Contents
Chairman’s Letter
CEO's Review
CFO’s Review
COO’s Review
Business Model & Strategy
Strategic Overview
Business Unit Update – Glenveagh Homes
Business Unit Update – Glenveagh Living
Risk Management Report
CSR Review
Governance
Corporate Governance Report
Audit and Risk Committee Report
Remuneration & Nomination Committee Report
Directors’ Report
Financial Statements
Company Information
Taylor Hill, Balbriggan, Co. Dublin
Proby Place, Blackrock, Co. Dublin
4
6
10
14
22
29
41
46
54
60
70
78
90
105
164
s
t
n
e
t
n
o
C
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
1
Glenveagh
at a Glance
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
Marina Village, Greystones, Wicklow
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
l
e
c
n
a
G
a
t
a
h
g
a
e
v
n
e
G
l
11,850units
€525 million
261
Existing land bank size
Capital Deployed
Employees
Note: Statistics as of 31 December 2018 unless otherwise stated
2
1,100+
14
Units under
construction
during 2018
Sites Open
Increase since IPO: Homes
c.6,800units
Increase since IPO: Living
1,850units
3
Chairman’s
Letter
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
Dear Shareholder,
Your Company has made significant
progress in its first full year of
operation and I am pleased to
present the Annual Report for the
year ended 31 December 2018.
Delivery on our targets
In particular the Company has focussed on the primary targets that
were set at our initial public offering (“IPO”) in October 2017 being:
Disciplined deployment of capital
The balance of the IPO proceeds was fully deployed during the year
with significant progress also made on deploying the proceeds of the
secondary capital raise . All land acquisitions have been completed
with a focus on shareholder returns and the Group now has a
landbank with the capacity to delivery in excess of 12,600 units.
Scaling the Operations
From commencement in October 2017, the Group is now active on 15
sites, and growing and has exceeded its sales target of 250 units by ten
per cent. in completing the sale of 275 units in 2018. We now have 270
people directly employed (85 at IPO) who are providing the platform
for future growth and the execution of our strategic objectives.
Market opportunity
We remain extremely positive on the market opportunity for the
business. The Group has structured its business around three segments
in the Irish residential market being Build to Sell (BTS); Private Rental
Sector (PRS) and Mixed Tenure and the optionality provided by many
4
270
We now have 270 people
directly employed (85 at
IPO) who are providing the
platform for future growth
and the execution of our
strategic objectives
12,600
All land acquisitions have
been completed with a focus
on shareholder returns and the
Group now has a landbank
with the capacity to delivery in
excess of 12,600 units
n
a
m
r
i
a
h
C
y
h
a
c
l
u
M
n
h
o
J
of the sites in our landbank across these segments
is a key strength of the business.
The strong and increasing demand for housing
in the Irish market coupled with our focus on
customer affordability in starter-homes, our
commitment to safety, quality and efficiency
(through standardisation of delivery) of construction
are the key to the Board’s confidence in the
Group’s BTS business.
The demand for PRS units from institutional and
international investors is strong and increasing and
our existing PRS portfolio is well placed to benefit
from this increasingly important segment of the
market. We continue to evaluate exit strategies
across our current portfolio and pipeline sites to
ensure we strike the appropriate balance across
both the BTS and PRS sectors.
Glenveagh Living has made significant progress
in 2018 in developing its initial portfolio from
a planning and design perspective while also
further enhancing our internal capability to avail
of the significant mixed tenure opportunity that is
presenting itself.
Our people
We now employ 270 staff and our ability
to continue to attract and retain people of
exceptional talent, commitment and dedication
has been a key element in delivering the levels
of growth we have achieved in 2018 and a focus
on talent retention will continue in 2019 and
beyond. On behalf of the Board, I want to thank
all our people for their efforts and dedication
throughout 2018. We were pleased to also be
recognised as one of the Best Workplaces in
Ireland in the 2019 awards.
partnering with us which has allowed the
business to make such significant progress
on all our active sites throughout 2018.
Governance
The Board comprises an Executive Chairman,
four Non-Executive Directors and two Executive
Directors and members meet formally in Board
Committees, Board meetings, and also less formally
to discuss issues affecting the Group. The primary
Board focus throughout 2018 was to support the
implementation of the Group’s business strategy,
while ensuring the appropriate policies, procedures,
corporate governance and risk management plans
were embedded across the business at such an
important phase in the Group’s development.
Glenveagh are firmly committed to maintaining the
highest standards of corporate governance. The
Company seeks to comply with all requirements of
the UK Corporate Governance Code 2016, the Irish
Corporate Governance Annex and best practice
generally in respect of corporate governance.
Details of our corporate governance approach
are set out in the separate Corporate Governance
Report on pages 60 to 69.
I would like to thank the Board and the Executive
Committee members for the significant progress
over the past year.
Outlook
The Board is pleased with the progress and
performance of the Group to date. 2018 has
been a year of significant progress where we
have effectively deployed capital by assembling
a highly attractive landbank capable of
leveraging the significant opportunity that
exists while also delivering on our financial and
operational targets for 2018.
The Board believes that the Group is well
positioned to deliver on our 2019 and 2020 targets
in line with the Group’s strategy. I would like to take
this opportunity to thank you, our shareholders, and
our stakeholders for your continued support during
this exciting time for the Group.
I would like to thank our wider construction
network, which includes over 1,000 contractors,
for their commitment and contribution in
John Mulcahy
Chairman
r
e
t
t
e
L
'
s
n
a
m
r
i
a
h
C
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
5
i
w
e
v
e
R
s
O
E
C
'
CEO’s
Review
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
I am pleased to update you, our
shareholders, on our continued
strong progress at Glenveagh.
We have shown during our first full year of trading that we are
capable of creating and operating a volume homebuilder for the
Irish market. Our progress since IPO 17 months ago has been strong.
We have the right strategy, the right team and we are in the right
sector to create a resilient, long-lasting and profitable business.
Our Landbank
Throughout 2018 we have worked tirelessly to add value to our
landbank. In 2018 we spent €351.1 million acquiring 16 sites with the
potential for c.7,400 units, bringing our total landbank to 11,850 units
on 46 sites at 31 December 2018. In doing so we assessed almost €2
billion of land opportunities and carefully screened those according to
location, margins, infrastructure availability and the ability to turn the
land and generate profits quickly.
In January we announced the acquisition of a further attractive site in
Cork with the potential to accommodate up to 500 residential units
in an area of high demand for total consideration of c.€25 million.
This acquisition means we delivered on a key Group IPO objective to
deliver residential housing on National Asset Management Agency
(“NAMA”) secured lands in a partnership structure.
Subsequently, we also purchased further sites at Leixlip and
Newbridge, Co. Kildare which currently have planning permission for
793 units for cash consideration of approximately €50m.
We also disposed of a number of our smaller sites during the year and
will continue to evaluate opportunities for the sale of our non-core
lands on an opportunistic basis once value is added.
11,850
In 2018 we spent €351.1
million acquiring 16 sites
with the potential for
c. 7,400 units, bringing
our total landbank to
11,850 units on 46 sites.
793
We also purchased
further sites at Leixlip and
Newbridge, Co. Kildare
which currently have
planning permission for 793
units for cash consideration
of approximately €50m.
l
e
k
c
i
B
n
i
t
s
u
J
O
E
C
d
n
a
r
e
d
n
u
o
F
-
o
C
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
We feel very positive about our land purchases
since IPO and expect the rate of acquisitions to
now slow as we focus on developing our extensive
land holdings and deploy our remaining capital to
best generate shareholder returns.
In homebuilding, a successful planning strategy
is a prerequisite to achieving group targets. We
are fortunate to have a strong and experienced
planning team in situ, and one we have continued
to invest in over the past 12 months.
Over 98% of the lands we own are zoned
residential while almost 34% of our landbank
now has planning. Additionally, we expect
to have 5,500 units at various stages of the
planning system during 2019 and will look to
more than double our planning consents by
this time next year. We have high confidence
in our approach to planning, not only to deliver
the units we have guided to the market, but
also incremental units achieved through
planning gains.
Glenveagh Homes
(“Homes”): focus on
starter-homes
Ireland is very much in the midst of a housing
crisis and needs to compensate for the decade
of housing undersupply since the global
financial crisis. The Glenveagh view is that if
you can build modern, value-for-money and
space-efficient homes at the right price in the
right locations and look after your customers,
then you will prosper as a business. That is
why Homes predominantly targets the starter-
home market. It is the deepest and most
resilient segment in our core business. It is also
the part of the market most under-served by
our competitors, particularly within the Dublin
commuter belt.
In the coming year Homes will again increase
its construction operations as we work towards
our 2019 goal of 725 sold units and longer term
Homes target of 2,000 sold units per year by
2023. All sites necessary to deliver our 2019
target of 725 units are now open. Importantly,
we are already constructing the majority of our
725 target for 2019, while 85% of our 2020 target
will be delivered through construction sites that
are already open. Glenveagh will ultimately be
judged on building the right product, in the right
location and at the right price. I am confident that
we will continue to innovate to meet changing
customer trends and that building well and
looking after our customers are key components
for Glenveagh’s long-term success.
I commend the Homes team for their efforts and
execution since IPO in ramping up construction
activity and creating an impressive landbank
(85% of our 12,600 units). We look forward to a
further ramp-up to our target of 725 sold units
for 2019 with the same level of efficiency and
professionalism as we delivered the last 275 in our
first full year of operations.
Glenveagh Living (“Living”)
We told our investors at IPO that not only would
we create a volume homebuilder in Ireland
focussed principally on starter-homes as we
have done (Homes), but that we would also
create additional business lines with a different
approach and return profile through Living.
6
7
i
w
e
v
e
R
s
O
E
C
'
Private Rental Sector (“PRS”)
I am pleased to report that during our first
full year as a business, PRS has now become
an increasingly active segment of the Irish
residential sector, vindicating our view that
there is a structural shift to rental in Ireland, as
is the case in a number of developed countries,
particularly North America, Canada, Australia
and the UK. Certain customers’ preference to
rent, rather than buy, is now a fundamental
tenet of the Irish residential landscape,
particularly since Dublin, as one of Europe’s
principal gateway cities, attracts individuals
and families who may plan to live and work in
Dublin for only a few years, rather than being
committed to a single family home or a single
location, forever.
Our view at Glenveagh is that it is important
to serve these residential tenants by delivering
buildings for their landlords, or the institutional
investors who ultimately own them, which
are modern, well-designed and future proofed
for their needs as tenants and families and
with the requisite level of amenities not
historically seen in the Irish market. Moreover,
we believe that, as a PLC, we have a number
of structural scale advantages over smaller
developers (including access to equity and
debt capital) which ought to make Glenveagh
very attractive to institutional investors, both
Irish and international.
The core team at Living are already capitalising
on the significant PRS opportunity that exists
in building rental communities and working to
de-risk our 1,850 units PRS portfolio which is at
an advanced design and planning stage. We
look forward to reporting more progress on this
endeavour in due course.
Mixed-Tenure and Joint Ventures
(“Partnerships”)
During the past 12 months we have presented
on the benefits and advantages of undertaking
Partnerships in Ireland in addition to delivering
starter-homes and our PRS schemes.
The reaction we have had in the past several
months has been very encouraging. We want
Partnerships to be a key long-term part of
Glenveagh’s business, particularly given the
amount of land which is held by local authorities
The core team at Living are
already capitalising on the
significant PRS opportunity
that exists in building rental
communities and working to
de-risk our 1,850 units PRS
portfolio which is at an
advanced design and planning
stage. We look forward to
reporting more progress on this
endeavour in due course.
and other State agencies and is either fit for
residential development or will be re-purposed
for residential use in the coming years.
We are pleased that our own strategy accords
with other newly constituted bodies like the
Land Development Agency (“LDA”) and look
forward to working with them in the coming
years. We are also delighted that the economic
model of our Partnerships business is attractive
to other key residential stakeholders such as the
approved housing bodies who work alongside
local authorities in managing social and
affordable units and who can play a pivotal role
in encouraging placemaking, and greater housing
provision, which is central to Living’s offering.
We believe that Living will prove over the coming
years to be a key driver of shareholder returns
and offers a differentiated proposition over other
companies active in Irish residential. There is a
lot of work to do in delivering on this vertical but
we are committed to do so given the potential
attractive returns for our shareholders.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
Marina Village, Greystones, Wicklow
More details of our business lines, Homes and
Living are set out in the Business Model and
Strategy section of this Annual Report.
Outlook
The fundamentals of our sector and its
investment outlook remain strong. There is a
continuing chronic under-supply of housing
in Ireland (both private and public) and a
dearth of scale homebuilders. With a strong
landbank and capital ready to deploy should
we see an opportunity, Glenveagh has already
earned a leading role within the Irish residential
landscape. We will continue to deliver the high-
quality starter-homes that are in high demand
from Homes and capture the rental and
partnerships opportunities through Living.
Experience suggests that the current favourable
market conditions will not last forever, and that
the time to future proof and create a resilient
and counter-cyclical homebuilding business
is now. We need to be, and remain attractive
to, both families looking for their first starter-
home, as well as institutional investors who want
quality and scale.
Our focus as a senior management team is
to execute on our long-term business plan
and hit each of our targets while the market
is favourable, while at the same time planning
ahead as to how best to generate revenues and
profits in a cyclical market. To that end it feels
like we are reaching the end of our ramp-up
phase as a business, and that instead we are
entering the execution phase of our lifecycle.
This is encouraging at such an early stage.
We believe that the next few years will see
a continued and sustained growth in Irish
residential and the sector will become more
institutional in nature and more attractive to
third-party capital providers. We are determined
to become a builder of volume in Ireland and
a trusted counterparty to deliver units in the
Irish market.
In closing, I would echo the words of our
Executive Chairman and thank all the
Glenveagh staff, their families and our industry
partners for joining us on this exciting journey.
I would also thank those shareholders who
believed in us at IPO, or who joined our
register recently, as without the support of
those investors, Glenveagh would not exist
and the value opportunity we see could not
be captured.
Justin Bickle
Chief Executive Officer
8
9
Glenveagh Properties PLC Annual Report and Accounts 2018
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
CFO's Review
e
c
i
R
l
e
a
h
c
i
M
r
e
c
ffi
O
l
i
a
c
n
a
n
F
i
2018 was a year of significant growth for
Glenveagh and has delivered a strong
operational and financial performance.
Group performance
2018 was a year of significant growth for Glenveagh and has delivered
a strong operational and financial performance.
The total unit completions for the year were 10% above guidance at 275
units (Guidance: 250 units) with overall group revenue of €84.2 million.
The Group’s revenue from the 275 units equated to €79.0 million. Over
90% of these units came from our developments aimed at first-time
buyers and the demand in this segment of the market remains very
strong versus the continuing undersupply. The strong demand for the
first-time buyer product is also evident from our Average Selling Price
(‘ASP’) for the year of €287k. Overall group revenue also included €5.0
million from the disposal of a number of our smaller sites.
The Group’s gross profit for the year amounted to €15.3 million with a
corresponding gross margin of 18.2%. This strong margin performance
is above market consensus and demonstrates that the Group’s target
of 20% gross margin in 2020 is certainly achievable.
€84 million
Overall group revenue 2018 was
€84 million, €79 million of which
relates to the sale of 275 units
and €5 million of land sales
Our operating loss pre-exceptional items for the year was €2.2
million, which is in line with expectations. The Group’s central costs
for the year were €17.2 million, which along with €0.2 million of
depreciation and amortisation gives total administrative expenses
pre-exceptional items of €17.4 million. This investment in our central
functions demonstrates our commitment to the management team
allowing them to deliver the company’s operational and financial
medium-term targets.
18.2%
The Group’s gross profit for
the year amounted to €15.3
million with a corresponding
gross margin of 18.2%
i
f
e
h
C
The exceptional costs of €0.4 million incurred in
the year relate to certain costs and fees on the
share placing in August 2018.
Net finance costs for the year were €1.4 million,
primarily reflecting interest on the drawn
portion of our Revolving Credit Facility ("RCF"),
commitment fees on the undrawn element of the
facility and arrangement fees, which are being
amortised over the life of the facility. The Group
has actively managed our cash deposits with
several banks to minimise the interest cost in the
current negative interest rate environment.
Balance Sheet
The Group’s net asset value has increased to
€843.2 million at 31 December 2018 (2017: €640.7
million), with the increase predominantly due to
the additional share capital following the Group’s
share placing in the year.
The Group has shown substantial growth during
the year with the land portfolio increasing
to €618.0 million (2017: €217.0 million), which
equates to c.11,350 units at 31 December 2018.
The Group has also invested heavily in work-in-
progress with a significant operational ramp up
from 5 active sites in the prior year to 14 active
sites at 31 December 2018. This is evident in the
work-in-progress balance of €101.0 million at
year end (2017: €11.1 million).
Cash flow
The Group deployed significant cash in the
year as we continued the growth phase of the
business. The cash outflows predominantly related
to the €446.0 million spent on land (including
the acquisition of a subsidiary undertaking) and
construction activity. These cash outflows were
financed from the remaining IPO proceeds and
the €206.0 million raised through our share
placing in August.
These significant cash movements, along with
a number of other operational cash flows, gave
rise to a net cash outflow for the Group of €221.1
million in the year, with the Group in a net cash
position of €130.7 million (2017: €351.8 million) at
year-end.
During the year, the Group drew down €26.0
million from the RCF in two separate tranches.
The full amount was repaid prior to year-end to
minimise the interest cost of the facility. We expect
to utilise this debt facility to a greater extent in
2019 as having deployed the remaining cash from
the share placing on land acquisitions, the Group
will finance the working capital requirements of
new and existing sites with the facility.
Capital structure
& financing
The investment in the land portfolio and
work-in-progress has been financed through
the Group’s net cash balances, which have
decreased to €130.7 million at 31 December
2018 (2017: €351.8 million).
In August, the Group completed a share placing
with 185 million of ordinary shares being issued
at a share price of €1.15. This provided the Group
with additional funds of €206.0 million (net of
issue costs).
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
10
i
w
e
v
e
R
s
O
F
C
'
11
i
w
e
v
e
R
s
O
F
C
'
At the time of the share placing, the Group had
deployed the full IPO proceeds and given the
continued strong land opportunity, additional funds
were required to take advantage of this. The Group
set a target of 12 months to deploy the additional
equity and given the land opportunities that we
have seen in the second half of 2018 and into 2019,
we are very confident of meeting this target.
During the year, the Group finalised a €250.0
million RCF with a syndicate of international and
domestic banks. The facility has a three-year
term, with a committed element of €125.0 million
and will provide the debt element of the Group’s
financing structure.
The Group’s RCF is subject to primary financial
covenants calculated on a quarterly basis:
- A maximum net debt to net assets ratio;
- A minimum cash reserves limit; and
- A minimum EBITDA to net interest
coverage ratio.
The Group was not in breach of any of these
covenants during the year.
Founder Share Scheme
During the financial year, the first test period of
the Founder Share Scheme completed and the
performance condition was satisfied. Given the
condition was satisfied, the Company issued
18,993,162 new ordinary shares to the three
founders and these new shares form part of
the Ordinary Share Capital of the Group at 31
December 2018.
Further details on the scheme and the new
shares issued to the founders are provided in the
Remuneration & Nomination Committee Report.
Investor Relations
The Group is committed to maintaining open
and transparent communications with its
shareholders. During 2018, the Group established
a comprehensive investor relations program
through which the CEO, COO, CFO and the
Director of Investor Relations & Strategy regularly
meet with the Group’s institutional shareholders
to present results and to discuss strategic issues.
Throughout 2018 members of the Group’s
IR team attended a wide variety of industry
conferences and road shows and institutional
investors were invited by the Group to join site
tours to a number of active developments.
Share Price and
Market Capitalisation
The Group’s shares traded between €0.67 and
€1.26 during the year. The share price at 31
December 2018 was €0.71 (31 December 2017:
€1.18) giving a market capitalisation of €618.7
million (2017: €787.1 million).
Financial KPIs
The Group has a number of key performance
indicators to measure its financial and operational
performance and track progress in achieving
medium and long-term targets.
Gross Margin
Gross margin reflects the Net Development
Value (‘NDV’) of units sold less the costs directly
linked to the construction and sale of those units.
Gross margin is one of the key metrics used by
management in acquiring land and is continually
assessed throughout the life of a development.
The Group’s gross margin for 2018 is 18.2%, which
is above market consensus and gives a strong
indication of the Group’s progress towards its
target of 20% by 2020.
Earnings before interest, tax,
depreciation and amortisation
(EBITDA)
Group management consider EBITDA to be the
most appropriate measure for assessing the
profitability of the Group in a given financial
period. It is calculated by adding back non-cash
depreciation and amortisation charges to the
Group’s operating profit for a year.
The Group has a negative EBITDA pre-exceptional
items of €2.0 million in 2018 but this loss was
forecasted given 2018 is the first full year of
operation and the business has been scaled with
medium and long-term goals in mind.
Return on Capital Employed
(ROCE)
The Group considers ROCE to be a key
long-term corporate metric once the Group
achieves scale. The Group believes that ROCE
is the best measure of the Group’s ability to
generate profits from its asset base in a capital
efficient manner and to create sustainable
shareholder value.
Management have carried out a full assessment
of our supply chain’s exposure to the UK in light
of a “Hard Brexit” and determined that Brexit will
not have a material impact on the Group’s ability
to source the necessary labour and materials. The
Board and senior management will continue to
monitor closely and assess the potential impact
on the business of the UK’s departure from the
European Union both pre and post Brexit and will
alter our strategic plans to meet the challenges of
Brexit if necessary.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
Financial Risk
Management
The Group’s financial risk management is
governed by policies and procedures which have
been approved by the Board of Directors and
are reviewed on an annual basis. These policies
primarily cover credit risk, liquidity risk and
interest rate risk. The principal objective of these
policies is the minimisation of financial risk at
reasonable cost.
Credit risk
The Group transacts with a variety of high
credit-rated financial institutions for both placing
deposits and managing our day-to-day cash
flow requirements. The Group actively monitors
its credit exposure to each counterparty to
ensure compliance with internal limits approved
by the Board.
Liquidity and interest rate risk
The Group has a strong balance sheet with its
cash balance and undrawn debt facility allowing
the business to finance its current growth strategy.
The Group’s debt facility is drawn on a floating
interest rate, with no related derivatives or financial
instruments in place. The Group will continue to
review this approach based on the level of drawn
funds and the wider interest rate environment.
Political Risk (“Brexit”)
The Board and senior management have been
monitoring closely the potential implications of
Brexit on the business with a particular focus on
the Group’s ability to source necessary labour
and materials. The outcome of the UK’s departure
from the European Union remains unclear and
its potential impact on the movement of people
and distribution of goods is difficult to quantify.
Outlook
The Group had forward sales (sold; signed or
reserved) of 202 units at 31 December 2018
which increased to 451 by 5 March 2019 which
gives a strong view on our 725 unit completion
target for 2019.
All sites required to deliver the 725 units in
2019 are now active, with prices agreed for
approximately 90% of construction costs
associated with 2019 deliveries. This enables us
to have very good visibility of the projected 2019
gross margin on each active site.
The Group has maintained a strong Balance
Sheet throughout the year with €130.7 million
of net cash at year end and an undrawn debt
facility of €250.0 million (of which €125 million is
committed). This demonstrates that the Group
has the necessary capacity to continue to acquire
appropriate land opportunities while also funding
the working capital needs of the business as it
continues the current growth phase.
The Group looks forward to further underlying
financial growth and operational development in
the year ahead.
Michael Rice
Chief Financial Officer
725
All sites
required to
deliver the
725 units in
2019 are
now active
€130.7m
The Group has maintained a strong
Balance Sheet throughout the year
with €130.7 million of net cash at
year end and an undrawn debt
facility of €250.0 million (of which
€125 million is committed)
12
13
Glenveagh Properties PLC Annual Report and Accounts 2018
i
w
e
v
e
R
s
O
O
C
'
COO's
Review
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
Our business has grown significantly
during the Group’s first full year of
operation exceeding expectations
across a number of our KPIs,
particularly in construction.
This was made possible by the dynamic and innovative team we have
assembled who continue to drive the Group towards the fulfilment of
our objectives.
Land Acquisitions
Building a starter-home landbank which can deliver our long-term
business goals is a key objective for the Group. During 2018 we
enhanced our existing landbank through off-market deals at attractive
rates. These included:
Project Quattro
Project Quattro saw the Group acquire four sites in the Greater
Dublin Area (“GDA”): two in Donabate, Co. Dublin; one at Dunboyne,
Co. Meath; and one at Stamullen, Co. Meath, which are capable of
delivering 1,435 starter-homes and apartments, subject to planning.
Each of these locations are well served by connections to major
transport networks. We are actively constructing in Donabate
(Semple Woods) and the site will start to deliver homes from 2019.
Kilcock, Co. Kildare (Ledwill Park)
In June Homes exchanged contracts to acquire a c.16.2-hectare site
of zoned residential land in the GDA which has the potential to
deliver c.400 residential units subject to planning. The acquisition
1,100
Including sold units the
business was actively
constructing on over
1,100 units in 2018
across 14 sites
2,000
The scale of the opportunity
as a partner of Glenveagh
is unrivalled given the
2,000+ unit per annum
output target in Homes
y
e
v
r
a
G
n
e
h
p
e
t
S
r
e
c
ffi
O
s
n
o
i
t
a
r
e
p
O
i
f
e
h
C
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
further strengthened Glenveagh’s focus on
delivering starter-homes in the GDA in proximity
to transportation nodes. The Group acquired the
site off-market and commenced construction in
H2 2018. The site will deliver homes in 2019.
Tyrrellstown
In August the Group exchanged contracts to
acquire a c.113-hectare site (39-hectares of which
are zoned residential) in Tyrrelstown, Dublin 15
which has the potential to deliver over 1,250 units
on land currently zoned residential. The acquisition
is adjacent to our existing site at Hollystown Golf
Club and we expect to lodge a Strategic Housing
Development (“SHD”) application later in 2019.
The benefits of scale and permanent capital
are such that we were able to assemble our
landbank at better rates as the year progressed
with land cost as a percentage of NDV decreasing
meaningfully since IPO.
As we have already de-risked our deliveries for
2019 and 2020, we are increasingly selective
on the characteristics required for future land
acquisitions. Our pipeline of future opportunities
remains strong. The vacant site levy should help
bring additional sellers to the market and ensure
a steady supply of land over the coming years.
2018 delivered significant
progress on the construction
front. With activity accelerating
through the period the team
continued to deliver on site
openings and unit construction.
Construction
2018 delivered significant progress on the
construction front. With activity accelerating
through the year, the team continued to deliver
on site openings and unit construction. In 2018 the
business was actively constructing on over 1,100
units across 14 sites. It is this level of activity which
is helping ensure we meet our unit guidance
for the 2019 and 2020 financial years. The vast
majority of our construction efforts are on our
starter-homes sites including; Taylor Hill; Cois
Glaisin; Cluain Adain; Cnoc Dubh; Kinghtsgate;
Semple Woods and Ledwill Park.
Importantly we are demonstrating that we can
open sites quickly after acquisition with Semple
Woods and Ledwill Park both active within the
financial year of acquisition. We have already
commenced enabling work in Maryborough Ridge,
a site which was acquired in late December 2018.
The Group continues to focus and invest in
ensuring the highest standards of health and
safety across all areas of activity in the Group. At
the end of 2018 and as part of the 2019 plans, the
Group has begun to introduce turnstile access to
all sites which ensures only authorised personnel
with all safety accreditations are allowed on site.
Digital technology is also used to review all our
sub-contractor documentation and records, such
as their SafePass, construction skills certification,
safety statements and insurances prior to
providing access to site. In addition, the Group are
introducing biometric scanning at the entrance
and exit to all sites. This will allow Glenveagh to
understand who is present on what site at a point
in time to further control health and safety and
minimise the risk of incidents arising.
14
15
i
w
e
v
e
R
s
O
O
C
'
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
SOLD
275
We exceeded our target to
deliver on 250 closed sales
for 2018 reaching 275
Combined these efforts help ensure we are a
compelling partner for sub-contractors.
Sales and Marketing
In 2018 we sold 275 units which exceeded our
initial target of 250 units by 10% and 451 of
our 725 unit target for 2019 are sold, signed or
reserved as of 5 March 2019. Given the significant
ramp up required and the lead-in times for
construction, this was a challenging target which
the team more than delivered on.
Our sales offering is compelling with value-
for-money homes in attractive locations with
exceptional levels of customer service, which
combined with our site opening track record
means Glenveagh is well positioned to meet
our long-term sales objectives.
Cnoc Dubh, Ballyboughal, Co. Dublin
Standardisation
We continue to innovate our design and
construction solutions in order to optimise margin
performance in the medium term, while also
delivering at scale helped by the standardisation
of processes and production across our
developments. Through repetition we can speed
up the construction process and drive down our
costs which in turn will help us deliver product
faster and return a stronger margin.
Attracting and Retaining
Construction Resource
A positive development from our first full year of
operation was the extent to which we are viewed
as the partner of choice for employees, sub-
contractors, suppliers and industry colleagues.
Glenveagh’s offering to our partners has a number
of advantages over our local non-PLC competition:
Conclusion
- The scale of the opportunity as a partner of
Glenveagh is unrivalled given the 2,000+ unit
per annum output target in Homes;
- We offer continuity of work on our multi-year sites
which are delivering a consistent number of units
on an annual basis – this gives sub-contractors
the confidence to grow their business with us;
- Sub-contractors are now familiar with our
process and product. As a result, they know
the key risks and the man hours involved
in delivering housing for the Group which
delivers keener pricing than would otherwise
be the case; and
- We reduce the capital requirements of our
sub-contractors by procuring their material
packages separately. This is particularly
relevant for trades that have high a material
component such as plumbing.
I would like to take this opportunity to
acknowledge our employees and extensive
network of c.1,000 contractors across a variety of
disciplines who play a key role in supporting and
enhancing our operations, enabling us to deliver
quality homes for the Irish residential market. We
look forward to broadening this vibrant network
into the future and working together to maintain
our momentum and strengthen our operations
in 2019 and beyond.
Stephen Garvey
Chief Operations Officer
Taylor Hill, Balbriggan, Co. Dublin
Herbert Hill, Dundrum, Dublin
16
17
Glenveagh Properties PLC Annual Report and Accounts 2018
e
n
i
l
e
m
T
i
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
e
n
i
l
e
m
T
i
108
r At IPO:
e
b
o
t
c
O
units under
construction
85
Employees
7
1
0
2
2
Active on 2 sites
3,144
unit landbank
East
Road
East Road
is Glenveagh
Living’s first
land acquisition
r
e
b
m
e
c
e
D
h
c
r
a
M
8
1
0
2
c. 600
units under construction
c. 7,300
unit landbank
1,435
Acquisition of Project
Quattro sites with the
potential for 1,435 units
148
Employees
10,120
unit landbank
1st
unit sold
12
Active on 12 sites
SOLD
650+1,000
Acquisition of Castleforbes and
Cork Docklands sites with the
potential for 650 and 1000 units
e
n
u
J
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
y
r
a
u
n
a
J
11,850
unit landbank
202
202 units signed or
reserved for 2019
9
1
0
2
500
Announced first
transaction with
NAMA for licence
agreement with the
potential for 500 units
r
e
b
m
e
v
o
N
800
units under
construction
140
Acquisition of
Blackrock Villas,
Cork with potential
for 140 units
123
SOLD
units sold of the
252 units completed
7
FO
R SALE
Selling from 7 sites
230
Employees
r
e
b
o
t
c
O
275
units sold exceeding
250 unit target
SOLD
261
Employees representing
a 3x increase since IPO
FO
R SALE
r
e
b
m
e
c
e
D
8
Selling from 8 sites
14
Active on 14 sites
18
19
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
l
e
d
o
M
s
s
e
n
s
u
B
i
y
g
e
t
a
r
t
S
&
20
Taylor Hill, Balbriggan, Co. Dublin
21
Strategic
Overview
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
With a focus on strategically
located developments in the
GDA, Cork, Limerick and
Galway, the Group comprises
two complementary residential
delivery divisions, Homes
and Living.
Homes delivers high quality starter-homes to its private customers
with selective developments of mid-size and executive houses and
apartments in areas of high demand. Our Homes portfolio also
has the optionality to deliver housing and low-rise apartments for
institutional investors (PRS).
Living delivers houses and apartments for the public sector and
institutional investors. Our Partnerships business focusses on Mixed-
Tenure and joint venture opportunities with the public sector in Ireland,
while our PRS business delivers large-scale private rental product for
institutional investors in high density urban locations.
Both of our business units benefit from the Group’s attractive landbank,
proven delivery platform and industry leading central resources.
The four strategic pillars of the Group are as follows:
A. Assembly and active management of a sector leading
landbank at attractive rates;
B. Operation of best-in-class delivery platform;
C. Delivery of an end-customer focussed product offering across our
three target markets; Build-to-Sell, PRS and Mixed-Tenure; and
D. Optimisation of capital employed to drive returns for shareholders.
The Group has made significant progress towards the achievement of
our strategic objectives.
22
1,100
With over 1,100 units under
construction during 2018 we
have substantially de-risked
our delivery targets for 2019
(725) and 2020 (1,000)
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
23
Taylor Hill, Balbriggan, Co. Dublin
Our valuable PRS sites also allow the Group
to capitalise on the large quantum of capital
currently seeking to access the PRS opportunity
in Ireland. Living now possesses a 1,850+ unit
high density PRS portfolio focused on Dublin’s
North Docklands, Tallaght and Galway. We also
estimate that our primarily low-density Homes
portfolio has the optionality to deliver over
3,000 units into the PRS sector.
Post year end the Group exchanged contracts to
acquire two sites via an off-market transaction
for a consideration of approximately €50 million
(excluding fees and stamp duty). The transaction
is expected to complete in Q2 2019.
Located at Lexlip and Newbridge Co. Kildare,
the properties currently have full planning
permission for 793 units:
- Site 1: 47-acres at Barnhall, Leixlip, Co Kildare
with planning permission for 450 units; and
- Site 2: 47-acres at Kilbelin, Newbridge, Co
Kildare with planning permission for 343 units.
The transaction further strengthens Glenveagh’s
focus on delivering starter-homes in the GDA.
Benefitting from strong planning permissions
construction is expected to commence in H2 2019
with the first units closing in 2020.
A. Assembly of
Monetisable Starter-Home
Focussed Landbank At
Attractive Rates
We have moved quickly to de-risk our long-
term sales objectives by assembling a starter-
home focussed landbank with affordability and
value-for-money at its core. Our landbank was
assembled at attractive rates in the context of both
cost per site (€50k vs €56k at IPO) and site cost as
a percentage of NDV (17% vs 22% at IPO).
The Group’s acquisitions occurred largely off-
market and our landbank now comprises over
12,600 units. Our sites are primarily located in
the GDA (81%) with approximately 85% of the
landbank sitting within our Homes business (15% in
Living) and 66% of the total units are expected to
be houses (34% apartments). This is consistent with
the land strategy we laid out at IPO.
Glenveagh is now positioned to deliver housing to
the deepest segments of the market with 74% of
Build-to-Sell units on forthcoming developments
priced at €350k or less. With an average site size
of approximately 265 units coupled with a focus on
starter-homes, the portfolio is monetisable in the
current regulatory and market environment within
a short time-frame.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
24
Our Lanbank -
Balanced GDA
Focused Portfolio
17
27
6
2
24
5
9
11
25
12
23
4
22
28
29
13
18
30
33
21
32
35
10
3 7
20
31
16
19
1
34
14 15
26
8
Key
Homes - Active site
Homes - Future site
Living - Future site
Motorway Network
Rail network
Site Schedule
Map# Site name
Active/Future
Units Net
Total
Construction
Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Homes Active Sites
Marina Village
Cois Glaisín
Herbert Hill
Holsteiner Park
Taylor Hill
Cluain Adain
Proby Place
Maplewoods
Cnoc Dubh
Shrewsbury Road
Knightsgate
Semple Woods
Ledwell Park
Eden
Maryborough Ridge
Total
Homes Future Sites
Blessington
Blackcastle
Parson Street, Maynooth
Adelaide Road, Bray
Millennium Park
Citywest
Hollystown GC
Dunboyne
Stamullen
Donabate East
Cork Docklands
Blackcastle
Tyrellstown
Castleknock
Leixlip
Newbridge
Total Homes Core
Homes - Non-Core
Homes - Non-Core strategic
Total Homes
Living
East Road
Tallaght
Galway
Castleforbes
Total Living
Total Landbank
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
Future
2018-2022
2018-2020
2018-2019
2018-2019
2018-2023
2018-2022
2018-2020
2018-2022
2018-2020
2018-2020
2018-2021
2018-2020
2018-2024
2018-2022
2019-2028
269
168
90
6
513
194
16
131
45
7
129
130
430
141
502
2,771
140
180
100
70
530
195
175
664
205
436
1,000
700
1,251
123
537
378
6,684
1,168
162
10,785
450
500
250
650
1,850
12,635
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
25
Further significant opportunities continue to exist
to make accretive land acquisitions which target
the deepest starter-home market in the strongest
locations. Once acquired these acquisitions will
contribute to the achievement of delivery targets
in the near-term and achieve returns above Group
targets in future years.
B. Delivery Platform
Now At Scale
We are now actively constructing from 15 sites with
16 sites expected to deliver our 2020 unit guidance
of 1,000 units. This is consistent with our target
absorption rate of 60-70 unit sales per site per
annum. With over 1,100 units under construction
during 2018 we have substantially de-risked our
delivery targets for 2019 (725) and 2020 (1,000).
In order to achieve our construction objectives,
the key priorities for the Group have been to:
- Put Health and Safety at the centre of our
construction strategy;
- Standardise our processes and end product;
and
- Ensure we are the partner of choice for our
sub-contractor base.
i. Health and Safety
Embedded in our construction operation is
a dedication to the highest standards of
health and safety. Each active site has dedicated
resources responsible for the implementation of
our robust health and safety programme which is
continually monitored by the Executive Committee
and our Board.
ii. Standardisation of Processes
and Production
Our construction methodologies are built around
a standardised process to deliver high quality
sustainable homes as efficiently as possible. This
approach has allowed Glenveagh to build at
volume across our active sites and deliver on our
multi-site strategy.
We are focused on increasing the level of
off-site manufacturing within our construction
methodology. We will continue to assess our
off-site manufacturing capabilities and invest
time researching other emerging innovative
construction practices.
Supporting our standardised construction
approach is our centralised procurement team that
has established strong relationships with suppliers
and sub-contractors enabling us to enter into
comparatively attractive contracts for key labour
and materials thereby allowing us to manage our
exposure to construction cost inflation.
The standardisation of our processes and end
product is well underway with the full benefits of
this expected to be achieved from the second
half of 2020.
iii. Best-in-class Sub-contractor
Proposition Established
We have intentionally capitalised the business
and designed our organisation to ensure we
are the partner of choice for our sub-contractor
base. Glenveagh’s offering to our partners
has a number of advantages over our local
non-PLC competition:
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
- The scale of the opportunity at Glenveagh is
unrivalled given the 2,000+ unit per annum
output target in Homes;
- Continuity of work on our multi-year sites which
are delivering a consistent number of units
on an annual basis gives sub-contractors the
confidence to grow their business with us;
- Certainty of what’s required given our
standardised processes and product. As a
result, sub-contractors know the key risks and
the man hours involved which allows them to
price keener than would otherwise be the case;
and
- Reduced risk and capital requirements
as Glenveagh procures sub-contractor
material packages centrally. This is
particularly relevant for trades that have
a high material component.
Combined these efforts help ensure we are
a compelling partner for sub-contractors
who are critical to the delivery of the Group’s
output target.
C. End-Customer Focused
Offering Developed
At Glenveagh our ambition is to capitalise on three
key opportunities via the delivery of a customer
focused offering in the following segments:
- Build-to-sell;
- PRS: and
- Mixed-Tenure
i. Build-to-Sell
The Group’s Build-to-Sell landbank is capable
of delivering housing in the locations that
customers want and at price points they can
afford. 84% of all transactions in Ireland in 2018
were below €425k which plays to the strength of
Glenveagh’s landbank with 92% of housing
on forthcoming build-to sell developments at
€425k or less.
Our developments are located in strong urban
conurbations close to key transport infrastructure,
schools and amenities. They are also strong
rental locations thereby providing optionality
of exit strategy by also providing institutional
PRS investors with a strong offering which
further de-risk the Group’s long-term sales
and delivery targets.
ii. PRS
Glenveagh has capitalised on the growing shift
to rental in Ireland with the assembly of an
attractive 1,100+ unit campus in Dublin’s North
Docklands and development rights on two key
retail assets in Tallaght and Galway totalling 750
units. A SHD fast-track planning application was
recently lodged on our East Road site in Dublin’s
North Docklands totalling 560 units. We will
continue to make strong progress in advancing
that portfolio in 2019.
Increasingly our Homes portfolio is attracting
interest from PRS investors for both housing and
low-rise apartments. Our delivery capability and
attractiveness as a counter-party is ensuring we are
capable of taking advantage of this to increase the
sales velocity on our existing sites.
Proby Place, Blackrock, Co. Dublin
26
1,000
We are now actively
constructing from 15 sites
with 16 sites expected
to deliver our 2020 unit
guidance of 1,000 units
27
Glenveagh Properties PLC Annual Report and Accounts 2018
iii. Mixed-Tenure
Mixed-Tenure is a housing delivery model whereby
a developer provides a combination of social,
affordable and private units usually on State
lands. This is a growing feature of the market in
Ireland principally through Local Authority public
tender processes. The creation of the LDA with its
long-term role to deliver homes to help meet the
growing demand for housing is expected to act
as a catalyst for binging more schemes to market
over a truncated time period. Our delivery and
sales capabilities coupled with our attractiveness as
a counterparty given our well capitalised balance
sheet will help ensure we are well placed to partner
with the key agencies on future projects.
D. Optimisation of Capital
Employed to Drive Returns
for Shareholders.
In the short-term our business requires significant
capital in order to scale quickly and capture the
compelling market opportunity that exists in
Ireland where there are only two PLCs focussed on
housebuilding. As the business makes increasing
progress towards achieving these objectives, we will
further optimise the capital employed within the
business to drive shareholder value and returns over
the long-term. Practically, this will mean a reduced
landbank investment without a reduction in output
in the outer years of our business plan.
Group Strategic Priorities
In achieving our corporate strategy, the strategic
priorities for the Group are to:
- Complete the build-out of the Group’s
landbank by acquiring sites at attractive rates
through disciplined capital deployment in what
is an illiquid land market;
- Maintain excellent levels of health and safety
as we continue to ramp-up and standardise
our construction operation;
- Continue to build a balanced and sustainable
business throughout the cycle by focussing
on the Build-to-Sell, PRS and Mixed-Tenure
markets; and
- Deliver sector leading return on capital over the
long-term by optimising the capital employed
within the business.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
28
Herbert Hill, Dundrum, Dublin
Business
Unit Update
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
s
e
m
o
H
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
i
t
i
n
U
s
s
e
n
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
29
At a Glance
Landbank Overview
2018 Revenue
31 December 2018 Inventory
30%
9%
36%
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
€84.1 million
Gross margin:
Units sold:
18.2%
275
100%/85%
of 2019/2020
deliveries from
existing active sites
€590 million
15
active sites
202/450
sold or reserved
at 31 Dec 18/5 Mar 19
SOLD
18% (2017: 21%)
of NDV
Landbank cost
30
Note: Statistics as of 5 March 2019 unless otherwise stated
Post IPO by Unit
Homes Portfolio by Unit
Location
Pre IPO by Unit
4%
23% 9%
14%
20%
44%
Dublin
GDA Inner
GDA Outer
Cork
Other
35%
Dublin
GDA Inner
GDA Outer
Cork
Other
1%
29%
19%
18%
34%
Dublin
GDA Inner
GDA Outer
Cork
Other
Site cost
Lower site cost
as a % of NDV
Site cost
Lower average site cost
per unit(€)
Houses vs
Apartment units
22%
17%
56k
47k
At IPO
Post IPO
At IPO
Post IPO
Site size
17
4
20
18
16
12
10
8
6
4
2
0
At IPO
Post IPO
11
1
8
3
22%
78%
Houses
Apartments
Average site size
448
255
105
Small (<150)
Medium (150-349)
Large (349+)
At IPO Post IPO Blended
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
s
e
m
o
H
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
t
i
n
U
s
s
e
n
i
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
31
Our approach
to homebuilding
We continue to innovate our design and construction solutions in
order to optimise margin performance in the medium term, while
also delivering at scale helped by the standardisation of processes
and production across our developments.
1. Landbank and
Acquisition Strategy
2. Design and
Planning Process
3. Construction and
Standardisation
4. Sales and
Marketing
FO
R SALE
SOLD
Taylor Hill, Balbriggan, Co. Dublin
Cois Glaisin, Navan, Co. Meath
Cluain Adain, Navan, Co. Meath
The quality of our landbank is one of the
main strengths of Glenveagh. The Glenveagh
team have focused on investing in locations
where there is strong demand for new homes
particularly from First-Time Buyers that can
deliver our target returns. Our experienced
team undertakes a rigorous evaluation process
to ensure all opportunities provide multi-year
delivery, meet our minimum financial KPIs
and allow for standardisation and maximum
optimisation. Sticking to these principles has
allowed us to assemble a balanced overall
portfolio mix capable of delivering on our 2019
targets and beyond. In addition, the quality of
our current landbank allows us the flexibility to
be selective with the deployment of equity to
ensure that we are investing in sites that are most
aligned with our strategic objectives.
The Glenveagh design approach is based on
delivering a quality product that appeals to
new home buyers, supports our standardised
construction approach and our continued focus
on managing our exposure to construction cost
inflation. We ensure our development and unit
designs are flexible so that we can react quickly to
changes in housing demand whilst also delivering
the highest quality, sustainable and innovative
product to the customer. Our dedicated planning
team work closely with local authorities and
planning offices to ensure the planning process
is completed efficiently and so that we can
maximise the planning potential of all our sites
while delivering quality housing developments.
32
Our construction approach is dedicated to having
a standardised process to building high quality
sustainable homes efficiently. This approach has
allowed us to build at volume across our active
sites and deliver on our multi-site delivery model.
Embedded in this process is a dedication to the
highest standards of health and safety and best
practice. Each active site has dedicated resources
responsible for the implementation of our robust
health and safety programme which is continually
monitored by the Executive Committee. We
are focused on increasing the level of off-site
manufacturing within our construction methodology
and will continue to assess our off-site manufacturing
capabilities and invest time researching emerging
innovative construction practices. Supporting our
standardised construction approach is our centralised
procurement team that has established strong
relationships with suppliers and sub-contractors
enabling us to enter into fixed price contracts for key
labour and materials thereby allowing us to manage
our exposure to construction cost inflation.
Through our quality landbank and the
aforementioned focus on quality and
efficiency of construction, we now offer an
attractive suite of house types in locations
of high demand with a particular focus on
affordability and the first-time buyer market.
In what is a highly competitive market, we
ensure that each sales team has an in-
depth knowledge of our developments, our
houses and importantly, the locations where
we are selling and provide unparalleled
customer service. We are continually sourcing
customer feedback and benchmarking
our customer service against some of our
peers in the housebuilding sector. We are
also constantly investigating technologically
innovative methods to differentiate our sales
and marketing approach to ensure the best
experience possible for our customers.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
s
e
m
o
H
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
t
i
n
U
s
s
e
n
i
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
33
Glenveagh Properties PLC Annual Report and Accounts 2018
Our active sites
GDA – Starter-Homes
Glenveagh
Taylor Hill
Balbriggan, Co. Dublin
Glenveagh
Cluain Adain
Clonmagadden, Navan
Cluain Adain, Clonmagadden, Navan is our second development in the Navan region and is
located on the northern side of the town. The development comprises 246, 2, 3 and 4 bed terrace
and semi-detached houses. Phase one launched in May 2018 and by December 2018, 50 units
were occupied with a further 5 units reserved.
Taylor Hill is a development of approx. 600 units located in Balbriggan in Co. Dublin. Phase 1 was
launched in February 2018 with 96 occupied during 2018. Phase 2 will commence in 2019 and will
comprise 78 2, 3 and 4 bed terrace, semi-detached and detached homes. The seaside town of
Balbriggan has superb transport links with a regular train service from the town to Dublin City Centre.
Glenveagh
Cnoc Dubh
Ballyboughal, Co Dublin
Glenveagh
Cois Glaisin
Johnstown, Navan
Cois Glaisin, Johnstown, Navan is a development of 276, 2, 3, 4 and 5 bedroom terrace, semi-
detached and detached homes. 94 units were occupied by December 2018 (with a further 29
units reserved).
Cnoc Dubh, Ballyboughal, Co Dublin is a development of 57 2, 3, 4 and 5 bedroom homes.
The first phase launched from showhouse in September 2018 with 12 units occupied by December
2018 and a further 14 units reserved. Ballyboughal is a small peaceful village with the perfect mix
between urban and rural, offering professionals the peace and space of the countryside within
easy reach of Dublin city and is located 15 minutes from Dublin Airport.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
34
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
s
e
m
o
H
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
t
i
n
U
s
s
e
n
i
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
35
Glenveagh
Knightsgate
Rush, Co. Dublin
GDA – Luxury Homes
and apartments
Glenveagh
Marina Village
Greystones, Co. Wicklow
Knightsgate, Rush is a development of 129 large 3 and 4 bed semi-detached and detached homes,
located within walking distance of the village of Rush in North County Dublin. The development is
situated c.2km from the coast and just c.20km from Dublin City Centre.
Glenveagh
Semple
Woods
Donabate, Co. Dublin
Glenveagh
Semple Woods
Glenveagh
Ledwill Park
Kilcock, Co. Kildare
Marina Village is a unique development of houses and apartments built on reclaimed land at
Greystones Marina, Co Wicklow. Phase 1 of the apartment development has commenced with
the first block of c.30 units due for completion in the summer of 2019 with the other blocks to
be completed throughout 2019 and 2020. A further collection of 3 bedroom terrace homes and
substantial 4/5 bedroom semi-detached and detached homes will commence build in 2019
completing this waterfront development.
Glenveagh
Herbert Hill
Dundrum, Dublin
Semple Woods is located in the picturesque
North Dublin town of Donabate. Phase one
comprises 134 3, 4 and 5 bedroom homes
and is expected to release off plans in early
2019 with show houses due in late Spring. The
development is located next to Donabate town
centre and is surrounded by local convenience.
Ledwill Park is a development of 2, 3, 4
& 5 bedroom terrace, semi-detached and
detached homes located within the townland
of Branganstown, a short stroll from the town
of Kilcock, County Kildare. Phase 1 is due to
be released in early 2019.
Herbert Hill is a luxury development of 90 1, 2 and 3 bedroom apartments and penthouse
apartments. Set back from Sandyford Road and adjacent to the Balally Luas (Dublin’s light rail
service) stop, Herbert Hill offers an unrivalled setting with many amenities and services within
immediate reach such as Dundrum Town Centre (Dublin's Premier Shopping Destination) and village.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
36
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
s
e
m
o
H
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
i
t
i
n
U
s
s
e
n
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
37
Glenveagh
Proby Place
Blackrock, South County Dublin
Cork
Glenveagh
Maple Woods
Middleton, Co. Cork
Proby Place is a development of 23 luxury 4 and 5 bedroom semi-detached homes set within a
secluded development off Carysfort Avenue, Blackrock South County Dublin. Blackrock is one of
the most prestigious locations in South County Dublin and is surrounded by local amenities.
Glenveagh
Holsteiner
Park
Clonee, Co. Meath
Glenveagh
The
Collection
Shrewsbury Road, Dublin 4
Glenveagh
Blackrock
Villas
Blackrock, Cork
Maplewoods is a development of
approximately 131, 2, 3 and 4 bedroom
homes and apartments in Ballinacurra,
Midelton, Co. Cork. The Midelton area
benefits from local schools and other
amenities and is well served by both
bus and rail routes to Cork City.
Glenveagh
Mount
Woods*
Douglas, Cork
Glenveagh
Mount Woods
Holsteiner Park is a development of 4 and
5 bedroom detached homes, in Clonee, on
the border of Co. Dublin and Co. Meath
and combines elegance, spacious living and
city convenience. Each home is on average
c.3,000 sqft. on c.1/3-acre of garden. The
village of Clonee is within walking distance
of the development.
“The Collection” at Shrewsbury Road, Dublin 4,
is an exceptional development of 7 outstanding
luxury homes at one of Dublin’s most desirable
addresses. The houses comprise on average
c.4,000 sqft and feature basement, ground, first
and second floor accommodation with secure
and private underground car parking facilities
for its residents. The villages of Ballsbridge and
Donnybrook are within a short walk with an
array of shops, boutiques and restaurants.
38
Blackrock Villas is a development of
approximately 141 units, 1 to 5 bedroom
homes and apartments in the exclusive
area of Blackrock, Co. Cork.
Maryborough Ridge is a development of 2, 3
and 4 bedroom detached and semi-detached
homes located in Douglas, Co Cork. Douglas is
long established as one of Cork’s most desirable
residential addresses with a population of over
20,000. Douglas is home to a number of sports
clubs and has a host of local. The first phase of
homes are due for completion in 2019.
* This name is awaiting approval by the planning authority.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
s
e
m
o
H
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
t
i
n
U
s
s
e
n
i
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
39
Glenveagh Properties PLC Annual Report and Accounts 2018
1
0
2
8 First time buyers' testimonial
- Glenveagh Taylor Hill
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
First time buyers, Bernard Faulkner and
Kim Thomas moved into a brand
new Glenveagh home in Taylor Hill,
Balbriggan in December 2018.
" When we saw the brochure
we fell in love. We were
waiting for the day they
opened up for people to
come and see the house."
" We didn’t know much about Glenveagh before
coming across Taylor Hill, but we have been
so impressed every step of the way. We weren’t
looking for a starter home, we wanted a lot of
space starting off. We weren’t sure if we’d get
one in our budget, but we thought we’d aim
high. Glenveagh were very patient with us as
there were some delays along the way. They
made things extremely easy.
The design of this place is fantastic. There’s a
kitchen island, a mini sitting room area in the
kitchen, plus another sitting room on top of that.
We spend most of our time in the kitchen area,
so we’ve put some money into making it a space
that feels like ours.
The aftercare has been excellent. If something
goes wrong, they’ll send someone around
straight away."
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
40
Business
Unit Update
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
East Road, Dublin Docklands (CGI)
i
g
n
v
L
i
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
i
t
i
n
U
s
s
e
n
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
41
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
42
i
g
n
v
L
i
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
i
t
i
n
U
s
s
e
n
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
Living operates in two
distinct channels being
PRS and Partnerships
Given these favourable market conditions Living are committed to
becoming the delivery partner of choice for purpose-built rental
accommodation in Ireland and have acquired four urban sites
capable of delivering over 1,850 PRS units principally in Dublin’s
Docklands, Tallaght and Galway.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
Through these two segments, the business aims to capitalise
on the significant opportunity that exists in building rental
communities and the requirement for strategic partnerships with
institutional investors, approved housing bodies and government
and local authorities in segments such as mixed-use residential
/ retail, social housing and affordable housing. Living’s objective
is to deliver best-in-class private rental developments and mixed
tenure developments to our private and public partners.
Living’s economic model is designed to:
- Deliver strong return on capital employed;
- Allow the group to access a wider spectrum of opportunities;
- Diversify risk through a variety of delivery strategies; and
- Provide resilience across the economic cycle.
PRS
Ireland – the macro opportunity
TO RENT
There continues to be an undersupply of rental properties in
Ireland which is yet more pronounced in the Dublin market,
where, the supply of new stock remains subdued. The continued
favourable demographic shift and the consequential change in
the market’s tenure demand mix towards rental accommodation
has seen demand for rental properties grow considerably. PRS in
Ireland has nearly doubled in size in the last 10 years with c.18% of
Ireland’s population and c.24% of Dublin’s population now living in
private rental accommodation.
There is significant demand for PRS product from both domestic
and international investors. In 2017, c.€387 million was invested
in 24 PRS schemes in Ireland. Given the attractiveness of Living’s
current PRS portfolio, we have targeted early engagement
with prospective PRS investors to forward fund and de-risk the
development of our 1,850 unit portfolio.
1,850
Given these favourable
market conditions Living
are committed to becoming
the delivery partner of
choice for purpose-built
rental accommodation in
Ireland and have acquired
four prime urban sites
capable of delivering over
1,850 PRS units principally in
Dublin’s Docklands and also
Tallaght and Galway
There is a clear demand / supply imbalance that
currently exists in the rental market and will likely
persist over the medium to long-term. In Dublin
the demand for the sector will increase further
over the next ten years in line with projected
population growth and in circumstances where
housing supply currently lags demand by c.18,000
homes per year. This presents a significant
opportunity for Living to deliver PRS schemes at
scale to the market.
Living’s current PRS portfolio
Given these favourable market conditions Living
are committed to becoming the delivery partner of
choice for purpose-built rental accommodation in
Ireland and have acquired four urban sites capable
of delivering over 1,850 PRS units principally in
Dublin’s Docklands, Tallaght and Galway. These
sites are currently being actively managed through
the design and planning process.
Dublin Docklands
In January 2018, Living completed the acquisition
of a c.5.2-acre site on East Road, Dublin 1 and,
subsequently, in November 2018 acquired the
neighbouring 2.44-acre site at Castleforbes
Business Park, Dublin 1. The combined sites
provide a significant and immediate opportunity
to demonstrate Living’s capabilities to create a
substantial PRS portfolio in a central urban area.
These sites are a key opportunity to obtain a
competitive edge in scaling our PRS portfolio
with the potential for over 1,100 units in a
prime central location in the heart of Dublin’s
Docklands. The sites are also a demonstration of
Living’s commitment to placemaking and urban
regeneration, which was part of our message to
investors at IPO.
Planning preparation and applications are
progressing well on each site with an application
through the SHD process for 560 units at East
Road lodged in December 2018.
Tallaght and Galway
In March 2018, Living completed the acquisition of
development rights at:
- a c.19-acre car park adjoining The Square
Shopping Centre, Tallaght, Dublin 24; and
- a c.5-acre site to the rear of Gateway Retail
Park, Galway.
The sites adjoin retail schemes operated by Sigma
Retail Partners. Living intend to develop residential
accommodation, comprising of c.800 units, across
the sites and are actively engaged with a design
team with the intention of submitting planning
applications during 2019.
Partnerships
Living also seeks joint venture opportunities and
partnership arrangements to design, develop
and deliver residential schemes for purchase by
institutional investors, approved housing bodies
and governmental and local authorities in Ireland.
There are two component parts to the Partnerships
opportunity – Mixed-Tenure and Joint Ventures.
Mixed-Tenure
A housing delivery model whereby a developer
provides a combination of social, affordable
and private units usually on State lands. This is a
well-developed sector in the UK and a growing
feature of the Irish market principally through
Local Authority public tender processes. There is a
considerable pipeline of state lands which would
be suitable for mixed-tenure schemes. The sector
should also benefit from the newly created LDA
43
and its long-term role to deliver homes to help
meet the growing demand for housing.
Living are committed to becoming a preferred
delivery partner for mixed-tenure schemes in
Ireland. The Group’s delivery and sales capabilities
coupled with our attractiveness as a counterparty,
given our well capitalised balance sheet, will help
ensure we are well placed to partner with the key
agencies on future projects.
Joint Ventures
An opportunity exists to partner with third-
party land owners who wish to develop their
residentially zoned lands but lack the financial or
construction capacity to deliver such a scheme.
Living are actively pursuing joint venture
opportunities with private landowners
and government agencies. Living, utilising
Glenveagh’s scale, planning, construction and
sales expertise, can create deep and lasting
relationships to become the delivery partner of
choice for joint venture arrangements.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
Glenveagh Living are actively
pursuing joint venture
opportunities with private
landowners and government
agencies representing the
current principal focus.
i
g
n
v
L
i
h
g
a
e
v
n
e
G
l
-
e
t
a
d
p
U
i
t
i
n
U
s
s
e
n
s
u
B
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
Castleforbes, Dublin 1 (CGI)
44
45
Glenveagh Properties PLC Annual Report and Accounts 2018
Risk Management
Report
The Board is responsible for ensuring good
corporate governance and prudent risk
management is implemented by the Group.
The Board has approved the Group’s Risk
Management Framework which provides a
common risk management process across the
Group to identify, assess, mitigate, monitor
and report risks which impact the Group. The
Group’s risk management process is a bottom
up integrated approach that aims to ensure
that all risks to which the Group is exposed
are identified, understood and appropriate
mitigating controls are implemented to manage
the risks effectively and protect the Group.
As part of its oversight responsibilities, the Audit
and Risk Committee is responsible for reviewing
the adequacy and effectiveness of the Group’s
internal controls and risk management process.
The Group’s risk register and principal risks are
a standing agenda item for each Audit and
Risk Committee meeting. The risk register is
used to support the risk management process
and document the Group’s risks, controls and
their approved ratings based on likelihood and
impact from both an inherent and residual risk
perspective. The Board formally reviews
and approves the risk register on at least a
bi-annual basis.
The Group has implemented a three line of defence model.
Line of defence
Function
Responsibilities
First line
Department
heads
1. Responsible for identification of operational
& strategic risks.
2. Responsible for implementing controls to
mitigate risks identified.
3. Responsible for implementing action plans.
Second line
Executive
committee
1. Supports department heads.
2. Responsible for monitoring the identification
and mitigation of operational &
strategic risks.
3. Responsible for monitoring the
implementation of action plans.
Third line
Internal audit
1. Responsible for providing additional
assurance to the Audit and Risk Committee
and Executive Committee the key risk areas
are identified and have the necessary
mitigating controls in place.
2. Completes independent reviews on the
effectiveness of internal controls.
3. Reports on management actions.
46
Risk Assessment Process
Management continued to review the risk register during the year following which the Board has
carried out a robust assessment of the principal risks facing the business. Arising from the risk review
process a number of principal risks and uncertainties have been identified which could have a material
impact on the Group in achieving its strategic objectives. The Board and Audit and Risk Committee
have reviewed the Group’s principal risks and have considered the new risks introduced for 2018. The
main risk categories that the Board considered are the following:
Risk Categories
Financial Risk
Investment Risk is defined as the probability or likelihood of occurrence of losses relative to the
expected return on any particular investment.
Market Risk is the risk of loss to the Group arising from market volatility or adverse movements
in the level or volatility of market prices of equities, currencies or property. Market Risk includes
Interest Rate Risk which is the risk to earnings and capital associated with changes in the level
or volatility of interest rates.
Non-Financial Risk
Compliance risk is the risk of legal sanctions, material financial loss, or loss to reputation that the
Group may suffer as a result of its failure to comply with legislation, regulations, code of conduct, and
standards of best/good practice.
Operational and IT risk is the risk of loss resulting from inadequate or failed internal processes, people
and systems, or from external events.
Reputational risk is a risk of loss resulting from damage to the Group's reputation.
Strategic risk is the loss or unplanned/unfair gains resulting from adverse strategic initiatives.
External Risk
External Risk is the risk to the Group of potentially failing to meet its strategic objectives following
significant changes to the external environment in which it operates.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
k
s
R
-
y
g
e
t
a
r
t
S
&
i
l
e
d
o
M
s
s
e
n
i
s
u
B
47
Glenveagh Properties PLC Annual Report and Accounts 2018
The risks and uncertainties together with key mitigating considerations that fall into each of these risk
categories are set out below.
Our risk category
Risk or uncertainty and potential impact
Risk rating change
External risk
1. Adverse macroeconomic conditions
2. Adverse changes to government policy and regulations
3. Mortgage availability and affordability
Operational risk
4. Availability and increased cost of materials and labour
5. Inadequate project management
6. Insufficient health and safety procedures
7. Employee development and retention
8. Data protection and cyber security
Reputational risk
9. Decline in product quality
Table legend
No change to risk rating in 2018
Increased risk rating in 2018
1
2
3
4
5
7
6
8
9
High Risk
Medium Risk
1
3
Likelihood
5
I
m
p
a
c
t
5
3
1
48
Our risk
category
Risk title
Risk description and
potential impact
Key Mitigating
Considerations
Risk
rating
change
External risk Adverse
macroeconomic
conditions
Glenveagh operates in a
property market that is cyclical
by nature which can lead to
volatility of property values and
market conditions.
The Group aims to maintain a
reasonable but limited stock of land
(generally 5-7 years).
The Group typically avoids any
longer exposure through strict land
acquisition policies.
The Group has a robust acquisition
policy and approval process in
place to ensure the best value is
achieved on assets and that assets
acquired are aligned to the strategic
objectives of the Group.
Living will assist in reducing the
Group’s exposure to the cyclical
nature of a traditional homebuilding
business through the delivery
of apartments and houses for
the rental market as well as the
alternative offering its Partnerships
business will provide to State bodies
and Local Authorities.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
k
s
R
-
y
g
e
t
a
r
t
S
&
i
l
e
d
o
M
s
s
e
n
i
s
u
B
49
Glenveagh Properties PLC Annual Report and Accounts 2018
Our risk
category
Risk title
Risk description and
potential impact
Key Mitigating
Considerations
Risk
rating
change
Our risk
category
Risk title
Risk description and
potential impact
Key Mitigating
Considerations
Risk
rating
change
External risk Adverse
macroeconomic
conditions
(continued)
Geopolitical uncertainty
(including Brexit) could lead
to a potential adverse impact
on the Group’s asset valuation
and financial performance due
to factors such as slowdown
in economic growth, increased
interest rates and decline in
consumer confidence.
External risk Adverse
changes to
government
policy and
regulations
A change in the domestic
political environment and/or
government policy (including
tax legislation, support of the
housebuilding sector, Part V
allowance and first-time buyer
assistance including the
Help to Buy initiative could
adversely affect the Group’s
financial performance.
50
The Board and senior management
have been monitoring closely the
potential implications of Brexit on
the business with a particular focus
on the Group’s ability to source
necessary labour and materials.
The outcome of the UK’s departure
from the European Union remains
unclear and its potential impact
on the movement of people and
distribution of goods is difficult to
quantify. Management have carried
out a full assessment of our supply
chain’s exposure to the UK in light
of a “Hard Brexit” and determined
that Brexit will not have a material
impact on the Group’s ability to
source the necessary labour and
materials. The Board and senior
management will continue to
monitor closely and assess the
potential impact on the business
of the UK’s departure from the
European Union both pre and post
Brexit and will alter our strategic
plans to meet the challenges of
Brexit if necessary.
The Group’s management and
Board monitor government policy
on an ongoing basis.
Group management’s site by site
forecasts are conservative by
nature and allow for expected
negative changes in government
policy and regulation.
The Group has the capability
to redesign developments as
appropriate should it be required.
The Group will consider alternative
sales strategies where required
to align to any changes in the
domestic political environment.
External risk Mortgage
availability and
affordability
Glenveagh understands that
affordable mortgage finance
is a crucial funding source
for buyers in the residential
property market in Ireland.
Constraints on the availability
and cost of mortgage financing
may have an adverse impact
on sales of the Group’s homes
due to a potential decline
in customer demand and
ultimately the profitability of
the Group.
Management and the Board
continuously monitor government
policy around mortgage availability.
The Group regularly engages with
mortgage advisors and financial
institutions to gain valuable insights
into the market and the impact
of regulatory changes impacting
mortgage lending.
The Group’s strategy can facilitate
the adjustment of delivery velocity
if required.
The Group is focused on the sub
€350k per unit sector being the
deepest segment of the market which
also mitigates this risk.
Operational
risk
Availability and
increased cost
of materials
and labour
Shortages or increased costs
of materials and labour
could lead to an increase in
construction costs and delays
in the completion of homes.
The Group has put fixed cost
agreements in place with
sub-contractors and suppliers
where possible.
Operational
risk
Inadequate
project
management
If the Group is unable to
control its costs or pass on
any increase in costs to the
purchasers of the Group’s
homes, source the requisite
labour, and / or renegotiate
improved terms with suppliers
and contractors, the Group’s
margins may reduce which
could have an adverse
impact on the Group’s
business operations and
financial condition.
Inadequate oversight of
the cost and delivery of
development projects
adversely affects expected
return on investment.
The Group has the potential to
expand its purchasing network
should it be required and maintains
flexibility by not having an over
reliance on any one supplier.
The Group engages in financial
planning and continuously
monitors and reviews the project
budgets versus actual costings and
forecast outturn.
The Group has put fixed cost
agreements in place with
sub-contractors and suppliers
where possible.
The Group employs highly
experienced and qualified project
managers who oversee a robust
financial planning process for each
development and on a monthly
basis monitor and review the project
budget versus actual costings. This
includes regular updates to the
Executive Committee and Board
of Directors.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
k
s
R
-
y
g
e
t
a
r
t
S
&
i
l
e
d
o
M
s
s
e
n
i
s
u
B
51
Glenveagh Properties PLC Annual Report and Accounts 2018
Our risk
category
Risk title
Risk description and
potential impact
Key Mitigating
Considerations
Risk
rating
change
Our risk
category
Risk title
Risk description and
potential impact
Key Mitigating Considerations
Risk
rating
change
Operational
risk
Insufficient
health
and safety
procedures
Glenveagh is focused on the
wellbeing of its employees,
contractors / sub-contractors
and the general public.
The Group understands that
failure to implement and
adhere to the highest standard
of Health & Safety practices
can lead to a significant risk
to safety, health and welfare
of staff and other parties
resulting in increased costs and
negatively impact the timely
and safe delivery of a project.
Additionally, any failure in
health or safety performance
or compliance, including any
delay in responding to changes
in health & safety regulations
may result in financial and /
or other penalties.
The Group has appointed a new
Head of Health & Safety with
extensive experience in the Sector
who oversees both the corporate
and site specific Health & Safety
policies and procedures.
These policies and procedures are
considered industry best practice
and are subject to monthly review
from both internal and external
auditors.
Each site has a dedicated Health
& Safety Officer in place.
The Group ensures all staff are
appropriately and adequately
trained.
The Group has a Safe-T certificate
which is the industry Health & Safety
auditing standard.
There is adequate insurance cover
in place to deal with any claims that
may arise from claims due to injury.
Operational
risk
Employee
development
and
retention
The success of the Group
is dependent on recruiting,
retaining and developing highly
skilled, competent people.
The Group is aware that loss
of key personnel and
/ or the inability to attract /
retain adequately skilled and
qualified people could lead to:
The Group offers competitive and
attractive remuneration packages
and where appropriate long-term
interest alignment.
The Group offers the opportunity
for advancement through creating a
positive working environment.
- Poor operational and
financial performance;
- Inadequate staff knowledge
and understanding of
policies & procedures;
- Reduced control
environment;
- Insufficient transfer of
knowledge amongst staff
to allow for succession
planning;
- Demotivated staff; and
- Failure to achieve /
deliver on the Group’s
strategic objectives.
The Group has implemented a
performance management and
appraisal process which includes
open channels of communication
and feedback and development
plans for employees.
The Group is developing a succession
plan to ensure continuity of quality
service and knowledge retention.
The Group ensures that all staff
have access to relevant internal and
external training.
52
Operational
risk
Data protection
and cyber
security
The Group uses information
technology to perform
operational activities and to
maintain its business records.
A cyber-attack could lead
to potential data breaches
or disruption to the Group’s
systems and operations which
in turn could lead to damage
to the Group’s reputation and
potential loss of customers
and revenue.
Any security or privacy breach
of the information technology
systems may also expose
the Group to liability and
regulatory scrutiny.
Reputational
risk
Decline in
product quality
Delivery of the highest quality
homes is central to the success
of Glenveagh.
The Group continues to focus
on ensuring our products meet
the desired standards and is
aware that significant negative
incidents including construction
defects, material environmental
liabilities (including hazardous
or toxic substances), quality
deficiencies or perceptions
thereof could adversely impact
the Group’s sales and possibly
result in litigation cases against
the Group with a potentially
negative impact on the
Group’s brand and customer
satisfaction which are crucial to
the Group’s performance.
The Group is continually monitoring
data storage across all business areas.
The Group uses internal and
external back-up systems under the
supervision of a third-party service
provider pursuant to agreements
that specify certain security and
service level standards.
The Group is proactively managing
the cyber threat and recently
engaged a third-party to perform
a system hygiene check to identify
and remediate any potential
weaknesses or control gaps.
The Group has implemented robust
quality control procedures and
strictly adheres to Building Control
(Amendment) Regulations requiring
(among other stipulations) the
appointment of suitably qualified
engineers and architects
The Group has an experienced and
professional support team in place.
The Group has a dedicated
customer service after-sales team.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
k
s
R
-
y
g
e
t
a
r
t
S
&
i
l
e
d
o
M
s
s
e
n
i
s
u
B
53
Glenveagh Properties PLC Annual Report and Accounts 2018
Corporate Social
Responsibility (“CSR”) Review
At Glenveagh, our dedication to providing quality
homes for our customers is matched by our focus
on the safety, development and retention of our
people and a commitment to doing business in
a sustainable manner in the communities we are
helping to create. In our first full year of operations
our CSR strategy has evolved and will continue to
be a key area of focus in 2019 and beyond.
Workplace
Glenveagh operates a ‘Safety First Approach’ to
construction on all sites with health and safety at
the core of how we operate. Glenveagh continues
to hold a Safe-T Cert accreditation which is a
certification scheme designed for certifying safety
management systems of contractors working in
the construction industry and requires intense and
continuous assessment.
In 2018 our ‘Safety First Approach’ was to the fore in
our role as a primary sponsor of the Construction
Industry Federation’s Construction Safety Week
from 22 to the 26 October.
As part of Construction Safety Week, Glenveagh
collaborated with the Construction Workers Health
Trust to deliver a health screening to all employees
on its sites and is committed to continuing a
number of wellbeing initiatives throughout 2019.
Every day during Construction Week there was a
daily ‘toolbox talk’ given by a guest speaker on a
different aspect of work safety, including ‘Working
safely at height’, ‘Positive Mental Health’ and
‘Working safely with hazardous substances’. The
Group has and will continue to actively promote
safety across its social media platforms.
In respect of our support Construction Safety
Week Stephen Garvey, COO said “safety is a
cornerstone of our operations at Glenveagh.
We’re starting as we mean to go on, instilling
a focus on safety amongst our employees in
everything we do. We also want to contribute
to the creation of a safety culture and the
promotion of greater safety awareness in the
wider industry. We are delighted to partner
with the Construction Industry Federation.”
The Director General of the Construction Industry
Federation, Tom Parlon, said Glenveagh’s support
for Construction Safety Week was a demonstration
of their commitment to safety in the industry.
“As a modern construction company, Glenveagh
are leading the way on site safety in the
housebuilding sector. It’s essential we have safety
champions like them to drive a safety culture
through their employees and their supplier network.
As housebuilding activity increases this is the only
way we can keep fatalities and accidents at the
historically low level the industry has worked so
hard to achieve.”
Working Safely Near
Utilities - Tool Box Talk at
the Glenveagh Rush site.
Attending Bressie’s talk on
Positive Mental Health to
Glenveagh Properties PLC
staff L to R: Dermot Casey,
Director, Safety and Training,
CIF; Diarmuid Leahy, CPO,
Glenveagh; Bressie; Stephen
Garvey, COO Glenveagh; Darren
Gavin, Laya Healthcare and
Cathel Mooney, Health & Safety
Manager, Glenveagh.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
i
w
e
v
e
R
R
S
C
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
Our People
We recognise that the talent and commitment and
development of our employees is crucial for the
future success of the Group and along with building
quality and affordable homes for our customers,
Glenveagh is focused on building a future for our
people. As can be seen from the Risk Management
report, the attraction and retention of talent is an
area of continued focus for the business. We have
identified the training and development of our
employees as key to maintaining the talent pipeline
and succession planning within the Group.
Glenveagh wants not only the best people but
also wants the best for its people. To achieve
this the company had several initiatives in place
during 2018 and have a number of initiatives on
the horizon for 2019.
In our first full year of operations we prioritised
the implementation of an employee appraisal
process at all levels of the organisation to ensure
we understand the individual needs and wants
of our people to allow us action these needs as
we move forward. We also use this process to get
feedback on the organisation at this early stage
of the Group’s life to allow us understand what we
can do differently to help our people in their work
life and careers thereby continuing to enhance our
commitment to our people.
We were named among Ireland’s Best Workplaces
in the 2019 “Great Place to Work” annual survey
which allowed us benchmark our commitment to
our employees against other organisations.
This process provides the organisation with both
an internal review of the satisfaction level of our
employees as well as an external benchmark
to measure ourselves against other similar sized
companies across Ireland.
We have appointed a dedicated Learning &
Development Manager who will work with all levels
in the organisation and liaise with various levels
of the Irish Education System (Primary, Secondary
and Third Level institutions). Our aim is to promote
careers in the construction industry and to provide
students, parents and teachers with information
about the industry and current market so all
are adequately informed. This initiative aims to
build on our already established support system
for employees undertaking further education or
qualifications aligned with their roles in Glenveagh.
Currently, we are supporting employees as they
complete a wide range of qualifications which
include a range of undergraduate degrees and
professional qualifications ranging from accounting
to quantity surveying. Glenveagh have already
engaged directly with third level institutions and
agreed to take on Health and Safety interns and
Quantity Surveyor graduates in 2019.
Glenveagh also recognise the need to promote
diversity within the construction industry and
demonstrated this through our partnership with the
Women in Trades Network Ireland who celebrate
women working in manual skills and trades and
normalise the idea of women on site with advocacy
and action. Glenveagh provided funding for the
Network as part of their attendance at the Women
Build Nations Conference 2018.
54
55
Glenveagh Properties PLC Annual Report and Accounts 2018
Presentation of defibrillator to the
Navan First Responders. Present
from L to R: Laughlin Rigby,
Marketing Director, Glenveagh
and Peter Millen, Operations
Director, Glenveagh along with
members of the Navan
First Responders
Community
Glenveagh are not only committed to building
high quality homes but are also dedicated
to providing our developments with a
neighbourhood identity through our commitment
to sustainable placemaking. It is important
to us that our customers identify with the
neighbourhood they live in and feel part of a
community. As part of our site identification and
acquisition process we place particular emphasis
on the relative location of public amenities
(including schools, local retail offering and
creches) and the proximity to alternative modes
of transport amongst our selection criteria. In
addition, as part of the design of all Glenveagh
developments we identify green space areas for
social and recreational infrastructures.
Currently we have construction plans for
playgrounds in a number of our Cork and Dublin
sites and have also committed to developing a
14-acre park at our Marina Village development in
Marina Village, Greystones and a 20-acre park at
Taylor Hill Balbriggan to ensure families living in our
developments are appropriately catered for.
As part of our commitment to developing a sense
of neighbourhood identity for all our developments,
Glenveagh have launched a defibrillator initiative
across all our sites. As part of our defibrillator
initiative all sites are provided with defibrillators
while the site is under construction and the
defibrillator is then donated to the local First
Responders group once residents move in.
12 of our 14 active sites at year end have
defibrillators available for use.
In December 2018, Glenveagh donated three
mobile defibrillators to community group Navan
First Responders. Navan First Responders are
one of several groups around the country whose
volunteers make themselves available to be called
upon in the event of a person suffering chest pain,
cardiac arrest, stroke or choking. The group, which
has 16 active members, has been operational since
February 2015. When Ambulance Control dispatches
an emergency ambulance in response to a callout,
it also sends a text message to the Community
Responder Team. If there is a member on duty,
they will attend the incident in their own vehicles.
In most cases the Community First Responders will
be on the scene within 3 to 9 minutes. This early
attendance can mean the difference between life
and death for the patient, especially if they have
suffered a cardiac arrest and require immediate
lifesaving intervention.
Co-Founder of Glenveagh Properties PLC and
COO, Stephen Garvey, said the group was
providing a vital community service.
“As a company which is building and fostering new
communities in the Navan area, we are delighted to
support Navan First Responders and the potentially
lifesaving service they provide to local residents and
visitors to the town. This is what community spirit
and volunteerism is all about and Glenveagh is
eager to play its part.”
Environment & Sustainability
The Group continue to consider and respond
to advancements in technology as part of the
design of our developments and homes to
build sustainable living environments. Given
the rate of growth and change in technology,
The Group are focused on delivering a product
that gives customers the opportunity to avail of
latest technologies, such as leaving all sites and
developments planned and completed to include
pre-wiring for electric cars. The Group also includes
sustainable build materials and elements as part of
all our homes as standard. All homes are built to
include dual flush toilet cisterns, smart technology
thermostats, roof, wall and floor insulation and
contain low U-value window systems. These
standard specifications help our homes to achieve
at a minimum a BER rating of A3 and air tightness
levels that exceed Part L building regulations.
Where possible the Group design our homes to
include the option of high level roofs, roof mounted
Dragon at the Docks. Vivian Marques (second from left)
who represented Glenveagh at the cheque handover to
Sam McGuinness (center) CEO of Dublin Simon Community.
solar panels and heat recovery ventilation
systems to customers preferences.
The Group are committed to the duty of care we
have to the environment and biodiversity that
surrounds the sites we are active on. During 2018
we implemented a waste segregation and recycling
plan to ensure that site waste was managed
and recycled in the most environmentally friendly
manner possible. Leading on from this in 2019, the
Group will be focusing on developing a ‘Waste
Reduction and Management Plan’ across all active
sites to ensure we are working to reduce the level of
waste on our sites as well as continuing to manage
the disposal of any waste that does arise in the
most environmentally friendly manner possible. Part
of this strategy will be the continued focus on off-
site manufacturing and standardisation of process.
By standardising and moving as much of the build
process off-site, the Group will continue to reduce
the level of onsite waste which will have a positive
impact on surrounding biodiversity.
Charity Work
Over the past year we have helped charities
throughout the country raise money for worthy
causes. All our departments actively participate
in raising funds for a variety of beneficiaries and
we operate a charity matching scheme where the
Group matches every euro raised on a one for one
basis for selected projects. Overall, Glenveagh and
its employees have raised €70,055.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
56
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
i
w
e
v
e
R
R
S
C
-
y
g
e
t
a
r
t
S
&
l
e
d
o
M
s
s
e
n
i
s
u
B
57
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
Cois Glaisin, Navan, Co. Meath
58
e
c
n
a
n
r
e
v
o
G
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
59
e
c
n
a
n
r
e
v
o
G
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
Corporate
Governance
Report
Dear Shareholders,
I am pleased to present the Corporate
Governance Report for 2018, our first
full year of operations at Glenveagh.
As a Board, we recognise that the Group’s success in delivering to both
external and internal stakeholders requires our ongoing commitment to
the highest standards of corporate governance. The Board recognises
the importance of the principles and provisions of the UK Corporate
Governance Code (‘the Code”) and the Irish Corporate Governance
Annex (‘the Annex”) which underpin the corporate governance
framework for premium listed companies. Glenveagh is outside the
FTSE 350 and qualifies under the Annex as a “smaller company” and,
as such, some of the provisions do not strictly apply to the Group
however the Board remains dedicated to promoting a strong culture
of good practice in relation to compliance with the Code.
In this Corporate Governance Report, we set out how we have applied
the principles of the Code and, in line with its ‘comply or explain’
model, we describe in detail any departures from its provisions. As this
Corporate Governance Report covers the year to 31 December 2018, we
are reporting against the 2016 version of the Code. Our next Annual
Report in 2019 will see us report against the new Code, which applies
for periods commencing 1 January 2019.
Much progress has been made by the Group during 2018, as
detailed within the Strategic Report. 2018 was a year of significant
ramp-up for the Group and the Board has been heavily involved in
supporting and developing the strategic priorities identified during
the Group’s IPO in October 2017 and expanded upon in our first
Annual Report in April 2018.
The Board recognises that, in addition to its own activities, the
work of the Board Committees is central to ensuring the robustness
of the Group’s corporate governance framework. During 2018, the
Audit and Risk Committee has continued its work to establish and
60
Together with my
colleagues on the Board,
I am looking forward to
the continued evolution
of our business in 2019.
We recognise that we are
assisted in our duties by a
highly experienced senior
management team, who
are in turn supported
by dedicated and hard-
working colleagues
across the Group.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
-
e
c
n
a
n
r
e
v
o
G
n
a
m
r
i
a
h
C
y
h
a
c
l
u
M
n
h
o
J
effectiveness of the decision making process. The
updated composition is detailed further within the
overview of the Group’s governance structure on
page 63. The members of the Executive Committee
also comprise the Group’s standing Disclosure
Committee, which was established in 2018 to assist
the Group in discharging its obligations to make
timely and accurate disclosures in the prescribed
manner of all information that is required to be
so disclosed to meet the legal and regulatory
requirements arising from the Listing Rules and
the Market Abuse Regulations.
One of my responsibilities as your Chairman is to
ensure that the Board is performing effectively and
as part of this process, I initiated our first annual
review of Board performance in 2018, assisted
by the Company Secretary. This 2018 review was
conducted internally, with an external review to
take place in every third year. Further detail in
relation to the review process and outcomes is set
out at page 66 but I am pleased to confirm that
no significant issues were raised, and it remains
the view of all the Directors that the Board and
its Committees continue to operate effectively to
support the business. I am also satisfied that each
Director continues to make a valuable contribution
to the work of the Board and demonstrates a high
level of ongoing commitment to their role.
Together with my colleagues on the Board, I am
looking forward to the continued evolution of our
business in 2019. We recognise that we are assisted
in our duties by a highly experienced senior
management team, who are in turn supported
by dedicated and hard-working colleagues across
the Group. On behalf of the Board, I would like
to thank all of our colleagues for their contribution
to the progress made by the Group in 2018.
John Mulcahy
Chairman
61
strengthen a culture of independent scrutiny of
the Group’s internal control and risk management
systems and the processes and procedures in
place to monitor both financial and non-financial
reporting. Throughout the year, the Remuneration
and Nomination Committee agenda focused on
significant issues around remuneration, evaluation
and the need to balance reward and performance,
both at individual Executive Director level and
across the Group as a whole. While there were no
changes to the membership of the Board or its
Committees during 2018, the Remuneration and
Nomination Committee continues to look ahead to
ensure that the skills, knowledge and experience
of the Board remains appropriate to support the
Group’s strategic objectives for 2019 and beyond.
The Committee will look to progressively refresh
the independent Non-Executive Directors (“NEDs”)
on the Board having regard to their mix of skills,
experience and diversity. The Committee has
determined that the Board could benefit from
the further experience and fresh perspective that
an additional independent NED could provide.
Furthermore, Caleb Kramer has informed the
Board of his intention to resign his seat during
2019 and will not be seeking re-election at the
Company’s AGM. The Committee has therefore
commenced a process to appoint at least one
new independent NED during 2019.
The Chairmen of the Audit and Risk Committee
and the Remuneration and Nomination Committee
present their respective reports on pages 70-77
and 78-89 These reports should be considered
in conjunction with the Corporate Governance
Statement, which details our compliance with the
requirements of the Code.
The Board has delegated day-to-day
responsibility for operational matters, including
the implementation of the Homes and Living
Business Plans and Group strategy, to the
Executive Committee. The Board has approved a
number of changes to the Executive Committee
during 2018 to ensure the continued efficiency and
Corporate
Governance
Statement
The Corporate Governance Statement, in
conjunction with the Audit and Risk Committee
Report and the Remuneration and Nomination
Committee Report, describes how the Group has
applied the Main Principles of the UK Corporate
Governance Code issued by the FRC in April 2016
(“the Code”) and the Irish Corporate Governance
Annex (“the Annex”) and details any departures
by the Group from the specific provisions of
the Code and the Annex. The full text of the
Code and the Annex can be obtained from the
following websites respectively:
www.frc.org.uk
www.ise.ie
Compliance with the UK
Corporate Governance
Code and Irish Annex
The Code sets out standards of good practice in
relation to board leadership and effectiveness,
remuneration, accountability and relations with
shareholders. The Group is committed to applying
the overarching corporate governance framework
for premium listed companies, which is underpinned
by the Code.
Through the Annex, the Irish Stock Exchange has
supplemented the Code with additional corporate
governance guidelines applicable to companies
with a primary listing on its main market for listed
securities. As a company listed on the Main Securities
Market in Ireland, the provisions of the Annex are
applicable to the Group. Throughout 2018, the
Group was regarded as a ‘smaller company’ under
the Annex’s interpretive provisions for company size,
equivalent to those set out in the Code.
As a company listed on the
standard listing segment of
the Official List of the London
Stock Exchange, the Group is
not subject to the principles
and provisions of the Code.
In the Prospectus issued ahead of admission to
trading in October 2017, the Group committed
to attaining the highest standards of corporate
governance and confirmed its intention to comply
with both the Code and the Annex by the first
anniversary of its admission to trading, save in
respect of John Mulcahy’s ongoing role as
Executive Chairman.
In keeping with its expressed intention at
admission to trading, the Group has complied
with the requirements of the Code during 2018
with the continued exception of Provision A.3.1,
which provides that the Chairman should, on
appointment, meet the independence criteria
set out within the Code.
While the Code prescribes that compliance
or otherwise with Provision A.3.1 need only be
reported for the year in which the appointment
is made, the Board would like to re-affirm its
previously stated collective belief that John
Mulcahy’s ongoing role as Executive Chairman
enables him to bring his extensive knowledge and
experience of the Irish residential housing market
to his leadership of the Board.
The Board continues to believe that John’s
commitment and contribution as Executive
Chairman is essential to the effective leadership
of the Board and the Group as it continues to
implement its strategy following admission to
trading last year.
62
Given the Board’s unanimous decision to
appoint an Executive Chairman, and its collective
preference for John Mulcahy to continue in his role,
the Senior Independent Director, Lady Barbara
Judge, remains willing and available to assume
additional responsibilities, as required. There also
continues to be a clear division of responsibilities
(which is described further on page 67) between
the Chairman and the CEO. As such, the Board
remains satisfied that no one individual or group
has dominated its decision making and that
there has been sufficient challenge of executive
management in meetings of the Board.
As part of its ongoing review of effectiveness
of the Board in its discharge of its duties, the
Board, with the assistance of the Remuneration
and Nomination Committee, will continue
to review the appropriateness of the current
governance arrangements.
Corporate Governance
Structure
The Group’s governance structure is illustrated
below. The Board is responsible for setting and
guiding the strategic direction of the organisation,
understanding the key risks faced by the Group,
determining the risk appetite of the Group
and ensuring that a robust internal control
environment and risk management framework
is in place. The Board has overall responsibility
for the management of the Group’s activities
and is accountable to shareholders for creating
and sustaining shareholder value, through its
management of the business, and the long-term
success of the Group.
To assist in discharging its responsibilities, the Board
has established an Audit and Risk Committee and
a Remuneration and Nomination Committee. The
Board has delegated a number of its responsibilities
to its Committees, while reserving to itself a formal
schedule of matters on which it exercises final
decision. The terms of reference for each of the
Board Committees and the schedule of matters
reserved for the Board are reviewed on an annual
basis and made available on the Group’s website.
The terms of reference for each Committee and
the schedule of matters reserved to the Board were
last reviewed and approved by the Board on 5
December 2018.
The activities of the Board Committees during
2018 are described in detail in the Audit and
Risk Committee Report on page 74 and the
Remuneration and Nomination Committee Report
on page 82.
Responsibility for day-to-day management of the
Group’s operations is delegated by the Board to
the Executive Committee. The terms of reference
Glenveagh Properties PLC Board
Audit & Risk
Remuneration
Committee
& Nomination
Committee
Executive
Committee
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
-
e
c
n
a
n
r
e
v
o
G
63
Glenveagh Properties PLC Annual Report and Accounts 2018
for the Executive Committee are reviewed annually
and, following the first annual review in December
2018, the Board approved a change in composition
of the Committee to reflect the refocus of key
business priorities across the senior management
team one year on from the Group’s IPO.
The Executive Committee is chaired by John
Mulcahy, Executive Chairman of the Board, and
its members are Justin Bickle, CEO, Stephen
Garvey, COO, and Michael Rice, CFO. The
Company Secretary is responsible for the proper
administration of the Executive Committee, as
prescribed by the terms of reference approved by
the Board. The Executive Committee meets formally
at least twice per month, and members meet
informally on day-to-day issues outside of meetings.
Board Composition
There were no changes to the membership of the
Board in 2018, which continues to be comprised of
seven Directors: three Executive Directors, including
the Executive Chairman, three independent
NEDs and one NED. During the year, the Board
reviewed the overall balance of skill, experience,
knowledge and independence of the Board and
its Committees. The Board remains satisfied that
it is of an appropriate size for the requirements
of the business and that the current composition
provides a suitable balance of skills and experience
including in property, construction, legal, accounting
and finance, which equip the Board members in
effectively discharging their duties to the Group and
to the shareholders.
The Board remains satisfied that the balance
of Executive and NEDs is suitable to facilitate
constructive and effective challenge and
debate. The NEDs have direct access to the senior
management team within the Group and contact
with the business is encouraged by the Board
and assists the NEDs in constructively challenging
management and offering advice and guidance
on strategic decisions. In addition, the Executive
Chairman met with the NEDs, individually and
collectively, throughout 2018 which provided the
NEDs with further opportunities to discuss issues
relevant to the running of the Board and the Group.
As part of the Board effectiveness evaluation
process, it was determined that while the collective
skills and experience of the current Board are more
than adequate to meet the needs of the Group
in the short–term, the Board could benefit from
the further experience and fresh perspective that
an additional independent NED could provide.
Furthermore, following the reduction in Oaktree
Capital Management’s shareholding in the Group
which was executed as part of the capital raise
during the year, Caleb Kramer has informed the
Board of his intention to resign his seat during 2019
and he will therefore not be seeking re-election at
the Group's AGM. The Committee has therefore
commenced a process, through the appointment
of external consultants, to identify and select
appropriate candidates with the intention of
appointing at least one new independent NED
during 2019.
As part of the nomination process, the
Remuneration and Nomination Committee
will consider the balance of skills, experience,
independence and knowledge on the Board. The
Committee will also consider the diversity of the
Board, including gender, and how the Board work
together as a collective unit. Any appointments to
the Board will have due regard to the benefits of
diversity on the Board, including gender, but will
be made on merit to ensure that the appropriate
balance of skills and experience required by the
business are continued to be met.
In 2018, the Group’s first full financial year of
operations, the Board’s focus was on the effective
operation of its current governance structures
and, while the Group does not yet have a
formal Diversity Policy in place, the approval and
implementation of a formal policy will form part of
the Remuneration and Nomination Committee’s
workstream in 2019, as the Group looks to appoint
our first new director post-IPO. Details of the
Directors serving on the Board during 2018 are
set out at pages 90 to 93. All Directors (with the
exception of Caleb Kramer) will submit themselves
for re-election at the 2019 Annual General
Meeting (“AGM”).
64
Independence of Directors
The Board has reviewed the independence of
all NEDs and determined that they continue
to be independent within the provisions of the
Code, with the exception of Caleb Kramer who
holds an executive position at Oaktree Capital
Management, a substantial shareholder of the
Group for part of 2018.
The Board is satisfied that the independent NEDs
continue to demonstrate autonomy in character
and judgement.
Director Interests
The Group’s Articles of Association provide that
any Director who is in any way, directly or indirectly,
interested in a contract or proposed contract with
the Group shall comply with the provisions of
Section 231 of the Companies Act 2014 and those
of the same Section with regard to the disclosure of
such interest by declaration.
The Board considers potential conflicts of interest
as a standing agenda item at each meeting and
a Conflicts of Interest Register is maintained by the
Company Secretary, setting out any conflicts of
interest which a Director has disclosed to the Board
in line with their statutory duty.
Subject to certain exceptions, Directors are
prohibited from voting at Board or Committee
meetings on any resolution concerning a matter
in which they, or a member of their immediate
family, have a direct or indirect interest which is
material or a duty which conflicts or may conflict
with the interests of the Group. A Director will
not count in the quorum present at a meeting in
relation to any such resolution on which they are
not entitled to vote.
The Group has established a comprehensive
Conflict of Interest Policy, which was updated and
approved by the Board during 2018. In line with
the Conflict of Interest Policy, each Director reviews
the Conflict of Interest Register and provides
an updated declaration of interests form to the
Company Secretary on an annual basis.
Board Meeting Attendance
The Board holds regularly scheduled meetings
throughout the year. It held 5 such meetings in
2018. Additional ad-hoc meetings of the Board
are convened as required between the regularly
scheduled meetings to consider acquisition
proposals presented by the Executive Committee.
During 2018 the Board held an additional 9
meetings. The table below provides details of
the attendance record for all meetings held by
the Board in 2018.
Board
Scheduled Ad-hoc
Audit and Risk
Committee
Remuneration
and Nomination
Committee
Number of
Meetings held
John Mulcahy
Justin Bickle
Stephen Garvey
Lady Barbara Judge
Robert Dix
Richard Cherry
Caleb Kramer
5
5/5
5/5
5/5
5/5
4/5
5/5
1/5
9
7/9
9/9
8/9
8/9
7/9
7/9
2/9
4
-
-
-
4/4
4/4
4/4
-
4
-
-
-
4/4
3/4
4/4
-
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
-
e
c
n
a
n
r
e
v
o
G
65
Glenveagh Properties PLC Annual Report and Accounts 2018
The performance and effectiveness
of the Board and its Committees
is monitored on an ongoing basis
and is subject to formal review
through the annual evaluation
process. In December 2018 the
Board undertook an internally
led effectiveness review.
Having reviewed the results of the evaluation
process, the Directors were satisfied that the Board
operated effectively in 2018 and that there were no
significant areas of concern.
Following the 2018 Board evaluation process,
the independent NEDs met with Lady Barbara
Judge as Senior Independent Director to review
the performance of the Chairman during the
year. Lady Judge later met with the Chairman to
communicate the feedback from that meeting and
she formally reported to the Board on the outcome
of the Chairman’s performance evaluation.
Division of Responsibilities
The roles of the Chairman and the CEO are clearly
segregated and the division of responsibilities
between them is set out in writing and reviewed
by the Board on an annual basis. The Chairman is
responsible for the leadership of the Board and is
tasked with ensuring its effectiveness, while the CEO
is responsible for leading the business of the Group
and for implementing the business strategy agreed
by the Board.
To ensure that the Board operates efficiently and
effectively, certain key roles have been clearly
defined and communicated to all Board members,
as summarised on the opposite page.
All Directors are expected to attend all meetings of
the Board, and of those Committees on which they
serve, and the Company’s AGM.
Dates for the regularly scheduled Board meetings
are set for the year in advance. The nature of the
ad-hoc meetings convened to consider acquisition
proposals is such that these may be called at
relatively short notice and, for this reason, Directors
on occasion have been unable to attend due to
prior engagements.
Meeting agendas are set by collaboration
between the Chairman and the Company
Secretary, with full Board packs circulated to
Directors for review and consideration in advance
of all meetings. The Company Secretary is
responsible for the co-ordination and organisation
of Board meetings and is available to provide
advice and support to all Directors as required.
Supplementary to its formal meetings, the Board
encourages its NEDs to communicate directly
with both the Executive Directors and the senior
management team. During the year certain
NEDs met regularly with members of senior
management and visited certain sites where
construction was ongoing.
Board Effectiveness
The performance and effectiveness of the Board
and its Committees is monitored on an ongoing
basis and is subject to formal review through the
annual evaluation process. In December 2018 the
Board undertook an internally led effectiveness
review. This is ahead of the three yearly external
evaluation which will take place in 2020.
The 2018 review process was led by the Chairman
with the support of the Company Secretary
and was carried out by means of an online
questionnaire which was carefully structured and
designed to enable the Directors to identify any
areas for potential improvement in the processes of
the Board and its Committees.
All Directors were also asked to complete the
self-evaluation questionnaire which asked each
individual Board member to assess their own
skills and expertise. The Chairman and Company
Secretary then met to discuss the results of the
evaluation process and a report was submitted to
the Board setting out the principal issues raised and
proposing appropriate actions for 2019.
66
Role
Responsibility
Executive Chairman
– John Mulcahy
CEO
– Justin Bickle
Senior Independent Director
– Lady Barbara Judge
Company Secretary
– Chloe McCarthy
The Chairman is responsible for leadership of the Board,
promoting its effectiveness in all aspects of its role and
ensuring its key duties are discharged to an acceptable degree.
The Chairman ensures that the Board members receive
accurate and timely information, enabling them to play a full
and constructive role in the development and determination
of the Group’s strategy. He is responsible for creating an
environment which encourages open dialogue and constructive
challenge. He ensures that there is effective communication
with the shareholders.
The CEO is accountable to, and reports to, the Board and is
charged with the responsibility for running the Group’s business.
He is responsible for the execution of agreed strategy and
implementation of the decisions of the Board with a view to
creating value for shareholders and the wider stakeholder base.
He is ultimately responsible for all day-to-day management
decisions and actions following this. The CEO acts as a direct
liaison between the Board and management and communicates
to the Board on behalf of management. He also communicates
on behalf of the organisation to external stakeholders.
The Senior Independent Director of the Group is available to
shareholders who have concerns that cannot be addressed
through the Chairman or Chief Executive and will attend
meetings with major shareholders as necessary. She acts
as a sounding board for the Chairman and serves as an
intermediary for the other Directors as necessary. The Senior
Independent Director also leads an annual meeting with the
NEDs to appraise the Chairman’s performance.
The Company Secretary supports the Chairman and the
CEO in fulfilling their duties. She is responsible for the
Group’s’ compliance with Board procedures and for the
commitment to best practice in corporate governance. The
Company Secretary is available to all Directors for advice
and support and she ensures that the Board has high quality
information, adequate time and appropriate resources in order
to function effectively. In addition, the Company Secretary
facilitates the induction of new Directors, assists with the
ongoing training and development of the Board and with the
annual evaluation process.
Directors’ Terms of Appointment
The NEDs have three-year appointments from 13 October 2017, with no right to re-nomination by the Board
either annually or after the conclusion of the three-year period. The terms of their engagement with the
Group as Directors are set out in formal letters of appointment.
The Executive Directors have service agreements with the Group, which provide for notice periods
of six months. Full details of the remuneration of the Directors can be found at page 88 of the
Remuneration Report.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
-
e
c
n
a
n
r
e
v
o
G
67
Glenveagh Properties PLC Annual Report and Accounts 2018
All Directors are subject to annual re-election
at the AGM of the Group and if they are not
re-elected by the shareholders or are retired from
office under the Constitution of the Group, their
appointment will terminate with immediate effect
and without compensation.
Directors’ Induction,
Training and Development
The Group is committed to providing newly
appointed NEDs with a formal induction process
which provides them with a comprehensive
understanding of their role and responsibilities
as Directors, the business of the Group and the
operations of the Board and which allows for
the efficient and effective integration of new
Board members.
The induction of NEDs is overseen by the Chairman
with the assistance of the Company Secretary and
includes visits to respective management teams in
each of the Group’s business units and site tours of
live construction projects. Newly appointed Directors
have access to the Company Secretary’s assistance
and guidance around the workings of the Board, in
addition to the experience gained with attendance
at regular meetings.
All Directors receive ongoing updates on the
Group’s projects and activities and are encouraged
to attend site tours facilitated by the Executive
Directors. Directors also receive updates from
the Company Secretary on legal and regulatory
changes. In 2018 this included briefings on the EU
Market Abuse Regulation and the General Data
Protection Regulation.
Internal Control and
Risk Management
The Board has in place an ongoing process for
identifying, evaluating and managing significant
risks that the Group may face. This process has
been in place for the financial year and up to the
date of approval of the financial statements and it
is regularly reviewed by the Board.
Oversight of the Group’s system of internal controls,
risk management and governance frameworks are
a key priority of the Board and has been delegated
to the Audit and Risk Committee. The Audit and
Risk Committee monitors and reviews the Group’s
risk management and internal control processes
including the financial, operational and compliance
controls. There are a number of actions taken by
the Audit and Risk Committee that are designed
to highlight any areas of weakness in the control
framework such as:
- on-going detailed discussions with management
and the Executive Committee;
- its oversight and review of the internal
audit function;
- the external audit reports as part of the half year
review and year end audit process; and
- review of the Group’s risk register.
Further details of the work undertaken by the
Audit and Risk Committee in relation to internal
control and risk management is detailed in the
report of the Audit and Risk Committee set out
on pages 70 to 77. The Board, through the Audit
and Risk Committee, will continue to monitor
and improve its risk management framework
throughout 2019.
The principal risks and uncertainties that face
the Group are outlined as part of the risk
management report on pages 46 to 53 of this
report and includes those risks that could threaten
the Group’s business model, future performance
and operations. The Directors confirm they have
carried out a robust assessment of these risks and
the controls that are in place to mitigate them.
The Group has documented its financial policies,
processes and controls for the Group as a whole,
which will be subject to a regular review to ensure
the systems remain fit for purpose. The key elements
of the system of internal controls related to the
financial reporting process include:
- The Board review and approve a detailed annual
budget and forecast and monitor performance
against the budget and forecast through monthly
Board Reporting;
- Prior to submission to the board with a
recommendation to approve, the Audit
and Risk Committee review the half year
consolidated financial statements, the annual
consolidated financial statements and all formal
announcements relating to these statements;
- Adherence to the Group Code of Conduct
and Group policies;
- Monthly reporting and financial review meetings
are held to review performance ensuring that
significant variances between budget and
68
Marina Village, Greystones, Wicklow
detailed management accounts are investigated
and that remedial action is taken;
- A well-resourced and appropriately skilled
Finance function is in place;
- The Board, through the Audit and Risk
Committee, completes an annual assessment
of risks and mitigating controls;
- The Group has a formal Finance Manual
in place which clearly sets out the Group
accounting policies;
- The Internal Audit function continually reviews
the internal controls and systems and makes
recommendations for improvement which are
reported to the Audit and Risk Committee;
- Monthly, interim and annual financial
performance and position are reviewed by
the CFO; and
- Interim consolidated financial statements are
reviewed by the Group’s external auditor and the
annual financial statements are subject to audit.
Engagement with
Shareholders
The Group is committed to maintaining open
and transparent communications with its
shareholders. During 2018, the Group established a
comprehensive investor relations program through
which the CEO, COO, CFO and the Director of
Investor Relations & Strategy regularly meet with the
Group’s institutional shareholders to present results
and to discuss strategic issues. Throughout 2018
members of the Group’s IR team attended a wide
variety of industry conferences and road shows and
institutional investors were invited by the Group to
join site tours to a number of active developments.
The Board recognises the importance of
communication with shareholders and receives
regular reports from the IR team with updates on
institutional shareholder meetings, broker reporting
and general market commentary. This assists the
Board in understanding and taking account of the
views of shareholders.
In addition, the Chairman and Senior Independent
Director are also available to shareholders
throughout the year should they have issues or
concerns that cannot be resolved through the
usual IR channels.
Annual General
Meeting (“AGM”)
The Company’s AGM provides an opportunity
for all shareholders to hear a presentation on the
Group’s activities and performance during the year,
and to vote on each resolution put to the meeting.
The AGM also provides the Board with a valuable
opportunity to communicate with private investors
and the Group encourages all shareholders to
attend the meeting each year and to put forward
any questions that they may have to the Directors
at the conclusion of the formal business of
the meeting.
The 2019 AGM will be held on 7 June 2019
at the InterContinental, Simmonscourt Rd,
Ballsbridge, Dublin 4.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
-
e
c
n
a
n
r
e
v
o
G
69
Glenveagh Properties PLC Annual Report and Accounts 2018
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
Audit and Risk
Committee Report
As Chairman of Glenveagh Properties
PLC’s Audit and Risk Committee,
I am pleased to present the Committee’s
Report for the financial year ended
31 December 2018.
Following the Committee’s inception in October 2017, 2018 was a busy
first full year of activity. We have proactively managed a wide range
of matters within our remit, and this activity has been outlined in
further detail in the sections that follow.
During the financial year the Committee focused particularly on
the appropriateness of the Group’s financial statements reviewing
accounting policies and areas of estimate and judgment as part
of the approval of Group’s 2017 annual report, the interim financial
statements for the three months ended 31 March 2018 and the half
year financial statements to 30 June 2018. In addition, the Committee
invested significant time reviewing the Group’s risk management
framework and approving a number of new Group wide policies.
The Committee also met with representatives of both the internal
and external audit functions to review various reports and findings
from audits undertaken during the financial year.
The Audit and Risk Committee has satisfied itself, and has advised
the Board accordingly, that the 2018 annual report and financial
statements are fair, balanced and understandable, and provide
the information necessary for shareholders to assess the Group’s
performance, business model and strategy.
As this report will demonstrate, I am confident in saying that the
Audit and Risk Committee has met its obligations and continues
to monitor changes in the ever-changing financial and regulatory
environment within which the organisation operates.
Robert Dix
Chairman
Audit and Risk Committee
70
70
As part of the approval
of Group’s 2017 annual
report ; the interim financial
statements for the three
months ended 31 March
2018 and the half year
financial statements to 30
June 2018, the Committee
focused particularly on
the appropriateness of the
Group’s financial statements
reviewing accounting
policies and areas of
estimate and judgment
n
a
m
r
i
a
h
C
i
x
D
t
r
e
b
o
R
e
e
t
t
i
m
m
o
C
k
s
R
i
d
n
a
t
i
d
u
A
Roles and Responsibilities
The Audit and Risk Committee’s Terms of Reference
are available on the Group’s website. The Terms
of Reference are reviewed annually and amended
in line with any future organisational changes to
ensure they continue to be fit for purpose.
At a high level, the duties carried out by
the Audit and Risk Committee relate to:
- Financial reporting;
- Risk management;
- Internal controls;
- Compliance; and
- Oversight of the Group’s relationship
with the external auditor.
These responsibilities are intended to
be performed in conjunction with the
management team, Executive Committee
and internal and external auditors.
Following the Committee’s
inception in October 2017,
2018 was a busy first full
year of activity.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
e
e
t
t
i
m
m
o
C
k
s
R
i
d
n
a
t
i
d
u
A
-
e
c
n
a
n
r
e
v
o
G
71
Activities
During the financial year, the business has
grown significantly with a consequential impact
on the nature and extent of the Group’s risk
profile and as a result the risks have evolved.
Further detail in relation to the Group’s approach
to risk management is set out on pages 46 to
53. The Group continues to monitor and invest
appropriate levels of resource in risk management
and compliance activity. Set out on page 74 is a
summary of the Committee’s activity during the
financial year.
One of the Committee's
responsibilities is to review the
adequacy and effectiveness of the
Group’s internal controls including
the systems established to identify,
assess, manage and monitor
risks and receive reports from
management on the effectiveness
of these, including the conclusions
of any testing carried out by
internal or external auditors and
other assurance providers.
Audit and Risk
Committee Composition
The Audit and Risk Committee comprises three
independent NEDs; Robert Dix (Chairman), Richard
Cherry and Lady Barbara Judge. The biographies of
these Directors can be found on page 90.
The Board believes that Committee members
offer a balanced suite of expertise, including
financial expertise and experience in the legal
and property sectors. Particularly, the Board
considers that the Committee Chairman has
sufficient recent and relevant financial experience
for the role and that there is sufficient financial
and commercial experience within the Audit and
Risk Committee as a whole. This vast array of skills
enables the Audit and Risk Committee to carry
out its duties and responsibilities as detailed in
the Committee’s Terms of Reference.
Meetings
The Audit and Risk Committee have met on four
occasions during the financial year. The attendance
of Committee members is detailed in the table
below. On occasion, special attendees were invited
to attend all, or part of Committee meetings
as deemed appropriate and necessary by the
Committee Chairman.
Committee
Member
In
Attendance
Committee
member
as of
Robert Dix
4/4
Richard Cherry
4/4
Lady Barbara
Judge
4/4
2017
2017
2017
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
e
e
t
t
i
m
m
o
C
k
s
R
i
d
n
a
t
i
d
u
A
-
e
c
n
a
n
r
e
v
o
G
73
The key function of the Committee is oversight of
the Group’s internal control and risk management
systems. This involves the following responsibilities:
- Review the adequacy and effectiveness of
the Group’s internal controls including the
systems established to identify, assess, manage
and monitor risks and receive reports from
management on the effectiveness of these,
including the conclusions of any testing carried
out by internal or external auditors and other
assurance providers;
- Review the principal risks identified in the annual
report and the statements on the Group’s internal
controls and risk management framework;
- Review and approve the risk management
policy and the Group’s risk register and appetite
statement, prior to submission to the Board
for its approval;
- Advise the Board on the Group’s current risk
exposures and future strategy for managing
such risks;
- Review relevant risk reporting, including
incident breach reporting in order to
assess the effectiveness of the Group’s risk
management process.
Other responsibilities of the Audit and Risk
Committee are set out in detail in its Terms of
Reference which are available on the Group’s
website and are noted below;
(i)
Integrity of the Financial Statements
and Announcements
(ii) Compliance, Whistleblowing and Fraud
(iii) Internal Audit
(iv) External Audit
(v) Committee Effectiveness
72
Glenveagh Properties PLC Annual Report and Accounts 2018
Activity in 2018
Topic
Financial Reporting
Risk Management
Description of activity
The Committee assessed whether suitable accounting policies had
been adopted in the preparation of the results for the financial year
and whether management had made appropriate estimates and
judgements. In particular, the Committee focused on areas that
involved a significant level of judgement or complexity (as outlined
in the financial reporting section below). The Committee also
considered the view expressed by the external auditor, KPMG, in
making these assessments.
During the financial year, the Committee reviewed and approved the
Group’s 2017 Annual Report and the financial statements for the three
month period ended 31 March 2018 and for the half year ended 30
June 2018.
The Committee considered the requirements of the Irish Companies
Act 2014 in relation to the Directors’ Compliance Statement and
is satisfied that appropriate steps have been taken to ensure
compliance by the Group with these requirements. The Committee
also considered the Group’s adoption of the going concern basis of
preparation and its viability statement prior to recommending both
for approval by the Board.
In respect of the 2018 annual report, the Committee considered the
Group’s risk management framework and the key business risks as
disclosed in the Risk Management Report as part of its review of the
Group’s risk register.
The Committee also reviewed and approved new Group wide
policies in relation to procurement, delegation of authority and
whistleblowing procedures.
Internal Audit
The Committee met representatives from the outsourced internal
audit function throughout the financial year and reviewed reports,
findings and recommendations arising from the audits conducted.
The Committee also approved the planned programme of work
for 2019.
External Audit
The Committee met representatives from the external auditor
throughout the financial year both with and without management
being present.
During 2018, the Committee reviewed KPMG’s reports on the 2017
audit as well on the interim reviews for the periods ended 31 March
2018 (required as part of the Group's capital raise) and 30 June 2018.
It also reviewed and approved KPMG’s audit plan in respect of the
audit for the year ended 31 December 2018.
Fair, Balanced and
Understandable
The Board is responsible for the approval of
the annual report and financial statements.
The Board is required to confirm that:
- It considers the annual report and financial
statements, taken as a whole, to be fair balanced
and understandable; and
- It provides the information necessary for
shareholders to assess the Group’s position and
performance, business model and strategy.
At the request of the Board, the Committee
considered whether the annual report and
financial statements for the financial year met
these requirements. The Committee considered
the content of the document and discussed
with management the approach taken to its
preparation, in particular the planning, co-
ordination and review activities. The Committee
also noted the process undertaken by KPMG.
The Audit and Risk Committee subsequently
confirmed to the Board that the annual
report, taken as a whole, is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the Group's
position and performance, business model
and strategy.
Financial Reporting
The primary issue considered by the Audit and Risk
Committee in relation to the financial statements
for the financial year ended 31 December 2018 was
the Group’s assessment of the carrying value of
inventory at the balance sheet date.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
e
e
t
t
i
m
m
o
C
k
s
R
i
d
n
a
t
i
d
u
A
-
e
c
n
a
n
r
e
v
o
G
Significant Issue Considered
Committee Activity
Carrying value of inventory
The carrying value of the Group’s inventory
was €718.9 million at 31 December 2018 which
comprises the cost of development land and
development rights acquired, and the costs of
the work completed thereon to date. Inventory
is required to be carried at the lower of cost
and net realisable value.
Management presented a summary of its review
to the Committee which included information in
relation to the cross functional approach taken to
the net realisable value calculations, as well as the
review process undertaken by senior management.
Management’s presentation included a summary of
the results of the review for each development site
with key assumptions highlighted for discussion.
At financial year end management undertook
an exercise to assess the net realisable value
of the inventory balance in order to assess
the carrying value at that date. There is a
significant level of judgement involved in this
exercise which includes a review of future cash
flows associated with each individual site in
order to validate current profitability projections
which are also the key determinants of profit
recognition as sales complete. The exercise
indicated no evidence of impairment and
therefore no adjustment to the carrying value
was required at 31 December 2018.
The Committee considered the financial year
end approach to the inventory carrying value
review and discussed same with management.
It also considered the external auditor’s findings
in respect of the carrying value review which
supported management’s assertion that no
indicators of impairment were identified.
Based on the results of the process undertaken by
management, the Committee was satisfied with
the carrying value of inventory at year end.
74
75
Glenveagh Properties PLC Annual Report and Accounts 2018
Internal Audit
While the Group has outsourced its internal audit
function to Deloitte, the Committee continues to
maintain oversight of and responsibility for the
function’s effectiveness on an annual basis. The
Committee met representatives from the outsourced
internal audit function on four occasions during
the financial year and considered the reports
and updates from the internal audit function
which summarised the work undertaken, findings,
recommendations and management responses
to audits conducted during the financial year.
The Committee has also approved the planned
programme of work for 2019.
External Auditor
KPMG is the external auditor of the Group. The
Audit and Risk Committee considers and makes
recommendations to the Board, to be put to
shareholders for approval at the AGM, in relation
to the appointment, re-appointment or removal of
the external auditor. KPMG attended each of the
Committee meetings in 2018.
Audit effectiveness
The effectiveness of the external audit process is
assessed by the Audit and Risk Committee, which
meets regularly throughout the financial year with
the audit partners. In conducting this review, the
Audit and Risk Committee concluded that the audit
process as a whole had been conducted robustly
and that the team selected to undertake the audit
had done so thoroughly and professionally.
In assessing the independence and objectivity of
the external auditor, the Audit and Risk Committee
considered the internal processes which the External
Auditor has in place to ensure their independence
and objectivity is monitored and reviewed
sufficiently. Further, the Audit and Risk Committee
considered senior management’s satisfaction with
KPMG. The Committee also meets regularly with
KPMG without the presence of management.
Auditor independence and non-audit services
KPMG have formally confirmed their independence
to the Audit and Risk Committee. In order to
further ensure independence, the Committee has
a policy on the provision of non-audit services by
the external auditor that seeks to ensure that the
services provided by the external auditor are not,
or are not perceived to be, in conflict with auditor
independence. Analysis of fees paid or payable
in respect of services provided by KPMG in the
financial year are analysed in the table below:
Audit fees
Non-audit fees
Interim review fees
Tax services fees
Reporting Accountant fees
Total non-audit fees
€ ‘000
120
15
77
300
392
At the end of the financial year, non-audit fees paid
to KPMG, excluding the non-recurring Reporting
Accountant fee in relation to the Group’s Capital
Raise, represented 77% of total audit fees.
It is the Group’s practice to engage KPMG
on assignments in addition to their statutory audit
duties where their expertise and experience with
the Group are important. During the financial
year, KPMG were retained to provide reporting
accountant services in relation to the issuing of
the Group’s shares on the main markets of the
London and Irish Stock Exchanges. The Audit
and Risk Committee considered this appropriate
given the nature of the transaction and KPMG’s
extensive knowledge of the business and the
Group’s internal processes arising not only from its
role as auditor but also its recent previous similar
work in connection with the Group’s IPO. On that
basis, the Group incurred professional fees with the
external auditor that exceeded the audit fee. KPMG
also provided certain tax services in the financial
year which were also considered and deemed
appropriate by the Committee.
76
The Committee has approved a policy on the use
of the external auditor for non-audit services and
continually monitors the ratio of audit to non-audit
fees, acknowledging the legislation which will apply
to the Group from 2020 onwards requiring fees
for non-audit services to be capped at 70% of the
average statutory audit fee over the previous 3
year period. Further, in reviewing non-audit services
provided by the external auditor, the Committee
considers whether the non-audit service is a
permissible service under the relevant legislation
and any real or perceived threat to the external
auditor’s independence and objectivity to include,
among other considerations, a review of: the nature
of the non-audit services; whether the experience
and knowledge of the external auditor makes it the
most suitable supplier of the non-audit services;
and the economic importance of the Group to the
external auditor. The policy on the supply of non-
audit services includes a case by case assessment
of the services to be provided and the costs of the
services by the external auditor considering any
relevant ethical guidance on the matter.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
e
e
t
t
i
m
m
o
C
k
s
i
R
d
n
a
t
i
d
u
A
-
e
c
n
a
n
r
e
v
o
G
77
Glenveagh Properties PLC Annual Report and Accounts 2018
Report of the Remuneration
and Nomination Committee
Dear Shareholder,
I am pleased to present the Remuneration
and Nomination Committee (“the
Committee”) report for the financial year
ended 31 December 2018 which provides
a summary of the activities carried out by
the Committee during the financial year.
2018 Performance
Overall, 2018 was a very productive year for Glenveagh with significant
progress made on the objectives set at IPO. The Group has successfully
assembled an attractive multi-year landbank capable of meeting the
strategic goals of the Group in the short term, while it continues to
actively assess an attractive pipeline of further opportunities for capital
deployment with specific focus on sites of an appropriate scale to
deliver optimal returns within a suitable timeframe. To date the Group
has invested in locations where demand for affordable new homes is
high which has resulted in a strong trading performance from both a
sales and gross margin perspective. We have achieved a solid start in
terms of opening, constructing and actively selling from our sites and
look forward to further progress in 2019.
y
r
r
e
h
C
d
r
a
h
c
i
R
e
e
t
t
i
m
m
o
C
n
o
i
t
a
n
m
o
N
i
d
n
a
n
o
i
t
a
r
e
n
u
m
e
R
,
n
a
m
r
i
a
h
C
approved savings related share option scheme
(SAYE Scheme) at an Extraordinary General
Meeting in June, as unanimously recommended
by the Directors, the Committee approved the
establishment of the ‘Glenveagh Properties PLC
Saving Related Share Option Scheme'. The SAYE
Scheme was subsequently rolled out across the
employee pool (excluding Executive Directors),
allowing participating employees to use a portion
of their salaries to purchase shares in the Company
at a fixed price on completion of a three or five
year period. The SAYE Scheme was unanimously
recommended to shareholders by the Directors
to assist in reinforcing the Group’s strategy to
encourage employee engagement and retention
by giving all employees the opportunity to share in
the future success of the business, further aligning
the interests of the employee base with those of
the shareholders. In carrying out its duties during
the year, the Committee met and consulted
with specialist external advisors, members of the
Executive Committee and members of the wider
management team on a number of occasions.
Succession planning for the Board and its
committees was also on the Committee’s agenda
in 2018, particularly given the partial sell-down
by Oaktree Capital Management (OCM) during
the year. As previously disclosed, Caleb Kramer
was appointed to the Board at IPO as an OCM-
representative non-independent, non-executive
Director of the Company. Following the reduction
in OCM’s shareholding in the Company, Caleb
Kramer informed the Board of his intention to
step down as a Director in 2019 and therefore
not to seek re-election at the Company’s AGM.
Committee Activity
During the financial year the Committee invested significant time to
ensure that both the financial and non-financial Key Performance
Indicators (KPIs) in place for both the Executive Directors and employee
bonus incentives were appropriate in the context of the maturity of the
business. Following approval by the shareholders of an Irish Revenue
We have achieved a solid
start in terms of opening,
constructing and actively
selling from our sites and
look forward to further
progress in 2019.
Marina Village, Greystones, Wicklow
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
78
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
e
e
t
t
i
m
m
o
C
n
o
i
t
a
n
m
o
N
d
n
a
i
n
o
i
t
a
r
e
n
u
m
e
R
e
h
t
f
o
t
r
o
p
e
R
-
e
c
n
a
n
r
e
v
o
G
79
In addition, the size and composition of the
Board was a key theme emerging from the
first Annual Board Evaluation. One of the
recommendations arising from the results of
this process was that, while adequate to meet
the needs of the Group in the short-term, the
collective skills and experience of the Board
would benefit from the further experience and
fresh perspective that an additional independent
NED could provide.
The Committee has therefore commenced the
process, assisted by an external recruitment and
advisory company, of reviewing the size, structure
and composition of the Board to ensure it has
the right mix of skills and experience to guide
the Group in its longer-term strategic objectives.
During 2019, the Committee will work to identify
and recommend to the Board at least one new
suitable candidate to act as an independent non-
executive Director of the Company.
Incentive Outcomes
for 2018
The Group’s performance in 2018, together
with individual performance during the year, is
reflected in annual bonus pay-outs for Executive
Directors of between 45% and 50% of the
maximum opportunity. The annual bonus pay-out
is considered and approved by the Committee
based on challenging internal targets across a
range of financial and non-financial metrics to
ensure the interests of Executive Directors are
aligned with those of shareholders. The 2018
pay-outs reflect the strong operational
performance of the Group during the year, while
also recognising the impact of macroeconomic
and wider market influences on the Company’s
share price during 2018.
The Committee has reviewed the ongoing
appropriateness and relevance of the Group’s
comprehensive Remuneration Policy, which is
laid out in this report, taking into account all
factors which it deems necessary including the
risk appetite of the Group and alignment to the
Group’s long-term strategic goals. In fulfilling its
primary objectives, the Committee has developed
appropriate annual and long-term incentive
arrangements as part of its Remuneration
Policy. No changes are proposed to be made
to Executive Director remuneration packages
for 2019.
In December 2018 the Committee completed
the annual review of its Terms of Reference. The
Committee confirmed the appropriateness of the
Terms of Reference and recommended to the
Board that no significant changes were required
to be made on foot of the annual review. The
Committee Terms of Reference are provided in full
on the Group website.
It is our intention to continue to operate in line
with the approved Remuneration Policy. We
welcome and will consider any shareholder
feedback on the Remuneration Policy and
Annual Report on Remuneration for 2018.
Richard Cherry
Chairman,
Remuneration and Nomination Committee
80
Roles and Responsibilities
The principal responsibilities and duties of the
Committee include:
- Assessing the effectiveness and performance
of the Board and each of its Committees
including consideration of the balance
of skills, experience, independence and
knowledge of the Group on the Board, its
diversity, including gender, how the Board
works together as a unit, and other factors
relevant to its effectiveness;
- Where necessary, making recommendations
to the Board based on the above
considerations;
- Considering succession planning for
Directors and members of senior
management, including the identification
and assessment of potential Board
candidates, and making recommendations
to the Board for its approval;
- Preparing job specifications for the
appointment of a Chairman; Senior
Independent NED; and other NEDs;
- Have responsibility for setting the
Remuneration Policy for all Executive Directors
including pension rights and any other
compensation payments;
- Recommend and monitor the level and
structure of remuneration for senior
management;
- Review the ongoing appropriateness and
relevance of the Remuneration Policy, taking
into account all factors which it deems
necessary, including the risk appetite of the
Group and alignment to the Group’s long-
term strategic goals;
- Review the total individual remuneration
package of each Executive Director, and
other designated senior executives including
any bonuses, incentive payments and share
options or other share awards; and
- Oversee any major changes in employee
benefits structures throughout the Group.
These responsibilities are performed in conjunction
with the Executive Committee.
Committee Composition
The Committee comprises three Independent
NEDs; Richard Cherry (Chairman), Robert Dix and
Lady Barbara Judge. The biographies of these
Directors can be found on page 90.
The Board believes that the Committee members
offer a balanced suite of expertise, meeting
the specific requirements of this Committee.
The breadth of skills and experience enables
the Committee to carry out its duties and
responsibilities as detailed in the Committee
Terms of Reference.
Meetings
The Committee met on four occasions during
the financial year ended 31 December 2018. On
occasion, additional attendees including the
Board Chairman, the CEO, the CFO, the CPO
and specialist external advisers were invited
to attend all or part of Committee meetings
as deemed appropriate and necessary by the
Committee Chairman.
Committee
Member
In
Attendance
Committee
member as of
Richard Cherry 4/4
Robert Dix
Lady Barbara
Judge
3/4
4/4
2017
2017
2017
Board Nomination
Activities
The Remuneration and Nomination Committee
continues to consider the future direction of the
business to ensure that the skills, knowledge and
experience of the Board remains appropriate
to support the Group’s strategic objectives
for 2019 and beyond. As part of the Board
evaluation process completed in 2018, the Board
reviewed the overall balance of skill, experience,
knowledge and independence of the Board
and its Committees. There were no changes to
the membership of the Board or its Committees
during 2018 as the Board are of the view that
the current composition provides a suitable
balance of skills and experience for the short
term. As the business continues to scale in line
with the Group’s longer-term strategic objectives,
the Directors consider that the Board would
benefit from the skills and experience of an
additional Independent NED to further equip
the Board in effectively discharging its collective
duties and responsibilities to the Group and to
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
e
e
t
t
i
m
m
o
C
n
o
i
t
a
n
m
o
N
d
n
a
i
n
o
i
t
a
r
e
n
u
m
e
R
e
h
t
f
o
t
r
o
p
e
R
-
e
c
n
a
n
r
e
v
o
G
81
Glenveagh Properties PLC Annual Report and Accounts 2018
the shareholders, and to ensure that the Board is of an appropriate size for the future requirements of
the business. Caleb Kramer has also informed the Board of his intention not to seek re-electoin at the
Group's AGM. The process of identifying suitable candidates is currently underway and a nomination and
appointment of at least one new independent NED is expected during the course of 2019.
As part of the nomination process, the Committee will consider the balance of skills, experience,
independence and knowledge on the Board. The Committee will also consider the diversity of the Board,
including gender, and how the Board work together as a collective unit. Any appointments to the Board
will have due regard to the benefits of diversity on the Board, including gender, but will be made on
merit to ensure that the appropriate balance of skills and experience required by the business continue
to be met.
As part of this first nomination and appointment process post-IPO, the Committee will oversee the
introduction of a formal Diversity Policy for the Group in 2019.
Other Activities
Set out below is a summary of the Committee’s activity during the financial year.
Activity in 2018
Topic
KPIs for annual bonus incentives
SAYE Scheme
Long-Term Incentive Plan (LTIP)
Executive Committee
Committee Evaluation
Description of activity
The Committee undertook a detailed review, through
discussions and presentations from management and
external advisors, of the KPIs for Executive Director and
Employee annual bonus incentives. The Committee
considered both the financial and non-financial KPIs
as well as the remuneration strategy of the Group.
Following on from this review, the Committee formally
approved the KPIs for both the Executive Director and
employee incentives for FY18. The Executive Director
targets for 2019 have also been considered and
approved by the Committee.
The Committee undertook a detailed review, through
discussion and presentations from management, of the
new SAYE scheme being offered to the employee pool.
Following on from this review, and the approval of the
shareholders at an Extraordinary General Meeting,
the Committee formally established the new employee
incentive scheme.
The Committee approved the granting of share options
to certain members of the senior management team and
noted its intention to obtain advice from independent
specialists in respect of further grants in FY19.
The Committee met representatives from the Executive
Committee throughout the financial year to receive
updates on the business and specific areas of interest to
the Committee.
During the year the Committee reviewed its Terms of
Reference to ensure they were fit for purpose. The Terms
of Reference are available on the Group’s website.
Diversity
Reporting
Glenveagh recognises the benefits of a
diverse workforce to deliver on our business
objectives. Diversity on the Board and in
senior management positions brings broader
perspectives, experience and understanding
which enables more robust discussion and
effective decision making.
In acknowledgement of this view, and in
preparation for the first nomination and
appointment process since IPO, the Committee
has determined that it is appropriate to formally
implement a Group Diversity Policy. Significant
focus will be given to drafting and implementing
an effective Diversity Policy in 2019 that re-affirms
the Board’s commitment to diversity across
the Group. The policy will include measurable
objectives for gender diversity and other diversity
metrics to track progress and report on in future
reporting periods.
The Chairman of the Committee reports to the
Board on the activities of the Committee. The
Chairman of the Committee will attend the
AGM to answer questions on the report on the
Committee’s activities and matters within the scope
of the Committee’s responsibilities.
External Advisers
During the financial year, the Committee obtained
independent advice from external remuneration
consultants, Mercer in relation to market trends,
comparator benchmarking, developments
in remuneration policies and practice and
governance best practice. Mercer also advised
the Committee on the drafting of the proposed
new SAYE scheme. Mercer are members of the
Remuneration Consultants Group and signatories
to its Code of Conduct, and all advice is provided
in accordance with this code.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
e
e
t
t
i
m
m
o
C
n
o
i
t
a
n
m
o
N
d
n
a
i
n
o
i
t
a
r
e
n
u
m
e
R
e
h
t
f
o
t
r
o
p
e
R
-
e
c
n
a
n
r
e
v
o
G
Remuneration Policy
The following table outlines the key details of the Executive Directors’ Remuneration Policy. In
designing this Remuneration Policy, the objective of the Committee is to continue to attract, retain and
motivate executive management of the quality required to run the Group successfully, having regard
to views of shareholders and other stakeholders. The Committee is satisfied that the remuneration
framework is in alignment with the Group’s risk appetite and its long-term strategic goals.
Element
Base Salary
To attract and retain high
calibre individuals
Operation
Maximum Opportunity
Base salaries are reviewed by
the Committee annually in the
last quarter of the year with any
adjustments to take effect from 1
January of the following year.
Factors taken into account in the
review include the individual’s role
and level of responsibility, personal
performance and developments in
pay in the market generally and
across the Group.
Base salary for Executive Directors
is inclusive of fees receivable by
the Executive as a Director of
the Group.
There are no prescribed
maximum salaries or
maximum increases.
Increases will normally reflect
increases across the Group
and in the market generally.
However, increases may be
higher or lower to reflect
certain circumstances such as
changes in responsibility or in
the case of newly appointed
individuals to progressively
align salary with market
norms. In line with good
practice, market movements
will not be considered in
isolation but in conjunction
with other factors.
82
83
Glenveagh Properties PLC Annual Report and Accounts 2018
Element
Benefits
To be competitive with
the market
Annual Bonus
To reward the achievement of
annual performance targets
84
Operation
Maximum Opportunity
Element
Operation
Maximum Opportunity
In addition to their base salaries,
Executive Directors’ benefits
include life and health insurance
and a car allowance in line with
typical market practice.
No maximum levels are
prescribed as benefits will be
related to each individual’s
circumstances.
Founder Share Scheme (“FSS”)
To incentivise the three founders
of Glenveagh to grow the
business through the initial
five-year period.
The maximum award for
Executive Directors as a
percentage of base salary is
as follows:
Executive Chairman
75%
CEO
COO
100%
100%
Individuals will receive annual
cash bonus awards based on
the achievement of financial and
non-financial targets agreed prior
to the start of each financial year.
Threshold levels will be set for
minimum and maximum awards
with pro-rata payments between
the two points based on relative
achievement levels against
agreed targets.
Annual bonus awards will be
based 60% on financial KPIs and
40% on non-financial KPIs.
The financial KPIs will ensure
that employees are aligned with
shareholders’ interests and the
parameters that the Group will be
assessed on by the market in the
long-term. The financial KPI targets
will be set annually based on the
budget and strategic plan process
carried out in Q3/Q4 every year.
The financial metrics for 2019
will be based on targets relating
to consolidated revenue;
consolidated EBITDA (excluding
bonus charge) and consolidated
EBITDA margin (excluding
bonus charge).
Non-financial targets for 2019
are based on metrics related to
safety and customer satisfaction.
The Committee retains discretion
to adjust any award to reflect
the underlying financial position
of the Group and to agree
awards outside of the above
framework in respect of recent
joiners and leavers.
Following the conversion of
18,993,162 Founder Shares to
Ordinary Shares during the
year, the total number of
Founder Shares in issue at 31
December 2018 is 181,006,838
(2017: 200,000,000 shares).
The table at page 89 sets out
the ownership split between
the Executive Directors.
In lieu of a long-term incentive
plan, Executive Directors (the
Group’s founding shareholders)
are entitled to participate in the
FSS. If predetermined targets
are met, the Scheme will reward
the Founders through an
allotment of Ordinary Shares or
a cash equivalent.
The scheme will run over five years
from 2018 to 2022. Performance
will be assessed separately
over five separate Test Periods,
with shares vesting based on
performance in that Test Period.
The Test Period is from 1 March to
30 June each year.
Vesting of awards is subject to a
performance condition. In order
for awards to vest, for a period of
15 or more consecutive business
days during the Test Period, the
Closing Share Price must exceed
the Adjusted Issue Price1 by 12.5%.
This percentage increase is to be
on a compound basis.
If the performance condition is
satisfied, the Founders are entitled
to convert Founder Shares into
such number of Ordinary Shares
which, at the Highest Average
Closing Price of an Ordinary Share
during the Test Period, have an
aggregate value equal to the
Founder Share Value.
The ‘‘Founder Share Value’’ shall
be calculated as 20% of the
Total Shareholder Return (“TSR”)
in the relevant period, being (i)
the first-time the Performance
Condition is satisfied, the period
from Admission to the Test
Period in which the Performance
Condition is first satisfied; and
(ii) for subsequent Test Periods,
the period from the end of the
previous Test Period in respect of
which Founder Shares were last
converted or redeemed to the Test
Period in which the Performance
Condition is next satisfied.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
e
e
t
t
i
m
m
o
C
n
o
i
t
a
n
m
o
N
d
n
a
i
n
o
i
t
a
r
e
n
u
m
e
R
e
h
t
f
o
t
r
o
p
e
R
-
e
c
n
a
n
r
e
v
o
G
85
Glenveagh Properties PLC Annual Report and Accounts 2018
Operation
Maximum Opportunity
Accordingly, the NED letters of appointment detail the following annual fees:
Element
Retirement Benefits
To attract and retain high
calibre individuals and reward
sustained contribution.
The Group operates a defined
contribution pension scheme
for Executive Directors. Pension
contributions are calculated on
base salary only.
15% of base salary.
(1) The Adjusted Issue Price is defined as the IPO Offer Price (€1) as adjusted to reflect any subsequent
consolidation or subdivision of Ordinary Shares or any allotment of Ordinary Shares pursuant to a
capitalisation of profits or reserves.
Policy for Leavers
Salary and Benefits
Payments are made only in respect of annual
salary excluding benefits for the relevant notice
period. The notice period for the Executive
Directors is 6 months. In all cases, the notice period
applies to both the Group and the Executive.
Annual Bonus
In order for annual bonus payments to be made,
Executive Directors must be employed by the
Group on the bonus payment date.
Founder Share Scheme (“FSS”)
If one of the Founders ceases to be a Director
or employee of the Group, he will retain his
Founder Shares.
Remuneration Policy for
Non-Executive Directors
NEDs have letters of appointment which set out
their duties and responsibilities. The appointments
are initially for a three-year term but are
terminable on one month’s notice.
The NEDs each receive a fee which is set by
the Committee and approved by the Board
on advice from the independent professional
advisors. The NEDs are paid a basic fee of
€60,000 per annum with additional fees payable
to the Senior Independent NED of €30,000
per annum. NEDs will receive an additional
€15,000 for taking on Chairmanship of the Audit
and Risk Committee and Remuneration and
Nomination Committee.
86
NED
Role
Lady Barbara Judge
Senior Independent NED
Robert Dix
Chairman, Audit & Risk Committee
Richard Cherry
Chairman, Remuneration & Nomination Committee
Caleb Kramer
NED
€
90,000
75,000
75,000
60,000
There has been no change in the fees payable
to NEDs since appointment and no change
is proposed for 2019. NEDs are not eligible to
participate in any Group pension plan. The
NEDs do not have service contracts and do not
participate in any bonus or share option schemes.
Long-Term Incentive Plan (‘LTIP’)
In addition to the FSS, the Group also operates a
long-term incentive plan for members of the senior
management team (excluding Executive Directors).
During the Group’s initial development phase, the
LTIP grants participants options over a number of
Ordinary Shares in the Group.
Participants are allocated options based on a
percentage of their gross salary. The number of
options is calculated based on that percentage
of gross salary divided by the share price on the
date of grant. LTIP Awards are granted subject to
performance conditions.
Options will vest based on the achievement of TSR
targets as follows over a three-year vesting period:
- 25% of the options will vest based on 6.25%
compound TSR growth per annum;
- The remaining options vest on a straight-line
basis to a maximum of 100% when 12.5%
compound TSR growth per annum is reached;
and
- TSR growth performance will be assessed on a
cumulative basis over the full period.
The Committee plans to grant further awards in
2019. All LTIP awards granted going forward will be
subject to a 3-year vesting period from grant date.
Any vesting of awards is subject to Committee
discretion that it is satisfied the Group’s underlying
performance has shown a sustained improvement
in the period since the date of grant.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
e
e
t
t
i
m
m
o
C
n
o
i
t
a
n
m
o
N
d
n
a
i
n
o
i
t
a
r
e
n
u
m
e
R
e
h
t
f
o
t
r
o
p
e
R
-
e
c
n
a
n
r
e
v
o
G
87
Glenveagh Properties PLC Annual Report and Accounts 2018
Annual Remuneration Report for 2018
Annual Bonus
The following table illustrates remuneration awarded to Directors for the financial year ended 31 December 2018:
Name
Fees/Salary (€) (1)
Annual Bonuses
(€) (2)
Benefits (€) (3)
Employer Pension
Contribution (€) (4)
Total (€)
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Robert
Dix
Richard
Cherry
Lady
Barbara
Judge
Caleb
Kramer
John
Mulcahy
Justin
Bickle
Stephen
Garvey
75,000
16,438
75,000
16,438
90,000
19,726
60,000
13,151
-
-
-
-
300,000
68,182
100,500
450,000
102,273
225,000
350,000
85,127
175,000
Total
1,400,000
321,335
500,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,500
4,205
-
-
-
-
-
-
-
-
-
-
75,000
16,438
75,000
16,438
90,000
19,726
60,000
13,151
419,000
72,387
22,000
5,000
22,500
5,114
719,500
112,387
21,901
4,205
17,500
3,977
564,401
93,309
62,401
13,410
40,000
9,091
2,002,901
343,836
1. Amounts reflect Directors' fees in respect of NEDs and salaries in respect of Executive Directors.
2. Annual Bonuses relate to bonuses paid to Executive Directors in accordance with their employment
contracts.
3. Benefits largely relate to car allowances and healthcare provided to Executive Directors in accordance
with their employment contracts.
4. Only Executive Directors are eligible to receive pension contributions. NEDs do not receive pension
contributions.
5. The 2017 amounts are in respect of the period from incorporation on 9 August 2017 to 31 December 2017.
6. In addition to the above, the Executive Directors received 18,993,162 of Ordinary Shares in respect of
shares converted in accordance with the terms and conditions of the Founder Shares Scheme. John
Mulcahy received 1,899,316 shares, Justin Bickle received 8,546,923 shares and Stephen Garvey received
8,546,923 shares. Further detail is included in Note 26 of the consolidated financial statements.
Base Salary
The salaries of the Executive Directors for the financial year ended 31 December 2018 are set out above.
The base salaries of Executive Directors (as set out in the table within the annual bonus section of this
report below) will remain unchanged for the 2019 financial year.
Executive Directors’ first annual bonus payments will be made in relation to performance over a 16-month
period to 31 December 2018. A threshold level of achievement in respect of agreed financial and non-
financial KPIs must be achieved before any level of bonus is payable. Targets are set at a challenging
level and where target performance levels have been met, executives will be eligible to receive between
50-70% of annual bonus. In the event stretch performance is achieved, executives will be awarded
maximum bonus entitlement. Entitlements for Executive Directors are set out below.
Name
Role
Salary
Annual Bonus %
Actual 2018 Bonus
Justin Bickle
CEO
Stephen Garvey COO
John Mulcahy
Executive
Chairman
€’000
Threshold
Target
Max
€’000
450
350
300
40
40
25
70
70
50
100
100
75
225
175
101
%
50
50
45
The annual bonus payments for Executive Directors in 2018 were based 60% on financial KPIs (Revenue
Consolidated Gross Margin % & EBITDA) and 40% on non-financial KPIs (metrics based on Safety and
Customer Satisfaction).
Long-term Incentives – Founder Share Scheme (“FSS”)
In lieu of a long-term incentive scheme, Executive Directors (the Group’s founding shareholders) are
entitled to participate in the FSS. The FSS as set in detail on page 85 was in operation for 2018 with the
first Test Period running from 1 March 2018 to 30 June 2018.
Following the completion of the first Test Period, it was confirmed that the Founder Share Value was
satisfied by way of conversion of Founder Shares into 18,993,162 Ordinary Shares of €0.001 each (“New
Ordinary Shares”). All New Ordinary Shares issued in respect of the conversion of Founder Shares are
subject to a 1-year lock-up period, with 50% of the New Ordinary Shares remaining subject to a further
1-year lock-up period thereafter.
Name
Justin Bickle*
Stephen Garvey
John Mulcahy
Total
No. of Founder Shares
at 31 December 2018
No. of Founder Shares
at 31 December 2017
81,453,077
81,453,077
18,100,684
181,006,838
90,000,000
90,000,000
20,000,000
200,000,000
* Beneficially held by Durrow Ventures
** Details of the ordinary shares held by Executive Directors are set out in the Directors’ Report on page 90.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
e
e
t
t
i
m
m
o
C
n
o
i
t
a
n
m
o
N
d
n
a
i
n
o
i
t
a
r
e
n
u
m
e
R
e
h
t
f
o
t
r
o
p
e
R
-
e
c
n
a
n
r
e
v
o
G
89
88
Glenveagh Properties PLC Annual Report and Accounts 2018
Directors’ Report
Board of Directors
Experience
Other Appointments
- Chairman of Irish Property
Unit Trust.
- Board member of TIO ICAV,
and Quinta do Lago S.A., a
Portuguese resort developer.
Stephen Garvey
(Irish - Age: 39):
Co-Founder and COO
First appointment to
the Board: 2017
Cadwalader, Wickersham
& Taft LLP and an Executive
Fellow in Finance at London
Business School.
Other Appointments
- Chairman of TIO ICAV.
Lady Barbara Judge
CBE
(British - Age: 72):
Senior Independent NED
First appointment
to the Board: 2017
John Mulcahy is a chartered
surveyor and has over 40
years’ experience in the Irish
real estate sector. His current
roles include being a member
of the board of TIO ICAV.
Previously, he was a member
of the board (from 2012 to
2014), and Head of Asset
Management (from 2011 to
2014), at NAMA and, prior to
that, was chairman and CEO of
JLL’s operations in Ireland from
2002 to 2010. John was also a
founding member of the RICS
Asset Valuations Standards
Committee and the Property
Advisory Committee of the
National Pension Reserve Fund.
Experience
Justin Bickle has over 23 years’
senior level experience in the
private equity, legal, finance
and property fields. Through
his role in Oaktree Capital’s
European Private Equity team,
he has significant experience
in operational real estate
portfolio companies in the UK
and Europe and their activities
in, among other things,
residential housebuilding,
retirement housebuilding,
student accommodation and
aparthotels. Justin is also
chairman of TIO ICAV. He
was formerly a partner in
the Financial Restructuring
department at US law firm
John Mulcahy
(Irish - Age: 70):
Co-Founder and
Executive Chairman
First appointment
to the Board: 2017
Justin Bickle
(British - Age: 48):
Co-Founder and CEO
First appointment to
the Board: 2017
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
90
negotiated the acquisition of
development sites, secured
external finance, formulated
and implemented business
plans for each project and
managed the overall delivery
of residential units. From 2014
to 2017, Stephen advised and
managed on the acquisition of
2,101 units in the Irish residential
development market on behalf
of TIO RLF.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
-
e
c
n
a
n
r
e
v
o
G
Experience
Stephen Garvey has over
21 years’ experience in the
construction and property
industry. His experience
includes working with many
of the large Irish property
developers, including Menolly
Homes, Schelester properties,
Glenman Corporation and
McCabe Builders. In 2003,
Stephen founded Bridgedale
Homes Ltd, Glenveagh’s
predecessor company, which
focused on constructing
residential developments in
the GDA. In his role as CEO
of Bridgedale, he sourced and
Experience
Other Appointments
- Chairman of Cifas.
- Chairman LoopUp.
- Chairman of the Astana
Financial Services Authority.
Committee Memberships:
- Member of the Audit and
Risk Committee (1 year).
- Member of the Remuneration
and Nomination Committee
(1 year).
Lady Barbara Judge, CBE,
has over 36 years’ experience
in the financial, legal and
property industries. She
completed her second term as
chairman of the UK Pension
Protection Fund in 2016. Lady
Judge previously served as
a Commissioner of the U.S.
Securities and Exchange
Commission, as a Director
of Samuel Montagu & Co in
Hong Kong and as founder
and chairman of Private Equity
Investor PlC. Lady Judge has
significant experience in the
real estate sector, including
her previous positions on the
boards of Quintain Estates and
Development PLC and Richard
Ellis International (now CBRE).
Lady Judge is a graduate of
the University of Pennsylvania
and received a Juris Doctor
degree with honours from
New York University Law
School. She was appointed
Commander of the Order of
the British Empire in 2010.
91
Experience
Other Appointments
Experience
Other Appointments
Robert was formerly a partner
and head of Transaction
Services at KPMG Ireland
until his retirement in 2008.
He currently operates his own
firm, Sopal Limited, which
advises organisations on
capital markets, corporate
governance and strategic
planning issues. Robert is a
graduate of Trinity College,
Dublin and is a Fellow of
Chartered Accountants Ireland.
- CEO of Sopal Limited.
- NED and Chairman and of
Quinn Property Group.
- Director and Chairman of the
Audit committee of Allianz
PLC and Dalata Hotel
Group PLC.
- Also holds non-executive
directorships at a number of
other private companies.
Committee Memberships:
- Chairman of the Audit and
Risk Committee (1 year).
- Member of the Remuneration
and Nomination Committee
(1 year).
Experience
Other Appointments
- None
Committee Memberships:
- Chairman of the Remuneration
and Nomination Committee
(1 year).
- Member of the Audit and
Risk Committee (1 year).
Richard was formerly a Director
and Chief Executive of the
Partnerships business at UK
housebuilder Countryside,
where he worked for over 35
years until his retirement in
September 2017. He served on
the main board for 30 years
and previously held the roles of
Group New Business Director
and Deputy Chairman. He has
significant experience in the
real estate sector, including in
the execution of partnership
projects with public authorities
and housing associations.
Richard is a graduate of the
University of Reading and is a
Fellow of the Royal Institution
of Chartered Surveyors.
Robert Dix
(Irish - Age: 66):
Independent NED and
Chairman of the Audit
and Risk Committee
First appointment to the
Board: 2017
Richard Cherry
(British - Age: 57):
Independent NED and
Chairman of the Remuneration
and Nomination Committee
First appointment to the
Board: 2017
- Managing Director and
Portfolio Manager (Europe)
at Oaktree Capital
Management (UK) LLP.
Caleb is Managing Director
and Portfolio Manager of the
European Principal Group at
Oaktree Capital Management
(UK) LLP. Prior to joining
Oaktree in 2000, Caleb
co-founded Seneca Capital
Partners LLC, a private equity
investment firm. From 1994 to
1996, Caleb was employed by
Archon Capital Partners, an
investment firm. Prior to 1994,
Caleb was an associate in
mergers and acquisitions at
Dillon Read and Co. Inc. and
an analyst at Merrill Lynch and
Co. Inc. Caleb received a B.A.
degree in Economics from the
University of Virginia.
Experience
Chloe is an ICSA-qualified
Company Secretary and a
Barrister-at-Law in Ireland.
A graduate of Business and
Law from University College
Dublin, Chloe completed her
Barrister-at-Law Degree at the
Honourable Society of King’s
Inns in Dublin and was called
to the Bar of Ireland in 2008.
Chloe gained experience in
commercial law at international
firms including Taylor Wessing
in London and Allens in Sydney,
before joining A&L Goodbody
as Company Secretarial Advisor
in their Asset Management and
Investment Funds department
in Dublin.
Caleb Kramer
(American - Age: 49):
NED
First appointment to the
Board: 2017
Chloe McCarthy
(Irish - Age: 34):
Company Secretary
Joined the Group in
November 2017.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
92
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
-
e
c
n
a
n
r
e
v
o
G
93
Report of
the Directors
The Directors present the Report of the Directors of
Glenveagh Properties PlC (the “Group”) together
with the audited financial statements for the year
ended 31 December 2018. The comparative period
in the financial statements covers the period from
incorporation on 9 August 2017 to 31 December 2017.
The Chairman’s Statement, CEO’s Review, CFO’s
Review, COO’s Review, Corporate Governance
Statement and all other sections of the annual
report and financial statements, to which cross
reference is made, are incorporated into the
Report of the Directors by reference.
Principal Activities
Glenveagh Properties PLC (“Glenveagh”) is the
ultimate holding company for the Group’s subsidiaries.
The Group’s principal activities are the development
and building of starter, mid-size executive and
high-end homes (both houses and apartments) in
Ireland, with a principal focus on the GDA, either
for itself or on behalf of third-parties.
The Group is comprised of two key business
divisions:
- Homes - Homes is focused on the development
of residential homes for resale principally in
the GDA.
- Living – Living is focused on delivering private
rental units for investors including institutional
pension funds and undertaking joint ventures
and partnerships to deliver housing for the Irish
State, social and affordable housing for approved
housing bodies.
Results and Dividends
Group revenue for the year ended 31 December
2018 was €84.2 million (2017: €1.4 million), gross
profit was €15.3 million (2017: €0.5 million), loss
after tax was €3.9 million (2017: loss of €51.4
million) and basic loss per share of €0.01 (2017:
loss per share of €0.14). The Group did not pay
a dividend during the financial year ended
31 December 2018 (2017: €Nil).
Business Review
The Strategic Report, including the CEO’s Review,
CFO’s Review and COO’s Review and Strategy and
Business Model section of this report on pages 6
to 45 respectively, sets out management’s review of
the Group’s key business milestones and highlights
for the financial year.
Glenveagh’s strategy
The Group has made significant steps towards
achieving its key strategic aims during the financial
year the details of which are set out as part of
the Group’s Strategic Report as noted above.
These priorities have been reviewed once again
by the Board during the financial year and
remain unchanged from those communicated to
shareholders, as follows:
A. Assembly and active management of a sector
leading landbank at attractive rates;
B. Operation of best-in-class delivery platform;
C. Delivery of an end-customer focused product
offering across our three target markets;
Build-to-Sell, PRS and Mixed-Tenure; and
D. Optimisation of capital employed to drive
returns for shareholders.
94
Marina Village, Greystones, Wicklow
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
-
e
c
n
a
n
r
e
v
o
G
95
Glenveagh Properties PLC Annual Report and Accounts 2018
Principal Risks and
Uncertainties
As per Section 327(1)(b) of the Companies Act
2014 and Regulation 5(4)(c)(ii) of the Transparency
Directive (2004/109/EC) Regulations 2007,
Glenveagh is required to describe the principal risks
and uncertainties faced by the Group. The risks
and the actions taken by the Group to mitigate the
risks are outlined in the Risk Management report on
pages 46 to 53. The principal risks are:
Code of Conduct
The Group is focused on meeting its responsibility
of maintaining the highest standards of ethics and
integrity in all of its dealings in relation to all of its
stakeholders i.e. investors, customers, suppliers and
the environment within which its business operates.
Glenveagh has a Code of Conduct which outlines
the principals across the Group that are expected
of employees in their conduct. Everyone in the
organisation is expected to encourage and adhere
to these principals.
- Adverse macroeconomic conditions
- Adverse changes to government policy
and regulations;
- Mortgage availability and affordability;
- Availability and increased cost of materials
and labour;
- Inadequate project management;
- Insufficient health and safety procedures;
- Employee development and retention;
- Data protection and cyber security; and
- Decline in product quality.
Subsequent Events
Subsequent to year end, the Group announced
that it had entered into a contract to acquire
two sites in the GDA: one at Leixlip, Co. Kildare
and one at Newbridge, Co. Kildare which have
full planning permission to deliver 793 starter-
homes and apartments. The transaction involves
cash consideration of approximately €50 million
(excluding stamp duty and fees) and is scheduled to
complete in Q2 2019.
Other than this transaction and the completion
of the Maryborough Ridge development land
acquisition noted in Note 30 of the consolidated
financial statements, no other events requiring
disclosure have occurred since 31 December 2018.
Corporate Governance
Glenveagh employs a robust corporate governance
framework and promotes the highest standards
of ethics throughout the organisation. For more
information on how Glenveagh achieves these
standards, please see the Corporate Governance
Statement on page 60.
Corporate Social
Responsibility
Glenveagh’s vision is to build homes and
create communities that have a unique
neighbourhood identity that resonates with our
customers. This is achieved through Glenveagh’s
community and people-focus, strong ethical
principles, sustainable building practices and other
CSR initiatives.
Glenveagh’s Board and Executive Committee are
committed to conducting business in a sustainable
and socially responsible manner. Glenveagh
considers the long-term impact on the homes and
places it develops and is committed to making a
positive, sustainable and social impact.
Following the successful completion of our first
full year of trading, CSR continues to be a key
focus for the Board and the Group. The CSR
review on pages 54 to 57 gives details of some
of the events and initiatives that the Group has
been involved throughout 2018 and outlines
some of the plans 2019.
The Group is focused on meeting
its responsibility of maintaining
the highest standards of ethics
and integrity in all of its dealings
in relation to all of its stakeholders
i.e. investors, customers, suppliers
and the environment within which
its business operates.
96
Taylor Hill, Balbriggan, Co. Dublin
Health and Safety
Share capital
Given the nature of the Group’s activities, health
and safety is the cornerstone of the day-to-day
operations of the Group and the health and
safety of our employees and customers remains
of paramount importance to the Group and
to the Board. The Group operates a ‘‘Safety
Management System’’ across its business which
is managed by the Group’s Head of Health and
Safety who reports to the Operations Director. The
Group promotes a very strong internal culture in
relation to health and safety which is applied on
a day-to-day basis by site managers on project
sites which has resulted in the Group achieving an
improved Safe-T Cert grade level.
The issued share capital of the Group at 5
March 2019 consists of 871,333,550 Ordinary
Shares and 181,006,838 Founder Shares. Both
share classes have a nominal value of €0.001.
Holders of ordinary shares are entitled to one
vote per ordinary share at general meetings of
the Group while no voting rights are conferred
on holders of Founder Shares. Founder Shares
may be converted to ordinary shares (or an
equivalent value in cash) in the future subject
to the achievement of performance hurdles
related to the Group’s share price. Further
detail is set out in Note 14 of the consolidated
financial statements.
The Group has also established a long-term
incentive plan which grants certain employees
options over ordinary shares in the Group which
vest over a 3-year period. Further detail in
relation to this plan is set out in Note 14 of the
consolidated financial statements.
Accounting Records
It is the responsibility of the Directors to ensure
that accounting records, as required by Sections
281 to 285 of the Companies Act 2014, are kept by
the Group. The necessary systems and resources
have been implemented by the Directors which
include employing accounting personnel with
appropriate qualifications and experience and
providing adequate resources to the finance
department. The accounting records of the Group
are maintained at Block B, Maynooth Business
Campus, Maynooth, Co. Kildare.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
-
e
c
n
a
n
r
e
v
o
G
97
Glenveagh Properties PLC Annual Report and Accounts 2018
The European Communities (Takeover bids
(Directive 2004/25/EC)) Regulations 2006
The Group have outlined the necessary information to be in compliance with the regulation 21 of the
European Communities (Takeover bids (Directive 2004/25/EC)) Regulations 2006 in the subsequent
paragraphs below.
The Group’s Founder Share and LTIP contain change of control provisions.
Founder Shares
In the event of a change of control of the Group at any time prior to 30 June 2022 which results in an offer to
all holders of shares, if the performance condition has been satisfied and such offer becomes unconditional
in all respects, the Founder Shares shall convert into such number of ordinary shares which, at such offer
price, have an aggregate value equal to his relative proportion of 20% of the TSR (calculated by reference to
the change of control price plus dividends and distributions made) between admission and the change of
control (less the value of any ordinary shares (at their original conversion or redemption price)) which have
previously been converted or redeemed.
Long-term incentive plan
The Remuneration and Nomination Committee will determine the extent to which unvested awards with
regard to the extent that the applicable performance condition has been satisfied up to the date of the
change of control event.
Substantial Shareholdings
Directors’ and Secretary’s Interest in Shares
The biographical information for the Directors and Company Secretary at the time of this report can be
found on page 90. The table below sets out the interests of the Directors and Company Secretary in Ordinary
Shares of the Group at 31 December 2018.
Ordinary Shares
Founder Shares
Deferred Shares
Ordinary Shares
under option
John Mulcahy
2,482,766
18,100,684
Justin Bickle
9,105,706
81,453,077
Stephen Garvey
13,061,329
81,453,077
Lady Barbara
Judge
109,880
Richard Cherry
1,166,666
Robert Dix
350,000
Caleb Kramer*
Chloe McCarthy
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65,000
As of 31 December 2018, and 5 March 2019, the Group has been notified of the following interests of 3% or
more in its ordinary share capital:
* Caleb Kramer is Oaktree Capital Management’s representative on the Board of Directors.
31 December 2018
5 March 2019
Shareholder
Ordinary Shares held %
Ordinary Shares held %
1 GIC
2
Rye Bay Capital
79,020,314
68,719,682
9.07
77,492,088
7.89
68,947,994
3 HSBC Securities
58,465,424
6.71
58,087,959
4 Oaktree Capital Mgt
55,250,000
6.34
55,250,000
5
6
Pelham Capital Mgt
45,497,440
5.22
45,497,440
Paradice Investment Mgt
42,387,436
4.86
46,745,760
7 Morgan Stanley
36,091,549
4.14
33,451,535
8.89
7.91
6.67
6.34
5.22
5.36
3.84
Political Donations
No political contributions were made which require
disclosure under the Electoral Act, 1997.
Subsidiaries
Information in relation to the Group’s subsidiaries
is set out in Note 24 to the financial statements.
The Group does not have any branches outside
of Ireland.
Going Concern
As noted in Note 7 of the Consolidated Financial
Statements, the Directors have assessed the
financial position of the Group in light of relevant
business risks facing the construction industry as a
whole and the Group’s strategic plan. They believe
that the Group is well placed to manage and
mitigate these risks. Thus, they have a reasonable
expectation that the Group has adequate
resources to continue in operational existence
for 12 months from the date of approval of the
financial statements.
Viability Statement
In accordance with provision C.2.2 of the UK
Corporate Governance Code issued by the FRC in
April 2016, the Directors are required to assess the
prospects of the Group, explain the period over
which they have done so and state whether they
have a reasonable expectation that the Group will
be able to continue in operation and meet liabilities
as they fall due over this period of assessment.
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
-
e
c
n
a
n
r
e
v
o
G
99
98
Glenveagh Properties PLC Annual Report and Accounts 2018
The Directors have concluded that three years was
an appropriate period for the assessment. The
three-year period was chosen having regard to
the following:
- The Group’s strategic plan is based on a
3-year horizon;
- The Group’s debt facility, which was executed
during the financial year (and discussed in Note
22 of the consolidated financial statements) has a
3-year term of which 2 years are remaining at the
date of approval of the financial statements; and
- In general, the inherent cyclical nature of the
residential market in Ireland, including the
Group’s forward sales and project pipeline, does
not lend itself to making long-term projection
statements greater than three years.
It is recognised that such future assessments are
subject to a level of uncertainty that increases with
time, and therefore future outcomes cannot be
guaranteed or predicted with certainty.
The Group’s strategic plan was considered by the
Board at its meeting in December 2018 and is
based on forecasts undertaken by management
of the relevant business functions. The plan reflects
construction cost and house price inflationary
assumptions which were reviewed at Board and
management level. The underlying assumptions of
the Group’s strategic plan are subject to sensitivity
analysis for scenarios that could reasonably
materialise. The risk factors outlined in the Risk
Management Report on pages 46 to 53 were also
considered in the strategic plan process.
Based on the above assessment the Directors have
a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities
as they fall due over the 3-year period.
Directors’ Compliance
Statement
The Directors are aware of their responsibility for
securing the Group’s compliance with its Relevant
Obligations in accordance with Section 225(2)(a)
of the Companies Act 2014. In accordance with
Section 225 (2)(b) of the Act, the Directors confirm
that they have:
100
i. Drawn up a Compliance Policy Statement setting
out the Group’s policies (that are, in the opinion
of the Directors, appropriate to the Group) in
respect of the compliance by the Group with its
Relevant Obligations;
ii. Put in place appropriate arrangements or
structures that, in the opinion of the Directors,
provide a reasonable assurance of compliance
in all material respects with the Group’s Relevant
Obligations; and
iii. Have conducted a review of the arrangements
or structures that the Directors have put in place
to ensure material compliance with the Group’s
Relevant Obligations during the financial year to
which this report relates.
Audit Information
As far as each Director is aware, there is no relevant
audit information of which the Group’s auditors
are unaware. Each Director has taken all the steps
that they ought to have taken as Directors in order
to make themselves aware of any relevant audit
information and to establish that the Group’s
auditors are aware of that information.
Auditor
In accordance with Section 383(2) of the
Companies Act 2014 the Group’s auditors, KPMG,
chartered accountants, will continue in office.
A resolution authorising the Directors to fix the
Auditor’s remuneration will be proposed at
the AGM.
Annual General Meeting
The 2019 AGM will take place on 7 June 2019 at the
InterContinental, Simmonscourt Road, Ballsbridge,
Dublin 4.
Pull out quote here Genia dis
con ent quam, que nonsequis
de et atur. Ihilignam quamus
eosapis ma quis debitat
eniendae et omnitem estibus.
Em volupis im reratur solenia
aut et dolo minvenis.
Justin Bickle
Director
Stephen Garvey
Director
5 March 2019
Cnoc Dubh, Ballyboughal, Co. Dublin
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
-
e
c
n
a
n
r
e
v
o
G
101
Glenveagh Properties PLC Annual Report and Accounts 2018
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
8
1
0
2
s
t
n
u
o
c
c
A
d
n
a
t
r
o
p
e
R
l
a
u
n
n
A
Cois Glaisin, Navan, Co. Meath
102
C
L
P
s
e
i
t
r
e
p
o
r
P
h
g
a
e
v
n
e
G
l
t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
-
e
c
n
a
n
r
e
v
o
G
103
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
104
Statement of Directors’ responsibilities in respect of the annual report and the financial statements
106
Independent auditor’s report to the members of Glenveagh Properties PLC
Consolidated statement of profit or loss and other comprehensive income
Consolidated balance sheet as at 31 December 2018
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Company balance sheet
Company statement of changes in equity
Notes to the Company financial statements for the financial year ended 31 December 2018
Supplementary Information for the financial year ended 31 December 2018
108
113
114
115
117
118
155
156
158
161
105
Glenveagh Properties PLC Annual Report and Accounts 2018 Statement of Directors’ responsibilities in respect of the
annual report and the financial statements
Statement of Directors’ responsibilities in respect of the
annual report and the financial statements (continued)
The Directors are responsible for preparing the annual report and the Group and Company financial
statements, in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each
financial year. Under that law, the Directors are required to prepare the consolidated financial
statements in accordance with IFRS as adopted by the European Union and applicable law including
Article 4 of the IAS Regulation. The Directors have elected to prepare the Company financial statements
in accordance with FRS 101 Reduced Disclosure Framework as applied in accordance with the provisions
of Companies Act 2014.
Under company law the Directors must not approve the Group and Company financial statements
unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position
of the Group and Company and of the Group’s profit or loss for the financial year ended 31 December
2018. In preparing each of the Group and Company financial statements, the Directors are required to:
− select suitable accounting policies and then apply them consistently;
− make judgements and estimates that are reasonable and prudent;
− state whether applicable Accounting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
− assess the Group and Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern; and
− use the going concern basis of accounting unless they either intend to liquidate the Group or
Company or to cease operations, or have no realistic alternative but to do so.
The Directors are also required by the Transparency (Directive 2004/109/EC) Regulations 2007 and the
Transparency Rules of the Central Bank of Ireland to include a management report containing a fair
review of the business and a description of the principal risks and uncertainties facing the Group.
The directors are responsible for keeping adequate accounting records which disclose with reasonable
accuracy at any time the assets, liabilities, financial position and profit or loss of the Company and which
enable them to ensure that the financial statements of the Company comply with the provision of the
Companies Act 2014. The Directors are also responsible for taking all reasonable steps to ensure such
records are kept by its subsidiaries which enable them to ensure that the financial statements of the Group
comply with the provisions of the Companies Act 2014 including Article 4 of the IAS Regulation. They are
responsible for such internal controls as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error, and have general
responsible for safeguarding the assets of the Company and the Group, and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities. The Directors are also responsible
for preparing a Directors’ report that complies with the requirements of the Companies Act 2014.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Group’s and Company’s website www.glenveagh.ie. Legislation in the
Republic of Ireland concerning the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Responsibility statement as required by the Transparency Directive and UK Corporate
Governance Code
Each of the Directors, whose names and functions are listed on pages 90 to 93 of this annual report,
confirm that, to the best of each person’s knowledge and belief:
− The Consolidated financial statements, prepared in accordance with IFRS as adopted by the
European Union and the Company financial statements prepared in accordance with FRS 101
Reduced Disclosure Framework as applied in accordance with the provisions of Companies Act 2014,
give a true and fair view of the assets, liabilities, and financial position of the Group and Company at
31 December 2018 and of the profit or loss of the Group for the financial year then ended;
− The Directors’ report contained in the annual report includes a fair review of the development
and performance of the business and the position of the Group and Company, together with a
description of the principal risk and uncertainties that they face; and
− The annual report and financial statements, taken as a whole, provides the information necessary
to assess the Group’s performance, business model and strategy and is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Company’s
position and performance, business model and strategy.
On behalf of the board
Justin Bickle
Director
Stephen Garvey
Director
5 March 2019
106
107
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Independent auditor’s report to the members of
Glenveagh Properties PLC
Independent auditor’s report to the members of
Glenveagh Properties PLC (continued)
Report on the audit of the financial statements
Opinion
We have audited the Group and Company financial statements of Glenveagh Properties PLC (‘the
Company’) for the year ended 31 December 2018 set out on pages 113 to 160, which comprise the Group
Statement of profit or loss and other comprehensive income, the Group Balance Sheets, the Group and
Parent Statements of Changes in Equity, the Group Statement of Cash Flows and related notes, including
the summary of significant accounting policies set out in note 8. The financial reporting framework that
has been applied in the preparation of the Group financial statements is Irish Law and International
Financial Reporting Standards (IFRS) as adopted by the European Union and, as regards the Company
financial statements, Irish Law and FRS 101 Reduced Disclosure Framework.
In our opinion:
− the financial statements give a true and fair view of the assets, liabilities and financial position of the
Group and Company as at 31 December 2018 and of the Group’s loss for the year then ended;
− the Group financial statements have been properly prepared in accordance with IFRS as adopted by
the European Union;
− the Company financial statements have been properly prepared in accordance with FRS 101 Reduced
Disclosure Framework issued by the UK’s Financial Reporting Council; and
− the Group and Company financial statements have been properly prepared in accordance with the
requirements of the Companies Act 2014 and, as regards the Group financial statements, Article 4 of
the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland))
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities section of our report. We believe that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is consistent with our report to the Audit and
Risk Committee.
We were appointed as auditor by the Directors on 21 August 2017. The period of total uninterrupted
engagement is the period from 21 August 2017 to 31 December 2018. We have fulfilled our ethical
responsibilities under, and we remained independent of the Group in accordance with, ethical
requirements applicable in Ireland, including the Ethical Standard issued by the Irish Auditing and
Accounting Supervisory Authority (IAASA) as applied to public interest entities. No non-audit services
prohibited by that standard were provided.
Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance
in the audit of the financial statements and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by us, including those which had the greatest
effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
In arriving at our audit opinion above, the key audit matter was as follows:
Carrying value of Inventory €719 million (2017 - €228 million)
Refer to page 126 (accounting policy) and pages 140 to 142 (financial disclosures)
The key audit matter
How the matter was addressed in our audit
Inventories, relating to work-in-progress
on sites under development and land
yet to be developed, represent a
significant asset of the Group.
Work-in-progress is made up of the
costs of the land being built on, direct
materials, direct labour costs and those
overheads that have been incurred in
bringing the inventories to their present
location and condition.
Work-in-progress is stated at the lower
of cost and net realisable value (“NRV”),
NRV being the estimated net selling price
less costs to sell and management’s
estimated total costs of completion. The
forecasting of selling prices and costs is
inherently judgemental.
For each development project, site-
wide residential development costs
are allocated between units built in
the current period and units to be
built in future years, which requires
further judgement.
There is a risk that the calculation of
NRV may be subject to estimation error,
leading to inventory being held at an
incorrect value.
Our audit procedures included, amongst others:
− Obtaining and documenting our understanding of the
process to determine the NRV of the Group’s work-in-
progress and testing the design and implementation of
the relevant controls therein.
− For all new land acquisitions, inspecting purchase
contracts to agree the costs of acquisition including
related purchase costs.
− Agreeing a sample of other costs incurred and included
in inventory in the year to invoices and/or payments,
including checking that they were allocated to the
appropriate site.
− We inspected Group’s NRV reports on a sample basis
and challenged the inputs and assumptions by:
− Agreeing a sample of forecast costs to purchase
contracts, supplier agreements or tenders.
− Comparing forecast sales prices against recent prices
achieved for similar properties to support the validity
of the estimated sales price in the forecast.
− Evaluating the sensitivity of the development margin
to a change in sales prices and costs and challenging
key assumptions in the models, where we considered
it appropriate to do so.
− Considering the adequacy of the Group’s disclosures
regarding the carrying value of inventory.
Overall, we found the key assumptions used in the
calculations of NRV and the related disclosures in respect of
work-in-progress to be appropriate.
Due to the nature of the Company’s activities, there are no key audit matters that we are required to
communicate in accordance with ISAs (Ireland).
Our application of materiality and an overview of the scope of our audit
The materiality for the Group financial statements as a whole was set at €4.4 million. This has been
calculated with reference to a benchmark of total assets which we consider to be one of the principal
considerations for members of the Group in assessing the financial performance of the Group as the
principal focus of the Group in the financial period has been the deployment of capital raised. Materiality
represents approximately 0.5% of this benchmark. We report to the Audit and Risk Committee all corrected
and uncorrected misstatements we identified through our audit with a value in excess of €0.2 million.
Materiality for the parent company financial statements as a whole was set at €4.3 million. This was
determined with reference to a benchmark of total assets. We reported to the Audit and Risk Committee
any corrected or uncorrected identified misstatements exceeding €0.2 million.
We subjected all of the Group’s reporting components to audits for group reporting purposes. The work
on all components was performed by the Group audit team.
108
109
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Independent auditor’s report to the members of
Glenveagh Properties PLC (continued)
Independent auditor’s report to the members of
Glenveagh Properties PLC (continued)
We have nothing to report on going concern
We are required to report to you if:
− we have anything material to add or draw attention to in relation to the Directors’ statement in note
7 to the financial statements on the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and Company’s use of that basis for a
period of at least twelve months from the date of approval of the financial statements; or
− if the related statement under the Listing Rules set out on page 99 is materially inconsistent with our
audit knowledge.
We have nothing to report in these respects.
Other information
The directors are responsible for the other information presented in the Annual Report together with the
financial statements. The other information comprises the information included in the Directors’ Report,
Chairman’s Letter, CEO’s Review, CFO’s Review, COO’s Review, Strategic Overview, Business Unit Update
- Glenveagh Homes, Business Unit Update - Glenveagh Living, Risk Management Report, CSR Review,
Corporate Governance Statement, Audit and Risk Committee Report and Remuneration and Nomination
Committee Report. The financial statements and our auditor’s report thereon do not comprise part of
the other information. Our opinion on the financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our
financial statements audit work, the information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge. Based solely on that work we have not identified material
misstatements in the other information.
Based solely on our work on the other information we report that:
− we have not identified material misstatements in the Directors’ report;
− in our opinion, the information given in the Directors’ report is consistent with the financial statements;
− in our opinion, the directors’ report has been prepared in accordance with the Companies Act 2014.
Disclosures of principal risks and longer-term viability
Based on the knowledge we acquired during our financial statements audit, we have nothing material
to add or draw attention to in relation to:
− the principal risks disclosures describing these risks and explaining how they are being managed
and mitigated;
− the Directors’ confirmation within Viability Statement pages 99 and 100 that they have carried out
a robust assessment of the principal risks facing the Group, including those that would threaten its
business model, future performance, solvency and liquidity; and
− the directors’ explanation in the Viability Statement of how they have assessed the prospects of the
Group, over what period they have done so and why they considered that period to be appropriate,
and their statement as to whether they have a reasonable expectation that the Group will be able
to continue in operation and meet its liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary qualifications or assumptions.
Other corporate governance disclosures
We are required to address the following items and report to you in the following circumstances:
− Fair, balanced and understandable: if we have identified material inconsistencies between the
knowledge we acquired during our financial statements audit and the directors’ statement that
they consider that the Annual Report and financial statements taken as a whole is fair, balanced
and understandable and provides the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy;
− Report of the Audit and Risk Committee: if the section of the Annual Report describing the work of
the Audit and Risk Committee does not appropriately address matters communicated by us to the
Audit and Risk Committee;
− Statement of compliance with UK Corporate Governance Code: if the Directors’ statement does not
properly disclose a departure from provisions of the UK Corporate Governance Code specified by the
Listing Rules for our review.
− We have nothing to report in these respects.
− In addition as required by the Companies Act 2014, we report, in relation to information given in the
Corporate Governance Statement on pages 60 to 69, that:
− based on the work undertaken for our audit, in our opinion, the description of the main features
of internal control and risk management systems in relation to the financial reporting process and
information relating to voting rights and other matters required by the European Communities
(Takeover Bids (Directive 2004/EC) Regulations 2006 and specified for our consideration, is consistent
with the financial statements and has been prepared in accordance with the Act;
− based on our knowledge and understanding of the Company and its environment obtained in the
course of our audit, we have not identified any material misstatements in that information; and
the Corporate Governance Statement contains the information required by the European Union
(Disclosure of Diversity Information by certain large undertakings and groups) Regulations 2017.
We also report that, based on work undertaken for our audit, other information required by the Act is
contained in the Corporate Governance Statement.
Our opinions on other matters prescribed by the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we consider necessary for the purpose of
our audit.
In our opinion, the accounting records of the Company were sufficient to permit the financial
statements to be readily and properly audited and the financial statements are in agreement with the
accounting records.
We have nothing to report on other matters on which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors’
remuneration and transactions required by Sections 305 to 312 of the Act are not made.
The Listing Rules of the Irish Stock Exchange and UK Listing Authority require us to review:
− the Directors’ Statement, set out on pages 99 and 100, in relation to going concern and longer-
term viability;
− the part of the Corporate Governance Statement on pages 60 to 69 relating to the Company’s
compliance with the provisions of the UK Corporate Governance Code and the Irish Corporate
Governance Annex specified for our review; and
− certain elements of disclosures in the report to shareholders by the Board of Directors’
Remuneration Committee.
110
111
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Independent auditor’s report to the members of
Glenveagh Properties PLC (continued)
Respective responsibilities and restrictions on use
Directors’ responsibilities
As explained more fully in their statement set out on page 106 and 107, the directors are responsible for:
the preparation of the financial statements including being satisfied that they give a true and fair view;
such internal control as they determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error; assessing the Group and parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern; and using the going concern basis of accounting unless they either intend to liquidate the
Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue our opinion in an
auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an
audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it
exists. Misstatements can arise from fraud, other irregularities or error and are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial statements. The risk of not detecting a material misstatement
resulting from fraud or other irregularities is higher than for one resulting from error, as they may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control and may
involve any area of law and regulation and not just those directly affecting the financial statements.
A fuller description of our responsibilities is provided on IAASA’s website at https://www.iaasa.ie/
getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_of_auditors_responsiblities_for_audit.pdf
The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the
Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
the Company and the Company’s members, as a body, for our audit work, for our report, or for the
opinions we have formed.
Ruaidhri Gibbons
5 March 2019
for and on behalf of KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2
Ireland
Consolidated statement of profit or loss and other
comprehensive income
for the financial year ended 31 December 2018
Period from incorporation on
9 August 2017 to 31 December 2017
Year Ended 31 December 2018
Before
exceptional
items
€’000
Exceptional
items
€’000
Total
€’000
Before
exceptional
items
€’000
Exceptional
items
€’000
84,179
(68,887)
-
84,179
- (68,887)
1,425
(901)
15,292
-
15,292
524
-
-
-
Total
€’000
1,425
(901)
524
Note
10
Revenue
Cost of sales
Gross profit
Administrative expenses
Founder Shares: Share-
based payment expense
11
11,14
(17,438)
(409)
(17,847)
(4,187)
(556)
(4,743)
-
-
-
-
(47,509)
(47,509)
Operating loss
(2,146)
(409)
(2,555)
(3,663)
(48,065)
(51,728)
Finance expense
Finance income
Loss before tax
Income tax credit
12
16
Loss after tax attributable
to the owners of the
Company
Other comprehensive
income
Total comprehensive
loss for the year/period
attributable of the
owners of the Company
Basic and diluted loss
per share (cents)
15
(1,414)
-
-
-
(1,414)
-
(69)
16
-
-
(69)
16
(3,560)
(409)
(3,969)
(3,716)
(48,065)
(51,781)
39
-
39
397
-
397
(3,521)
(409)
(3,930)
(3,319)
(48,065)
(51,384)
-
-
-
-
-
-
(3,930)
(0.53)
(51,384)
(13.73)
112
113
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Consolidated balance sheet
as at 31 December 2018
Consolidated statement of changes in equity
for the financial year ended 31 December 2018
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Deferred tax asset
Restricted cash
Current assets
Inventory
Trade and other receivables
Income tax receivable
Cash and cash equivalents
Total assets
Equity
Share capital
Share premium
Retained earnings
Share-based payment reserve
Total equity
Liabilities
Non-current liabilities
Trade and other payables
Finance lease liability
Current liabilities
Trade and other payables
Finance lease liability
Total liabilities
Total liabilities and equity
On behalf of the board
31 December
2018
€’000
31 December
2017
€’000
Note
17
18
16
23
19
20
27
26
21
28
21
28
11,497
727
208
1,500
13,932
718,862
14,507
340
130,701
864,410
878,342
1,052
879,281
(80,661)
43,443
843,115
1,803
5
1,808
33,386
33
33,419
35,227
878,342
1,476
75
151
1,500
3,202
228,089
69,374
326
351,796
649,585
652,787
867
666,381
(74,112)
47,548
640,684
1,903
170
2,073
9,946
84
10,030
12,103
652,787
Share Capital
Founder
shares
€’000
Ordinary
shares
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
Balance as at 1 January 2018
667
200
666,381
47,548
(74,112)
640,684
Total comprehensive loss for
the financial year
Loss for the financial year
Other comprehensive income
Transactions with owners of
the Company
Issue of ordinary shares for cash
Share issue costs
Conversion of Founder Shares
to ordinary shares
Equity-settled share-based
payments
Balance as at 31 December 2018
-
-
-
-
-
-
-
-
(3,930)
-
(3,930)
-
667
200
666,381
47,548
(78,042)
636,754
185
-
19
-
204
871
-
-
212,900
-
-
-
-
(7,131)
213,085
(7,131)
(19)
-
-
-
(4,512)
4,512
-
407
-
407
(19)
212,900
(4,105)
(2,619)
206,361
181
879,281
43,443
(80,661)
843,115
Justin Bickle
Director
Stephen Garvey
Director
5 March 2019
114
115
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Consolidated statement of changes in equity
for the period from incorporation on 9 August 2017 to 31 December 2017
Consolidated statement of cash flows
for the financial year ended 31 December 2018
Share Capital
Founder
shares
€’000
Ordinary
shares
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
-
-
-
-
752
-
-
-
-
-
-
-
-
-
-
-
551,819
-
(200)
200
-
Balance as at 9 August 2017
Total comprehensive loss for
the period
Loss for the period
Other comprehensive income
Transactions with owners of
the Company
Issue of ordinary shares for cash
Share issue costs
Re-designation as
Founder Shares
Issue of ordinary shares related
to business combinations
Issue of ordinary shares in
consideration for inventories
Equity-settled share-based
payments
Balance as at 31 December 2017
-
-
-
-
-
-
-
-
-
-
-
(51,384)
-
(51,384)
-
(51,384)
(51,384)
-
(22,728)
552,571
(22,728)
-
-
-
-
-
4,427
110,250
47,548
4,423
110,139
-
-
-
-
47,548
4
111
-
667
667
200
666,381
47,548
(22,728)
692,068
200
666,381
47,548
(74,112)
640,684
Year ended 31
December 2018
€’000
Note
Period from
incorporation on 9
August 2017 to 31
December 2017
€’000
Cash flows from operating activities
Loss for the financial year/period
Adjustments for:
Depreciation and amortisation
Finance costs
Finance income
Equity-settled share-based payment expense
Tax credit
Loss on disposal of property, plant and equipment
14
16
17
Changes in:
Inventories
Trade and other receivables
Trade and other payables
Cash used in operating activities
Interest paid
Tax paid
(3,930)
235
1,414
-
407
(39)
18
(1,895)
(432,031)
11,076
23,126
(399,724)
(1,218)
(32)
(51,384)
110
69
(16)
47,548
(397)
-
(4,070)
(116,902)
(69,295)
11,612
(178,655)
(68)
(211)
Net cash used in operating activities
(400,974)
(178,934)
17
18
25
23
25
Cash flows from investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Cash acquired on acquisition
Transfer to restricted cash
Acquisition of subsidiary (net of cash acquired)
Net cash (used in)/from investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Issue costs paid
Proceeds from loans and borrowings
Repayment of loans and borrowings
Transaction costs related to loans and borrowings
Payment of finance lease liabilities
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year/
period
Cash and cash equivalents at the end of the year/period
(10,622)
(564)
15
-
(13,663)
(24,834)
213,085
(7,131)
26,000
(26,000)
(1,025)
(216)
204,713
(221,095)
351,796
130,701
(309)
(38)
3,229
(1,500)
-
1,382
552,571
(22,728)
-
-
-
(495)
529,348
351,796
-
351,796
116
117
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Notes to the consolidated financial statements
for the financial year ended 31 December 2018
1 Reporting entity
5 Measurement of fair values
Glenveagh Properties PLC (“the Company) is domiciled in the Republic of Ireland. The Company’s
registered office is 15 Merrion Square North, Dublin 2. These consolidated financial statements comprise
the Company and its subsidiaries (together referred to as “the Group”) and cover the financial year
ended 31 December 2018. The comparative period was for the period from incorporation on 9 August
2017 to 31 December 2017. The Group’s principal activities are the construction and sale of houses and
apartments for the private buyer and local authorities.
2 Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS) 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
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, apart from the estimation involved in 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, land 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.
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. 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;
− Note 25 Business combinations; and
− Note 27 Financial instruments and financial risk management.
6
New standards and interpretations and adoption of new accounting policies
(i) New standards effective in the financial year
The following new standards became effective in the financial year:
IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments became effective in
the financial year. Due to the transition methods chosen by the Group in applying these standards,
comparative information throughout these financial statements has not been restated to reflect the
requirements of the new standards.
(a) IFRS 15 Revenue from Contracts with Customers
From 1 January 2018, IFRS 15, Revenue from Contracts with Customers replaced IAS 18 Revenue and
IAS 11 Construction Contracts, setting out new revenue recognition criteria particularly with regard to
performance obligations and assessment of when control of goods or services passes to the customer.
The Group has adopted IFRS 15 using the cumulative effect method (without practical expedients), with
the effect of initially applying this standard at the date of initial application 1 January 2018. Based on the
Group’s assessment of IFRS 15, adoption of this standard had no impact on the prior period financial
statements. The Group’s new accounting policy is included in Note 8.
Revenue – policy applicable before 1 January 2018
Revenue comprises the fair value of consideration received or receivable, net of value-added tax, rebates
and discounts. Revenue is recognised once the value of the transaction can be reliably measured and
the significant risks and rewards of ownership have been transferred.
Revenue represents the amounts receivable from the sale of houses and other fee income directly
associated with property development, including asset advisory and construction services. Where
the Group concludes that it operates as an agent for services rendered, (i.e. the Group takes no title,
development or inventory risk) only commission earned is recognised as revenue. On the sale of homes,
revenue is recognised at legal completion.
118
119
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 6
New standards and interpretations and adoption of new accounting policies (continued)
6
New standards and interpretations and adoption of new accounting policies (continued)
(i) New standards effective in the financial year (continued)
(b) IFRS 9 Financial Instruments
IFRS 9 Financial Instruments came into effect on 1 January 2018 replacing IAS 39 Financial Instruments:
Recognition and Measurement and requires changes to the classification and measurement of certain
financial instruments from that under IAS 39. The Group has adopted IFRS 9 using the cumulative effect
method with the effect of initially applying this standard at the date of initial application 1 January
2018. Based on an assessment performed of the key areas in scope of IFRS 9 which includes but is not
limited to, additional disclosures required by IFRS 7 ‘Financial Instruments – Disclosures’, the majority of
the Group’s financial assets and liabilities will continue to be accounted for on an identical basis under
IFRS 9 as they were under IAS 39. Glenveagh adopted the new standard on the required effective date
of 1 January 2018 and has not restated comparative information. The Group’s new accounting policy is
included in Note 8.
Financial instruments – Policy applicable before 1 January 2018
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment. A provision for impairment of trade
receivables is established when there is objective evidence that the Group will not be able to collect
all amounts due according to the original terms of the receivables. The amount of the provision is the
difference between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate. The carrying amount of the asset is reduced through
the use of an allowance account, and the amount of the loss is recognised in the statement of profit or
loss within administration expenses. When a trade receivable is uncollectible, it is written off against the
allowance account for trade receivables. Subsequent recoveries of amounts previously written off are
credited against administration expenses in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances in hand and at the bank, including bank overdrafts
repayable on demand.
Cash and cash equivalents that are not available for use by the Group are presented as restricted cash.
Amounts of restricted cash which cannot be exchanged or used to settle a liability for at least 12 months
after the end of the reporting period are classified as non-current assets.
Trade and other payables
Trade and other payables on normal terms are not interest bearing and are stated at their nominal
value which is considered to be their fair value. Trade payables on extended terms are recorded at their
fair value at the date of acquisition of the asset to which they relate. The discount to nominal value is
amortised over the period of the credit term and charged to finance costs.
Financial instruments
The Group classifies non-derivative financial assets into the following categories: financial assets at fair
value through profit or loss, held to maturity financial assets, loans and receivables and available for
sale financial assets.
The Group classifies non-derivative financial liabilities into the following categories: financial liabilities at
fair value through profit or loss and other financial liabilities.
(i) New standards effective in the financial year (continued)
(b) IFRS 9 Financial Instruments (continued)
Financial instruments – Policy applicable before 1 January 2018
Non-derivative financial assets and financial liabilities – recognition and derecognition
The Group initially recognises loans and receivables and debt securities issued on the date when they
are originated. All other financial assets and financial liabilities are initially recognised on the trade date
when the entity becomes a party to the contractual provisions of the instruments.
The Group derecognises a financial asset when the contractual rights to the cash flows from the
financial assets expire, or it transfers the rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of the financial asset are transferred, or in
which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and
does not retain control over the transferred asset. Any interest in such derecognised financial assets that
is created or retained by the Group is recognised as a separate asset or liability.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled
or expire.
Financial assets and financial liabilities are offset, and the net amount presented in the balance sheet
when, and only when, the Group currently has a legally enforceable right to offset the amounts and
intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Non-derivative financial assets – measurement
These assets are initially measured at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, they are measured at amortised cost using the effective interest
method, as adjusted for any impairments.
Non-derivative financial liabilities (including interest bearing loans and borrowings) – measurement
Non-derivative financial liabilities are initially measured at fair value less directly attributable transaction
costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the
effective interest method.
For interest-bearing borrowings any difference between initial carrying amount and redemption value is
recognised in profit or loss over the period of the borrowings on an effective interest basis.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured at their fair value. Any directly attributable transaction costs are recognised in
profit or loss as incurred.
Embedded derivatives are separated from the host contract and accounted for at fair value through
profit or loss if certain criteria are met.
120
121
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 6
New standards and interpretations and adoption of new accounting policies (continued)
6
New standards and interpretations and adoption of new accounting policies (continued)
(i) New standards effective in the financial year: (continued)
(b) IFRS 9 Financial Instruments (continued)
Financial instruments – Policy applicable before 1 January 2018
Impairment of financial assets
An impairment loss is calculated as the difference between an asset’s carrying amount and the present
value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses
are recognised in profit or loss when they occur and are reflected in an allowance account. When the
Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are
written off. If the amount of impairment loss subsequently decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, then the previously recognised
impairment is reversed through profit or loss.
(ii) Adoption of new accounting policies
There were also two other changes to the Group’s significant accounting policies since the last annual
financial statements which were adopted due to specific transactions entered into during the year. The
first change is the adoption of an accounting policy in respect of joint operations in accordance with
IFRS 11 Joint Arrangements. This was required as a result of the transaction described in Notes 19 and
29 in respect of the Group’s interests in sites at The Square Shopping Centre, Tallaght and Gateway
Retail Park, Knocknacarra, Co. Galway. The second change was the adoption of an accounting policy
in respect of interest bearing loans and borrowings following the execution of a revolving credit facility
(RCF) in the financial year as set out in Note 22. Both new accounting policies are included in Note 8.
A number of other new standards are also effective from 1 January 2018 but they do not have a material
effect on the consolidated financial statements.
(iii) Standards not yet effective
IFRS 16 Leases addresses the definition of a lease, recognition and measurement of leases and
establishes principles for reporting useful information to users of financial statements about the leasing
activities of both lessees and lessors. A key change arising from IFRS 16 is that most operating leases
will be accounted for on balance sheet for lessees. The standard replaces IAS 17 Leases, and related
interpretations. The standard is effective for annual periods beginning on or after 1 January 2019 and
earlier application is permitted subject to EU endorsement.
The Group will not early adopt the standard and will therefore apply IFRS 16 for the first time for the
financial year ending 31 December 2019.
The Group is currently evaluating the potential impact on its consolidated financial statements resulting
from the application of IFRS 16 by carrying out a review of its contracted leases. Due to the limited
number of leases to which Group is party to and the profile of those leases, the adoption of IFRS 16 will
not have a material impact on the Group’s consolidated financial statements. Notes 28 and 30 outline
the extent of the Group’s lease commitments at 31 December 2018.
(iv) Annual improvements to IFRS Standards 2015-2017 (issued on 12 December 2017)
The changes under the Annual Improvements to IFRS Standards 2015 – 2017 Cycle are in relation to the
following:
− IFRS 3 Business Combinations: This amendment clarifies that a company remeasures its previously
held interest in a joint operation when it obtains control of the business.
− IFRS 11 Joint Arrangements: This amendment clarifies that a company does not remeasure its
previously held interest in a joint operation when it obtains joint control of the business.
− IAS 12 Income Taxes: This amendment clarifies that a company accounts for all income tax
consequences of dividend payments in the same way.
− IAS 23 Borrowing Costs: This amendment clarifies that a company treats as part of general
borrowings any borrowing originally made to develop an asset when the asset is ready for its
intended use or sale.
(v) IFRIC 23 Uncertainty over Income tax treatments:
IFRIC 23 clarifies the application of recognition and measurement requirements of IAS 12 Income Taxes
when there is uncertainty over income tax treatments. The interpretation specifically provides guidance
on considering uncertain tax treatments separately or together, examination by tax authorities, the
appropriate method to reflect uncertainty and accounting for changes in facts and circumstances.
7 Going concern
The Group has recorded a loss before tax of €3.9 million (2017: €51.2 million). The Group has a cash
balance of €130.7 million (2017: €351.8 million) and has committed undrawn funds available of €125.0
million. Having considered the Group’s cash flow forecasts, the Directors believe that the Group has
adequate resources to continue in operational existence for the foreseeable future and that it is
appropriate to prepare the financial statements on a going concern basis.
8 Significant accounting policies
The Group has consistently applied the following accounting policies to all periods presented in these
consolidated financial statements, except if mentioned otherwise.
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.
122
123
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 8 Significant accounting policies (continued)
8.1 Basis of consolidation (continued)
(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 – policy applicable from 1 January 2018
The Group develops and sells residential properties. Revenue is recognised at the point in time when
control over the property has been transferred to the customer, which occurs at legal completion.
Revenue is measured at the transaction price agreed under the contract.
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.
Administration expense is recognised in respect of goods and services received when supplied in
accordance with contractual terms.
8.4 Taxation
Income tax on the profit or loss for the financial year comprises current and deferred tax. Income tax
is recognised in the statement of profit or loss, except to the extent that it relates to items recognised
directly in other comprehensive income or equity.
(i) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the
financial year and any adjustment to the tax payable or receivable in respect of previous periods.
The amount of current tax payable or receivables 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.
8 Significant accounting policies (continued)
8.4 Taxation (continued)
(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;
− 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 is measured at the tax rates that are expected to apply in the periods in which temporary
differences reverse, based on tax rates and laws enacted or substantively enacted at the balance
sheet date.
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 and future profitability. 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.
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, 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.
In the current year, listing costs associated with the placing of shares in the Group’s Firm Placing
and Open Offer (€0.4 million) are considered exceptional items (see Note 11). The directors believe
that separate presentation of these exceptional expenses is useful to the reader as it allows clear
presentation of the results of the underlying business and is relevant for an understanding of the
Group’s performance in the financial year.
124
125
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 8 Significant accounting policies (continued)
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
− Plant and machinery
− Fixtures and fittings
− Computer Equipment
2.5%
14-20%
20%
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 – computer software
Computer software is capitalised as intangible assets as acquired and amortised 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.
The assets’ useful economic 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.
8 Significant accounting policies (continued)
8.10 Financial instruments – policy applicable from 1 January 2018
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:
Type
IAS 39 classification
IFRS 9
Classification
Original
carrying amount
under IAS 39
€’000
New carrying
amount
under IFRS 9
€’000
Financial assets
Cash and cash equivalents
Other receivables
Restricted cash
Construction bonds
Financial liabilities
Bank indebtedness
Accounts payable and
accrued liabilities
Cash and cash equivalents
Loans and receivables Amortised cost
Loans and receivables Amortised cost
Loans and receivables Amortised cost
Loans and receivables Amortised cost
130,701
70
1,500
3,377
130,701
70
1,500
3,377
Other liabilities
Amortised cost
-
-
Other liabilities
Amortised cost
35,189
35,189
Cash and cash equivalents include cash and short-term investments with an original maturity of three
months or less. Interest earned or accrued on these financial assets is included in other income.
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 consolidated balance sheets and are accounted for
at amortised cost. These assets are subsequently measured at amortised cost. The amortised cost is
reduced by impairment losses. IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit
loss’ model (ECL model). The new impairment model applies to financial assets measured at amortised
cost, contract assets and debt instruments at FVOCI, but not to investment in equity instruments. Interest
income and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised
in profit or loss.
126
127
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 8 Significant accounting policies (continued)
8 Significant accounting policies (continued)
8.10 Financial instruments – policy applicable from 1 January 2018 (continued)
8.15 Finance income and costs
Other liabilities
Such financial liabilities are recorded at amortised cost and include all liabilities.
Fair value through profit and loss
Financial instruments in this category are recognised initially and subsequently at fair value. Gains
and losses arising from changes in fair value are presented within the profit and loss account in the
consolidated statement of profit and loss and other comprehensive income in the period in which they
arise. Financial assets and liabilities at FVTPL are classified as current, except for the portion expected to
be realised or paid more than 12 months after the reporting date, which is classified as non-current.
Derivatives
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured
at fair value, and changes therein are generally recognised in profit or loss.
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 Finance lease liabilities
Leases of property, plant and equipment that transfer to the Group substantially all of the risks and
rewards of ownership are classified as finance leases. The leased assets are measured initially at an
amount equal to the lower of their fair value and the present value of the minimum lease payments.
Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy
applicable to that asset.
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.
The Group’s finance income and finance costs include:
− Interest income
− Interest expense
Interest income and expense is recognised using the effective interest method.
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 two key reportable operating segments being Glenveagh Homes and
Glenveagh Living. Internal reporting to the Chief Operating Decision Maker (“CODM”) is provided on
this basis. The CODM has been identified as the Executive Committee (as detailed in the Corporate
Governance Statement).
The Group currently operates solely in the Republic of Ireland and therefore no geographically
segmented financial information is provided.
Glenveagh Homes
Homes develops and builds starter, mid-size, executive and high-end homes (both houses and
apartments) for the residential market in Ireland, with a focus principally on the Greater Dublin Area, as
well as the Cork, Limerick and Galway regions.
Glenveagh Living
Living’s strategic focus is on designing, developing and delivering residential solutions for institutional
investors, social and affordable landlords, government entities and strategic landowners. Glenveagh
Living intends to augment its operations with partnership arrangements to design, develop and
deliver residential schemes for purchase by institutional investors, approved housing authorities and
governmental and local authorities in Ireland. Glenveagh Living is also the Group’s delivery platform
for Private Rental Sector (“PRS”) projects, which are residential projects that governmental authorities
promote by offering a range of financial incentives, such as by granting guarantees and other financial
risk sharing incentives, in order to increase the supply of properties in the build-to-rent market.
Glenveagh Living develops residential schemes for private sector investors in PRS projects.
128
129
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 9 Segmental information (continued)
Segmental financial results
10 Revenue
Revenue
Glenveagh Homes
Glenveagh Living
Revenue for reportable segments
Operating profit/(loss)
Glenveagh Homes
Glenveagh Living
Operating profit/(loss) for reportable segments
Reconciliation to results for the year/period
Segment results – operating profit/(loss)
Finance expense
Finance income
Corporate expenses
Share-based payment expense: Founder Shares
Loss before tax
Segment assets and liabilities
Year ended
31 December
2018
€’000
Period from
Incorporation On 9
August 2017 to 31
December 2017
€’000
84,115
64
84,179
6,311
(1,306)
5,005
5,005
(1,414)
-
(7,560)
-
(3,969)
1,425
-
1,425
(3,127)
(93)
(3,220)
(3,220)
(69)
16
(999)
(47,509)
(51,781)
Residential property sales
Land sales
Income from property rental and other income
Asset advisory and management services
Construction services
Revenue earned by the Group in the prior financial period is in respect of certain contractual services
undertaken on behalf of a related party as disclosed in the prior period consolidated financial statements.
11 Exceptional items
Period from
incorporation
on 9 August
2017 to 31
December 2017
€’000
-
-
-
147
1,278
Year ended
31 December
2018
€’000
78,971
4,950
258
-
-
84,179
1,425
Period from
incorporation
on 9 August
2017 to 31
December 2017
€’000
556
47,509
Year ended
31 December
2018
€’000
409
-
409
48,065
2018
2017
Glenveagh
Homes
€’000
Glenveagh
Living
€’000
Glenveagh
Homes
€’000
Glenveagh
Living
€’000
Total
€’000
Total
€’000
Administration expenses
Founder Shares share-based payment expense (Note 14)
Segment assets
632,503
130,324 762,827
260,237
44,621 304,858
Reconciliation to Consolidated
Balance Sheet
Deferred tax asset
Trade and other receivables
Cash and cash equivalents
Property, plant and equipment
Total Assets
71
1,117
106,650
7,677
878,342
14
8,769
339,146
-
652,787
Segment liabilities
30,708
2,660
33,368
11,228
484
11,712
Reconciliation to Consolidated
Balance Sheet
Trade and other payables
Interest accrual
Total Liabilities
130
1,663
196
35,227
391
-
12,103
In the current financial year, listing costs of €0.4 million relating to the Group’s Firm Placing and Open
Offer have been classified as exceptional items in accordance with the Group’s accounting policy set out
at Note 8.6.
In the prior financial period, costs of €0.6 million relating to the Company’s Initial Public Offering
listing fees and other related expenses and €47.5 million relating to Founder Shares (see Note 14) were
classified as exceptional items in the prior financial period.
131
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements
12 Statutory and other information
13 Employment costs
Amortisation of intangible assets (Note 18)
Depreciation of property, plant and equipment (Note 17)*
Operating lease rentals
Employment costs (Note 13)
Loss on disposal of property, plant and equipment
Auditor’s remuneration
Audit of Group, Company and subsidiary financial statements**
Other assurance services
Tax advisory services
Tax compliance services
Directors’ remuneration
Salaries, fees and other emoluments
Pension contributions
Founder Shares share-based payment expense (Note 14)
Period from
incorporation
on 9 August
2017 to 31
December 2017
€’000
Year ended
31 December
2018
€’000
61
645
771
19,885
18
120
315
48
29
512
1,963
40
-
2,003
50
75
189
50,569
-
100
728
27
41
896
335
9
47,509
47,853
*Includes €0.5 million (2017: €0.015 million) capitalised in inventory during the year ended 31 December 2018
**Included in the auditor’s remuneration for the Group is an amount of €0.015 million (2017: €0.015
million) that relates to the Company’s financial statements.
The average number of persons employed by the Group (including Executive Directors) during the
financial year was 200 (Executive Committee: 5; Construction: 126; and Other 69). (2017: Executive
Committee: 5; Construction: 64; and Other: 35)
The aggregate payroll costs of these employees for the financial year were:
Wages and salaries
Social welfare costs
Pension costs - defined contribution
Share-based payment expense (Note 14)
Year ended 31
December 2018
Period from incorporation on 9
August 2017 to 31 December 2017
Before
exceptional
items
€’000
2,660
280
81
39
Exceptional
items
€’000
-
-
-
47,509
Total
€’000
2,660
280
81
47,548
3,060
47,509
50,569
Total
€’000
16,998
1,685
795
407
19,885
€7.3 million (2017: €1.0 million) of employment costs were capitalised in inventory during the year.
14 Share-based payment arrangements
The Group operates three equity-settled share-based payment arrangements being the Founder Share
scheme, the Long-Term Incentive Plan (“LTIP”) and the Savings Related Share Option Scheme (known as
the Save As You Earn or “SAYE Scheme” ) which is a new scheme that was approved during the year.
(a) Founder Share Scheme
The founders of the Company (John Mulcahy, Justin Bickle (beneficially held by Durrow Ventures), and
Stephen Garvey) subscribed for a total of 200,000,000 ordinary shares of €0.001 each for cash at par
value during the prior period, which were subsequently converted to Founder Shares in advance of the
Company’s initial public offering. These shares entitle the Founders to share 20% of the Company’s Total
Shareholder Return (“TSR”) (being the increase in market capitalisation of the Company, plus dividends
or distributions in the relevant period) in each of five individual testing periods up to 30 June 2022,
subject to achievement of a performance condition related to the Company’s share price. Further details
in respect of the Founder Shares are outlined in Note 26.
An expense of €47.5 million was recognised in the consolidated statement of profit or loss in the period
ended 31 December 2017 with a corresponding increase in the share-based payment reserve. This
represented the full grant date fair value of the Founder Shares which was recognised at grant date on
the basis that no service condition attaches to the shares under the terms of the scheme. There has
been no expense recognised in the current financial year and none will be recognised in future reporting
periods. The following were the key assumptions used in determining the fair value at of Founder Shares
grant date:
132
133
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements
14 Share-based payment arrangements (continued)
(a) Founder Share Scheme (continued)
14 Share-based payment arrangements (continued)
(b) LTIP (continued)
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividend yield
Risk free rate
Founder shares
€0.24
€1.00
N/A
34.12%
5 years
0%
-0.023% - +0.18%
As set out in Note 26, 18,993,162 Founder Shares were converted to ordinary shares during the year
following the completion of the first test period. This resulted in the re-classification of the portion of
the €47.5 million share-based payment expense noted above which related to these shares (being €4.5
million) from the share-based payment reserve to retained earnings.
(b) LTIP
The Group’s LTIP was approved in 2017 and a total of 2,427,565 options have subsequently been granted
to members of the senior management team (excluding Executive Directors). 839,065 options were
granted in two separate tranches in the current year. All options granted to date are subject to the same
service and performance conditions.
LTIP 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 TSR across the vesting
period. 25% of the award will vest once the 3-year annualised TSR reaches 6.25% per annum with the
remaining options vesting on a pro rata basis up to 100% if TSR of 12.5% is achieved.
Details of options outstanding and grant date fair value assumptions
LTIP options in issue at the beginning of the financial year/period
Granted during the financial year/period
Cancelled during the financial year/period
Number
of Options
2018
1,588,500
839,065
(75,822)
Number
of Options
2017
-
1,588,500
-
LTIP options in issue at the end of the financial year/period
2,351,743
1,588,500
Fair value at grant date
Share price at grant date
Valuation methodology
Exercise price
Expected volatility
Expected life
Expected dividend yield
Risk free rate
2018
Tranche 1
€0.48
€1.16
Monte Carlo
€0.001
34.3%
3 years
0%
-0.45%
2018
Tranche 2
€0.31
€0.87
Monte Carlo
€0.001
28.1%
3 years
0%
-0.42%
2017
€0.64
€1.16
Monte Carlo
€0.001
36.6%
3 years
0%
-0.088%
The exercise price of all options granted under the LTIP to date is €0.001 and all options have a 7- year
contractual life.
Given the Group did not have an extensive trading history at grant date, expected share price and TSR
volatility was based on the 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 €0.4 million (2017: €0.04 million) in the consolidated statement of
profit or loss in respect of options granted under the LTIP.
(c) SAYE Scheme
The SAYE scheme was approved by the Board during the year and a total of 506,040 options have
subsequently been granted to employees of the Group. 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.
Details of options outstanding and grant date fair value assumptions
SAYE options in issue at 1 January 2018
Granted during the financial year/period
Cancelled during the financial year/period
Number of Options Number of Options
5 Year
-
150,000
-
3 Year
-
356,040
(14,400)
SAYE options in issue at 31 December 2018
341,640
150,000
134
135
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements
14 Share-based payment arrangements (continued)
(c) SAYE Scheme (continued)
Fair value at grant date
Share price at grant date
Valuation Methodology
Exercise price
Expected volatility
Expected life
Expected dividend yield
Risk free rate
3 Year
€0.20
€1.03
Monte Carlo
€1.00
26.8%
3 years
0%
-0.14%
5 Year
€0.23
€1.03
Monte Carlo
€1.00
29.6%
5 years
1.4%
-0.42%
Given the Group did not have an extensive trading history at grant date, expected share price and TSR
volatility was based on the 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 €0.01 million in the consolidated statement of profit or loss in
respect of options granted under the SAYE scheme.
15 Loss per share
The calculation of basic loss per share has been based on the loss attributable to ordinary shareholders
and the weighted average number of shares outstanding for the financial year. There were 871,333,550
ordinary shares in issue at 31 December 2018 (2017: 667,049,000). Ordinary shares potentially issuable
from share-based payment arrangements are anti-dilutive due to the loss in the financial year meaning
there is no difference between basic and diluted earnings per share. The number of potentially
issuable shares in the Group held under option or Founder Share arrangements at 31 December 2018 is
183,850,221 (2017: 201,588,500).
Loss for the year attributable to ordinary shareholders (€’000)
Weighted average number of shares for the financial year/period
Period from
incorporation
on 9 August
2017 to 31
December 2017
(51,384)
374,284,264
Year ended
31 December
2018
(3,930)
745,664,898
Basic and diluted loss per share (cents)
(0.53)
(13.73)
15 Loss per share (continued)
Reconciliation of weighted average number of shares
Issued ordinary shares at beginning of financial year/period
Effect of Founder Shares Converted
Effect of shares re-designated as Founder Shares
Effect of shares issued related to business combinations
Effect of shares issued for cash
Effect of shares issued as consideration for inventories
2018
2017
No. of shares No. of shares
667,049,000
7,545,229
-
-
71,070,669
-
1
-
(188,888,889)
2,428,701
500,260,076
60,484,375
745,664,898
374,284,264
See Note 26 for further information in relation to significant share issuances.
16 Income tax
Current tax charge/(credit) for the financial year/period
Deferred tax credit for the financial year/period
Period from
incorporation
on 9 August
2017 to
31 December
2017
€’000
(246)
(151)
Year ended
31 December
2018
€’000
18
(57)
Total income tax credit
(39)
(397)
136
137
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 16 Income tax (continued)
17 Property, plant and equipment
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.
Period from
incorporation
on 9 August
2017 to
31 December
2017
€’000
Year ended
31 December
2018
€’000
Loss before tax for the financial year/period
(3,969)
(51,781)
Tax credit at standard Irish income tax rate of 12.5%
(496)
(6,473)
Tax effect of:
Income taxed at the higher rate of corporation tax
Non-deductible expenses - Founder Share expense
Non-deductible expenses - other
Other adjustments
Total income tax credit
Movement in deferred tax balances
Tax losses carried forward
Total deferred tax asset
324
-
109
24
(39)
5
5,938
248
(115)
(397)
Balance at 1
January 2018
€’000
151
Recognised in
profit or loss
€’000
57
Balance at 31
December 2018
€’000
208
151
57
208
The deferred tax asset accrues in Ireland and therefore has no expiry date. Management has considered
it probable that future profits will be available against which the above losses can be recovered and,
therefore, the related deferred tax asset can be realised.
Cost
At 1 January 2018
Acquisitions through business
combinations (Note 25)
Additions
Disposals
At 31 December 2018
Accumulated depreciation
At 1 January 2018
Charge for the year
Disposals
At 31 December 2018
Net book value
At 31 December 2017
At 31 December 2018
Land &
buildings
€’000
Fixtures &
fittings
€’000
Plant &
machinery
€’000
Computer
equipment
€’000
Total
€’000
-
-
7,713
-
7,713
-
(36)
-
(36)
-
7,677
331
-
417
-
748
(15)
(74)
-
(89)
316
659
1,161
62
2,136
(18)
3,341
(50)
(452)
2
(500)
57
1,549
-
356
(6)
407
(8)
(83)
4
(87)
62
10,622
(24)
12,209
(73)
(645)
6
(712)
1,111
49
1,476
2,841
320
11,497
The depreciation charge for the year includes €0.5 million (2017: €0.015 million) which was capitalised
in inventory at 31 December 2018. The Group leases plant and machinery under finance lease
arrangements. As at 31 December 2018, the net book value of leased equipment was €0.05 million (2017:
€0.3 million).
138
139
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 18 Intangible assets
Cost
At 1 January 2018
Acquisitions through business combinations (Note 25)
Additions
At 31 December 2018
Accumulated amortisation
At 1 January 2018
Charge for the year
At 31 December 2018
Net book value
At 31 December 2017
At 31 December 2018
19 Inventory
Land held for development (i)
Development expenditure
Development rights (ii)
Licence
€’000
Computer
Software
€’000
Total
€’000
-
149
-
149
-
-
-
-
149
145
-
564
709
(70)
(61)
(131)
75
578
145
149
564
858
(70)
(61)
(131)
75
727
2018
€’000
597,028
100,964
20,870
2017
€’000
216,964
11,125
-
718,862
228,089
€66.6 million (2017: €0.9 million) of inventory was recognised in ‘cost of sales’ during the year ended 31
December 2018.
19 Inventory (continued)
(i) Development land acquisitions completed during the year
East Road
The Group entered into an unconditional contract to acquire a 2-hectare site in the North Docklands,
Dublin known as “East Road” in December 2017. At 31 December 2017 an amount of €44.6 million was
recognised within trade and other receivables reflecting the payment of full consideration and related
stamp duty and acquisition costs at that date. The transaction completed in January 2018 resulting in the
transfer of this amount to inventory.
Millennium Park, Naas, Co. Kildare
On 22 December 2017, the Group announced it had entered into an unconditional contract to acquire a
development site at Millennium Park, Naas, Co. Kildare. At 31 December 2017 an amount of €2.1 million
was recognised within trade and other receivables reflecting a deposit paid. This transaction completed
in January 2018 resulting in a further payment of €20.5 million bringing total consideration including
stamp duty and acquisition costs to €22.6 million.
Citywest, Dublin
In January 2018, the Group exchanged contracts to acquire a development site at Citywest Road, Dublin
24. This transaction completed in December 2018 for total consideration of €12.9 million (including fees
and stamp duty).
Hollystown Golf & Leisure Limited
The acquisition of Hollystown Golf & Leisure Limited on 28 February 2018 resulted in an increase in
inventory of €14.6 million at the date of acquisition reflecting fair value of development land acquired at
that date. Further detail in relation to this transaction is outlined in Note 25.
Project Quattro
On 13 March 2018 the Group entered into a contract to acquire four sites in the Greater Dublin Area
(“GDA”): two in Donabate, Co. Dublin; one at Dunboyne, Co. Meath; and one at Stamullen, Co. Meath.
The transaction involved cash consideration of €90 million (including fees and stamp duty) and
completed in April 2018.
Tyrellstown, Dublin
In July 2018, the Group acquired a c. 113-hectare site (39 hectares of which are zoned residential) in
Tyrellstown, Dublin 15. The exact purchase price is commercially sensitive but is in excess of €65 million.
Project Bill / Project Hector / Cork Docklands
In June 2018, the Group acquired three sites for an aggregate consideration of in excess of €44 million
(excluding fees and stamp duty). These acquisitions were announced by the Company on 29 June 2018
and included, Project Bill under the terms of the Project Bill Acquisition Agreement signed on 28 June
2018; Project Hector under the terms of the Project Hector Acquisition Agreement signed on 29 June 2018
and a site in the Cork Docklands under the terms of the Cork Docklands Acquisition Agreement signed
on 18 June 2018.
140
141
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 19 Inventory (continued)
20 Trade and other receivables
(i) Development land acquisitions completed during the year (continued)
Castleforbes, North Docklands, Dublin
In June 2018, the Group acquired a loan secured against Castleforbes Business Park for total
consideration of €59.9 million (including fees and stamp duty) together with the separate acquisition
of common areas and roads on the site for €5.4 million (including fees and stamp duty) which were
obtained through the Group’s acquisition of Bulwark Limited. The purchase completed on 9 July 2018.
Subsequent to acquisition, the Group secured title to the full site (including roads and common areas)
through the settlement of the loan resulting in the classification of Castleforbes Business Park within
inventory at 31 December 2018.
(ii) Development rights
Tallaght, Dublin 24 / Gateway Retail Park, Co. Galway
On 12 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 sites at
The Square Shopping Centre, Tallaght, Dublin 24 and Gateway Retail Park, Knocknacarra, Co. Galway
for aggregate consideration of approximately €13.9 million (including stamp duty and acquisition costs).
The development rights will (subject to planning) entitle the Group to develop at least 750 residential
units under two joint business plans 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 both sites. The Directors
have determined that joint control over both sites exists and the arrangements have been accounted for
as joint operations in accordance with IFRS 11 Joint Arrangements. For further information regarding the
APSA, see Note 29 of these financial statements.
Maryborough Ridge, Cork
In December 2018, the Group entered into a licence agreement to develop 18.65 acres at Maryborough
Ridge, Cork. At 31 December 2018 an amount of €6.9 million was recognised within inventory reflecting
the licence fee paid to date. Subject to meeting the conditions of the licence agreement, a further
amount of €6.1 million will be paid in the future as outlined in Note 30.
Trade receivables
Trade receivables from related party
Other receivables
Prepayments
Unamortised transaction costs on debt facility
VAT recoverable
Construction bonds
Deposits for sites
Payment in respect of site acquisition and associated fees*
2018
€’000
249
-
70
1,065
788
6,461
3,377
2,497
-
14,507
2017
€’000
-
1,192
107
492
-
16,912
1,139
4,953
44,579
69,374
*This amount related to payment of the purchase price, stamp duty and acquisition costs for a 2-hectare
site in Dublin’s North Docklands known as “East Road”. A conditional contract was signed in December
2017 with payment transferred to the vendor’s legal representatives in advance of period end. The
transaction subsequently completed in January 2018.
The carrying value of all financial assets and trade and other receivables is approximate to their fair value.
21 Trade and other payables
Trade payables
Trade payables due to related party
Payroll and other taxes
Inventory accruals
Other accruals
Interest accrual
Non-current
Current
2018
€’000
7,821
-
2,787
21,289
3,096
196
35,189
1,803
33,386
35,189
2017
€’000
3,036
1,434
922
4,057
2,400
-
11,849
1,903
9,946
11,849
The carrying value of all financial liabilities and trade and other payables is approximate to their fair value.
142
143
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 22 Loans and Borrowings
25 Business combinations
In April 2018, the Group entered into a RCF for a total of €250.0 million (of which €125.0 million is
committed) with a syndicate of domestic and international banks for a term of 3 years at an interest
rate of one-month EURIBOR (subject to a floor of 0 per cent.) plus a margin. Amounts drawn during the
year were repaid in full pre-year end resulting in a €nil principal balance outstanding at 31 December
2018. There is a commitment fee payable on the undrawn down value of the RCF. The amount payable
at the reporting date is outlined in Note 21. Pursuant to the RCF agreement, there is a fixed and floating
charge in place over certain assets of the Group as continuing security for the discharge of any amounts
drawn down.
23 Restricted cash
The restricted cash balance relates to €1.5 million held in escrow until the completion of certain
infrastructural works relating to the Group’s residential development at Balbriggan, Co. Dublin. The
estimated fair value of restricted cash as at 31 December 2018 is its carrying value.
24 Subsidiaries
The subsidiary companies (all of which are resident in Ireland) and the percentage shareholdings held by
Glenveagh Properties PLC, either directly or indirectly, at 31 December 2018 are as follows:
Company
Principal activity
%
Reg.office
Glenveagh Properties (Holdings) Limited
Glenveagh Treasury DAC
Glenveagh Contracting Limited
Glenveagh Homes Limited
Greystones Devco Limited
Marina Quarter Limited
GLV Bay Lane Limited
Glenveagh Living Limited
GL Partnership Opportunities DAC
GL Partnership Opportunities II DAC
Hollystown Golf & Leisure Limited
GLL PRS Holdco Limited
GLL Partnership Holdco Limited
GLL Holdco Limited
Into the Future (South) Limited
Feathermist Limited
Braddington Developments Limited
Bulwark Limited
Holding company
Financing activities
Property development
Property development
Property development
Property development
Property development
Property development
Property development
Property development
Golf Club operations
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1
2
15 Merrion Square North, Dublin 2, D02 YN15
Block B, Maynooth Business Campus, Maynooth, Co. Kildare, W23W5X7
1
2
2
2
1
2
2
1
1
1
2
1
1
1
2
2
2
1
On 28 February 2018, Glenveagh Homes Limited (a subsidiary of the Group) acquired 100 per cent. of
the share capital of Hollystown Golf and Leisure Limited (HGL). The table below summarises the fair
value of consideration transferred and assets and liabilities assumed at that date.
Property, plant and equipment
Intangible assets
Inventory
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Fair value of net assets acquired
Consideration
Cash consideration
Total consideration
€’000
62
149
14,654
102
15
(1,319)
13,663
13,663
13,663
Consideration of €13.7 million was paid in respect of this acquisition which was primarily executed to
access the development potential of land owned by 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.
HGL has not had a material impact on the consolidated loss for the post acquisition period and had the
acquisition taken place at beginning of the financial year the impact would still not have been material.
26 Share capital and share premium
(a) Authorised share capital
Ordinary Shares of €0.001 each
Founder Shares of €0.001 each
Deferred Shares of €0.001 each
2018
Number of shares
1,000,000,000
200,000,000
200,000,000
2017
€’000
1,000
200
200
Number of shares
1,000,000,000
200,000,000
200,000,000
€’000
1,000
200
200
1,400,000,000
1,400
1,400,000,000
1,400
144
145
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 26 Share capital and share premium (continued)
(b) Issued share capital and share premium
At 31 December 2018
Ordinary Shares of €0.001 each
Founder Shares of €0.001 each
At 31 December 2017
Ordinary Shares of €0.001 each
Founder Shares of €0.001 each
(c) Reconciliation of shares in issue
In respect of current year
In issue at 1 January 2018
Issued for cash
Conversion of Founder Shares
In respect of prior year
In issue at incorporation on 9 August 2017
Issued for cash
Re-designation as Founder Shares
IPO issue
Issued in business combinations
Issued as consideration for inventories
Number of
shares
871,333,550
181,006,838
Share
capital
€‘000
871
181
Share
premium
€’000
879,281
-
1,052,340,388
1,052
879,281
Number of
shares
667,049,000
200,000,000
867,049,000
Share
capital
€‘000
667
200
867
Share
premium
€’000
666,381
-
666,381
Ordinary
shares
‘000
667,049
185,291
18,993
Founder
shares
‘000
200,000
-
(18,993)
Share
capital
€‘000
867
185
-
Share
premium
€’000
666,381
212,900
-
871,333
181,007
1,052
879,281
Ordinary
shares
‘000
-
200,001
(200,000)
552,371
4,427
110,250
Founder
shares
‘000
-
-
200,000
-
-
-
Share
capital
€‘000
-
200
-
552
4
111
Share
premium
€’000
-
-
-
551,819
4,423
110,139
667,049
200,000
867
666,381
26 Share capital and share premium (continued)
(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.
Founder Shares
Founder Shares do not confer on any holder thereof the right to receive notice of, attend, speak or vote
at general meetings of the Company except in relation to resolutions regarding the voluntary winding up
of the Company or the granting of further Founder Shares. Founder Shares do not entitle their holder to
receive dividends.
Founder Shares entitle the Founders of the Company namely, Justin Bickle (through Durrow Ventures),
Stephen Garvey and John Mulcahy to share 20% of the Company’s TSR (being the increase in market
capitalisation of the Company plus dividends and distributions in the relevant period) in the five years
following the IPO of the Company.
This entitlement is subject to the achievement of a performance condition related to the Company’s
share price, specifically that a compound rate of return of 12.5% (adjusted for any dividends or other
distributions and returns of capital made but excluding the value of any Founder Shares which have
been redeemed) is achieved across five testing periods.
Following completion of the first test period (which ran from 1 March 2018 until 30 June 2018), it was
confirmed that, the Founder Share Value for the first test period would be satisfied by way of the
conversion of 18,993,162 Founder Shares into the same number of Ordinary Shares of €0.001 each and
these new shares were subsequently issued. All new Ordinary Shares issued in respect of the conversion
of Founder Shares are subject to a lock-up period, with 50% of the new Ordinary Shares subject to a
one-year lock-up period and the balance subject to a two-year lock-up. The closing market price of the
Company’s shares on 29 June 2018 was €1.15 per share.
(e) Significant share issuances during the year
(i)
(ii)
On 9 August 2018, the Company issued 18,993,162 Ordinary Shares (through the conversion
of 18,993,162 Founder Shares) to the Founders of the Company namely Justin Bickle (through
Durrow Ventures), Stephen Garvey and John Mulcahy.
On 14 August 2018, the Company issued 185,291,388 Ordinary Shares at €1.15 per share by
way of a Firm Placing and Open Offer, raising gross proceeds of €213.1 million. €7.1 million of
directly attributable share issue costs have been recognised in equity (retained earnings).
27 Financial instruments and financial risk management
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).
146
147
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 27 Financial instruments and financial risk management (continued)
27 Financial instruments and financial risk management (continued)
Financial instruments: financial assets
Liquidity risk
Trade receivables
Trade receivables from related party
Other receivables
Construction bonds
Deposits for sites
Cash and cash equivalents
Restricted cash (non-current)
Total financial assets
Cash and cash equivalents are short-term deposits held at variable rates.
Financial instruments: financial liabilities
Trade payables
Trade payables due to related party
Finance lease obligation
Inventory accruals
Other accruals
Total financial liabilities
2018
€’000
249
-
70
3,377
2,497
130,701
1,500
2017
€’000
-
1,192
107
1,139
4,953
351,796
1,500
138,394
360,687
2018
€’000
7,821
-
38
21,289
3,096
32,244
2017
€’000
3,036
1,434
254
4,057
2,400
11,181
Trade payables and other current liabilities are non-interest bearing.
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.
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 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.
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.
Finance lease obligations
Trade payables
Inventory accruals
Other accruals
Loans and borrowings*
31 December 2018
Carrying
amount
€’000
38
7,821
21,289
3,096
-
Contractual
cash flows
€’000
42
7,821
23,713
672
2,920
Less than
1 year
€’000
36
7,821
23,713
672
1,252
1 year to
2 years
€’000
6
-
-
-
1,252
More than
2 years
€’000
-
-
-
-
416
32,244
35,168
33,494
1,258
416
*Contracted cash flows on loans and borrowings relate to commitment fee payable on the RCF.
Finance lease obligations
Trade payables
Amounts due to related party
Inventory accruals
Other accruals
31 December 2017
Carrying
amount
€’000
254
3,036
1,434
4,057
2,400
Contractual
cash flows
€’000
287
3,036
1,434
4,057
2,400
Less than
1 year
€’000
94
3,036
1,434
4,057
2,400
1 year to
2 years
€’000
94
-
-
-
-
More than
2 years
€’000
99
-
-
-
-
11,181
11,214
11,021
94
99
148
149
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 27 Financial instruments and financial risk management (continued)
27 Financial instruments and financial risk management (continued)
Liquidity risk (continued)
Funds available
Revolving credit facility (undrawn committed)*
Cash and cash equivalents
2018
€’000
125,000
130,701
255,701
2017
€’000
-
351,796
351,796
*The Group’s RCF contains a mechanism through which the committed amount can be increased up to
€250.0 million. Under the terms of the Group’s RCF, the Group is required to maintain a minimum cash
balance of €25.0 million in cash in cash equivalents throughout the term of the facility.
The Group’s RCF is subject to primary financial covenants calculated on a quarterly basis:
− A maximum net debt to net assets ratio;
− A minimum cash reserves limit; and
− A minimum EBITDA to net interest coverage ratio.
Credit risk
The Group’s exposure to credit risk encompasses the financial assets being: trade and other receivables
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, 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. In April 2018, the Group entered into a RCF for a total of €250.0 million (of which
€125.0 million is committed) with a syndicate of domestic and international banks for a term of 3 years
at an interest rate of EURIBOR (subject to a floor of 0 per cent.) plus a margin. All amounts drawn
under the facility during the year were repaid in full in advance of year end which is reflected in the €nil
balance at 31 December 2018. The Group has an exposure to cash flow interest rate risk where there are
changes in the EURIBOR rates. As the balance on the RCF was €nil at 31 December 2018 no interest rate
sensitivities have been provided.
Capital management
The Group finances its operations by a combination of shareholders’ funds 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. This allows the
Group to take advantage of prevailing market conditions by investing in land and work-in-progress at
the right point in the cycle.
28 Finance lease liabilities
Finance lease liabilities are payable as follows:
Current portion
Non-current portion
At 31 December 2018
Less than one year
Between one and two years
More than two years
At 31 December 2017
Less than one year
Between one and two years
More than two years
2018
€’000
33
5
38
2017
€’000
84
170
254
Present value of
minimum lease
payments
€’000
33
5
-
38
Present value of
minimum lease
payments
€’000
84
84
86
254
Interest
€’000
3
1
-
4
Interest
€’000
10
10
13
33
Future
minimum lease
payments
€’000
36
6
-
42
Future
minimum lease
payments
€’000
94
94
99
287
150
151
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC 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:
Short-term employee benefits
Post-employment benefits
LTIP and SAYE share-based payment expense
Founder Shares share-based payment expense
2018
€’000
2,357
74
50
-
2,481
2017
€’000
456
27
10
47,509
48,002
(ii) Other related party transaction
As set out in Note 19 above, the Group entered into the APSA with TIO, a wholly owned subsidiary
of OCM Luxembourg EPF III S.a.r.l. (OCM) (and an entity in which John Mulcahy and Justin Bickle are
directors) on 12 March 2018.
Under the terms of the APSA, the Group acquired certain development rights in respect of sites at The
Square Shopping Centre, Tallaght, Dublin 24 and Gateway Retail Park, Knocknacarra, Co. Galway for
aggregate consideration of approximately €13.9 million (including stamp duty and transaction costs). The
development rights will (subject to planning) entitle the Group to develop at least 750 residential units
under two joint business plans 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 both sites.
The Directors have determined that joint control over both sites exists and the arrangements have been
accounted for as joint operations in accordance with IFRS 11 Joint Arrangements.
The APSA also stipulates certain profit-sharing arrangements in relation to the residential development
opportunity at both sites together with a third site at Bray Retail Park, Bray, Co. Wicklow under which
TIO would be entitled to a share of profit on any residential development should certain returns
be achieved.
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
In addition to the contingent liabilities outlined in Notes 25 and 29 above, the Group had the following
commitments at 31 December 2018 relating to development land acquisitions:
Land acquisition subject to re-zoning
In April 2018, the Group contracted to acquire 66 acres of currently unzoned land in the Greater Dublin
Area subject to appropriate residential zoning being awarded in the next local authority development
plan on at least 30 acres of the site. Once this minimum threshold is achieved, the Group has committed
to acquiring the entire site at a fixed price per acre on land zoned for residential development with the
remaining land to be acquired at market value.
Maryborough Ridge, Cork
(i) Acquisition of development land
On 22 December 2018, the Group entered into an unconditional contract to acquire 24.34 acres of zoned
land for residential development at Maryborough Ridge a development site at Douglas, Co. Cork for
total consideration of €12.5 million. At 31 December 2018 an amount of €1.3 million was recognised within
trade and other receivables reflecting a deposit paid and the transaction subsequently completed in
February 2019.
(ii) Licence agreement
The Group also entered into a licence agreement to develop a further 18.65 acres at the Maryborough
Ridge site. At 31 December 2018 an amount of €6.9 million was recognised in inventory reflecting the
initial licence fee paid and related stamp duty and acquisition costs. The remaining €6.1 million of the
licence fee is payable in equal instalments in line with milestones outlined in the licence agreement
which will bring the total consideration to approximately €13.0 million.
Under the terms of the licence agreement, the Group has committed to paying the vendor variable
amounts dependent on the number of units developed and unit sale prices achieved in excess of those
contemplated in the licence agreement. As these commitments are based on uncertain future events, the
Group has treated them as contingent liabilities. The Group will reassess these commitments at each
reporting date.
Castleknock
As at 31 December 2018, the Group had contracted to acquire a development site at Carpenterstown
Road, Castleknock, Co. Dublin for total consideration of €9.3 million. A deposit of €0.9 million was paid
pre-year end and is classified within other receivables at 31 December 2018. The transaction completed
on 16 January 2019.
152
153
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements 30 Commitments and contingent liabilities (continued)
(b) Operating lease commitments
Total commitments under non-cancellable operating leases are due as follows:
Less than one year
Between 1 – 5 years
More than 5 years
31 Subsequent events
Minimum
Payments
2018
€’000
805
500
-
Minimum
Payments
2017
€’000
279
52
-
1,305
331
Subsequent to year end, the Group has entered into a contract to acquire two further sites in the GDA:
one at Leixlip, Co. Kildare and one at Newbridge, Co. Kildare which have full planning permission to
deliver 793 starter-homes and apartments. The transaction involves cash consideration of approximately
€50.8 million (excluding stamp duty and fees) and is scheduled to complete in Q2 2019.
Other than this acquisition and the completion of the Maryborough Ridge development land acquisition
noted in Note 30, no other events requiring disclosure have occurred since 31 December 2018.
32 Loss of the Parent Company
The parent company of the Group 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 €0.7 million
(2017: €47.8 million).
33 Approved financial statements
The board of directors approved the financial statements on 5 March 2019.
Company balance sheet
as at 31 December 2018
Assets
Non-current assets
Investments in subsidiaries
Current assets
Trade and other receivables
Amounts owed by subsidiaries
Cash and cash equivalents
Total assets
Equity
Share capital
Share premium
Retained earnings
Share-based payment reserve
Liabilities
Current liabilities
Trade and other payables
Total liabilities
Total liabilities and equity
Note
3
4
5
7
6
2018
€’000
4,471
4,471
264
845,931
447
846,642
2017
€’000
4,064
4,064
8,752
568,005
63,806
640,563
851,113
644,627
1,052
879,281
(73,893)
43,443
849,883
1,230
1,230
851,113
867
666,381
(70,559)
47,548
644,237
390
390
644,627
154
155
Notes to the consolidated financial statements for the financial year ended 31 December 2018 (continued)Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Company statement of changes in equity
for the financial year ended 31 December 2018
Company statement of changes in equity
for the period from incorporation on 9 August 2017 to 31 December 2017
Share Capital
Ordinary
shares
€’000
Founder
shares
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
Share Capital
Ordinary
shares
€’000
667
Founder
shares
€’000
200
Share
premium
€’000
666,381
Share-based
payment
reserve
€’000
47,548
Retained
earnings
€’000
(70,559)
Total
equity
€’000
644,237
-
-
-
185
-
19
-
204
871
-
-
-
-
-
(19)
-
(19)
-
-
-
212,900
-
-
-
-
-
-
(715)
-
(715)
(715)
-
(715)
-
(7,131)
213,085
(7,131)
-
(4,512)
4,512
-
-
212,900
407
(4,105)
-
(2,619)
407
206,361
181
879,281
(43,443)
(73,893)
849,883
Balance as at 1 January 2018
Total comprehensive loss for
the financial year
Loss for the financial year
Other comprehensive income
Transactions with owners of
the Company
Issue of ordinary shares for cash
Share issue costs
Conversion of Founder Shares
to ordinary shares
Equity-settled share-based
payments
Balance as at 31 December 2018
Balance as at 9 August 2017
Total comprehensive loss
for the period
Loss for the period
Other comprehensive income
Transactions with owners of
the Company
Issue of ordinary shares for cash
Share issue costs
Re-designation as
Founder Shares
Issue of ordinary shares related
to business combinations
Issue of ordinary shares in
consideration for inventories
Equity-settled share-based
payments
Balance as at 31 December 2017
-
-
-
752
-
-
-
-
-
-
-
-
-
551,819
-
(200)
200
-
-
-
4,423
110,139
4
111
-
667
667
-
-
-
-
-
-
-
-
(47,831)
-
(47,831)
(47,831)
-
(47,831)
-
(22,728)
552,571
(22,728)
-
-
-
-
4,427
110,250
-
200
-
666,381
47,548
47,548
-
(22,728)
47,548
692,068
200
666,381
47,548
(70,559)
644,237
156
157
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Notes to the Company financial statements
for the financial year ended 31 December 2018
Notes to the Company financial statements
For the financial year ended 31 December 2018 (continued)
1 Basis of preparation
3
Investment in subsidiaries
The financial statements have been prepared on a going concern basis under the historical cost
convention in accordance with the Companies Act 2014 and Generally Accepted Accounting Practice in
the Republic of Ireland (Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101)). Note
2 describes the principal accounting policies under FRS 101, which have been applied. The Company has
applied the exemptions available under FRS 101 in respect of the following disclosures:
− Statement of Cash Flows
− Disclosures in respect of transactions with wholly owned subsidiaries
− Certain requirements of IAS 1 Presentation of Financial Statements
− Disclosures required by IFRS 7 Financial Instrument Disclosures
− Disclosures required by IFRS 13 Fair Value Measurement; and
− The effects of new but not yet effective IFRSs
− Disclosures in respect capital management
As noted in Note 32 of the consolidated financial statements, the Company has also availed of the
exemption from presenting the individual statement of profit or loss and other comprehensive income.
The Company’s loss for the financial year was €0.7 million. (2017: €47.8 million).
2 Significant accounting policies
Significant accounting policies specifically applicable to these individual Company financial statements
and which are not included within the accounting policies for the consolidated financial statements are
detailed below.
Investments in subsidiaries are accounted for in these individual Company financial statements on the
basis of the direct equity interest, rather than on the basis of the reported results and net assets of
investees. Investments in subsidiaries are carried at cost less impairment.
The capital contributions arising from share-based payment charges represents the Company’s
granting rights over its equity instruments to employees of the Company’s subsidiaries. This results in a
corresponding increase in investment in subsidiary.
(b) Intra-group guarantees
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of
companies within the Group, the Company considers these to be insurance arrangements and accounts
for them as such. The Company treats the guarantee contract as a contingent liability until such time as
it becomes probable that it will be required to make a payment under the guarantee.
Investment in subsidiaries
Accumulated cost of share-based payments in respect of subsidiaries
2018
€’000
4,025
446
4,471
2017
€’000
4,025
39
4,064
Details of subsidiary undertakings are given in Note 24 of the consolidated financial statements. The Company
has considered indicators of impairment, including market capitalisation and no impairment was required.
4 Trade and other receivables
VAT receivable
Prepayments and other receivables
Amounts due from subsidiaries
2018
€’000
110
154
264
2017
€’000
8,500
252
8,752
2018
€’000
845,931
2017
€’000
568,005
845,931
568,005
Amounts owed by subsidiaries are non-interest bearing and are repayable on demand. The expected
credit loss associated with the above balances is considered to be insignificant.
6 Trade and other payables
Trade payables
Accruals
Payroll and other taxes
2018
€’000
146
1,022
62
1,230
2017
€’000
127
208
55
390
(a) Investments in subsidiaries
5 Amounts due from subsidiaries
158
159
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Notes to the Company financial statements
For the financial year ended 31 December 2018 (continued)
Supplementary Information
for the financial year ended 31 December 2018
7 Share capital and share premium
Alternative Performance Measures (APMs)
For further information on share capital and share premium, refer to Note 26 of the consolidated
financial statements
8 Financial instruments
The carrying value of the Company’s financial assets and liabilities are a reasonable approximation of
their fair value.
Relevant disclosures on consolidated financial instruments and risk management are given in Note 27 of
the consolidated financial statements.
9 Share-based payments
For information in relation to share-based payment arrangements impacting the Company, refer to Note
14 of the consolidated financial statements.
10 Related party disclosures
See Note 29 of the consolidated financial statements for information in relation to related party transactions.
Remuneration of key management
Key management of the Company is defined as the directors of the Company. The compensation of key
management personnel is set out in Note 29 of the consolidated financial statements.
The Group reports certain alternative performance measures (“APMs”) that are not required under IFRS,
which is the framework under which the consolidated financial statements are prepared. The Group
believes that these metrics assist investors in evaluating the performance of the underlying business and
provides a more meaningful understanding of how senior management review and monitor the business
on an ongoing basis.
These performance measures are referred to throughout our strategy and business model update and
the discussion of our reported financial performance and position. These performance measures may
not be uniformly defined by all companies and accordingly they may not be directly comparable with
similarly titled measures and disclosures made by other companies.
The principal APMs used by the Group are defined as follows:
1 Gross margin
Gross profit
Revenue
Gross margin
Financial statements reference
Statement of profit or loss
Note 10
2018
€’000
15,292
84,179
18.2%
2017
€’000
524
1,425
36.8%
2 EBITDA pre-exceptional items
An APM representing earnings pre exceptional items and before interest, tax, depreciation and
amortisation that Group management considers to be the most appropriate measure for assessing
the profitability of the Group in a given financial period. It is calculated by adding back non-cash
depreciation and amortisation charges to the Group’s operating profit or loss for a period.
Financial statements reference
Depreciation -
recorded in inventory
Depreciation -
recognised in profit or loss
Total depreciation
Note 17
Operating loss
Exceptional items
Depreciation –
recognised in profit or loss
Amortisation
EBITDA
Statement of profit or loss
Note 11
As above
Note 18
2018
€’000
524
121
645
2018
€’000
(2,555)
409
121
61
2017
€’000
15
60
75
2017
€’000
(51,728)
48,065
60
-
(1,964)
(3,603)
160
161
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements Supplementary Information
for the financial year ended 31 December 2018 (continued)
Company Information
3 ROCE
An APM representing return on capital employed that Group management believes is the best measure
of the Group’s ability to generate profits from its asset base in a capital efficient manner to create
sustainable shareholder value. ROCE is calculated as operating profit divided by average capital
employed, where operating profit is earnings before interest and tax and where capital employed is
calculated as (i) net assets plus (ii) financial indebtedness, less (iii) cash and intangible assets.
4 Net Development Value (NDV)
An APM representing an estimate of the development value of land held in inventory. NDV is calculated
by multiplying the number of units the Group expects to sell on a given site by the estimated sales price
of each unit (excluding VAT).
Directors
Registrars
Bankers
Executive Directors
John Mulcahy
Justin Bickle
Stephen Garvey
Non-Executive Directors
Lady Barbara Judge, CBE
Robert Dix
Richard Cherry
Caleb Kramer
Company Secretary
Chloe McCarthy
Computershare Investor
Services (Ireland) Limited
Heron House
Corrig Road
Sandyford Industrial Estate
Dublin 18
Auditor
KPMG
Chartered Accountants
1 Stokes Place
St. Stephen’s Green
Dublin 2
Registered Office
Solicitor
Glenveagh Properties PLC
15 Merrion Square North
Dublin 2
Ireland
A&L Goodbody
North Wall Quay
Dublin 1
Kane Tuohy
The Malt House North
Grand Canal Quay
Dublin 2
Allied Irish Bank, plc
Bankcentre
Ballsbridge
Dublin 4
Barclays Bank Ireland plc
2 Park Place
Hatch Street
Dublin 2
HSBC Bank plc
One Grand Canal Square
Grand Canal Harbour
Dublin 2
Website
www.glenveagh.ie
Stockbrokers
Davy Group
Davy House
49 Dawson Street
Dublin 2
Ireland
162
163
Glenveagh Properties PLC Financial StatementsGlenveagh Properties PLC Financial Statements
Notes
164
e
i
.
g
o
d
d
e
r
.
w
w
w
:
i
n
g
s
e
D
Glenveagh Properties PLC Financial Statements
Glenveagh Properties PLC
15 Merrion Square North
Dublin 2
D02YN15
Ireland
T: +353 (0)1 556 5600
E: enquiries@glenveagh.ie
Block B, Maynooth Business Campus
Maynooth,
Co. Kildare
W23 W5X7
Ireland
T: +353 (0)1 610 6546
glenveagh.ie