PRESS RELEASE

from KAUFMAN & BROAD (EPA:KOF)

Kaufman & Broad SA: RESULTS FOR THE 1ST HALF YEAR OF 2024

Kaufman & Broad SA
Kaufman & Broad SA: RESULTS FOR THE 1ST HALF YEAR OF 2024

11-Jul-2024 / 18:07 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


  

S Press release

  Press release

 Paris, 2024 July 11th

 

Results for thE 1st half YEar of 2024

 

 

  • 11.5% increase in housing orders in value
  • Still very solid financial structure: Positive net cash(a ) of €224.9M
  • Confirmation of guidance for the 2024 financial year

 

 

 

 

 

  • Main elements of commercial activity

 

  • Total Orders: €582.9M incl. VAT

 O/w housing : €561.2M incl. VAT for 2,400 units

 O/w Commercial property : €21.7M incl. VAT

 

  • Take-up rate Housing: 4.1 months(b)

 

  • Key financial data

 

  • Revenue: €452.5M O/w Housing : €389.6M

 

  • Gross margin : €97.5M
  • ROC (EBIT ) : €34.5M
  • EBIT margin(c )  : 7.6%
  • Attributable Net Income : €21.1M
  • Net cash(a ) : € 224.9 m 
  • Financial capacity : € 578.9 m 

 

  • Key growth indicators

 

  • Total backlog: €2,673.4M excl. VAT

O/w housing: €2090.0M excl. VAT

  • Real estate portfolio Housing: 33,003 units 

Kaufman & Broad SA today announces its results for the 1st half of fiscal year 2024 (from 2023 December 1st to 2024, May 31st). Nordine Hachemi, Chairman and Chief Executive Officer of Kaufman & Broad, said:

 

" For the whole of the 1st half of 2024, Kaufman & Broad's property reservations rose by 11.5%. The increase was 7.2% in volume terms, compared with an estimated 35% decline (d) across the entire housing market.

 

This progression can be explained in particular by the increased interest of individuals buyers in housing that prioritises, in addition to quality, the adaptation to their purchasing power.

 

The 4.1 month take-up rate for Kaufman & Broad's programmes in the 1st half of the year remains well below the estimated 26 months in the market.

 

This ability to sell our programmes quickly also demonstrates that demand for new housing remains strong in France, fueled for many years by demographic, sociological and environmental factors.

 

However, this strong potential demand remains constrained by the continuing weakness of French building permits allocation since 2018, at the lowest level since 1992(e). This situation is clearly the main cause of the crisis in the new real estate market.

 

Kaufman & Broad and the Banque des Territoires (Caisse des Dépôts Group) have partnered in an investment vehicle in student managed residences, to be rehabilitated or acquired in VEFA. This new joint venture with a long-term partner benefited from the contribution by Kaufman & Broad of two residences already operated in Amiens and Gagny. It allows the continued development of this activity with controlled investment.

The good profitability of the investment in the first two residences validates the relevance of our model of a portfolio of managed residences with an operating history.

 

The A7/A8 project continues according to the announced schedule.

 

For the full half year, gross margin and trading operating margin rates were in line with expectations. They confirm the choice made in 2018 to focus on economic performance rather than market share.

 

Kaufman & Broad's financial structure remains extremely strong. At the end of May 2024, after the repayment of €50M Euro PP and the payment of €46.8M dividends, Cash and cash equivalent amounted to €328.9M and net cash(a) amounted to €224.9M. The financial capacity amounts to €578.9M.

 

Kaufman & Broad confirmed its guidance for the entire 2024 financial year. The group's revenue is expected to be around 1.1 billion euros, the difference compared to 2023 being explained by the base effect of the Austerlitz operation. The recurring operating income ratio is expected to be between 7% and 7.5%. The Group is expected to maintain a positive net cash position(a ).  

 

 

  • Sales Activity

 

  • Housing Segment

 

In the 1st half of 2024, home reservations amounted to €561.2M (including VAT), up 11.5% from €503.2M in 2023. In volume terms, they stood at 2,400 homes in 2024, up 7.2% from 2,238 in 2023.

 

The program’s take-up rate[1] was 4.1 months in 2024, 1st half year, down nearly 3 months from the same period in 2023 (7.0 months).

 

The commercial offer, with 97% of homes located in tight areas (A, ABIS and B1), amounted to 1,626 homes at 2024 May 31 (2,618 homes at the end of May 2023).

 

Customer Breakdown

 

Orders in value (including VAT) for first time buyers accounted for 17% of orders, compared to 12% over the same period in 2023. First time buyers accounted for 6% of orders, as in 2023.

Orders made to investors accounted for 11% of orders (of which 5% for Pinel scheme alone), compared with 13% in May 2023 (of which 5% for Pinel scheme alone). Block sales accounted for 66% of orders in value (including VAT), compared with 70% over the same period in 2023.

 

  • Commercial Property

 

As of 2024, May 31, the commercial property division recorded net orders of €21.7M (including VAT) compared to €24.5M (including VAT) for the same period in 2023.

 

Kaufman & Broad currently has 192,000 sq.m. of office space and approximately 107,200 sq.m. of logistics space on the market or under study. In addition, 119,500 sq.m of office space is currently under construction or in start-up in the coming months. Finally, the company has nearly 13,500 sq.m of office space to be completed in MOD (delegated project management as well as 12,670 sq.m of logistics space to be signed).

 

  • Leading indicators of business activity and growth

 

As of 2024, May 31, Housing Backlog stood at €2,090.0M (excluding VAT) compared to €2148.9M (excluding VAT) for the same period in 2023, i.e. 28.3 months of activity compared to 22.8 months of activity at the end of May 2023. In the 1st half of 2024, Kaufman & Broad had 123 residential programs under marketing, representing 1,626 housing units (145 programs and 2,618 housing units at the end of May 2023).

 

The Housing portfolio represents 33,003 units, down 4.9% compared to the end of November 2023 (34,694 units). At the end of may 2024, it represented over 6 years of commercial activity.

 

In addition, 89% of the housing portfolio is located in tight areas, representing 29,250 housing units as of 2024, May 31.

 

In the 3rd quarter of 2024, the group plans to launch 11 new programs for 593 units, of which 2 in the Paris region areas representing 109 units and 9 in the Regions areas representing 484 units.

 

At the end of May 2024, the Backlog of the Commercial property division was €583.4M euros excl. VAT compared to €665.1 M excl. VAT for the same period in 2023.

 

 

  • Financial performance

 

  • Activity 

 

Total revenue amounted to €452.5M (excluding Vat), compared to €848.8M in the same period in 2023.

 

Housing revenue amounted to €389.6M (excluding VAT), compared to €461.0M (excluding VAT) in 2023. It represents 86.1% of the group's revenue.

 

Revenue from the Apartments business line was €356.3M (excl. VAT) (vs. €428.4M (excl. VAT) at the end of May 2023). Revenue for the Commercial property division was €54.4M (excl. Vat), compared to €381.0M (excl. Vat) over the same period in 2023. Other activities generated revenues of €8.5M (excl. VAT) (including €4.0M in revenues from the operation of student managed residences) compared to €6.9M (excl. VAT) (including €3.7M in revenues from the operation of student managed residences).

 

  • Profitability data 

 

Gross profit amounted to €97.5M in the 1st half of 2024, compared with €141.7M in 2023. The gross margin was 21.6% compared to 16.7% in the same period of 2023.

 

Current operating expenses amounted to €63.0M (13.9% as of sales), compared to €73.9M in the same period in 2023 (8.7% as of sales). Current operating income amounted to €34.5M, compared to €67.7M in 2023. Current operating margin stood at 7.6%, compared with 8.0% in 2023.

Operating profit amounted to €37.9M, compared to €67.7M in 2023.

 

At the end of May 2024, consolidated net income amounted to €27.9M, compared with the same period in 2023 when it amounted to €46.0M. non-controlling interests amounted to €6.8M in the 1st half of 2024 compared to €7.5M in 2023.

Attributable net income was €21.1M, compared with €38.5M in 2023.

 

  • Financial structure and liquidity

 

The positive net cash position (excluding IFRS 16 debt and Neoresid put debt) at 2024, May 31 was €224.9M, compared with a positive net cash position (excluding IFRS 16 debt and Neoresid put debt) of €101.7M at the end of May 2023 and €180.5M at the end of November 2023. Cash and cash equivalents amounted to €328.9M at 2024, May 31, compared with €267.1M at the end of May 2023 and €350.0M at 2023, November 30. Financial capacity amounted to €578.9M at 2024, May 31, compared with €517.1M at 2023, May 31 and €600.0M at the end of November 2023.

 

Working capital requirements amounted to €(138.9)M at 2024, May 31, or -13.7% of sales, compared with €24.7M at the end of May 2023 (or 1.6% of sales) and €(80.8)M at 2023, November 30, or -5.7% of sales.

 

  • Repayment of ‘Euro PP’ debt and new RCF line

 

As part of its Euro PP bond issue, Kaufman & Broad redeemed the first 7-year tranche of €50M (maturing in May 2024). Repayment was made in accordance with the documentation on 2024, May 17, using the company's excess cash. This private placement, which amounted to €150M at the time of subscription, also comprises an 8-year €100M tranche (maturing in May 2025).

 

In addition, a new five-year RCF facility of €200M was signed on 2024, July 10. It replaces and cancels the €250M of RCF credit facility that expired in January 2025.

 

  • Governance

 

The Kaufman & Broad Shareholders' Meeting held on 2024, May 6, chaired by Mr. Nordine Hachemi, appointed Mr. Yves Perrier as Director to replace Mr. Michel Giannuzzi.

In addition, at the close of the Shareholders' Meeting of 2024, May 6, the Board of Directors coopted Mrs. Isabelle Bordry as Director to replace Mr. Yves Gabriel.

  • Managed Residences * *

 

Kaufman & Broad and Banque des Territoires of the Territories have partnered to create an investment property in student managed residences. The operation of the residences will be carried out by Neoresid and the real estate company will be managed by the company 123 IM.

51% -owned by Kaufman & Broad and 49% -owned by Banque des Territoires, the purpose of SCI KetB Etudiants is to hold the walls of student residences, with the operation of residences being carried out by Neoresid, a subsidiary of Kaufman & Broad.

In addition to the residences currently in the portfolio within SCI KetB Etudiants, the latter will be fueled by acquisitions of VEFA or by already existing residences with the objective of renovation and compliance with environmental standards. Several projects are identified and could be developed over the next few years based on the developer/operator/investor model implemented by Kaufman & Broad. The investment strategy will focus on cities with a strong actual or potential student presence, and where the current supply of managed residences and related services for students is reduced.

 

  • Outlook 2024

 

For the whole of 2024, the group's revenue is expected to be around €1.1 billion, the difference compared to 2023 being explained by the base effect of the Austerlitz operation. The Current operating income ratio is expected to be between 7% and 7.5%. The group is expected to maintain a positive net cash position(a ).

 

a) excluding IFRS 16 and Put Neoresid debt

 

 

 

 

This press release is available at www.corporate.kaufmanbroad.fr

 

  • Next periodic information date:
  • Monday 2024 September 30th: Publication of results for the first nine months of 2024 (after the stock market)

Presentation of results , for the period

 

Mr. Nordine HACHEMI, Chairman and Chief Executive Officer and Mr. Bruno Coche, Chief Financial Officer will comment on the results of the period and answer questions, at a meeting to be held at the Company's registered office located at: 17 quai du Président Paul Doumer 92400 Courbevoie. It will also be broadcast simultaneously by conference call.

 

The presentation of the results will take place in French with simultaneous translation into English on:

Friday, July 12, 2024 at 8.30 CET

 

Registration for the presentation of the results for the period must be made by request at:

Infos-invest@ketb.com

 

  • To follow the live presentation at the web conference you will receive a link (in French or English) *
  • To follow the live presentation at the conference by phone you will receive the number for the desired language (French or English)

* Activation of accesses from 8: 00, the connection requiring registration via a form

 

The Webcast media will be available ½ hour before the presentation starts at www.kaufmanbroad.fr/finance/publications-financieres/

 

 

 

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