TIDMLGEN
RNS Number : 4880H
Legal & General Group Plc
13 March 2018
Legal & General Group plc
13 March 2018
Legal & General Capital acquires full ownership of CALA
Homes
Legal & General Group announces today that its Legal &
General Capital division has acquired the 52.1% of CALA Homes which
it did not previously own. Transaction announcement and completion
occurs simultaneously.
The business has performed strongly under our joint ownership
with Patron Capital Partners, with revenues growing threefold from
GBP241m in 2013 to GBP748m in 2017, and profits growing at a CAGR
of 12% over the last three years.
Legal & General believes that CALA Homes has attractive
growth prospects under its continued ownership based on Legal &
General Capital's long term approach to investing and the
attractive market for housebuilding in the UK.
If CALA Homes had been 100% owned by Legal & General during
2017 on a post transaction basis, the operating profit before tax
would have been GBP91.5m. Legal & General reported operating
profit before tax for its 47.88% stake in CALA Homes in 2017 of
GBP42.5m.
The total valuation of 100% of the equity in CALA Homes was
GBP605m. The acquisition cost of the 52.1% share capital Legal
& General did not own was GBP315m plus additional transaction
costs and financial adjustments to reflect the contribution of
management and Patron during the period of our joint ownership.
Kerrigan Procter, Chief Executive Officer of Legal & General
Capital said: "Legal & General is delighted to assume full
ownership of CALA Homes, a growing business which we know and
understand well. It has a strong management team with proven
experience of managing a housebuilding business across business
cycles, and has delivered great returns for shareholders since its
acquisition in 2013, having tripled in revenue during this time. I
am excited to be working with the team as CALA Homes continues to
develop and grow under our continued ownership.
"Legal & General has valued the contributions of Patron over
the past years and is pleased to have successfully grown the
business together."
Alan Brown, Chief Executive of CALA Homes, commented: "Today's
investment by Legal & General marks the start of another
exciting new chapter for CALA Homes and is a fantastic endorsement
of our growth potential from one of the UK's most highly-respected,
blue-chip investors who shares our long-term vision.
"Over the past five years we have become one of the UK's fastest
growing housebuilders and this is testament to the strength and
ambition of our team, the quality of our homes and our approach to
customer service. We have also benefitted from the ongoing backing
of our shareholders and I would like to take this opportunity to
thank Patron for their support alongside Legal & General."
Keith Breslauer, Managing Director of Patron Capital, said:
"With the combined resources of Patron and Legal & General, we
have worked successfully with the management team to support the
growth of the business and consolidate CALA Homes' position in the
market. Over the last five years, CALA Homes has expanded
significantly, growing twofold the annual volume of homes sold and
fourfold the operating profits, delivering on the business plan set
out at the time of Patron and Legal & General's
acquisition.
"Patron wishes to thank the CALA management for delivering on
the plan and Legal & General for its support of the investment;
we are confident that the business will continue to grow and thrive
under Legal & General's ownership. Patron remains committed to
the UK residential sector with our extensive investment activities
in this area."
-Ends-
Notes to Editors:
- The implied Operating Profit Before Tax of GBP91.5m for 2017
is also adjusted for transaction and reporting effects from taking
Legal & General's ownership up to 100%
- In its financial year to 30 June 2013, CALA Homes achieved
sale completions on 850 homes; in the year to 30 June 2017, it
achieved 1,677 sale completions, an increase of 2.0x.
- CALA Homes delivered operating profit of GBP21.7m in the year
to 30 June 2013. The equivalent figure for the year to 30 June 2017
was GBP92.8m, an increase of 4.3x.
CALA Homes:
CALA Homes is a leading UK provider of high quality family
housing. It delivered 1,677 total completions in 2017. Of these
completions, 1,322 private homes were sold with an average selling
price of GBP497k. Over 60% of profits came from its English regions
(the remainder from within Scotland), with 21% of units (355 units)
delivered being affordable homes.
Legal & General Capital
Legal & General Capital (LGC) is the principal investment
arm of Legal & General Group. Investing from Legal &
General's GBP7.3bn shareholder balance sheet, LGC's purpose is to
generate long-term shareholder value by injecting new capital into
key sectors where there has been a shortage of investment and
innovation. Focused on Housing, Urban Regeneration, Clean Energy
and SME Finance, these sectors reflect our aim to invest for the
long term in economically and socially useful assets, to secure
competitive returns and to create new asset classes for Legal &
General's varied investment requirements, for our partners and for
the wider marketplace.
Investments to date within Housing include: bringing homes back
to the centre of the UK's cities through large scale regeneration,
such as in Salford, Plymouth, Liverpool, Bracknell, Newcastle and
Canning Town; a Build to Rent platform managed by Legal &
General Investment Management ("LGIM"), which has secured around
2,000 homes under construction or in planning in Bristol,
Edinburgh, Salford, Bath, Brighton, Leeds and Walthamstow;
providing later living accommodation through Inspired Villages
Group, an operator and developer of later living accommodation
which Legal & General established in August last year, which
has a portfolio of over 1,100 homes over seven sites; Legal &
General Modular Homes which is revolutionising the construction
industry by producing the first precision-engineered homes ever
created using an automated assembly line; and Legal & General
Homes which is a specialist in the careful masterplanning of larger
sites and bringing forward a housing pipeline of over 3,000 new
homes.
Legal & General Group
Established in 1836, Legal & General is one of the UK's
leading financial services groups and a major global investor, with
a number of growing businesses in the US. Over fifteen million
people worldwide rely on us to help them save for the future and to
protect their families and their homes.
We operate in three principal areas:
- Investing & Annuities, where we manage GBP58bn of
retirement annuities for policyholders and invest for their long
term return within Legal & General Retirement, as well as
investing our own balance sheet within Legal & General
Capital;
- Investment Management, where we have GBP983bn in total assets
under management from clients in the UK, US, Asia and EMEA and a
leading UK workplace savings and retail investments business within
LGIM; and
- Insurance, where we provide protection against life events for
customers, with GBP2.9bn of gross written premiums principally in
life insurance in the UK and US within Legal & General
insurance and household insurance in the UK within our General
insurance division.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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