2024.
We continue to employ several
strategies to mitigate the impact of this inflationary environment.
We collaborate with supply chain partners to secure sustainable,
competitive pricing while maintaining supply security. We also
benefit from our scale and purchasing power in negotiating
competitive terms and pricing with suppliers, while ensuring
greater control over input costs through the Group's supply chain
integration strategy. In addition, the Government announced in
April 2023 that development levies would be removed for a limited
time subject to certain criteria being met, a measure that has
partly mitigated against cost pressures across the
industry.
These mitigation strategies
enabled us to manage build cost inflation to a 4-5% level in FY
2023. As levels of HPI in the new homes market were at similar
levels, the overall impact on margin was broadly
neutral.
vi. Supply Chain Integration - NUA
In June we launched NUA, the
innovative manufacturing and new technology arm of the business
that operates from our three off-site manufacturing facilities in
Carlow town, Arklow, Co. Wicklow and Dundalk, Co. Louth. The sites
are strategically located to service all our sites effectively as a
nationwide home builder.
Significant investment is now
largely completed so the focus is on maximising the value from NUA
and building the capability to deliver our own housing
requirements. NUA has the capacity to deliver frames for over 2,000
homes per year, focusing on the off-site panellised manufacture
using timber frame and light gauge steel.
This innovation in off-site
manufacturing is becoming increasingly important as standardised
house types in Glenveagh designed planning units become a much
larger component of our output. We anticipate that approximately
70% of our output in FY 2024 will use our standardised housing
typologies. As a result, we can plan, design, and build houses more
effectively, with greater efficiency and speed, and in greater
numbers than ever before. Standardising process and product across
the business supports an improved margin and return profile for the
Group overall.
vii. Sustainability Agenda Progress
In FY 2023 the Group's main
sustainability focus was on launching the Net Zero Transition Plan,
developing our Biodiversity and Circular Economy strategies, and
implementing our Equity, Diversity & Inclusion (ED&I)
strategy.
The key milestone in H1 2023 was
the launch of the Group's Net Zero Transition Plan in March 2023,
outlining our near-term and long-term GHG emissions reduction
targets for scopes 1, 2 and 3. These targets call for a 46.2%
reduction in absolute Scopes 1 & 2 emissions by 2031 and a 55%
reduction in Scope 3 emissions intensity
(tCO2e/100sqm) by 2031, using 2021 as the
baseline year. Longer term net zero targets have been set for
scopes 1,2&3 by 2050. All targets have been validated by the
Science Based Targets initiative (SBTi).
In FY 2023 we reduced absolute
Scope 1 & 2 emissions by 11% compared to FY 2022. This is an
encouraging first step, which can be attributed to the roll out of
HVO (hydrotreated vegetable oil) to replace diesel across sites
during the year. While scope 1 & 2 emissions are still tracking
above our 2021 baseline, we are confident that the work we have
completed has a solid foundation and that we are on the right track
to see a reduction in FY 2024 with a full year of HVO use.
Meanwhile, our Scope 3 emissions have now decreased by 7% against
our FY 2021 baseline, measured on an intensity basis
(tCO2e/100sqm). This is primarily due to our focus on the energy
efficiency of our homes. In FY 2023, we saw the proportion of A1
rated homes increase from 55% to 85% which has a positive impact on
the carbon emissions associated with the occupant energy of the
home.
Our biodiversity strategy,
'Building a Better Habitat', was launched in January 2024 and
integrates biodiversity conservation into the core of our 'Building
Better' strategy. The strategy is a step
towards better understanding how we as a business impact on and
depend upon biodiversity. We have developed a biodiversity
framework that will allow us to manage our impacts, risks, and
opportunities across our value chain.
We are today launching our
Circular Economy strategy, which sets out the actions we will take
to move towards circular design, reduce resource use and the waste
associated with it. We have set a target to prepare 70% of our
construction and demolition (non-hazardous) waste for reuse,
recycling and other material recovery. We have also set out
commitments in relation to circular design, supply chain engagement
and data. Our three strategies complement each other as we seek to
address the issues of climate change, biodiversity loss and
resource depletion in a coordinated way. They are supported by a
supplier engagement programme, initiated in 2023. We are also proud
to be a founding member of the Supply Chain Sustainability School
Ireland which launched in January 2024.
We also began to implement our
ED&I strategy, 'Building a Better Workplace', that was launched
in December 2022. We established an ED&I Steering Group and
launched five Employee Network Groups each sponsored by an
Executive Committee member. In May we retained the Investors in
Diversity Silver Mark and achieved an overall result of 'Building
Momentum'.
Elsewhere across the business, we
agreed a new sustainability linked finance facility in February
2023 that incorporates four specific sustainability Key Performance
Indicators ("KPIs"). We continued our preparation to disclose under
the Corporate Sustainability Reporting Directive. We have also
continued to maintain and improve our ESG ratings. Our
Sustainalytics rating improved from 19.3 to 16.4 and is denoted as
'Low-risk'. Our CDP rating is B and our MSCI rating is
AA.
2. FINANCIAL
REVIEW
i. Group Performance
Total Group revenue was €608
million (FY 2022: €645 million). The Group's gross profit for the
year increased modestly to €112.7 million (FY 2022: €108.1 million)
with an overall gross margin of 18.5% (FY 2022: 16.8%).
In the Suburban business segment,
revenue of €471m represents steady growth and equates to a 4%
increase in revenue versus 2022. The Group delivered 1,328 core
units in the year at an Average Selling Price of approximately
€336k (FY 2022: €330k) reflecting the Group's strong operational
performance. ASP increased by 2% as a result of portfolio mix and
house price inflation in the period.
The most significant margin
improvement came in the Suburban business with a gross margin of
20.2% (FY 2022: 18.4%) and an underlying suburban housing margin of
19.3% (FY 2022: 18.4%). The business benefitted from a number of
operational improvements including but not limited to increased
product standardisation, our pricing power in the market and the
early signs of cost benefits from our manufacturing capabilities.
The margin was also augmented by the impact of land sales. We would
expect further progression in the underlying suburban margin in FY
2024 as we deliver a higher percentage of our product from our
standardised house types and our manufacturing
facilities.
Our Urban business segment
generated revenue of €120 million. This includes the completion of
our forward fund on the Premier Inn hotel in the Docklands and our
apartment development in Marina Village, Greystones along with the
continuation of the development phase in our apartment schemes in
Citywest and Castleknock. Urban gross margin was 12.8% in FY 2023,
broadly consistent with the 2022 margin of 12.9%.
We generated €17 million of
revenue from our Partnerships business segment, the first time this
segment has contributed revenue, reflecting significant progress
made on both Partnership sites during the year. Given the structure
of the Partnership transactions, we recognise revenue and profits
on a percentage of completion basis and therefore the revenue and
profits recognised in FY 2023 reflect the early stages of
construction rather than any units being completed. The Partnership
gross margin was 12.9%, reflecting very low activity levels and the
early stage of development on both sites. For FY 2024 and future
years, the margin on both sites will be consistent with our 15%
guidance for that business segment.
Group operating profit was €70.9
million (FY 2022: €70.1 million). The Group's central costs for the
year were €39.4 million (FY 2022: €36.0 million), which along with
€2.4 million (FY 2022: €1.9 million) of depreciation and
amortisation gives total administrative expenses of €41.8 million
(FY 2022: €38.0 million).
Net finance costs for the year
increased significantly to €15.8 million (FY 2022: €7.1 million),
primarily impacted by the increased European Central Bank interest
rates which have impacted the overall market and a higher level of
average debt during the year to support the growth trajectory of
the business.
Overall, the Group delivered an
improved Earnings Per Share of 8.0 cent (FY 2022: 7.6 cent), which
was at the higher end of the range management had provided as
market guidance.
ii. Balance Sheet
The business has continued to
improve our balance sheet efficiency during FY 2023 and has reduced
the Group's net assets modestly to €678.2 million at 31 December
2023 (FY 2022: €693.1 million). There are a number of elements
within this net reduction, some of which relate to increased
investment for future efficiencies and benefits while some relate
to capital reductions in the year.
In line with our manufacturing
strategy, we continued to invest in our off-site facilities and
equipment, totalling €18.1m in the year. This is included in our
increased Property, Plant & Equipment balance of €64.2 million
(FY 2022: €51.8 million).
The business has again seen
significant progress in the reduction of our land portfolio, with a
year-end balance of €403.8 million (2022: €455.3 million),
excluding development rights. We believe that further reductions
can be made in our land portfolio, with the carrying value of land
reducing below €400 million in FY 2024.
To facilitate the significant
growth trajectory into FY 2024, the business has invested in
work-in progress with an overall year end balance of €274.6 million
(FY 2022: €227.4 million), an increase of nearly €50 million. This
increase is primarily attributable to the increase in our urban
business and two sites in particular, the Docklands office
development and our apartment scheme in Cluain Mhuire which has
been forward sold and will deliver in FY 2024. Combined these two
assets have approximately €70 million of work in progress at year
end, an increase of €40 million year on year.
The reduced equity figure at 31
December 2023 reflects the reduced number of shares in the business
following the successful completion of the Group's fourth share
buyback programme. In FY 2023, a total of 63.8 million shares were
repurchased at a total cost of €62.9 million. The Group has now
returned over €300 million to shareholders since the beginning of
our first share buyback programme in May 2021.
iii. Cash Flow
The business continued to generate
substantial operating cash inflow, albeit not at the same levels as
in previous years. We generated €50.9 million (FY 2022: €140.9
million) cash from operating activities, the reduction reflecting
our investment in inventory.
This cash generation allowed the
business to invest in line with our capital allocation priorities,
predominantly focussed on our manufacturing capabilities of €17.9
million and our fourth share buyback programme of €62.9
million.
Reflecting the investment in work
in progress, which will deliver in FY 2024, the Group had an
increased net debt position at year end of €48.8 million (2022:
€13.8 million). This remains a prudently managed debt level in the
context of the overall scale of the business, the investments that
have been made in FY 2023 and the opportunities available to the
business in FY 2024.
Glenveagh Properties plc
Consolidated statement of profit or
loss and other comprehensive income
|
|
2023
|
2022
|
|
Note
|
€'000
|
€'000
|
|
|
|
|
Revenue
|
10
|
607,938
|
644,706
|
|
|
|
|
Cost of sales
|
|
(495,207)
|
(536,655)
|
|
|
|
|
Gross
profit
|
|
112,731
|
108,051
|
|
|
|
|
Administrative expenses
|
|
(41,782)
|
(37,956)
|
|
|
|
|
Operating
profit
|
|
70,949
|
70,095
|
|
|
|
|
Finance expense
|
11
|
(15,839)
|
(7,094)
|
|
|
|
|
Profit before
tax
|
12
|
55,110
|
63,001
|
|
|
|
|
Income tax
|
16
|
(8,002)
|
(10,434)
|
|
|
|
|
Profit after
tax attributable to the owners of the Company
|
|
47,108
|
52,567
|
|
|
|
|
Items that are
or may be reclassified subsequently to profit or
loss:
|
|
|
|
Fair value movement on cashflow
hedges
|
|
(1,240)
|
-
|
Cashflow hedges reclassified to profit or
loss
|
|
(383)
|
-
|
|
|
|
|
|
|
|
|
Total other
comprehensive loss
|
|
(1,623)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
comprehensive profit for the year attributable of the owners of the
Company
|
|
45,485
|
52,567
|
|
|
|
|
|
|
|
|
Basic earnings
per share (cent)
|
15
|
8.0
|
7.6
|
|
|
|
|
|
|
|
|
Diluted
earnings per share (cent)
|
15
|
8.0
|
7.6
|
|
|
|
|
For the
financial year ended 31 December 2023
Glenveagh Properties plc
Consolidated balance
sheet
as at 31
December 2023
|
Note
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
Assets
|
|
|
|
Non-current assets
|
|
|
|
Goodwill
|
18
|
5,697
|
5,697
|
Property, plant and
equipment
|
17
|
64,184
|
51,750
|
Intangible assets
|
18
|
2,781
|
1,770
|
Deferred tax asset
|
16
|
884
|
619
|
|
|
|
|
|
|
73,546
|
59,836
|
|
|
|
|
Current assets
|
|
|
|
Inventory
|
19
|
707,600
|
685,751
|
Trade and other
receivables
|
20
|
77,974
|
58,671
|
Income tax receivable
|
|
3,901
|
-
|
Restricted cash
|
23
|
458
|
458
|
Cash and cash equivalents
|
27
|
71,863
|
71,085
|
|
|
|
|
|
|
861,796
|
815,965
|
|
|
|
|
|
|
|
|
Total assets
|
|
935,342
|
875,801
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
26
|
659
|
719
|
Share premium
|
26
|
179,719
|
179,416
|
Undenominated capital
|
26
|
399
|
335
|
Retained earnings
|
|
450,103
|
465,680
|
Cashflow hedge reserve
|
24
|
(1,623)
|
-
|
Share-based payment
reserve
|
|
48,899
|
46,968
|
|
|
|
|
Total equity
|
|
678,156
|
693,118
|
|
|
|
|
Liabilities
|
|
|
|
Non-current liabilities
|
|
|
|
Loans and borrowings
|
22
|
112,083
|
71,221
|
Lease liabilities
|
22
|
4,230
|
4,216
|
Derivative contracts
|
24
|
1,623
|
-
|
Trade and other payables
|
21
|
1,750
|
3,500
|
|
|
|
|
|
|
119,686
|
78,937
|
|
|
|
|
Current liabilities
|
|
|
|
Trade and other payables
|
21
|
132,719
|
93,234
|
Income tax payable
|
|
-
|
565
|
Loans and borrowings
|
22
|
3,562
|
9,419
|
Lease liabilities
|
22
|
1,219
|
528
|
|
|
|
|
|
|
137,500
|
103,746
|
|
|
|
|
Total liabilities
|
|
257,186
|
182,683
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
935,342
|
875,801
|
|
|
|
|
Michael
Rice
Stephen
Garvey
27 February 2024
Director
Director
Glenveagh Properties
plc
Consolidated statement of changes
in equity
for the
financial year ended 31 December 2023
|
Share
Capital
|
|
|
|
|
|
|
|
Ordinary
|
Deferred
|
Undenominated
|
Share
|
Share-based
payment
|
Cashflow
|
Retained
|
Total
|
|
shares
|
Shares
|
capital
|
premium
|
reserve
|
hedge
reserve
|
earnings
|
equity
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
|
Balance as at 1 January 2023
|
638
|
81
|
335
|
179,416
|
46,968
|
-
|
465,680
|
693,118
|
|
|
|
|
|
|
|
|
|
Total comprehensive profit for the year
|
|
|
|
|
|
|
|
|
Income for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
47,108
|
47,108
|
Fair value movement on cashflow
hedges
|
-
|
-
|
-
|
-
|
-
|
(1,240)
|
-
|
(1,240)
|
Cashflow hedges reclassified to
profit and loss
|
-
|
-
|
-
|
-
|
-
|
(383)
|
-
|
(383)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
638
|
81
|
335
|
179,416
|
46,968
|
(1,623)
|
512,788
|
738,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners of the Company
|
|
|
|
|
|
|
|
|
Equity-settled share-based
payments
|
-
|
-
|
-
|
-
|
2,137
|
-
|
-
|
2,137
|
Lapsed share options (Note
14)
|
-
|
-
|
-
|
-
|
(206)
|
-
|
206
|
-
|
Cancellation of deferred shares
(Note 26)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Exercise of options
|
4
|
-
|
-
|
303
|
-
|
-
|
-
|
307
|
Purchase of own shares (Note
26)
|
(64)
|
-
|
64
|
-
|
-
|
-
|
(62,891)
|
(62,891)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(60)
|
-
|
64
|
303
|
1,931
|
-
|
(62,685)
|
(60,447)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 31 December 2023
|
578
|
81
|
399
|
179,719
|
48,899
|
(1,623)
|
450,103
|
678,156
|
|
|
|
|
|
|
|
|
|
Glenveagh Properties
plc
Consolidated statement of changes
in equity
for the
financial year ended 31 December 2022
|
Share
Capital
|
|
|
|
|
|
|
Ordinary
|
Founder
|
Deferred
|
Undenominated
|
Share
|
Share-based
payment
|
Retained
|
Total
|
|
shares
|
shares
|
Shares
|
capital
|
premium
|
reserve
|
earnings
|
equity
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
|
Balance as at 1 January 2022
|
771
|
181
|
-
|
100
|
179,310
|
45,251
|
558,468
|
784,081
|
|
|
|
|
|
|
|
|
|
Total comprehensive profit for the year
|
|
|
|
|
|
|
|
|
Income for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
52,567
|
52,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
771
|
181
|
-
|
100
|
179,310
|
45,251
|
611,035
|
836,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners of the Company
|
|
|
|
|
|
|
|
|
Equity-settled share-based
payments
|
-
|
-
|
-
|
-
|
-
|
1,717
|
-
|
1,717
|
Lapsed share options (Note
14)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Conversion of founder shares to
deferred shares (Note 26)
|
-
|
(181)
|
181
|
-
|
-
|
-
|
-
|
-
|
Cancellation of deferred shares
(Note 26)
|
-
|
-
|
(100)
|
100
|
-
|
-
|
-
|
-
|
Exercise of options
|
2
|
-
|
-
|
-
|
106
|
-
|
-
|
108
|
Purchase of own shares (Note
26)
|
(135)
|
-
|
-
|
135
|
-
|
-
|
(145,355)
|
(145,355)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(133)
|
(181)
|
81
|
235
|
106
|
1,717
|
(145,355)
|
(143,530)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 31 December 2022
|
638
|
-
|
81
|
335
|
179,416
|
46,968
|
465,680
|
693,118
|
|
|
|
|
|
|
|
|
|
Glenveagh Properties plc
Consolidated statement of cash
flows
For the
financial year ended 31 December 2023
|
|
2023
|
2022
|
|
Note
|
€'000
|
€'000
|
Cash flows from
operating activities
|
|
|
|
Profit for the financial year
|
|
47,108
|
52,567
|
Adjustments
for:
|
|
|
|
Depreciation and amortisation
|
|
2,373
|
2,081
|
Finance costs
|
11
|
15,839
|
7,094
|
Equity-settled share-based payment
expense
|
14
|
2,137
|
1,717
|
Tax expense
|
16
|
8,002
|
10,434
|
Profit on disposal of property, plant and
equipment
|
12
|
(214)
|
(1,501)
|
|
|
|
|
|
|
75,245
|
72,392
|
Changes
in:
|
|
|
|
Inventories
|
|
(18,529)
|
83,360
|
Trade and other receivables
|
|
(19,217)
|
(26,290)
|
Trade and other payables
|
|
38,100
|
35,662
|
|
|
|
|
Cash from operating activities
|
|
75,599
|
165,124
|
|
|
|
|
Interest paid
|
|
(12,009)
|
(6,490)
|
Tax paid
|
|
(12,732)
|
(17,778)
|
|
|
|
|
|
|
|
|
Net cash from
operating activities
|
|
50,858
|
140,856
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Acquisition of property, plant and
equipment
|
17
|
(16,361)
|
(19,278)
|
Acquisition of intangible assets
|
18
|
(1,477)
|
(1,055)
|
Acquisition of subsidiary
undertakings
|
|
-
|
(6,875)
|
Cash acquired on acquisition
|
|
-
|
847
|
Proceeds from the sale of property, plant and
equipment
|
|
959
|
2,036
|
|
|
|
|
Net cash used
in investing activities
|
|
(16,879)
|
(24,325)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from loans and borrowings
|
22
|
381,667
|
110,000
|
Repayment of loans and borrowings
|
22
|
(347,500)
|
(150,000)
|
Transaction costs related to loans and
borrowings
|
22
|
(4,318)
|
-
|
Purchase of own shares
|
26
|
(62,891)
|
(146,260)
|
Proceeds from exercise of share
options
|
26
|
307
|
108
|
Proceeds from derivative settlements
|
24
|
295
|
-
|
Payment of lease liabilities
|
28
|
(761)
|
(470)
|
|
|
|
|
Net cash used
in financing activities
|
|
(33,201)
|
(186,622)
|
|
|
|
|
|
|
|
|
Net increase /
(decrease) in cash and cash equivalents
|
|
778
|
(70,091)
|
|
|
|
|
Cash and cash equivalents at the beginning of
the year
|
|
71,085
|
141,176
|
|
|
|
|
Cash and cash
equivalents at the end of the year
|
|
71,863
|
71,085
|
|
|
|
|
|
|
|
|
|
|
|
|
Glenveagh Properties plc
Notes to the consolidated financial
statements
For the
financial year ended 31 December 2023
1
Reporting entity
Glenveagh Properties plc ("the Company) is
domiciled in the Republic of Ireland. The Company's registered
office is Block C, Maynooth Business Campus, Maynooth Co. Kildare.
These consolidated financial statements comprise the Company and
its subsidiaries (together referred to as "the Group") and cover
the financial year ended 31 December 2023. The Group's principal
activities are the construction and sale of houses and apartments
for the private buyer, local authorities and the private rental
sector.
The consolidated financial statements have
been prepared in accordance with International Financial Reporting
Standards (IFRS's) as adopted by the European Union which comprise
standards and interpretations approved by the International
Accounting Standards Board (IASB), and those parts of the Companies
Act 2014, including the Commission Delegated Regulation 2018/815
regarding the single electronic reporting format (ESEF), applicable
to companies reporting under IFRS and Article 4 of the IAS
regulation.
2
Statement of compliance
The consolidated financial statements have
been prepared in accordance with International Financial Reporting
Standards (IFRS's) as adopted by the European Union which comprise
standards and interpretations approved by the International
Accounting Standards Board (IASB), and those parts of the Companies
Act 2014 applicable to companies reporting under IFRS and Article 4
of the IAS regulation.
3
Functional and presentation currency
These consolidated financial statements are
presented in Euro which is the Company's functional currency. All
amounts have been rounded to the nearest thousand unless otherwise
indicated.
4 Use of
judgements and estimates
The preparation of the Group's financial
statements under International Financial Reporting Standards
("IFRS"), as adopted by the European Union, requires the Directors
to make judgments and estimates that affect the application of
policies and the reported amounts of assets, liabilities, income,
expenses and related disclosures. Actual results may differ from
these estimates.
Critical
accounting judgements
Management applies the Group's accounting
policies as described in Note 8 when making critical accounting
judgements, of which no individual judgement is deemed to have a
significant impact upon the financial statements.
Key sources
of estimation uncertainty
The key source of significant estimation
uncertainty impacting these financial statements involves assessing
the carrying value of inventories as detailed below.
(a) Carrying value of
work-in-progress, estimation of costs to complete and impact on
profit recognition
The Group holds inventories stated at the
lower of cost and net realisable value. Such inventories include
land and development rights, work-in-progress and completed units.
As residential development is largely speculative by nature, not
all inventories are covered by forward sales contracts.
Furthermore, due to the nature of the Group's activity and, in
particular the scale of its developments and the length of the
development cycle, the Group has to allocate site-wide development
costs between units being built and/or completed in the current
year and those for future years. It also has to forecast the costs
to complete on such developments.
These estimates impact management's assessment
of the net realisable value of the Group's inventory balance and
also determine the extent of profit or loss that should be
recognised in respect of each development in each reporting
period.
In making such assessments and allocations
there is a degree of inherent estimation uncertainty. The Group has
established internal controls designed to effectively assess and
centrally review inventory carrying values and ensure the
appropriateness of the estimates made. These assessments and
allocations evolve over the life of the development in line with
the risk profile, and
accordingly, the margin recognised reflects
these evolving assessments, particularly in relation to the Group's
long-term developments. The impact of sustainability and other
macroeconomic factors have been considered in the Group's
assessment of the carrying value of its inventories at 31 December
2023, particularly with regard to the potential implications for
future selling prices, development expenditure and construction
programming. Management has considered a number of scenarios on
each of its active developments and the consequential impact on
future profitability based on current facts and circumstances
together with any implications for future projects in undertaking
its net realisable value calculations.
As part of the assessment, the Group has
re-evaluated its most likely exit strategies on all developments in
the context of the current market environment and reflected these
in revenue assumptions within the forecast models. The results of
this exercise determined that the net impairment charge or reversal
required for the period was €Nil (2022:
Nil).
Management have performed a sensitivity
analysis to assess the impact of a change in estimated costs for
developments on which sales were recognised in the year. A 1%-4%
increase in estimated costs recognised in the year, which is
considered to be reasonably possible, would reduce the Group's
gross margin by approximately 118-333bps (2022: 58-174bps).
5
Measurement of fair values
A number of the Group's accounting policies
and disclosures require the measurement of fair values, both for
financial and non-financial assets and liabilities.
The Group has an established control framework
with respect to the measurement of fair values. This includes a
valuation team that has overall responsibility for overseeing all
significant fair value measurements, including Level 3 fair values
and reports directly to the chief financial officer.
The valuation team regularly reviews
significant unobservable inputs and valuation adjustments. If third
party information, such as broker quotes or pricing services, is
used to measure fair values, then the valuation team assess the
evidence obtained from the third parties to support the conclusion
that these valuations meet the requirements of the Standards,
including the level in the fair value hierarchy in which the
valuations should be classified.
Significant valuation issues are reported to
the Group's Audit and Risk
committee.
Fair value is defined in IFRS 13, Fair Value Measurement, as the price
that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at
the measurement date. When measuring the fair value of an asset or
liability, the Group uses market observable data as far as
possible. Fair values are categorised into different levels in a
fair value hierarchy based on the inputs used in the valuation
techniques as follows:
Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities.
Level 2: inputs other than quoted prices
included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
Level 3: inputs for the asset or liability
that are not based on observable market data (unobservable
inputs).
Further information about the assumptions made
in measuring fair values is included in the following
notes:
· Note
14 Share-based payments arrangements;
· Note
21 Trade and other payables;
· Note
24 Derivatives and cashflow hedge reserve; and
· Note
27 Financial instruments and financial risk management.
6 Changes in
material accounting policies
Amendments to standard IAS 12 Income taxes:
International Tax Reform - Pillar Two Model Rules; Deferred Tax
Related to Assets and Liabilities Arising From a Single
Transaction, IFRS 17 Insurance Contracts: amendments to IFRS 17
insurance contracts; Initial Application of IFRS 17 and IFRS 9 -
Comparative Information and IAS 8 Accounting policies, Changes In
Accounting Estimates And Errors: Definition of accounting estimates
and errors, are effective from 1 January 2023 but they do not have
a material effect on the Group's financial statements.
(i) New material accounting
policies
a)
Derivative contracts and hedge accounting
The Group has transacted derivatives relating
to an interest rate swap to manage the interest rate risk arising
from floating rate borrowings. Derivatives are initially recognised
at fair value on the date a derivative contract is entered into,
and they are subsequently remeasured to their fair value at the end
of each reporting period. The accounting for subsequent changes in
fair value depends on whether the derivative is designated as a
hedging instrument and, if so, the nature of the item being
hedged.
The group designates certain derivatives as
hedges of a particular risk associated with the cash flows of
recognised assets and liabilities and highly probable forecast
transactions (cash flow hedges).
Changes in the fair value of derivative
hedging instruments designated as cash flow hedges are recognised
in other comprehensive income to the extent that the hedge is
effective. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss.
Amounts accumulated in other comprehensive
income are reclassified to profit or loss in the same periods that
the hedged items affect profit or loss. The reclassified gain or
loss relating to the effective portion of interest rate swaps
hedging variable rate borrowings is recognised in profit or loss
within finance income or costs respectively.
If the hedging instrument no longer meets the
criteria for hedge accounting, expires or is sold, terminated or
exercised, then hedge accounting is discontinued prospectively. The
cumulative gain or loss previously recognised in other
comprehensive income remains there until the forecast transaction
occurs, unless the hedged transaction is no longer expected to
occur, in which case the cumulative
gain or loss that was previously recognised in
other comprehensive income is transferred to profit and
loss.
At inception of the hedge relationship, the
group documents the economic relationship between hedging
instruments and hedged items, including whether changes in the cash
flows of the hedging instruments are expected to offset changes in
the cash flows of hedged items. The group documents its risk
management objective and strategy for undertaking its hedge
transactions.
The full fair value of a hedging derivative is
classified as a non-current asset or liability when the remaining
maturity of the hedged item is more than 12 months; it is
classified as a current asset or liability when the remaining
maturity of the hedged item is less than 12 months.
b)
Research and development costs
Expenditure on research activities is
recognised in profit or loss as incurred.
Development expenditure is capitalised only if
the expenditure can be measured reliably, the product or process is
technically and commercially feasible, future economic benefits are
probable and the Group intends to and has sufficient resources to
complete development and to use or sell the asset. Otherwise, it is
recognised in profit or loss as incurred. Subsequent to initial
recognition, development expenditure is measured at cost less
accumulated amortisation and any accumulated impairment
losses.
c)
Disclosure of accounting policies (amendments to IAS 1 and IFRS
Practice Statement 2)
The Group adopted Disclosure of Accounting
Policies (amendments to IAS 1 and IFRS Practice Statement 2) from 1
January 2023. The amendments did not result in any material changes
to the accounting policies and accounting policy information
disclosed in the financial statements.
The amendments require the disclosure of
material rather than significant accounting policies. The
amendments also provide guidance on the application of materiality
to disclosure of accounting policies, assisting entities to provide
useful, entity specific accounting policy information that users
need to understand other information in the financial
statements.
There have been no other changes to material
accounting policies during the financial year ended to 31 December
2023.
(ii) Other
standards
The Group has not adopted the following new
and amended standards early, and instead intends to apply them from
their effective date as determined by the date of EU endorsement.
The potential impact of these amendments to standards on the Group
is under review:
- IAS 7 Statement of Cash Flows and
IFRS 7 Financial
Instruments: Disclosures: Supplier Finance
Arrangements (amendment) (effective
01/01/2024)
- IAS 1 Presentation of Financial
Statements:
o
Classification of Liabilities as Current or Non-current
Date (amendment) (effective 01/01/2024)
o
Classification of Liabilities as Current or Non-current -
Deferral of Effective Date (amendment) (not yet
effective)
o Non-current
Liabilities with Covenants (amendment) (effective
01/01/2024)
- IFRS 16 Leases: Lease Liability in a
Sale and Leaseback (amendment) (not yet effective)
- IAS 21 The Effects of Changes in Foreign
Exchange Rates -
Lack of Exchangeability (amendment) (effective
01/01/2024)
- ESRS S1 General Requirements for Disclosure
of Sustainability-related Financial Information
(not yet effective)
- ESRS S2 Climate-related
Disclosures (not yet effective)
7 Going
Concern
The Group has recorded a profit before tax of
€55.1 million (2022: €63.0 million. The Group has an unrestricted
cash balance of €46.9 million (31 December 2022: €46.1 million)
exclusive of the minimum cash balance of €25.0 million which the
Group is required to maintain under the terms of its debt
facilities. The Group has committed undrawn funds available of
€233.3 million (31 December 2022: €150.0 million).
Management has prepared a detailed cash flow
forecast to assess the Group's ability to continue as a going
concern for at least a period of twelve months from the signing of
these financial statements. The preparation of this forecast
considered the principal risks facing the Group, including those
risks that could threaten the Group's business model, future
performance, solvency or liquidity over the forecast period. These
principal risks and uncertainties and the steps taken by the Group
to mitigate them are detailed in the Risk Management Report of the
Annual Report. The Group's business
activities, together with the factors likely
to affect its future development are outlined in the Strategic
Report of the Annual Report. Further disclosures regarding the
Group's loans and borrowings are provided in note 22.
The Group is forecasting compliance with all
covenant requirements under the current facilities including the
interest cover covenant which is based on earnings before interest,
tax, depreciation and amortisation (EBITDA) excluding any non-cash
impairment charges or reversals. Total debt must not exceed
adjusted EBITDA by a minimum of 4 times, this is calculated on both
a forward and trailing twelve-month basis. Other assumptions within
the forecast include the Group's expected selling prices and sales
strategies as well as its investment in work in progress which
reflect updated development programmes.
Based on the forecasts modelled, the Directors
have assessed the Group's going concern status for the foreseeable
future. Having considered the Group's cash flow forecasts, the
Directors are satisfied that the Group has the appropriate working
capital management strategy, operational flexibility, and resources
in place to continue in operational existence for the foreseeable
future. Accordingly, these consolidated financial statements have
been prepared on a going concern basis.
8 Material
accounting policies
The Group has consistently applied the
following accounting policies to all periods presented in these
consolidated financial statements, except if mentioned
otherwise.
The Group adopted Disclosure of accounting
policies (amendments to IAS 1 and IFRS Practice Statement 2) from 1
January 2023. The amendments require the disclosure of material
rather than significant accounting policies. Although the
amendments did not result in any material changes to the accounting
policies themselves, they impacted the accounting policy
information disclosed in the financial statements in certain
instances.
8.1 Basis of
consolidation
(i) Business
combinations
The Group accounts for business combinations
using the acquisition method when control is transferred to the
Group. The consideration transferred in the acquisition is
generally measured at fair value, as are the identifiable net
assets acquired. Any goodwill that arises is tested annually for
impairment. Any gain on a bargain purchase is recognised in profit
or loss immediately. Transaction costs are expensed as incurred,
except if related to the issue of debt or equity
securities.
The consideration transferred does not include
amounts related to the settlement of pre-existing relationships.
Such amounts are generally recognised in profit or loss. Any
contingent consideration is measured at fair value at the date of
acquisition. If an obligation to pay contingent consideration that
meets the definition of a financial instrument is classified as
equity, then it is not remeasured, and settlement is accounted for
within equity. Otherwise, other contingent consideration is
remeasured at fair value each reporting date and subsequent changes
in the fair value of the contingent consideration are recognised in
profit or loss.
(ii)
Subsidiaries
Subsidiaries are entities controlled by the
Group. The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. The financial statements of subsidiaries are included
in the consolidated financial statements from the date on which
control commences until the date on which control
ceases.
(iii)
Joint
operations
Joint operations arise where the Group has
joint control of an operation with other parties, in which the
parties have direct rights to the assets and obligations of the
operation. The Group accounts for its share of the jointly
controlled assets and liabilities and income and expenditure on a
line by line basis in the consolidated financial
statements.
(iv) Transactions eliminated on
consolidation
Intra-group balances and transactions, and any
unrealised income and expenses arising from intra-group
transactions, are eliminated.
8.2
Revenue
The Group develops and sells residential
properties and non-core land in addition to developing land under
development agreements with third parties.
(i) Housing and land
sales
Revenue is recognised at the point in time
when control over the property has been transferred to the
customer, which occurs at legal completion.
(ii) Development
revenue
Revenue arising on contracts under a
development agreement which give the customer control over
properties as they are constructed, and for which the Group has a
right to payments for work performed, is recognised over time.
Revenue and costs are recognised over time with reference to the
stage of completion of the contract activity at the balance sheet
date where the outcome of a contract can be estimated reliably.
This is measured by surveys of work performed to date. Variations
in contract work, claims and incentive payments are included to the
extent that it is probable that they will result in revenue, and
they are capable of being reliably measured. When land is
transferred at the start of a contract, revenue is not recognised
until control has been transferred to the customer which includes
legal title being passed to them. Where the outcome of a contract
cannot be estimated reliably, contract revenue where recoverability
is probable is recognised to the extent of contract costs incurred.
The costs associated with fulfilling a contract are recognised as
expenses in the period in which they are incurred. When it is
probable that total contract costs will exceed total contract
revenue, the expected loss is recognised as an expense
immediately.
8.3
Expenditure
Expenditure recorded in inventory is expensed
through cost of sales at the time of the related property sale. The
amount of cost related to each property includes its share of the
overall site costs. Expenditure related to revenue recognised over
time is expensed through cost of sales on an inputs basis.
Administration expense is recognised in respect of goods and
services received when supplied in accordance with contractual
terms.
Expenditure on research activities is
recognised in profit or loss as incurred.
8.4
Taxation
Income tax expense comprises current and
deferred tax. It is recognised in profit or loss except to the
extent that it relates to a business combination, or items
recognised directly in equity or in OCI.
The Group has determined that the global
minimum top-up tax is an income tax in the scope of IAS
12.
(i) Current
tax
Current tax comprises the expected tax payable
or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous
years. The amount of
current tax payable or receivable is the best
estimate of the tax amount expected to be paid or received that
reflects uncertainty related to income taxes, if any. It is
measured using tax rates
enacted or substantively enacted at the
reporting date. Current tax also includes any tax arising from
dividends.
Current tax assets and liabilities are offset
only if certain criteria are met.
(ii) Deferred
tax
Deferred tax is recognised in respect of
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for taxation purposes.
Deferred tax is not recognised for:
- temporary
differences on the initial recognition of assets or liabilities in
a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss and does not give
rise to equal taxable and deductible temporary
differences;
- temporary
differences related to investments in subsidiaries, associates and
joint arrangements to the extent that the Group is able to control
the timing of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable future;
and
- taxable
temporary differences arising on the initial recognition of
goodwill.
Deferred tax assets are recognised for unused
tax losses, unused tax credits and deductible temporary differences
to the extent that it is probable that future taxable profits will
be available against which they can be used. Future taxable profits
are determined based on the reversal of relevant taxable temporary
differences. If the amount of taxable temporary differences is
insufficient to recognise a deferred tax asset in full, then future
taxable profits, adjusted for reversals of existing temporary
differences, are considered, based on the business plans for
individual subsidiaries in the
Group. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit will be
realised; such reductions are reversed when the probability of
future taxable profits improves. Once changes to the
tax laws in any jurisdiction in which the Group operates are
enacted or substantively enacted, the Group may be subject to the
top-up tax. Currently, the Group operates solely in the Republic of
Ireland, based on current criteria there is no current tax
impact
Unrecognised deferred tax assets are
reassessed at each reporting date and recognised to the extent that
it has become probable that future taxable profits will be
available against which they can be used.
Deferred tax is measured at the tax rates that
are expected to be applied to temporary difference when they
reverse, using tax rates enacted or substantively enacted at the
reporting date, and reflects uncertainty related to income taxes,
if any.
The measurement of deferred tax reflects the
tax consequences that would follow from the manner in which the
Group expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities.
8.5
Share-based payment arrangements
The grant date fair value of equity-settled
share-based payment arrangements granted to employees is generally
recognised as an expense, with a corresponding increase in equity,
over the vesting period of the awards. The amount recognised as an
expense is adjusted to reflect the number of awards for which the
related service and non-market performance conditions are expected
to be met, such that the amount ultimately recognised is based on
the number of awards that meet the related service and non-market
performance conditions at the vesting date. For share-based payment
awards with non-vesting conditions or market conditions, the grant
date fair value of the share-based payment is measured to reflect
such conditions and there is no true-up for differences between
expected and actual outcomes.
8.6
Exceptional items
Exceptional items are those that are
separately disclosed by virtue of their nature or amount in order
to highlight such items within the consolidated statement of profit
or loss for the financial year. Group management exercises
judgement in assessing each particular item which, by virtue of its
scale or nature, should be highlighted as an exceptional item.
Exceptional items are included within the profit or loss caption to
which they relate.
During the financial year, there were no
income or costs considered exceptional items.
8.7 Property,
plant and equipment
Property, plant and equipment is carried at
historic purchase cost less accumulated depreciation. Cost includes
the original purchase price of the asset and the costs attributable
to bringing the asset to its working condition for its intended
use. Depreciation is provided to write off the cost of the assets
on a straight-line basis to their residual value over their
estimated useful lives at the following annual rates:
·
Buildings
2.5%
·
Plant and machinery
14-20%
·
Fixtures and
fittings
20%
·
Computer Equipment
33%
The assets' residual values, carrying values
and useful lives are reviewed on an annual basis and adjusted if
appropriate at each reporting date.
Where an impairment is identified, the
recoverable amount of the asset is identified and an impairment
loss, where appropriate, is recognised in the statement of profit
or loss and other comprehensive income.
Gains and losses on disposals are determined
by comparing the proceeds with the carrying amount and are
recognised within administration expenses in the statement of
profit or loss and other comprehensive income.
Subsequent expenditure is capitalised only if
it is probable that the future economic benefits associated with
the expenditure will flow to the Group.
8.8
Intangible assets
Goodwill arising on the acquisition of
subsidiaries is measured at cost less accumulated impairment
losses. Goodwill impairments are not reversed. Goodwill is not
amortised but is subject to impairment testing on an annual basis
and at any time during the year if an indicator of impairment is
considered
to exist. The annual goodwill impairment tests
are undertaken at a consistent time in each annual
period.
Development expenditure is capitalised only if
the expenditure can be measured reliably, the product or process is
technically and commercially feasible, future economic benefits are
probable and the Group intends to and has sufficient resources to
complete development and to use or sell the asset. Otherwise, it is
recognised in profit or loss as incurred. Subsequent to initial
recognition, development expenditure is measured at cost less
accumulated amortisation and any accumulated impairment losses.
Capitalised development expenditure has an indefinite useful
life.
Indefinite life intangible assets are those
for which there is no foreseeable limit to their expected useful
life. The classification of intangible assets as indefinite is
assessed annually.
Subsequent expenditure is capitalised only if
it is probable that the future economic benefits associated with
the expenditure will flow to the Group.
Computer software is capitalised as intangible
assets as acquired and amortised on a straight-line basis over its
estimated useful life of 3 years, in line with the period over
which economic benefit from the software is expected to be
derived.
Licence costs are capitalised as intangible
assets as acquired and amortised on a straight-line basis over
their estimated useful life in line with the period over which
economic benefit from the software is expected to be
derived.
The assets' useful lives and residual values
are reviewed and adjusted, if appropriate, at each reporting
date.
8.9
Inventory
Inventory comprises property in the course of
development, completed units, land and land development rights.
Inventories are valued at the lower of cost and net realisable
value. Direct cost comprises the cost of land, raw materials and
development costs but excludes indirect overheads. Land purchased
for development, including land in the course of development, is
initially recorded at cost. Where such land is purchased on
deferred settlement terms, and the cost differs from the amount
that will subsequently be paid in settling the liability, this
difference is charged as a finance cost in the statement of profit
or loss and other comprehensive income over the period to
settlement. A provision is made, where appropriate, to reduce the
value of inventories and work-in-progress to their net realisable
value.
Raw material and finished good stock are
valued at the lower of cost and net realisable value. Stocks are
determined on a first-in first-out basis. Cost comprises
expenditure incurred in the normal course of business in bringing
stocks to their present location and condition. Full provision is
made for obsolete and slow-moving items. Net realisable value
comprises actual or estimated selling price (net of trade
discounts) less all further costs to completion or to be incurred
in marketing and selling.
8.10
Financial instruments
Financial
assets and financial liabilities
Under IFRS 9, financial assets and financial
liabilities are initially recognised at fair value and are
subsequently measured based on their classification as described
below. Their classification depends on the purpose for which the
financial instruments were acquired or issued, their
characteristics and the Group's designation of such instruments.
The standards require that all financial assets and financial
liabilities be classified as fair value through profit or loss
("FVTPL"), amortised cost, or fair value through other
comprehensive income ("FVOCI").
Classification of financial
instruments
The following summarises the classification
and measurement the Group has elected to apply to each of its
significant categories of financial instruments:
|
IFRS 9
|
Type
|
Classification
|
Financial assets
|
|
Cash and cash
equivalents
|
Amortised cost
|
Trade receivables
|
Amortised cost
|
Contract assets
|
Amortised cost
|
Other receivables
|
Amortised cost
|
Amounts recoverable on
construction contracts
|
Amortised cost
|
Restricted cash
|
Amortised cost
|
Deposits for sites
|
Amortised cost
|
Construction bonds
|
Amortised cost
|
|
|
Financial liabilities
|
|
Lease liabilities
|
Amortised cost
|
Trade payables
|
Amortised cost
|
Inventory accruals
|
Amortised cost
|
Other accruals
|
Amortised cost
|
Loans and borrowings
|
Amortised cost
|
Derivative contracts
|
Fair value (cash flow
hedge accounting)
|
Contingent
consideration
|
Fair value
through profit or loss
|
Cash and cash
equivalents
Cash and cash equivalents include cash,
short-term investments with an original maturity of three months or
less and minimum cash balances required under the terms of the debt
facilities. Interest earned or accrued on these financial assets is
included in finance income.
Trade and
other receivables
Such receivables are included in current
assets, except for those with maturities more than 12 months after
the reporting date, which are classified as non-current assets.
Loans and other receivables are included in trade and other
receivables on the statement of financial position and
are
accounted for at amortised cost. These assets
are subsequently measured at amortised cost. The amortised cost is
reduced by impairment losses. The Group recognises impairment
losses on an 'expected credit loss' model (ECL model) basis in line
with the requirements of IFRS 9. Interest income and impairment are
recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Amounts
recoverable on construction contracts
Amounts recoverable on construction contracts
includes recoverable revenue recognised over time with reference to
the stage of completion arising on contracts under a development
agreement which are receivable within 12 months of the reporting
date.
Contract
assets
Contract assets are amounts recoverable on
long-term contracts where revenue is recognised over
time.
Deposits for sites
Deposits for sites includes a percentage
amount paid of the total purchase price for the acquisition of land
intended for development.
Restricted
cash
Restricted cash includes cash amounts which
are classified as current assets and held in escrow until the
completion of certain criteria.
Construction
bonds
Construction bonds includes amounts receivable
in relation to the completion of construction activities on sites.
These assets are included in trade and other receivables on the
consolidated balance sheets and are accounted for at amortised
cost.
Derivative
contracts
Derivative contracts are contracts for
interest rate swaps to manage the interest rate risk arising from
floating rate borrowings. Derivatives are initially recognised at
fair value on the date a derivative contract is entered into, and
they are subsequently remeasured to their fair value at the end of
each reporting period.
Financial
liabilities
Financial liabilities such as inventory and
other accruals are recorded at amortised cost and include all
liabilities.
Loans and
borrowings
Loans and borrowings include debt facilities,
interest accrued and borrowing costs classified as current and
non-current liabilities.
Contingent
consideration
Contingent consideration includes amounts
payable if conditions pertaining to the business combination are
satisfied.
8.11
Provisions
Provisions are recognised when the Group has a
present legal or constructive obligation as a result of past events
and it is probable that an outflow of resources will be required to
settle that obligation, and the amount has been reliably
estimated.
Provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks
specific to the liability, where the effect of discounting is
considered significant. The unwinding of the discount is recognised
as a finance cost.
8.12
Pensions
The Group operates a defined contribution
scheme. The assets of the scheme are held separately from those of
the Group in a separate fund. Obligations for contributions to
defined contribution plans are expensed as the related service is
provided.
8.13
Leases
At the inception of a contract, the Group
assess whether a contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for
consideration.
i. As a lessee
At commencement or on modification of a
contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component and non-lease
component on the basis of its relative stand-alone prices. However,
for the leases of property the Group has elected not to separate
non-lease components and account for the lease and non-lease
components as a single lease component.
The Group recognises a right-of-use asset and
a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial
amount of the lease liability adjusted for any lease payments made
at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The right-of-use asset is subsequently
depreciated using the straight-line method from the commencement
date to the end of the lease term, unless the lease transfers
ownership of the
underlying asset to the Group by the end of
the lease term or the cost of the right-of-use asset reflects that
the Group will exercise a purchase option. In that case the
right-of-use asset will be depreciated over the useful life of the
underlying asset, which is determined on the same basis as those of
property and motor vehicles. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially measured at
the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in
the lease, or, if that rate cannot be readily determined, the
Group's incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing
rate with reference to its current financing sources and makes
certain adjustments to reflect the terms of the lease and type of
the asset leased.
Lease payments included in the measurement of
the lease liability comprise fixed payments, including in-substance
fixed payments;
The lease liability is measured at amortised
cost using the effective interest method. It is remeasured when
there is a change in the future lease payments arising from a
change in an index or rate, if there is a change in the Group's
estimate of the amount expected to be payable under a residual
value guarantee, if the Group changes its assessment of whether it
will exercise a purchase, extension or termination option or if
there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this
way, a corresponding adjustment is made to the carrying amount of
the right-of-use asset or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced to
zero.
The Group presents right-of-use assets that do
not meet the definition of investment property in 'property, plant
and equipment' and lease liabilities in 'lease liability' in the
statement of financial position.
Short-term
leases and leases of low-value assets
The Group has elected not to recognise
right-of-use assets and lease liabilities for leases of low-value
assets and short-term lease. The Group recognises the lease
payments associated with these leases as an expense on a
straight-line basis over the lease term in the income
statement.
8.14 Share
capital
(i) Ordinary
shares
Incremental costs directly attributable to the
issue of ordinary shares are recognised as a deduction from equity
(retained earnings).
(ii) Founder
Shares
Founder Shares were initially issued as
ordinary shares and subsequently re-designated as Founder Shares.
Following re-designation, the instruments are accounted for as
equity-settled share-based payments as set out at Note 8.5
above.
8.15 Finance
income and costs
The Group's finance income and finance costs
include:
·
Interest income
·
Finance income
·
Interest expense
·
Lease interest
Interest income and expense is recognised
using the effective interest
method.
8.16
Derivative contracts and hedge accounting
Derivatives are initially recognised at fair
value on the date a derivative contract is entered into, and they
are subsequently remeasured to their fair value at the end of each
reporting period. The accounting for subsequent changes in fair
value depends on whether the derivative is designated as a hedging
instrument and, if so, the nature of the item being
hedged.
The group designates certain derivatives as
hedges of a particular risk associated with the cash flows of
recognised assets and liabilities and highly probable forecast
transactions (cash flow hedges).
Changes in the fair value of derivative
hedging instruments designated as cash flow hedges are recognised
in other comprehensive income to the extent that the hedge is
effective. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss.
Amounts accumulated in other comprehensive
income are reclassified to profit or loss in the same periods that
the hedged items affect profit or loss. The reclassified gain or
loss relating to the effective portion of interest rate swaps
hedging variable rate borrowings is recognised in profit or loss
within finance income or costs respectively.
If the hedging instrument no longer meets the
criteria for hedge accounting, expires or is sold, terminated or
exercised, then hedge accounting is discontinued prospectively. The
cumulative gain or loss previously recognised in other
comprehensive income remains there until the forecast
transaction occurs, unless the hedged transaction is no longer
expected to occur, in which case the cumulative gain or loss that
was previously recognised in other comprehensive income is
transferred to profit and loss.
At inception of the hedge relationship, the
group documents the economic relationship between hedging
instruments and hedged items, including whether changes in the cash
flows of the hedging instruments are expected to offset changes in
the cash flows of hedged items. The group documents its risk
management objective and strategy for undertaking its hedge
transactions.
The full fair value of a hedging derivative is
classified as a non-current asset or liability when the remaining
maturity of the hedged item is more than 12 months; it is
classified as a current asset or liability when the remaining
maturity of the hedged item is less than 12 months.
9 Segmental
information
The Group has considered the
requirements of IFRS 8 Operating
Segments in the context of how the business is managed and
resources are allocated.
The Group is organised into three
key reportable segments, being Suburban, Urban and Partnerships.
Internal reporting to the Chief Operating Decision Maker ("CODM")
is provided on this basis. The CODM has been identified as the
Executive Committee.
The Group currently operates
solely in the Republic of Ireland and therefore no geographically
segmented financial information is provided.
Suburban
The Suburban segment is focussed
primarily on high quality housing (with some low rise apartments)
with demand coming from private buyers and institutions. Our core
Suburban product is affordable and located in well serviced
communities predominantly in the Greater Dublin Area and
Cork.
Urban
Urban's strategic focus is
developing apartments to deliver to institutional investors. The
apartments are located primarily in Dublin and Cork, but also on
sites adjacent to significant rail transportation hubs. Urban's
strategy is to deliver the product to institutional investors
through a forward sale, or forward fund transaction providing
longer term earnings visibility.
Partnerships
A Partnership will typically
involve the Government, local authorities, or state agencies
contributing their land on a reduced cost, or phased basis into a
development agreement with Glenveagh. Approximately 50% of the
product is delivered back to the government or local authority via
social and
affordable homes. This provides
longer term access to both land and unit deliveries for the
business and provides financial incentive by reducing risk from a
sales perspective.
Segmental
financial results
|
|
|
|
|
|
|
|
2023
|
2022
|
|
|
|
€'000
|
€'000
|
|
Revenue
|
|
|
|
|
Suburban
|
|
470,820
|
454,540
|
|
Urban
|
|
120,122
|
190,166
|
|
Partnerships
|
|
16,996
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Revenue for reportable segments
|
|
607,938
|
644,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
2022
|
|
|
|
€'000
|
€'000
|
|
Operating profit/(loss)
|
|
|
|
|
Suburban
|
|
79,872
|
70,353
|
|
Urban
|
|
12,367
|
21,532
|
|
Partnerships
|
|
513
|
(1,565)
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit for reportable
segments
|
|
92,752
|
90,320
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to results for the financial
year
|
|
|
|
|
Segment results - operating
profit
|
|
92,752
|
90,320
|
|
Finance expense
|
|
(15,839)
|
(7,094)
|
|
Directors' remuneration
|
|
(3,488)
|
(3,402)
|
|
Corporate function payroll
costs
|
|
(5,871)
|
(6,081)
|
|
Depreciation and
amortisation
|
|
(2,449)
|
(2,081)
|
|
Professional fees
|
|
(3,075)
|
(4,992)
|
|
IT costs
|
|
(2,060)
|
(1,673)
|
|
Share-based payment
expense
|
|
(2,137)
|
(1,717)
|
|
Profit on sale of property, plant
and equipment
|
|
214
|
1,501
|
|
Other corporate
costs
|
|
(2,937)
|
(1,780)
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax
|
|
55,110
|
63,001
|
|
|
|
|
|
Excluding profit on the sale of
property, plant and equipment, there are no individual costs
included within other corporate costs that is greater than the
amounts listed in the above table.
|
|
31 December 2023
|
31 December
2022
|
|
|
Suburban
|
Urban
|
Partnerships
|
Total
|
Suburban
|
Urban
|
Partnerships
|
Total
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
|
|
|
Segment
assets
|
555,329
|
185,525
|
49,865
|
790,719
|
590,321
|
153,018
|
6,452
|
749,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to Consolidated Balance
Sheet
|
|
|
|
|
|
|
|
|
|
Deferred tax asset
|
|
|
|
884
|
|
|
|
620
|
|
Trade and other receivables
|
|
|
|
1,010
|
|
|
|
785
|
|
Cash and cash equivalents
|
|
|
|
71,863
|
|
|
|
71,085
|
|
Property, plant and equipment
|
|
|
|
64,184
|
|
|
|
51,750
|
|
Income tax receivable
|
|
|
|
3,901
|
|
|
|
-
|
|
Intangible
assets
|
|
|
|
2,781
|
|
|
|
1,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
935,342
|
|
|
|
875,801
|
|
|
|
|
|
|
|
|
|
|
|
Segment
liabilities
|
92,520
|
15,191
|
19,395
|
127,106
|
69,138
|
9,876
|
159
|
79,173
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to Consolidated Balance
Sheet
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
|
7,363
|
|
|
|
17,561
|
|
Loans and Borrowings
|
|
|
|
115,645
|
|
|
|
80,640
|
|
Derivative contracts
|
|
|
|
1,623
|
|
|
|
-
|
|
Lease liabilities
|
|
|
|
5,449
|
|
|
|
4,744
|
|
Income tax payable
|
|
|
|
-
|
|
|
|
565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
257,186
|
|
|
|
182,683
|
|
|
|
|
|
|
|
|
|
|
10
Revenue
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
Suburban
|
|
|
|
Core
|
|
470,820
|
451,930
|
Non-core
|
|
-
|
2,610
|
|
|
|
|
|
|
470,820
|
454,540
|
|
|
|
|
|
|
|
|
Urban
|
|
|
|
Core
|
|
95,561
|
176,570
|
Non-core
|
|
24,561
|
13,596
|
|
|
|
|
|
|
120,122
|
190,166
|
|
|
|
|
|
|
|
|
Partnerships
|
|
|
|
Core
|
|
16,996
|
-
|
|
|
|
|
|
|
16,996
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue
|
|
607,938
|
644,706
|
|
|
|
|
The Group has presented revenue as a split
between core and non-core by business segment. This split is
consistent with internal reporting to the Chief Operating Decision
Maker ("CODM").
Core suburban product relates to affordable
starter homes for first time buyers. Core urban product relates
primarily to apartments suitable for institutional investors.
Non-core suburban and urban product relates to high-end, private
developments and sites. Core and non-core suburban and urban
revenue is recognised at a point in time. Non-core suburban and
urban cost of sales is mostly attributable to land and development
expenditure costs for high end, private developments and
sites.
Urban core revenue includes income from the
sale of land and development revenue from construction contracts
that are recognised over time by reference to the stage of
completion of the contract with the customer. Development revenue
recognised in the financial year related to the development of the
sites at Barn Oaks Apartments, Castleforbes and Carpenterstown and
amounted to €95.6 million (2022:
€82.1 million) with €25.5 million (2022: €32.1 million) outstanding in
contract receivables (note 20) at the year end. The payment terms
for these contracts are between 30 and 90
days.
Partnerships revenue includes income from the
sale of units recognised at a point in time and development revenue
from construction contracts that are recognised over time by
reference to the stage of completion of the contract with the
customer. Development revenue recognised in the financial year
related to the development of the sites at Ballymastone and Oscar
Traynor Road and amounted to €17.0 million (2022: €Nil) with the
full amount (2022: €Nil) outstanding in contract assets (note 20)
at the year end. No units were sold during the current
year.
All revenue is earned in the Republic of
Ireland.
11 Finance
Expense
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
Interest on secured bank
loans
|
|
16,084
|
7,049
|
Cahflow hedges-reclassified from
other comprehensive income
|
|
(383)
|
-
|
Finance cost on lease
liabilities
|
|
138
|
45
|
|
|
|
|
|
|
|
|
|
|
15,839
|
7,094
|
|
|
|
|
12
|
Statutory and other information
|
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Amortisation of intangible assets
(Note 18)
|
534
|
487
|
|
Depreciation of property, plant and
equipment (Note 17)*
|
5,159
|
3,509
|
|
Employment costs (Note
13)
|
46,264
|
40,337
|
|
Profit on disposal of property,
plant and equipment
|
(214)
|
(1,501)
|
|
|
|
|
|
|
|
|
|
Audit of Group, Company and
subsidiary financial statements
|
280
|
255
|
|
Other assurance services
|
20
|
20
|
|
Tax advisory services
|
67
|
30
|
|
Tax compliance services
|
36
|
43
|
|
Other non-audit services
|
25
|
20
|
|
|
|
|
|
|
|
|
|
|
428
|
368
|
|
|
|
|
|
|
|
|
|
Directors' remuneration
|
|
|
|
Salaries, fees and other
emoluments
|
3,438
|
3,252
|
|
Pension contributions
|
50
|
150
|
|
|
|
|
|
|
|
|
|
|
3,488
|
3,402
|
|
|
|
|
*Includes €3.3 million (2022: €2.1 million)
capitalised in inventory during the year ended 31 December
2023
**Included in the auditor's remuneration for
the Group is an amount of €0.025million (2022: €0.020 million) that relates to the Company's
financial statements.
13 Employment
costs
The average number of persons employed by the
Group (including executive directors) during the financial year was
513 (Executive Committee: 6;
Non-executive Directors: 5; Construction:301; and Other:
201). (2022:423 (Executive
Committee: 6; Non-executive Directors: 5; Construction: 227; and
Other: 185))
The aggregate payroll costs of these employees
for the financial year were:
|
|
2023
|
2022
|
|
|
Total
|
Total
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Wages and salaries
|
38,550
|
33,734
|
|
Social welfare costs
|
4,126
|
3,540
|
|
Pension costs - defined contribution
|
1,451
|
1,346
|
|
Share-based payment expense (Note 14)
|
2,137
|
1,717
|
|
|
|
|
|
|
|
|
|
|
46,264
|
40,337
|
|
|
|
|
€18.9 million (2022: €15.4 million) of employment
costs were capitalised in inventory during the financial
year.
14 Share-based payment
arrangements
The Group operates two
equity-settled share-based payment arrangements being the Long-Term
Incentive Plan ("LTIP") and the Savings Related Share Option Scheme
(known as the Save As You Earn or "SAYE" scheme). As described
below, options were granted under the terms of the LTIP and SAYE
schemes during the financial year.
(a) LTIP
In February 2023, the Remuneration
Committee approved the grant of 5,515,311 options to certain
members of the management team in accordance with the terms of the
Company's LTIP. These options will vest on completion of a
three-year service period from grant date subject to the
achievement of certain performance condition hurdles based on the
Company's Return on Equity (ROE) and Earnings per Share (EPS)
across the vesting period. 50% of the awards will vest based on the
Group's ROE for the financial year ended 31 December 2025. The EPS
based options will vest based on the Group's EPS* for the financial
year ended 31 December 2025. 25% of ROE based options vest should
the Group achieve ROE of 11.0% with the remaining options vesting
on a pro rata basis up to 100% if ROE of 16.2% is achieved. 25% of
EPS based options will vest should the Group achieve Group EPS* of
14.0 cents per share with the remaining options vesting on a pro
rata basis up to 100% if Group EPS* of 22.0 cents per share is
achieved. In line with the Group's remuneration policy, LTIP awards
granted to Executive Directors from 2020 onwards include a holding
period of at least two years post exercise.
|
Number of
Options
2023
|
Number of
Options
2022
|
|
|
|
LTIP options
in issue at 1 January
|
13,022,830
|
10,583,497
|
Granted
during the financial year
|
5,515,311
|
4,568,698
|
Forfeited
during the financial year
|
(284,403)
|
(264,729)
|
Lapsed during
the financial year
|
(1,067,076)
|
-
|
Exercised
during the financial year
|
(3,226,235)
|
(1,864,636)
|
|
|
|
LTIP options
in issue at 31 December
|
13,960,427
|
13,022,830
|
|
|
|
|
|
|
Exercisable
at 31 December
|
388,859
|
461,395
|
|
|
|
LTIP options were exercised during the
financial year with the average share price being €1.00
(2022: €1.00). The options
outstanding at 31 December 2023 had an exercise price €0.001
(2022: €0.001) and a
weighted-average contractual life of 7 years (2022: 7 years).
The EPS and ROE related performance conditions
are non-market conditions and do not impact the fair value of the
EPS or ROE based awards at grant date which is equivalent to the
share price at grant date. The fair value of LTIP options granted
in the prior periods which were based on market conditions were
measured using a Monte Carlo simulation. There is no Total
Shareholder Return (TSR) linked performance condition for options
granted in the period and therefore no fair value exercise was
performed related to this performance condition. Service and
non-market conditions attached to the arrangements were not taken
into account when measuring fair value. The inputs used in
measuring fair value at grant date were as follows:
|
|
|
2023
|
2022
|
|
Fair value at
grant date
|
|
€1.12
|
€1.16
|
|
Share price at grant date
|
|
€1.12
|
€1.16
|
The exercise price of all options granted
under the LTIP to date is €0.001 and all options have a 7- year
contractual life.
The Group recognised an expense of €2.1
million (2022:
€1.7million) in the consolidated statement of profit or loss
in respect of options granted under the LTIP.
(*Group EPS is
defined as Basic Earnings Per Share as calculated in accordance
with IAS 33 Earnings Per Share subject to adjustment by the
Remuneration Committee at its discretion, for items deemed not
reflective of the Group's underlying performance for the financial
year.)
(b) SAYE
Scheme
Under the terms of the scheme,
employees may save up to €500 per month from their net salaries for
a fixed term of three or five years and at the end of the savings
period they have the option to buy shares in the Company at a fixed
exercise price. No options were granted in the current year or
prior period and therefore no fair value exercise was
performed.
Details of
options outstanding and grant date fair value
assumptions
|
2023
|
2022
|
|
Number of
Options
3 Year
|
Number of
Options
5 Year
|
Number of
Options
3 Year
|
Number of
Options
5 Year
|
|
|
|
|
|
SAYE options
in issue at 1 January
|
590,220
|
165,000
|
799,740
|
165,000
|
Granted
during the financial year
|
-
|
-
|
-
|
-
|
Forfeited
during the financial year
|
(19,167)
|
-
|
(32,520)
|
-
|
Lapsed during
the financial year
|
(720)
|
-
|
-
|
-
|
Exercised
during the financial year
|
(504,333)
|
-
|
(177,000)
|
-
|
|
|
|
|
|
|
|
|
|
|
SAYE options
in issue at 31 December
|
66,000
|
165,000
|
590,220
|
165,000
|
|
|
|
|
|
The weighted average exercise price of all
options granted under the SAYE to date is €0.99 (2022: €0.97).
The expected share price and TSR volatility
was based on the historical volatility of a comparator group of
peer companies over the expected life of the equity instruments
granted together with consideration of the Group's actual trading
volatility to date.
The Group recognised an expense of €0.03
million (2022:
€0.06
million) in the consolidated statement of
profit or loss in respect of options granted under the SAYE
scheme.
15 Earnings
per share
a)
Basic earnings per share
The calculation of basic earnings
per share has been based on the profit attributable to ordinary
shareholders and the weighted average numbers of shares outstanding
for the financial year. There were 578,049,118
ordinary shares in issue at 31 December 2023 (2022: 638,131,722).
|
|
2023
|
2022
|
|
Profit for the financial year attributable to
ordinary shareholders (€'000)
|
47,108
|
52,567
|
|
Weighted average number of shares
for the financial year
|
588,951,593
|
693,872,004
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share (cent)
|
8.0
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
2022*
|
|
No. of shares
|
No. of shares
|
Reconciliation of weighted average
number of shares
|
|
|
Number of ordinary shares at
beginning of financial year
|
638,131,722
|
771,770,694
|
Effect of share buyback
|
(52,032,676)
|
(78,865,173)
|
Effect of SAYE maturity
|
255,980
|
29,487
|
Effect of LTIP maturity
|
2,596,567
|
936,996
|
|
|
|
|
|
|
|
588,951,593
|
693,872,004
|
|
|
|
|
|
|
b) Dilutive earnings per
share
Diluted
earnings per share
|
|
2023
|
2022
|
|
|
|
|
|
Profit for the financial year attributable to
ordinary shareholders (€'000)
|
47,108
|
52,567
|
|
Weighted average number of shares
for the financial year
|
590,114,076
|
695,970,940
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share (cent)
|
8.0
|
7.6
|
|
|
|
|
|
|
2023
|
2022
|
|
|
No. of shares
|
No. of shares
|
|
Reconciliation of weighted average
number of shares (diluted)
|
|
|
|
|
|
|
|
Weighted average number of
ordinary shares (basic)
|
588,951,593
|
693,872,004
|
|
Effect of potentially dilutive
shares
|
1,162,483
|
2,098,936
|
|
|
|
|
|
|
|
|
|
|
590,114,076
|
695,970,940
|
|
|
|
|
*The number of potentially issuable
shares in the Group held under option arrangements at 31 December
2023 is 13,960,427 (2022:
13,022,830).
**Under IAS 33, LTIP arrangements have an
assumed test period ending on 31 December 2023. Based on the
assumed test period only the TSR performance condition was met
related to LTIP options and therefore only ordinary shares related
to this condition would be issued through the conversion of LTIP
options. SAYE options matured in the year with ordinary shares
related to this being issued through the conversation of the SAYE
options.
At 31 December 2023 Nil options (2022: Nil options) were excluded from
the diluted weighted average number of ordinary shares because
their effect would have been anti-dilutive.
16
|
Income
tax
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Current tax charge for the financial
year
|
8,148
|
10,650
|
|
Deferred tax credit for the financial
year
|
(146)
|
(216)
|
|
|
|
|
|
|
|
|
|
Total income
tax charge
|
8,002
|
10,434
|
|
|
|
|
|
|
|
|
The tax assessed for the financial
year differs from the standard rate of tax in Ireland for the
financial year. The differences are explained below.
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Profit before
tax for the financial year
|
55,110
|
63,001
|
|
|
|
|
|
|
|
|
|
Tax charge at standard Irish income tax rate
of 12.5%
|
6,889
|
7,875
|
|
|
|
|
|
Tax effect
of:
|
|
|
|
Income taxed at the higher rate of corporation
tax
|
949
|
2,424
|
|
Non-deductible expenses - other
|
30
|
97
|
|
Adjustment in respect of prior year under
accrual
|
134
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income
tax charge
|
8,002
|
10,434
|
|
|
|
|
|
|
|
|
|
Movement in
deferred tax balances
|
|
|
|
|
|
|
Balance at
|
|
Balance at
|
|
|
|
1 January
|
Recognised in
|
31 December
|
|
|
|
2023
|
profit or loss
|
2023
|
|
|
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
Expenses deductible in future
periods
|
|
619
|
265
|
884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
619
|
265
|
884
|
|
|
|
|
|
|
|
|
|
|
|
|
The expenses deductible in future periods
arise in Ireland and have no expiry date. Based on profitability
achieved in the period, the continued forecast profitability in the
Group's strategic plan and the sensitivities that have been applied
therein, management has considered it probable that future profits
will be available against which the above tax expenses can be
recovered and, therefore, the related deferred tax asset can be
realised.
Global
minimum tax
To address concerns about uneven profit
distribution and tax contributions of large multinational
corporations, various agreements have been reached at a global
level, including an agreement by over 135 jurisdictions to
introduce a global minimum tax rate of 15%. In December 2022, the
Organisation for Economic Co-operation and Development ("OCED")
released a draft legislative framework that is expected to be used
by individual jurisdictions that signed the agreement to amend
their local tax laws. The Republic of Ireland has enacted the
new legislation, however, based on the current criteria there is no
current tax impact in the financial year as the Group is not in
scope of the legislation (2022:
€Nil).
17
|
Property,
plant and equipment
|
Land &
|
Fixtures
|
Plant &
|
Computer
|
|
|
|
buildings
|
& fittings
|
machinery
|
equipment
|
Total
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
Cost
|
|
|
|
|
|
|
At 1 January 2023
|
36,322
|
2,096
|
22,495
|
950
|
61,863
|
|
Additions
|
12,584
|
-
|
5,015
|
550
|
18,149
|
|
Disposals
|
(2,351)
|
-
|
(1,850)
|
-
|
(4,201)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2023
|
46,555
|
2,096
|
25,660
|
1,500
|
75,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
depreciation
|
|
|
|
|
|
|
At 1 January 2023
|
(2,964)
|
(654)
|
(5,868)
|
(627)
|
(10,113)
|
|
Charge for the financial year
|
(1,592)
|
(242)
|
(3,127)
|
(198)
|
(5,159)
|
|
Disposals
|
2,351
|
-
|
1,294
|
-
|
3,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2023
|
(2,205)
|
(896)
|
(7,701)
|
(825)
|
(11,627)
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
At 31
December 2023
|
44,350
|
1,200
|
17,959
|
675
|
64,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land &
|
Fixtures
|
Plant &
|
Computer
|
|
|
|
buildings
|
& fittings
|
machinery
|
equipment
|
Total
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
Cost
|
|
|
|
|
|
|
At 1 January 2022
|
18,239
|
945
|
14,699
|
717
|
34,600
|
|
Acquisitions through business
combinations
|
3,313
|
56
|
714
|
-
|
4,083
|
|
Additions
|
15,315
|
1,095
|
7,874
|
308
|
24,592
|
|
Disposals
|
(545)
|
-
|
(792)
|
(75)
|
(1,412)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2022
|
36,322
|
2,096
|
22,495
|
950
|
61,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
depreciation
|
|
|
|
|
|
|
At 1 January 2022
|
(2,216)
|
(438)
|
(4,121)
|
(595)
|
(7,370)
|
|
Charge for the financial year
|
(748)
|
(216)
|
(2,447)
|
(98)
|
(3,509)
|
|
Disposals
|
-
|
-
|
700
|
66
|
766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2022
|
(2,964)
|
(654)
|
(5,868)
|
(627)
|
(10,113)
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
At 31
December 2022
|
33,358
|
1,442
|
16,627
|
323
|
51,750
|
|
|
|
|
|
|
|
The depreciation charge for the year includes
€3.3 million (2022: €2.1 million) which was capitalised in
inventory at 31 December 2023.
Property plant and equipment includes right of
use assets of €4.9 million (2022: €4.5 million) related to leased
properties and motor vehicles.
In the prior financial year, the Group entered
into new lease agreements for the use of land and buildings as its
head office facility in Maynooth, Co. Kildare. The land and
buildings lease commenced in September 2022 for a duration of seven
years. On lease commencement, the Group recognised €4.7 million of
right-of-use assets and lease liabilities.
|
18 Intangible assets
|
|
|
|
|
|
|
|
|
Capitalised
|
|
|
|
|
|
|
Development
|
|
Computer
|
|
|
|
Goodwill
|
Expenditure
|
Licence
|
Software
|
Total
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
At 1 January 2023
|
5,697
|
-
|
300
|
3,133
|
9,130
|
|
Additions
|
-
|
719
|
500
|
326
|
1,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2023
|
5,697
|
719
|
800
|
3,459
|
10,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
amortisation
|
|
|
|
|
|
|
At 1 January 2023
|
-
|
-
|
-
|
(1,663)
|
(1,663)
|
|
Charge for the year
|
-
|
-
|
(40)
|
(494)
|
(534)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2023
|
-
|
-
|
(40)
|
(2,157)
|
(2,197)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
At 31
December 2023
|
5,697
|
719
|
760
|
1,302
|
8,478
|
|
|
|
|
|
|
|
|
|
|
|
|
Computer
|
|
|
|
|
Goodwill
|
Licence
|
Software
|
Total
|
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
At 1 January 2022
|
|
-
|
-
|
2,390
|
2,390
|
|
Additions
|
|
5,697
|
300
|
743
|
6,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2022
|
|
5,697
|
300
|
3,133
|
9,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
amortisation
|
|
|
|
|
|
|
At 1 January 2022
|
|
-
|
-
|
(1,176)
|
(1,176)
|
|
Charge for the year
|
|
-
|
-
|
(487)
|
(487)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31
December 2022
|
|
-
|
-
|
(1,663)
|
(1,663)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
At 31
December 2022
|
|
5,697
|
300
|
1,470
|
7,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) Impairment
of goodwill
Goodwill acquired in business combinations are
allocated to the Group's cash generating units ("CGUs") that are
expected to benefit from the business acquisition, rather than
where the assets are owned. The CGUs represent the lowest level
within the Group at which the associated goodwill is monitored for
internal management purposes and are not larger than the operating
segments determined in accordance with IFRS 8 'Operating Segments'.
CGUs are kept under review to ensure that they reflect changing
interdependencies of cash inflows within the Group and how
management monitors operations. The goodwill carrying amount is
allocated to the suburban segment with the recoverable amount of
this CGU being based on value in use. The value in use was
determined by the cash flows to be generated from the continuing
use of the CGU over a three year period.
a) Key
assumptions
The Group has established internal controls
designed to effectively assess and centrally review future cash
flows generated from CGUs. The key assumptions on which management
has based its cash flows are revenue and construction costs.
Revenue assumptions relate to unit sales prices for sites
delivering over the period based on prices achieved to date,
current market prices, historic prices, and sales agent reports.
Construction cost assumptions are based on contracted/procured
package pricing or where packages are not procured, historic
pricing achieved, or pricing achieved on similar packages in
reference to other sites.
The impact of sustainability and other
macroeconomic factors have been considered in the Group's
assessment of these cash flows, particularly with regard to the
potential implications for future selling prices, development
expenditure and construction programming. Management has considered
scenarios on each of its active developments and the consequential
impact on future profitability based on current facts and
circumstances together with any implications for future projects in
undertaking its impairment analysis.
As part of the assessment, the Group has
re-evaluated its most likely exit strategies on all developments in
the context of the current market environment and reflected these
in revenue assumptions within the forecast models. The results of
this exercise determined that the no impairment was required at the
reporting date.
The cash flow projections used to determine
the value in use of the CGU are based on three years of cash flows
from the Group's Strategic Plan.
A discount rate based on the Group's
incremental borrowing rate and a growth rate into perpetuity was
applied to these cash flows.
A sensitivity analysis has been conducted in
respect of the value in use of the CGU. There were no CGU
impairments as a result of the applied sensitivity analysis in the
financial year.
19
|
Inventory
|
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Land
|
403,756
|
455,280
|
|
Development expenditure work in
progress
|
274,592
|
227,240
|
|
Development rights
|
29,252
|
3,231
|
|
|
|
|
|
|
|
|
|
|
707,600
|
685,751
|
|
|
|
|
€488.4 million (2022: €530.4 million) of inventory was recognised
in 'cost of sales' during the year ended 31 December 2023.
Sustainable materials such as heat pumps, PV panels, timber frames,
light gauge steel frames and building expenditure necessary to
deliver A1/A2 Building Energy Rating ("BER") homes are included
within development expenditure work in progress.
(i)
Impairment of inventories
During the financial year the
Group carried out a net realisable value
assessment of its inventories at the reporting date. This
assessment determined that the net impairment charge or reversal
required for the period was €Nil (2022: €Nil).
(ii)
Employment cost capitalised
€18.9 million of employment costs
incurred in the financial year have been capitalised in inventory
(2022: €15.4
million).
(iii)
Development right
Oscar Traynor Road, Coolock, Dublin 5
In December 2022, the Group entered into a
Development Agreement ("DA") with Dublin City Council ("DCC").
Under the terms of the DA and following planning permission being
granted in February 2023, the Group acquired certain development
rights in respect of the site at Oscar Traynor Road, Coolock,
Dublin 5 for consideration of approximately €14.0m exclusive of
stamp duty and acquisition costs. Under the granted planning
permission for the site, the development rights will entitle the
Group to develop approximately 850 residential units alongside
commercial elements in accordance with the terms of the
DA.
Ballymastone, Donabate,
Dublin
In December 2021, the Group entered into a
Development Agreement ("DA") with Fingal County Council ("FCC").
Under the terms of the DA and following planning
permission being granted in March 2023, the Group
acquired certain development rights in respect of the site at
Ballymastone, Donabate, Dublin for consideration of approximately
€11.0m exclusive of stamp duty and acquisition costs. The
development rights will (subject to planning permission) entitle
the Group to develop approximately 1,200 residential units in
accordance with the terms of the DA.
Gateway Retail Park, Co.
Galway
In March 2018, the Group entered into an
Acquisition and Profit Share Agreement ("APSA") with Targeted
Investment Opportunities ICAV ("TIO"), a wholly owned subsidiary of
OCM Luxembourg EPF III S.a.r.l. Under the terms of the APSA, the
Group acquired certain development rights in respect of the site at
Gateway Retail Park, Knocknacarra, Co. Galway for consideration of
approximately €3.2 million (including stamp duty and acquisition
costs). The development rights will (subject to planning) entitle
the Group to develop at least 250 residential units under a joint
business plan to be undertaken with Sigma Retail Partners (on
behalf of TIO) which will also entitle TIO to control and benefit
from any retail development at the site. The Directors have
determined that joint control of the site exists and the
arrangement has been accounted for as a joint operation in
accordance with IFRS 11 Joint Arrangements. For further information
regarding the APSA, see Note 29 of these financial
statements.
20
|
Trade and other
receivables
|
|
|
|
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Trade receivables
|
9,765
|
9,224
|
|
Contract receivables
|
25,540
|
32,113
|
|
Contract assets
|
16,996
|
-
|
|
Other receivables
|
3,475
|
2,283
|
|
Prepayments
|
1,106
|
862
|
|
Construction bonds
|
15,924
|
12,140
|
|
Deposits for sites
|
5,168
|
2,049
|
|
|
|
|
|
|
|
|
|
|
77,974
|
58,671
|
|
|
|
|
The carrying value of all financial assets and
trade and other receivables is approximate to their fair value and
are short term in nature with the exception of construction
bonds.
21
|
Trade and other
payables
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
Current
|
|
|
|
Trade payables
|
7,875
|
7,132
|
|
Payroll and other taxes
|
5,741
|
4,897
|
|
Inventory accruals
|
64,921
|
33,600
|
|
Contingent consideration
|
1,750
|
1,500
|
|
Other accruals
|
26,651
|
16,372
|
|
VAT payable
|
25,781
|
29,733
|
|
|
|
|
|
|
|
|
|
|
132,719
|
93,234
|
|
|
|
|
|
|
|
|
The carrying value of all financial
liabilities and trade and other payables is approximate to their
fair value and are repayable under the normal credit
cycle.
|
|
2023
|
2022
|
|
Non-current
|
€'000
|
€'000
|
|
|
|
|
|
Contingent consideration
|
1,750
|
3,500
|
|
|
|
|
|
|
|
|
|
Non-current
|
1,750
|
3,500
|
|
Current
|
132,719
|
93,234
|
|
|
|
|
|
|
|
|
|
|
134,469
|
96,734
|
22 Loans and
Borrowings
(a)
Loans and borrowings
In February 2023, the Group entered into a new
five-year sustainability linked finance facility of €350.0 million
(Term loan: €116.7m, Revolving Credit Facility: €233.3m), with a
syndicate of domestic and international financial institutions, at
an interest rate of one-month EURIBOR (subject to a floor of 0 per
cent) plus a margin of 2.7-2.8%. The debt facility interest rates
are linked to the Group meeting certain sustainability performance
targets aligned to its sustainability strategy. The sustainability
performance targets are in respect of decarbonisation and the
Group's Equity, Diversity and Inclusion strategy. The term loan is
repayable in full at the end of the five years. The prior period
debt facilities were fully repaid by the Group during the year and
at 31 December 2023, €116.7 million has been drawn on the term loan
element of the new debt facility (31 December 2022: €82.5 million).
Pursuant to the debt facility agreement, there is fixed and
floating charges and assignments in place over all the assets of
the Group as continuing security for the discharge of any amounts
drawn down. The assets carrying value at 31 December 2023 is €935.3
million (31 December 2022: €875.8 million).
|
|
31 December
|
31 December
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Debt facilities
|
116,667
|
82,500
|
|
Unamortised borrowing costs
|
(3,697)
|
(1,877)
|
|
Interest accrued
|
2,675
|
17
|
|
|
|
|
|
|
|
|
|
Total loans
and borrowings
|
115,645
|
80,640
|
|
|
|
|
|
|
|
|
|
Loans and
borrowings are payable as follows:
|
31 December
|
31 December
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Less than one year
|
3,562
|
9,419
|
|
Between one and two years
|
888
|
9,401
|
|
More than two years
|
111,195
|
61,820
|
|
|
|
|
|
|
|
|
|
Total loans
and borrowings
|
115,645
|
80,640
|
|
|
|
|
|
|
|
|
The Group's debt facilities were entered into
with AIB, Bank of Ireland, Barclays and Home Building Ireland
Finance and are subject to primary financial covenants calculated
on a bi-annual basis:
- A maximum
total debt to gross asset value ratio of 40%;
- Loans to
eligible assets value does not equal or exceed 65%;
- The Group
is required to maintain a minimum cash balance of €25.0 million
throughout the term of the debt facility;
- EBITDA must
exceed net interest costs by a minimum of 3 times and is calculated
on a trailing twelve-month basis.
- Total debt
must not exceed adjusted EBITDA by a minimum of 4 times, this is
calculated on a trailing twelve-month basis, and;
- Total debt
must not exceed projected adjusted EBITDA by a minimum of 4 times,
this is calculated on a forward twelve-month basis.
All
covenants have been complied with in 2023 and
2022.
Debt facilities are secured by a debenture
incorporating fixed and floating charges and assignments over all
the assets of the Group. The carrying value of the total assets of
the Group as at 31 December 2023 is €935.3 million (31 December
2022: €875.8 million).
(b)
Reconciliation of movements of liabilities to cash flows arising
from financing activities
2023
|
|
Cash flows
|
Non-cash
changes
|
|
Opening
2023
|
Credit facility
drawdown
|
Credit facility
repayment
|
Transaction costs related to
loans and borrowings
|
Share
buyback
payments
|
Proceeds from share option
exercise
|
Payment of lease
liability
|
Interest received /
(paid)
|
Amortisation of transaction
costs
|
Interest
|
New hedging
instrument
|
New leases
|
Closing
2023
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
borrowings
|
82,500
|
381,667
|
(347,500)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
116,667
|
|
Unamortised transaction costs
|
(1,877)
|
-
|
-
|
(4,318)
|
-
|
-
|
-
|
-
|
2,498
|
-
|
-
|
-
|
(3,697)
|
|
Derivative contracts
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,623
|
-
|
1,623
|
|
Lease
liability
|
4,744
|
-
|
-
|
-
|
-
|
-
|
(761)
|
-
|
-
|
138
|
-
|
1,328
|
5,449
|
|
Interest accrual
|
17
|
-
|
-
|
-
|
-
|
-
|
-
|
(12,009)
|
-
|
14,667
|
-
|
-
|
2,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share buyback
|
(253,726)
|
-
|
-
|
-
|
(62,891)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(316,617)
|
|
Share option exercise
|
137
|
-
|
-
|
-
|
-
|
307
|
-
|
-
|
-
|
-
|
-
|
-
|
444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(168,205)
|
381,667
|
(347,500)
|
(4,318)
|
(62,891)
|
307
|
(761)
|
(12,009)
|
2,498
|
14,805
|
1,623
|
1,328
|
(193,456)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
Cash flows
|
Non-cash
changes
|
|
Opening
2022
|
Credit facility
drawdown
|
Credit facility
repayment
|
Transaction costs related to
loans and borrowings
|
Share
buyback
payments
|
Proceeds from share option
exercise
|
Payment of lease
liability
|
Interest
Paid
|
Amortisation of transaction
costs
|
Interest on debt
facilities
|
Interest on lease
liability
|
New leases
|
Closing
2022
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
borrowings
|
122,500
|
110,000
|
(150,000)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
82,500
|
|
Unamortised transaction costs
|
(2,476)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
599
|
-
|
-
|
-
|
(1,877)
|
|
Lease
liability
|
547
|
-
|
-
|
-
|
-
|
-
|
(470)
|
-
|
-
|
-
|
45
|
4,622
|
4,744
|
|
Interest accrual
|
223
|
-
|
-
|
-
|
-
|
-
|
-
|
(6,490)
|
-
|
6,284
|
-
|
-
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share buyback
|
(107,466)
|
-
|
-
|
-
|
(146,260)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(253,726)
|
|
Share option exercise
|
29
|
-
|
-
|
-
|
-
|
108
|
-
|
-
|
-
|
-
|
-
|
-
|
137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,357
|
110,000
|
(150,000)
|
-
|
(146,260)
|
108
|
(470)
|
(6,490)
|
599
|
6,284
|
45
|
4,622
|
(168,205)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Net
debt reconciliation
|
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Restricted Cash
|
458
|
458
|
|
Cash and cash equivalents
|
71,863
|
71,085
|
|
Loans and borrowings
|
(115,645)
|
(80,640)
|
|
Lease liabilities
|
(5,449)
|
(4,744)
|
|
|
|
|
|
|
|
|
|
Total net
debt
|
(48,773)
|
(13,841)
|
|
|
|
|
(d)
Lease Liabilities
Lease
liabilities are payable as follows:
|
|
31 December 2023
|
|
|
Present value
|
|
Future value
|
|
|
of minimum
|
|
of minimum
|
|
|
lease
|
|
lease
|
|
|
payments
|
Interest
|
payments
|
|
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
Less than one year
|
1,219
|
96
|
1,315
|
|
Between one and two years
|
1,205
|
98
|
1,303
|
|
More than two years
|
3,025
|
362
|
3,387
|
|
|
|
|
|
|
|
|
|
|
|
|
5,449
|
556
|
6,005
|
|
|
|
|
|
23 Restricted
cash
|
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Current
|
458
|
458
|
|
|
|
|
|
|
|
|
|
|
458
|
458
|
|
|
|
|
|
|
|
|
The restricted cash balance relates to €0.5
million held in escrow for the completion of certain
infrastructural works relating to the Group's residential
development at Balbriggan, Co. Dublin.
24 Derivatives and
cashflow hedge reserve
a) Interest rate
swap
On 28 February 2023, the Group entered into an
interest rate swap to hedge the interest rate risk associated with
€100.0 million of the term loan element of our new debt facilities.
The interest rate swap is in place for the 5-year period of the
facility agreement. The nominal amount hedged for years one and two
is €100.0 million with this stepping down to €50.0 million for the
remaining three years of the facility agreement. The interest rate
swap has a fixed interest rate of 3.035%.
Derivative Financial Instruments
|
2023
|
2022
|
|
€'000
|
€'000
|
|
|
|
Interest rate swaps - cash
flow hedges
|
(1,623)
|
-
|
|
|
|
Included in other comprehensive income
|
2023
|
2022
|
|
€'000
|
€'000
|
|
|
|
Fair value movement on cashflow hedges
|
(1,240)
|
-
|
Cashflow hedges reclassified to profit or loss
|
(383)
|
-
|
|
|
|
|
(1,623)
|
-
|
|
|
|
b) Cashflow hedge
reserve
The cashflow hedge reserve reflects the
effective portion of the cumulative net change in the fair value of
derivatives that are designated and qualify as cash flow hedges.
Amounts accumulated in the hedging reserve are recycled to the
income statement in the periods when the hedged item affects income
or expense, or are included in the initial cost of a hedged
non-financial item, depending on the hedged item.
25
Subsidiaries
The principal subsidiary companies and the
percentage shareholdings held by Glenveagh Properties PLC, either
directly or indirectly, pursuant to Section 314 of the Companies
Act 2014 at 31 December 2023 are as follows:
|
Company
|
Principal
activity
|
%
|
Reg. office
|
|
Glenveagh Properties (Holdings)
Limited
|
Holding company
|
100%
|
1
|
|
Glenveagh Treasury DAC
|
Financing activities
|
100%
|
1
|
|
Glenveagh Contracting Limited
|
Property development
|
100%
|
1
|
|
Glenveagh Homes Limited
|
Property development
|
100%
|
1
|
|
Greystones Devco Limited
|
Property development
|
100%
|
1
|
|
Marina Quarter Limited
|
Property development
|
100%
|
1
|
|
GLV Bay Lane Limited
|
Property development
|
100%
|
1
|
|
Glenveagh Living Limited
|
Property development
|
100%
|
1
|
|
GL Partnership Opportunities DAC
|
Property development
|
100%
|
1
|
|
Castleforbes Development Company
DAC
|
Property development
|
100%
|
1
|
|
Nua Manufacturing MMC Limited
|
Manufacturing operations
|
100%
|
1
|
|
GMP Developments Limited
|
Holding company
|
100%
|
1
|
1 Block C, Maynooth Business
Campus, Maynooth, Co. Kildare
Pursuant to section 316 of the Companies Act
2014, a full list of subsidiaries will be annexed to the Company's
Annual Return to be filed in the Companies Registration Office in
Ireland.
26
Capital and reserves
(a) Authorised share
capital
|
|
|
2023
|
2022
|
|
|
|
Number of
|
|
Number of
|
|
|
|
|
shares
|
€'000
|
shares
|
€'000
|
|
|
|
|
|
|
|
|
Ordinary Shares of €0.001 each
|
|
1,000,000,000
|
1,000
|
1,000,000,000
|
1,000
|
|
Deferred Shares of €0.001 each
|
|
200,000,000
|
200
|
200,000,000
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,200,000,000
|
1,200
|
1,200,000,000
|
1,200
|
|
|
|
|
|
|
|
(b) Issued and fully paid
share capital and share premium
At 31
December 2023
|
|
|
|
Share
|
Share
|
|
|
|
|
Number of
|
capital
|
premium
|
|
|
|
|
shares
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
Ordinary Shares of €0.001 each
|
|
|
578,049,119
|
578
|
179,719
|
|
Founder Shares of €0.001 each
|
|
|
-
|
-
|
-
|
|
Deferred Shares of €0.001 each
|
|
|
81,453,077
|
81
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
659,502,196
|
659
|
179,719
|
|
|
|
|
|
|
|
At 31
December 2022
|
|
|
|
Share
|
Share
|
|
|
|
|
Number of
|
Capital
|
premium
|
|
|
|
|
shares
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
Ordinary Shares of €0.001 each
|
|
|
638,131,722
|
638
|
179,416
|
|
Founder Shares of €0.001 each
|
|
|
-
|
-
|
-
|
|
Deferred Shares of €0.001 each
|
|
|
81,453,077
|
81
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
719,584,799
|
719
|
179,416
|
|
|
|
|
|
|
|
(c) Reconciliation of shares
in issue
In respect of current year
|
Ordinary
|
Founder
|
Deferred
|
Undenominated
|
Share
|
Share
|
|
|
shares
|
shares
|
shares
|
capital
|
capital
|
premium
|
|
|
'000
|
'000
|
'000
|
€000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
|
In issue at 1 January
2023
|
638,132
|
-
|
81,453
|
335
|
719
|
179,416
|
|
Purchase of own shares
|
(63,813)
|
-
|
-
|
64
|
(64)
|
-
|
|
Conversion of founder shares to
deferred shares
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Cancellation of deferred
shares
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Exercise of options
|
3,730
|
-
|
-
|
-
|
4
|
303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
578,049
|
-
|
81,453
|
399
|
659
|
179,719
|
|
|
|
|
|
|
|
|
In respect of prior year
|
Ordinary
|
Founder
|
Deferred
|
Undenominated
|
Share
|
Share
|
|
|
shares
|
shares
|
shares
|
capital
|
capital
|
premium
|
|
|
'000
|
'000
|
'000
|
€000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
|
In issue at 1 January
2022
|
771,771
|
181,007
|
-
|
100
|
952
|
179,310
|
|
Purchase of own shares
|
(135,680)
|
-
|
-
|
135
|
(135)
|
-
|
|
Conversion of founder shares to
deferred shares
|
-
|
(181,007)
|
181,007
|
-
|
-
|
-
|
|
Cancellation of deferred
shares
|
-
|
-
|
(99,554)
|
100
|
(100)
|
-
|
|
Exercise of options
|
2,041
|
-
|
-
|
-
|
2
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
638,132
|
-
|
81,453
|
335
|
719
|
179,416
|
|
|
|
|
|
|
|
|
(d) Rights of shares
in issue
Ordinary
Shares
The holders of Ordinary Shares are entitled to
one vote per Ordinary Share at general meetings of the Company and
are entitled to receive dividends as declared by the
Company.
(e) Nature and purpose
of reserves
Share based
payment reserve
The share-based payment reserve comprises
amounts equivalent to the cumulative cost of awards by the Group
under equity settled share-based payment arrangements being the
Group's Long Term Incentive Plan and the SAYE scheme. Details of
the share awards, in addition to awards which lapsed in the year,
are disclosed in Note 14.
(f) Share buyback
programme
On 16 November 2021, the Group announced a
second share buyback programme, which completed on 28 April 2022.
The total number of shares purchased was 92,950,510 at a total cost
of €111.0 million. The total number of shares purchased in the
period 1 January to 28 April 2022 was 64,929,549 at a total cost of
€77.9m. All repurchased shares were cancelled in accordance with
the share buyback programme in the year ended 31 December
2022.
On 1 June 2022, a third share buyback
programme commenced up to a further €75.0 million, which completed
on 1 November 2022. As at 31 December 2022 the total number of
shares purchased under the third buyback programme was 70,750,810
at a total cost of €67.5 million. All repurchased shares were
cancelled in the year ended 31 December 2022.
On 6 January 2023, a fourth share buyback
programme commenced to repurchase up to 10% of the Group's issued
share capital such that the maximum number of shares which can be
repurchased under this buyback is 63,813,172. On 2 August 2023, the
Group completed the fourth share buyback programme repurchasing
63,813,172 shares for a cost of €62.9 million. All repurchased
shares were cancelled.
27 Financial
instruments and financial risk management
(a)
Accounting classification and fair value
The Group classifies and discloses the fair
value for each class of financial instrument based on the fair
value hierarchy in accordance with IFRS 13. The fair value
hierarchy distinguishes between market value data obtained from
independent sources and the Group's own assumptions about market
value. The hierarchy levels are defined below:
-
Level 1 - Inputs based on quoted prices in active markets for
identical assets or liabilities;
-
Level 2 - Inputs based on factors other than quoted prices
included in Level 1 and may include quoted prices for similar
assets and liabilities in active markets, as well as inputs that
are observable for the asset or liability (other than quoted
prices), such as interest rates and yield curves that are
observable at commonly quoted intervals; and
-
Level 3 - Inputs which are unobservable for the asset or
liability and are typically based on the Group's own assumptions as
there is little, if any, related market activity. The Group's
assessment of the significance of a particular input to the fair
value measurement in its entirety requires judgement and considers
factors specific to the asset or liability.
The Group's assessment of the significance of
a particular input to the fair value measurement in its entirety
requires judgement and considers factors specific to the asset or
liability.
The following table presents the Group's
estimates of fair value on a recurring basis based on information
available at 31 December 2023, aggregated by the level in the fair
value hierarchy within which those measurements fall.
|
31 December
2023*
|
Level 1
|
Level 2
|
Level 3
|
|
|
|
Quoted prices in
|
|
|
|
|
|
active markets for
|
|
Significant
|
|
|
|
identical assets &
|
Significant other
|
unobservable
|
|
|
|
liabilities
|
observable inputs
|
inputs
|
Total
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
|
Recurring
Measurement
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Contingent consideration
|
-
|
-
|
3,500
|
3,500
|
|
Derivative contracts
|
-
|
1,623
|
-
|
1,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
-
|
1,623
|
3,500
|
5,123
|
|
|
|
|
|
|
*The period
ended 31 December 2023 is the first period the Group has transacted
in derivative contracts, see note 6.
The consolidated financial assets and
financial liabilities are set out below. While all financial assets
and liabilities are measured at amortised cost, the carrying
amounts of the consolidated financial assets and financial
liabilities approximate to fair value. Trade and other receivables
and trade and other payables approximate to their fair value as the
transactions which give rise to these balances arise in the normal
course of trade and, where relevant, with industry standard payment
terms and have a short period to maturity (less than one
year).
|
Financial
instruments: financial assets
|
|
|
|
|
2023
|
2022
|
|
The consolidated financial assets can be
summarised as follows:
|
€'000
|
€'000
|
|
|
|
|
|
Trade receivables
|
9,765
|
9,224
|
|
Amounts recoverable on construction
contracts
|
25,540
|
32,113
|
|
Contract assets
|
16,996
|
-
|
|
Other receivables
|
3,475
|
2,282
|
|
Construction bonds
|
15,924
|
12,140
|
|
Deposits for sites
|
5,168
|
2,049
|
|
Cash and cash equivalents
|
71,863
|
71,085
|
|
Restricted cash (current)
|
458
|
458
|
|
|
|
|
|
|
|
|
|
Total
financial assets
|
149,189
|
129,351
|
|
|
|
|
Cash and cash equivalents are short-term
deposits held at variable rates.
|
Financial
instruments: financial liabilities
|
|
|
|
|
2023
|
2022
|
|
|
€'000
|
€'000
|
|
|
|
|
|
Trade payables
|
7,875
|
7,132
|
|
Lease liabilities
|
5,449
|
4,744
|
|
Inventory accruals
|
64,921
|
33,600
|
|
Other accruals
|
26,651
|
16,372
|
|
Contingent consideration
|
3,500
|
5,000
|
|
Loans & borrowings
|
119,617
|
80,640
|
|
|
|
|
|
|
|
|
|
Total
financial liabilities
|
228,013
|
147,488
|
|
|
|
|
Trade payables and other current liabilities
are non-interest bearing.
(b)
Financial risk management objectives and policies
As all of the operations carried out by the
Group are in Euro there is no direct currency risk, and therefore
the Group's main financial risks are primarily:
- liquidity risk
- the risk that suitable funding for the Group's activities may not
be available;
- credit risk -
the risk that a counter-party will default on their contractual
obligations resulting in a financial loss to the Group;
and
- market risk -
the risk that changes in market prices, such as interest rates and
equity prices will affect the Group's income or the value of its
holdings of financial instruments.
- interest rate
risk - the risk that changes in interest rates will affect the
Group's income or the value of its holdings of financial
instruments.
This note presents information and
quantitative disclosures about the Group's exposure to each of the
above risks, its objectives, policies and processes for measuring
and managing risk, and the Group's management of
capital.
Liquidity
risk
Liquidity risk is the risk that the Group may
not be able to generate sufficient cash reserves to settle its
obligations in full as they fall due or can only do so on terms
that are materially disadvantageous. The Group's approach to
managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring,
unacceptable losses or risking damage to the Group's reputation.
The Group's liquidity forecasts consider all planned development
expenditure.
In February 2023, the Group
entered into a new five-year sustainability linked finance facility
of €350.0 million, with a syndicate of domestic and international
financial institutions, at an interest rate of one-month EURIBOR
(subject to a floor of 0 per cent) plus a margin of 2.7%-2.8%. The
debt facility interest rates are linked to the Group meeting
certain sustainability performance targets aligned to its
sustainability strategy. The sustainability performance targets are
in respect of decarbonisation and the Group's Equity, Diversity and
Inclusion strategy. The prior period debt facilities were fully
repaid by the Group during the year ended 31 December 2023. €116.7
million has been drawn on the new debt facility (2022: €82.5 million). The Group has
an exposure to cash flow interest rate risk where there are changes
in the EURIBOR rates.
Management monitors the adequacy of the
Group's liquidity reserves against rolling cash flow forecasts. In
addition, the Group's liquidity risk management policy involves
monitoring short-term and long-term cash flow forecasts. Set out
below are details of the Group's contractual cash flows arising
from its financial liabilities and funds available to meet these
liabilities.
|
|
31 December 2023
|
|
|
Carrying
|
Contractual
|
Less than
|
1 year
|
More than
|
|
|
amount
|
cash flows
|
1 year
|
to 2 years
|
2 years
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
Lease liabilities
|
5,499
|
6,005
|
1,314
|
1,303
|
3,388
|
|
Trade payables
|
7,875
|
7,875
|
7,875
|
-
|
-
|
|
Inventory accruals
|
64,921
|
64,921
|
64,921
|
-
|
-
|
|
Other accruals
|
26,651
|
26,651
|
26,651
|
-
|
-
|
|
Contingent consideration
|
3,500
|
3,500
|
1,750
|
1,750
|
-
|
|
Derivative contracts
|
1,623
|
1,623
|
(362)
|
569
|
1,416
|
|
Loans and borrowings
|
115,645
|
134,725
|
13,018
|
10,343
|
111,364
|
|
|
|
|
|
|
|
|
|
225,714
|
245,300
|
115,167
|
13,965
|
116,168
|
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2022
|
|
|
Carrying
|
Contractual
|
Less than
|
1 year
|
More than
|
|
|
amount
|
cash flows
|
1 year
|
to 2 years
|
2 years
|
|
|
€'000
|
€'000
|
€'000
|
€'000
|
€'000
|
|
|
|
|
|
|
|
|
Lease liabilities
|
4,744
|
5,057
|
84
|
16
|
4,957
|
|
Trade payables
|
7,132
|
7,132
|
7,132
|
-
|
-
|
|
Inventory accruals
|
33,600
|
33,600
|
33,600
|
-
|
-
|
|
Other accruals
|
16,372
|
16,372
|
16,372
|
-
|
-
|
|
Contingent consideration
|
5,000
|
5,000
|
1,500
|
1,750
|
1,750
|
|
Loans and borrowings
|
80,640
|
89,488
|
11,563
|
11,546
|
66,379
|
|
|
|
|
|
|
|
|
|
147,488
|
156,649
|
70,251
|
13,312
|
73,086
|
|
|
|
|
|
|
|
Funds
available
|
|
|
|
2023
|
2022
|
|
€'000
|
€'000
|
|
|
|
Debt facilities (undrawn
committed)
|
233,333
|
150,000
|
Cash and cash
equivalents*
|
71,863
|
71,085
|
Restricted cash
|
458
|
458
|
|
|
|
|
|
|
|
305,654
|
221,543
|
|
|
|
*Includes €25 million (2022: €25 million) of restricted
cash
The Group's RCF is subject to primary
financial covenants calculated on a bi-annual basis:
- A maximum
total debt to gross asset value ratio of 40%;
- Loans to
eligible assets value does not equal or exceed 65%;
- The Group
is required to maintain a minimum cash balance of €25.0 million
throughout the term of the debt facility;
- EBITDA must
exceed net interest costs by a minimum of 3 times and is calculated
on a trailing twelve-month basis.
- Total debt
must not exceed adjusted EBITDA by a minimum of 4 times, this is
calculated on a trailing twelve-month basis, and;
- Total debt
must not exceed projected adjusted EBITDA by a minimum of 4 times,
this is calculated on a forward twelve-month basis.
Credit
risk
The Group's exposure to credit risk
encompasses the financial assets being: trade and receivables,
contract assets and cash and cash equivalents. Credit risk is
managed by regularly monitoring the Group's credit exposure to each
counter-party to ensure credit quality of customers and financial
institutions in line with internal limits approved by the
Board.
There has been no impairment of trade
receivables in the year presented. The impairment loss allowance
allocated against trade receivables, contract assets, cash and cash
equivalents and restricted cash is not material. The credit risk on
cash and cash equivalents is limited because counter-parties are
leading international banks with minimum long-term BBB+
credit-ratings assigned by international credit agencies. The
maximum amount of credit exposure is the financial assets in this
note.
Market risk
The Group's exposure to market
risk relates to changes to interest rates and stems predominately
from its debt obligations. Interest rate risk reflects the Group's
exposure to fluctuations in interest rates in the market. This risk
arises from bank loans that are drawn under the Group's debt
facilities with variable interest rates based upon EURIBOR. At the
year ended 31 December 2023 it is estimated that an increase of 100
basis points to EURIBOR would have decreased the Group's profit
before tax by €2.9 million (2022:
€2.5 million) assuming all other variables remain constant,
and the rate change is only applied to the loans that are exposed
to movements in EURIBOR.
As part of the Group's strategy to manage our
interest rate risk, the Group entered into an interest rate swap on
28 February 2023 to hedge the interest rate risk associated with
€100.0 million of the term loan element of our new debt facilities.
The interest rate swap is in place for the 5-year period of the
facility agreement. The nominal amount hedged for years one and two
is €100.0 million with this stepping down to €50.0 million for the
remaining three years of the facility agreement.
The Group is also exposed to interest rate
risk on its cash and cash equivalents. These balances attract low
interest rates and therefore a relative increase or decrease in
their interest rates would not have a material effect on the
Group's profit.
A fundamental review and reform of major
interest rate benchmarks is being undertaken globally, including
the replacement of some interbank offered rates (IBORs) with
alternative nearly risk-free rates (referred to as 'IBOR reform').
The Group has no exposure to these changes as it only has exposure
to EURIBOR interest rates which is outside the scope of the current
IBOR reform.
The amounts relating to items
designated as hedging instruments and hedge ineffectiveness were as
follows:
|
As at 31 December
2023
|
For the year ended 31
December 2023
|
Nominal amount
|
Carrying amount
|
Changes in the value of hedging instruments recognised in
OCI
|
Hedge ineffectiveness recognised in profit or
loss
|
Line items in profit or loss that includes hedge
ineffectiveness
|
Amount reclassed from hedging reserve to profit or
loss
|
|
Assets
|
Liability
|
(€'000)
|
(€'000)
|
(€'000)
|
(€'000)
|
(€'000)
|
(€'000)
|
(€'000)
|
(€'000)
|
Interest rate swap
|
100,000
|
-
|
(1,623)
|
(1,240)
|
-
|
Loss on derivative financial
instruments
|
(383)
|
Financing costs
|
The Group held the following instruments to
hedge exposures to changes in interest rates:
Interest rate swaps
|
2023
|
2022
|
|
|
|
Net exposure
(€'000)
|
1,535
|
-
|
Average fixed interest
rate
|
3.035%
|
-
|
The amounts at the reporting date relating to
items designated as hedged items were as follows:
As at 31 December 2023
|
|
|
|
Change in
|
|
|
value used for
|
|
|
calculating
|
Cashflow
|
|
hedge
|
hedge
|
|
ineffectiveness
|
Reserve
|
|
€'000
|
€'000
|
|
|
|
Interest rate
swap
|
-
|
(1,623)
|
|
|
|
|
|
|
|
-
|
(1,623)
|
|
|
|
Capital
management
The Group finances its operations
through a combination of shareholders' funds, long term borrowings
and working capital. The Group's objective when managing capital is
to maintain an appropriate capital structure in the business to
allow management to focus on creating sustainable long-term value
for its shareholders, with flexibility to take advantage of
opportunities as they arise in the short and medium term. The
Group's capital allocation policy is to invest in supply chain,
land, and work-in-progress. Once the business has invested
sufficiently in each of these priorities, excess capital is
returned to shareholders.
28
Leases
A. Leases as lessee (IFRS
16)
The Group leases a property and motor
vehicles. Motor vehicle leases typically run for a period of 1-3
years, with an option to renew the lease after that date. Lease
payments are renegotiated every 1-3 years to reflect market
rentals. The property lease is for 15 years with a break clause
after 7 years.
The Group leases certain motor vehicles with
contract terms of one year. These leases are short term and leases
of low-value items. The Group has elected not to recognise
right-of-use assets and lease liabilities for these
leases.
Information about leases for which the Group
is a lessee is presented below.
i. Right-of-use assets
Right-of-use assets related to leased
properties (that do not meet the definition of investment property)
and motor vehicles are presented as property, plant and equipment
(see Note 17).
|
|
|
Motor
|
|
|
|
Property
|
Vehicles
|
Total
|
|
|
€'000
|
€'000
|
€'000
|
|
2023
|
|
|
|
|
Balance at 1 January
|
4,385
|
86
|
4,471
|
|
Additions to right-of-use
assets
|
-
|
1,328
|
1,328
|
|
Depreciation charge for the
year
|
(658)
|
(224)
|
(882)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December
|
3,727
|
1,190
|
4,917
|
|
|
|
|
|
|
|
|
Motor
|
|
|
|
Property
|
Vehicles
|
Total
|
|
|
€'000
|
€'000
|
€'000
|
|
2022
|
|
|
|
|
Balance at 1 January
|
286
|
261
|
547
|
|
Additions to right-of-use
assets
|
4,605
|
-
|
4,605
|
|
Depreciation charge for the
year
|
(506)
|
(175)
|
(681)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December
|
4,385
|
86
|
4,471
|
|
|
|
|
|
ii.
Amounts recognised in profit or loss
|
|
|
2023
|
2022
|
|
|
|
€'000
|
€'000
|
|
2023 - Leases
under IFRS 16
|
|
|
|
|
Interest on lease liabilities
|
|
138
|
45
|
|
Expenses relating to short-term
leases
|
|
151
|
97
|
|
|
|
|
|
|
|
|
|
|
iii.
Amounts recognised in statement of cash flows
|
|
|
2023
|
2022
|
|
|
|
€'000
|
€'000
|
|
|
|
|
|
|
Total cash outflow on leases
|
|
761
|
470
|
|
|
|
|
|
B. Leases as
lessor
In certain instances, the Group acts as a
lessor in relation to certain property assets. These arrangements
are not material to the Group's consolidated financial
statements.
29 Related party
transactions
(i) Key Management
Personnel remuneration
Key management personnel comprise the
Non-Executive Directors and the Executive Committee. The aggregate
compensation paid or payable to key management personnel in respect
of the financial year was the following:
|
|
|
2023
|
2022
|
|
|
|
€'000
|
€'000
|
|
|
|
|
|
|
Short-term employee benefits
|
|
4,746
|
4,864
|
|
Post-employment benefits
|
|
214
|
294
|
|
LTIP and SAYE share-based payment
expense
|
|
996
|
670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,956
|
5,828
|
|
|
|
|
|
Compensation of the Group's key management
personnel includes salaries, non-cash benefits and contributions to
a post-employment defined contribution plan.
(ii)
Other related party transactions
Acquisition
of development rights
The Group entered into the Acquisition and
Profit Share Agreement (APSA) with Targeted Investment
Opportunities ICAV (TIO), a wholly owned subsidiary of OCM
Luxembourg EPF III S.a.r.l. (OCM) (and an entity in which John
Mulcahy is a director) on 12 March 2018. Under the terms of the
APSA, the Group acquired certain development rights in respect the
site at Gateway Retail Park, Knocknacarra, Co. Galway for
consideration of approximately €3.2 million (including stamp duty
and transaction costs). The development rights will (subject to
planning) entitle the Group to develop at least 250 residential
units under the joint business plan to be undertaken with Sigma
Retail Partners (on behalf of TIO) which will also entitle TIO to
control and benefit from any retail development at the
site.
The Directors have determined that joint
control over the site exists, and the arrangements have been
accounted for as joint operations in accordance with IFRS 11 Joint
Arrangements. This accounting treatment was re-assessed at the end
of the reporting period and the Directors concluded that it remains
appropriate.
The APSA also stipulates that TIO would be
entitled to share, on a 50/50 basis, any residual profit remaining
after the Group's purchase consideration plus interest and
residential development cost plus 20% has been deducted from sales
revenue in relation to the residential development opportunity at
Gateway Retail Park, Knocknacarra, Co. Galway and Bray Retail Park,
Bray, Co. Wicklow.
The agreement defines certain default events
including TIO not possessing good and marketable title over the
development sites and TIO not transferring good and marketable
title over the development sites. On the occurrence of a default
event, the Group shall be entitled to recover the aggregate
purchase consideration in respect of the development rights. OCM
has agreed to guarantee this obligation of TIO.
30
Commitments and contingent liabilities
(a)
Commitments arising from development land
acquisitions
The Group had no contingent liabilities at 31
December 2023. The Group had the following commitments at 31
December 2023 relating to Development Land
Acquisitions.
Hollystown
Golf and Leisure Limited ("HGL")
During 2018, the Group acquired 100 per cent
of the share capital of HGL. Under the terms of an overage covenant
signed in connection with the acquisition, the Group has committed
to paying the vendor an amount equal to an agreed percentage of the
uplift in market value of the property should any lands owned by
HGL, that are not currently zoned for residential development be
awarded a residential zoning. This commitment has been treated as
contingent consideration and the fair value of the contingent
consideration at the acquisition date was initially recognised at
€nil. At the reporting date, the fair value of this contingent
consideration was considered insignificant.
Contracted
acquisitions
At 31 December 2023, the Group had contracted
to acquire 5 development sites; two in County Dublin, one in Co.
Kildare, one in County Meath and one in County Galway for
aggregate
consideration of approximately €24 million
(excluding stamp duty and legal fees). Deposits totalling €5.2
million were paid pre-year end and are included within trade and
other receivables at 31 December 2023.
31 Subsequent
events
There were no significant subsequent events
that warrant disclosure in the financial statements.
32 Profit of the
Parent Company
The parent company is Glenveagh Properties
PLC. In accordance with section 304 of the Companies Act 2014, the
Company is availing of the exemption from presenting its individual
statement of profit or loss and other comprehensive income to the
Annual General Meeting and from filing it at the Companies
Registration Office. The Company's loss after tax for the financial
year was €0.001 million (for the year ended 31 December 2022:
profit of €7.7million).
33 Approved financial
statements
The Board of Directors approved the financial
statements on 27 February 2024.