Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
Annual Report & Accounts 2020 Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
Building high
quality homes for
where and how
our customers
want to live.
Marina Village
Greystones,
Co. Wicklow
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
Glenveagh at a Glance
Chairman’s Letter
CEO’s Review
CFO’s Review
Our KPIs
Business Model & Strategy
Strategic Report
Business Units
Risk Management Report
Sustainability Report
Governance
Corporate Governance Report
Audit and Risk Committee Report
Remuneration Committee Report
Nomination Committee Report
Board of Directors
Directors’ Report
Financial Statements
Company Information
4
6
10
14
19
22
32
38
50
102
110
116
136
138
141
147
208
3ACCESSQUALITY INNOVATION We are giving more people the opportunity of owning their own new home —Building where they want to live and at a price that is more affordable.We do not compromise on quality. We build homes that last, are energy efficient, and are designed for the way that people live today.We achieve quality and greater accessibility to new homes by relentlessly innovating the way we plan, design and build. We bring new ideas home.Silver Banks Stamullen, Co. MeathDevelopment Town, CountyCONTENTSSilver Banks Stamullen, Co. MeathCluain Adain Clonmagadden, Navan Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
4Glenveagh Properties PLC Annual Report and Accounts 2020* Pre-asset impairment of €20.3 million in H1 2020 ** At Annual Report approval date*** Suburban portfolio at year end 5Glenveagh at a Glance€232.3m Revenue€36.0mNet cash at 31 December€29.8m Underlying Gross Profit* 16Selling sites700Unit completions950Units sold, signed or reserved**€311KASP€821.2mInventory at 31 December96%Pricing <€450k***Our vision is that everyone should have the opportunity to access great value, high-quality homes in flourishing communities across Ireland.14.1%Core gross margin %Financials 2020Sales Activity 2020GLENVEAGH AT A GLANCE18Active construction sites100%Next year's deliveries from existing sites3Site openingsConstruction 2020 Land Utilisation€Targeting a Maximum of 5-year Landbank at ScaleOn track to deliver greater land utilisationOn track to deliver >€100m reduction in landbank(1) June December June December 20212019 2019 2020 2020 Target€710m€668m€659m€619mNotes: (1) vs June 2019€610m Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
7Chairman's LetterJohn Mulcahy ChairmanPurpose and CultureThe Group’s overarching purpose is to build a business that is synonymous with the provision of access to high quality, energy and thermal efficient homes in flourishing communities across Ireland. The Group has positioned itself as ‘Home of the New’ in Irish residential development, not only in how it builds energy and thermal efficient, high quality homes but in how it selects land and partners, how it plans on land, how it fosters and embeds relationships with communities and how it utilises technology to innovate in delivering on land. The Group has a clear vision which has resulted in the creation of the leading and most sustainable homebuilding platform in Ireland that recognises and reinforces the pivotal role played by its people in achieving its aims. To this end, the Group has developed a culture that is safety-led, customer-centred, collaborative and innovative.Business Model Resilience Demonstrated by Strong Operational PerformanceOur clear strategy to target three business areas - Suburban, Urban and Partnerships – continues to provide the best platform for targeting the deepest, and most resilient segments of the market. The benefit of this approach is demonstrated by the Group’s resilient performance during 2020. CHAIRMAN’S LETTERI am pleased to present our Annual Report for the year ended 31 December 2020. The Company’s successful performance in 2020, despite a challenging operating environment, demonstrates that we continue to implement the right strategy and provide attractive, affordable and high-quality homes to owner occupiers, local authorities and institutional investors.Total revenue for the year was €232.3 million (2019: €284.6 million) as the Group delivered for our customers in a pandemic dominated and demanding operational environment with 700 unit sales completed (2019: 844). Glenveagh finished the year with almost 700 units contracted or reserved for 2021 (2019: 240) providing further evidence of the strong demand and maturing sales profile within the business.Looking ahead, we expect the market environment to remain favourable with significant owner occupier and institutional demand for housing, particularly starter homes. Government policy is supportive of increased output from individual sites by bringing a larger cohort of buyers into the system via a combination of the expanded help-to-buy scheme, shared equity and direct purchases. Reflecting confidence in our operational progress, the Group is targeting the delivery of 3,000 units per annum by 2024. Our 3,000 unit output target and our approach to funding our development expenditure reflects the Group's continued commitment to invest in operational scale and efficiencies that maximise return on capital. Delivering For Our PeopleThe Board recognises the significant role the people within our Company have played in delivering our success to date. We will continue to support and develop our people through refining our culture and communicating what we value as a Company. The implementation of our culture and values extend beyond employees and include our wider subcontractor and supplier base. Glenveagh now employs over 300 staff and has a subcontractor network of more than 2,000. The health and safety of our people is our number one priority and we work relentlessly to promote a safety-first culture to protect our people and our reputation. While Glenveagh’s performance was impacted as construction sites were closed for six weeks as part of a Government enforced industry-wide lockdown as the pandemic initially took hold, we moved quickly to develop extensive health and safety protocols in line with Government and health organisations advice to ensure a safe return to work for our people when sites began to reopen in May. As we continue to scale our operations we will retain, attract and develop the best talent. We will bring the brightest and best minds to the challenge of innovating how we develop, build and market new homes in Ireland.Our Broader Sustainability AgendaOur developments are designed to promote people's health, happiness, and well-being and to create flourishing communities with a sense of place and purpose.We take our commitments to environmental and social stewardship seriously. We recognise that our developments must be affordable not only in the economic sense, but also in terms of their environmental and social impact. Our long-term ‘north star’ sustainability objective is to set a new benchmark in our we continue to target 3,000 units per annum by 20243,0006Glenveagh Properties PLC Annual Report and Accounts 2020Marina Village Greystones, Co. WicklowOur CultureInnovativeCustomer- CentredSafety LedCollaborativeEnvironmentCan-Do Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
9Chairman’s Lettersector by delivering the maximum possible social benefit at the lowest possible environmental cost.We strive to minimise emissions, waste and resource use during construction. We design energy and thermal efficiency into our homes as standard to enable customers to minimise their own carbon footprint. We seek to make the most efficient use of land possible whilst meeting customer requirements. In line with this approach, we have established a baseline for Scope 1 and Scope 2 emissions and agreed targets for emissions reduction per unit. (See page 96).Governance and Board CompositionThe Board was deeply saddened this year by the untimely death of the Group’s Senior Independent Director, Lady Barbara Judge CBE. Lady Barbara played an integral role in the growth of the Group from her appointment at IPO and on behalf of the Board, I would like to extend our deepest sympathies once again to her family and friends.Following the passing away of Lady Barbara, the Board made a number of changes to its committee composition and announced Robert Dix as successor to the role of Senior Independent Director. Cara Ryan succeeded Robert as Chair of the Audit and Risk Committee and the Board established a Remuneration Committee and, separately, a Nomination Committee, in place of the existing Remuneration and Nomination Committee. Richard Cherry continues to serve as Chair of the Remuneration Committee, while Pat McCann assumed the role of Chair of the Nomination Committee. A key focus for the newly established Nomination Committee has been the commencement of a process to identify a replacement independent Non-Executive Director following Lady Barbara’s death. This process has been informed by the Board’s completion of its first externally facilitated performance evaluation at the end of 2020 and the assessment of existing skills, experience, knowledge and diversity on the Board.RemunerationAs we announced to the market in May 2020, a number of mitigating actions were put in place in response to the outbreak of the pandemic and enforced site closures. This included some temporary lay-offs and furlough arrangements for certain staff. Salaries for all employees were temporarily reduced, and all employer pension contributions temporarily ceased. For the Executive Directors, this resulted in a salary reduction of approximately 20%. Fees for the Non-Executive Directors were reduced by 25%. All salaries and fees were restored to their full levels on 1 September and employer pension contributions resumed. Recognising the underlying strength of the business, we have since repaid to all employees, including the Executive Directors, the salaries and pensions foregone as a result of the temporary reductions.Executive Directors and other senior executives within the business have waived their entitlement to any 2020 annual bonus. More junior employees remained eligible for a bonus although payment depended on performance against the pre-set targets. As a result of the above factors, the remuneration of the Executive Directors is expected to be materially lower in 2020 than in 2019. We believe this approach is appropriate given the circumstances.Engagement with ShareholdersThe Board recognises the importance of effective engagement with, and active participation from, its shareholders and is committed to building and maintaining successful shareholder relationships through regular and transparent communication. This commitment is formalised through the Group’s comprehensive investor relations programme. In addition to the detailed presentations and roadshows conducted after the announcement of interim and full-year results, the Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and the Director of IR & Strategy regularly meet with institutional investors and analysts throughout the year and participate in a number of industry conferences. Both Richard Cherry, Chair of the Remuneration Committee, and I have held a number of meetings with shareholders during the course of 2020 to seek their views on key issues such as executive remuneration and Group strategy. All feedback has been shared with the wider Board and has been factored into our key decision making. This will be an ongoing programme as we progress into the next financial year.Conclusion and OutlookIn what was a challenging year for many people and businesses here in Ireland and across the world, I am particularly grateful to my fellow Board members and to all our employees across the Group for their hard work, commitment and support this year. Our business continues to grow, and we recognise that our employees are critical to our growth plans while maintaining the high standards expected of Glenveagh.In the market there continues to be a long-term demand for 34,000 units per annum1. We intend to be the volume operator supplying these units to the market. The Board remains very confident about the future for your Company and the further progress 2021 and beyond will bring. John Mulcahy Executive ChairmanIn the market there continues to be a long-term demand for 34,000 units per annum. We intend to be the volume operator supplying these units to the market. 8Glenveagh Properties PLC Annual Report and Accounts 2020Bellingsmore Kilmartin, Dublin 1. Central Bank of Ireland Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
For more information
on our Strategy see
our Strategic Report on
page 22
11Glenveagh Properties PLC Annual Report and Accounts 202010CEO's ReviewStephen GarveyChief Executive Officer2020 – A Year Like No OtherAs we all know, 2020 was a year like no other, as best laid plans gathered dust, economic activity ground suddenly to a halt and sites across the country fell silent. Up to that point, our production had tripled in volume. We had grown the number of site openings and we had innovated our production methods through technology. The good news is, despite this unprecedented year, we are well on our way to completing 1,1503 homes in 2021, and 3,000 per annum by 2024.In our third full year of trading it has been another strong performance for the Group both operationally and financially. We have navigated Covid-19 safely and prudently, optimised our capital employed by reducing our net investment in land, and grown our operations consistent with the business plan laid out at our Investor Day 2020. Albeit with some delay to deliveries as a result of Covid-19 site closures.CEO’S REVIEWI am pleased to update you, our shareholders, on our continued strong progress at Glenveagh during 2020,where despite the challenging operating environment the Group continued to deliver for all its stakeholders: • Developed and rolled-out a safe operating environment for our people and the communities in which we operate;• 700 happy customers moved into a Glenveagh home;• Our order book for 2021 of approximately 7002 units (+192%) reflecting our attractive product offering to private, institutional and state customers;• Contracted Private Residential Sector (“PRS”) transactions in both our Suburban and Urban business units; and• Capital employed optimised resulting in a net cash position of €36.0 million.Strong Sales PerformanceOur resilient sales performance in a demanding operating environment resulted in revenue for the year of €232.3 million (2019: €284.6 million). At year end, almost 700 units were contracted or reserved for 2021 (2019: 240) highlighting the robust demand that exists for the Group’s product offering.The strong momentum on existing open sites carried forward from last year with net private reservation rates per active site growing again in 2020. New selling sites delivering from H2 2020 included Barnhall Meadows, Bellingsmore, Oldbridge Manor and Silver Banks where private reservations and completions have been strong. Interest from institutional investors continues to increase across both our Urban and Suburban portfolios. Notwithstanding the strong take-up from private customers, to further drive momentum and return on capital across our active sites, deliveries for Suburban PRS are now contracted for 2021. Validation of the Group’s Strategic DirectionAligned with our purpose of providing access to high quality, energy and thermal efficient homes in flourishing communities across Ireland, our focus remains on scaling the business to 3,000 units per annum. Recent experience in the market has reaffirmed our belief that the Group's strategic focus on starter-homes for sale, building quality affordable PRS product in sustainable rental locations and placemaking with local authorities through partnership schemes, continues to represent the best proposition for the Irish residential market:• Demand for starter-homes has remained strong since the onset of Covid-19 demonstrating the depth of demand and affordability in that segment of the market;• The PRS sector is critical for alleviating the housing crisis in Ireland and has outperformed relative to other institutional asset classes highlighting the attractive characteristics of the sector, with the Group contracted on a number of transactions due for delivery in 2021;• A key element of the Government’s strategy to address the accommodation crisis is to support social and affordable housing providing further long-term opportunities for our Partnerships business beyond the Group’s existing tender pipeline.A key driver of this unit delivery for Glenveagh is a market opportunity which remains highly compelling. Population growth on top of an already high headship rate is driving a housing need and well-capitalised scale homebuilders, such as Glenveagh, are best placed to address this. The landbank we’ve assembled can deliver housing that is both in demand and affordable and for which we have the operations and capital structure to execute on. Going forward, we’re positioned as a partner for landowners including local authorities and Government Agencies to continue to supply the market over the long-term.Bringing Further Innovation to Our Customer OfferingWe are very proud to lead the industry in Ireland in both build quality and customer service. These have been long-term commitments for us, and we strive to meet and exceed our customers’ expectations. We believe that high quality homes and excellent customer service are fundamental to our ongoing success. We are building homes the nation needs, creating jobs and supporting economic growth whilst also delivering both operationally and financially for our shareholders. This year we successfully adopted virtual operations and rolled out interactive house viewings. The Group benefitted from early efforts to make the customer experience more accessible by enhancing our digital completed homes in 20211,1503Virtual Viewings Available We believe that high quality homes and excellent customer service are fundamental to our ongoing success.2. As at 31 December 2020 3. 1,000 core units, 150 non-core units. Assumes restrictions on residential construction end no later than 5 April. Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
12Glenveagh Properties PLC Annual Report and Accounts 202013CEO’s Review offering and facilitating customers to complete their entire home buying journey remotely or in a contactless manner with our agents providing virtual assistance via video calling. Delivering the Maximum Possible Social Benefit at the Lowest Possible Environmental CostOur sustainability programme accelerated in 2020 where our initial focus was on ensuring that we fully adopted and implemented the Governance, Strategy, and Risk Management processes necessary for delivering a comprehensive climate action plan. We participated in the Climate Disclosure Project 2020 for the first time where we achieved a B-rating. Our homes are A-Rated with electric vehicle charging points and low-energy heating systems, and we run our own energy-efficient fleet vehicles. Our reporting now includes disclosures of the level expected by Task Force on Climate-related Financial Disclosures (“TCFD”), Sustainability Accounting Standards Board (“SASB”) and Global Reporting Initiative (“GRI”). However, we know more is required. We are introducing a 25% Scope 1 and 2 emissions intensity reduction target by 2024 using 2019 baseline. We are also committing to implementing a Science Based Target using a 2024 baseline and are targeting Net Zero by 2050. For more details on this and our sustainability strategy please see the Sustainability Report on page 50.Our People are Our Number One PriorityThe Group has a clear vision which has resulted in the creation of the leading and most sustainable homebuilding platform in Ireland that recognises and reinforces the pivotal role played by its people in achieving its aims. To this end, the Group has developed a culture that is safety-led, customer-centred, collaborative and innovative.Health and safety is at the heart of our operations. We are committed to maintaining the health and safety of every single person who is employed by the Group or who engages with the Group both on and off our sites. Following on from being awarded the Construction House Building Award from National Irish Safety Organisation ('NSIO') and a Grade A Safe T certification in 2019 and 2020, the Group completed the phase 1 pre-assessment for ISO 45001 Occupational Health and Safety Management in November 2020 with certification expected to be achieved in quarter 2 of 2021. To ensure a safe return to work after lockdown, we have committed to ongoing investment in and monitoring of our health and safety protocols and practices for our staff, our customers and the wider community. All of this continues to be supported by a large number of our team working remotely.The closure period on our sites facilitated supplementary online safety training delivered by our Environmental, Health, Safety and Training (“EHS&T”) department to counteract our top five risks - crane safety, working at heights, scaffolding and alloy towers, plant safety and excavation safety. The Covid-19 operating procedure training was undertaken online prior to restarting construction on our sites to help all staff and sub-contractors adapt to a new way of working. Working Closely with Our Supply Chain We believe that housing delivery in Ireland needs to innovate if we are to meet the challenge of the under supply of new affordable homes that exists. Our own innovation initiatives have included the optimisation of our processes and finished product, in addition to adopting modern building practices, including utilising off site timber-frame and modular manufacturing systems. To further our innovation journey, the Group continues to develop closer links with our supply chain. In 2020, the Keenan Timber Frame ("KTF") manufacturing facility backed by an open book supply agreement commenced operations in H2 2020 helping to de-risk Glenveagh’s medium and long-term housing delivery targets while also allowing the Group to benefit from any savings delivered as a result of the partnership. The factory initially has the capability to deliver approximately 800 timber frame units per annum on a single shift with the option to expand this capacity in the future with limited investment. In H2 the Group’s soil recovery facility for the disposal of inert material also became operational and we expect to make more progress with our supply chain over the course of 2021. Expedient Growth with a Highly Targeted Use of Capital Our approach to enhancing return on capital involves growing unit numbers as expediently as possible, while investing prudently across our three distinct business segments. We have re-shaped our investment in inventory where at the end of 2019 80% related to land, this has now reduced to 75% and is expected to reduce further. Targeting a maximum of five year landbank the Group has reduced its net investment in land by close to €100.0 million over the last 18 months. This capital has been re-deployed into working capital to facilitate the growth in unit deliveries.Demand for starter-homes has remained strong since the onset of Covid-19 demonstrating the depth of demand and affordability in that segment of the market.Given our single delivery platform, one of the welcome challenges the Group faces is where to deploy our construction resource to deliver the best return on capital for shareholders. In the near-term that is across Suburban and Urban where we’re balancing the returns on offer against the requirement to both manage risk and build a sustainable business. Over the life of the plan, when Partnerships materialise, we will take the opportunity to reduce our overall land investment further and deliver our output targets in as capital light a manner as possible. Conclusion The fundamentals of our sector remain strong. There is a continuing chronic under-supply of housing in Ireland (both private and public) and well-capitalised scale homebuilders are best placed to address this. With a strong landbank primed for operation together with a skilled team and proven track record, Glenveagh has already earned a leading role within the Irish residential landscape. In what has been a turbulent year, we have weathered the storm together as a team, and we emerge at year end, stronger and more determined than ever to deliver on our long-term goals. I would like to thank all who work with Glenveagh, our team and our industry partners, for all of their endeavours in an extraordinary year.As we welcome in the new year with the promise of brighter days, we look forward to the opportunities that lie ahead and we continue, not just to build ‘homes of the future’ for the people of Ireland, but to build a brighter, more prosperous future, for everyone involved with Glenveagh. Stephen GarveyChief Executive Officer Marina Village Greystones, Co. Wicklow Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
For more information
see our Financial
Statements
from page 147
15Glenveagh Properties PLC Annual Report and Accounts 202014CFO's ReviewMichael Rice Chief Financial OfficerHaving evaluated and quantified the impact of Covid-19 on the business, we amended the business’s key financial targets impacted by the pandemic for 2020. The Group’s original target of 1,000 units for 2020 was amended to 650 core units and our core gross margin target was reduced to 14% for 2020 due to longer construction programmes, increased health & safety measures and the costs of inefficiency on site due to social distancing. Once the construction sector is through the current phase of Covid-19 restrictions and having such a strong Balance Sheet in place, the business will be in a position to quickly return to significant and industry-leading growth. Group PerformanceThe total unit completions for the year were 700 units (2019: 844), with 665 units delivered by our core sites and 35 units delivered by our non-core sites. CFO’S REVIEWGlenveagh’s performance for the year was significantly impacted by the outbreak of Covid-19. Our construction sites were closed for a 6-week period in April and May due to a Government enforced lockdown in response to Covid-19, normally one of our most productive times of the year. During the shut-down and on re-opening, cash management was hugely important for the business with our main focus on finishing the units closest to completion to ensure quick and recurring cash generation. Total group revenue was €232.3 million (2019: €284.6 million) for the year primarily relating to unit sales of €230.9 million (2019: €280.0 million) generated from the 700 unit completions. The Group generated core revenue of €208.7 million from 665 core units, marginally ahead of our amended target of 650 units. The Average Selling Price4 was €311k (2019: €321k) reflecting the Group’s focus on Suburban starter- home schemes. Glenveagh delivered the 665 core units from 16 selling sites and finished the year with 5445 core units contracted or reserved for 2021 (2019: 240) providing further evidence of the strong demand and maturing sales profile within the business. In the first half of the year, we reviewed our non-core assets, which make up less than 2% of our overall landbank, in the context of our overall strategy. We took the decision to accelerate the sale of these units and sites to maximise cash generation. This facilitated a substantial exit from our non-core units and sites within 12 months (versus more than 48 months at historic private reservation rates), delivering a net cash inflow of more than €100.0 million. The decision to accelerate sales of our non-core, developments and sites resulted in an asset impairment charge of €20.3 million. Of the Group’s net realisation target of more than €100.0 million, €24.1 million was received in 2020 with a further €70.0 million contracted or reserved at year end for 2021. The Group’s gross profit for the year amounted to €9.5 million (2019: €51.5 million) with an overall gross margin of 4.1% (2019: 18.1%), which includes both the one-off impairment of €20.3 million as well as the disposal of non-core units. The underlying core gross margin is 14.1% and reflects costs associated with our Covid-19 safety measures and operating protocols, in addition to negative mix effects as units at the Group's new higher margin sites were delayed due to Covid-19. A significant portion of the mix effect and the impact of increased Covid-19 costs are expected to abate from 2021. Gross margin for 2021 is expected to increase to in excess of 16.0% with continued margin progression in 2022 towards our current spot portfolio margin of 17.0%. Our operating loss was €12.7 million (2019: profit of €29.4 million), which includes the one-off impairment of €20.3 million. The Group generated an underlying operating profit6 of €7.6 million and an operating margin of 3.3%. The Group’s central costs for the year were €20.2 million (2019: €20.7 million), which along with €2.0 million (2019: €1.4 million) of depreciation and amortisation gives total administrative expenses of €22.2 million (2019: pre-exceptional items €22.1 million). Net finance costs for the year were €3.0 million (2019: €2.7 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. Once the construction sector is through the current phase of Covid-19 restrictions and having such a strong Balance Sheet in place, the business will be in a position to quickly return to significant and industry-leading growth. €232.3m Revenue€853.5mNest Assets14.1%Core gross margin€4. Based on core sales5. As at 31 December 20206. Operating Profit excluding impairment Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
16Glenveagh Properties PLC Annual Report and Accounts 202017CFO's ReviewOverall, the Group delivered a loss after tax of €13.9 million (2019: Profit of €22.8 million) and a loss per share of 1.60 cent (2019: Earnings per share of 2.62 cent). Statement of Financial PositionThe Group’s net asset value has decreased to €853.5 million at 31 December 2020 (2019: €866.5 million) due to the losses incurred in the year.The Group has decreased its land portfolio to €619.3 million (2019: €667.8 million) at 31 December with the Group showing significant progress in decreasing its net investment in land as part of its overall commitment to improve Balance Sheet efficiency. The Group has continued to invest in work in progress in line with the growth strategy of the business with a year-end balance of €201.9 million (2019: €172.7 million). Our non-core developments contribute €58.2 million to work in progress at 31 December and this significant balance highlights the importance of the strategy to accelerate the exit from these completed non-core sites and generate in excess of €100.0 million in cash. The Group’s core work in progress is €143.7 million and spread across 18 active construction sites, which equates to an average work in progress of less than €8.0 million per site, which is in line with management’s expectations for an efficient starter home development. The Balance Sheet now reflects, the approval by the Irish High Court of the Group’s application to redesignate €700.0 million of Share Premium to Retained Earnings to allow for future distributions under section 117 of the Companies Act 2014. Cash flowThe Group had a net cash inflow in the year of €44.1 million (2019: outflow of €37.5 million).The business generated cash inflows before changes in working capital of €10.7 million (2019: €69.6 million), which is a strong performance given the Covid-19 restrictions in place during the year. Our net inventory spend for the year was only €0.1 million (2019: €118.6 The strong cash position at year end demonstrates that the business effectively managed its financing through various Covid-19 challenges but also that it has the required balance sheet for the continued growth of the business. million) with a net spend of €38.8 million on work in progress and a net cash inflow of €38.9 million from land, which is in line with the Group’s strategy of continued investment in work in progress and the reduction in our net investment in land. The net cash position of €36.0 million (2019: €53.1 million) at year-end is reflective of €137.3 million of cash, €99.9 million of debt from our Revolving Credit Facility and €1.3 million of lease liabilities. This strong cash position at year end demonstrates that the business effectively managed its financing through the various Covid-19 challenges but also that it has the required balance sheet for the continued growth of the business.Group Financing Subsequent to the year end, the Group finalised a new 5-year debt facility. The facility is €250.0 million in total, consisting of €100.0 million term loan and a committed RCF of €150.0 million. To ensure the optimal balance and structure within the syndicate, the Group increased the number of financial institutions participating in the syndicate from three to four. Notwithstanding the difficult current climate, the Group are pleased with the pricing obtained in the market, which was broadly in line with the existing facility while also achieving an extension in the tenure of the facilities to five years. The structure and quantum of this facility will support the significant growth of the business over the next 5 years and will provide the flexibility and funding to allow the business to reach its target of 3,000 units per annum. The quantum available to the Group and the significant interest from financial institutions during the refinancing process continues to demonstrate that Glenveagh is a very strong counterparty and a partner of choice within the industry.Investor RelationsGlenveagh is committed to interacting with the international financial community to ensure a full understanding of the Group’s strategic plans and targets and its performance against these plans and targets. During the year, the executive management and investor team presented at six capital market conferences and conducted two hundred and thirteen institutional one-on-one and group meetings.On 29 January 2020, the Group also hosted a Capital Markets Day in the London Stock Exchange with a strong attendance amongst shareholders, analysts and financial institutions. The Group’s updated 5-year plan was unveiled at this event, with increased delivery targets and new forward funding mechanisms outlined.Although the outbreak of Covid-19 has delayed this strategy and corresponding targets, management still believe that this strategy is right for the business and current market dynamics. Share Price and Market CapitalisationThe Group’s shares traded between €0.43 and €0.92 during the year (2019: €0.62 to €0.91). The share price at 31 December 2020 was €0.86 (31 December 2019: €0.87) giving a market capitalisation of €749.0 million (2019: €758.0 million). Financial Risk ManagementThe 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 RiskThe 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 RiskThe Group has a strong balance sheet with its cash balance and 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. OutlookThe Group has forward sales of almost 700 units (2019: 240 units) at 31 December 2020 which gives strong visibility for our 1,150 unit completion target for 2021 with all sites required to deliver these units now active. The Group has maintained a strong Balance Sheet throughout the year with €36.0 million (2019: €53.1 million) of net cash at year end and funds available of €162.5 million (2019: €178.2 million). This strong Balance Sheet position is further enhanced by the Group’s new debt facility which provides the necessary funding for the Group’s significant growth trajectory. The Group looks forward to further underlying financial and operational growth in the year ahead.Michael RiceChief Financial Officer Bellingsmore Kilmartin, Dublin Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
For more information on how
our KPIs impact Executive
Director's remuneration
See page 130
19Our KPIs 18Glenveagh Properties PLC Annual Report and Accounts 2020OUR KPISHealth & SafetyCustomer SatisfactionRevenue predominantly includes housing revenue, which reflects the number of units sold by the Average Selling Price of those units, and non-core land disposals. As the business continues to grow, Revenue is seen as a key measure of top-line business improvement. €232.3m RevenueGroup management consider Adjusted EBITDA pre exceptional items and the related margin percentage of revenue, to be an important measure for assessing profitability of the Group. It demonstrates profitable and sustainable growth during our initial ramp-up phase and shows improvements in the operating efficiencies of the business. (€10.7m) Adjusted EBITDA(4.6%)Adjusted EBITDA MarginThe Group considers Health & Safety audit scoring an important indicator of performance for the Group. The metric is the average Site Safety Audit score percentage from both internally and externally completed audits. 2020Performance achieved 88%2019: 75%Exceeding customer expectations is central to the Group's strategy and a key indicator of performance linked to variable remuneration. Glenveagh engages an independent external firm to survey our customers on topics linked to their experience with Glenveagh. 2020Performance achieved 83%2019: 84% Financial KPIs Non-financial KPIs€20202019 20202019 The health and safety of our people is our number one priority and we work relentlessly to promote a safety-first culture to protect our people and our reputation.20202019 €284.6m€232.3m€31.9m(€10.7m)11.2%(4.6%)Bellingsmore Kilmartin, Dublin Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
2120Glenveagh Properties PLC Annual Report and Accounts 2020BUSINESS MODEL & STRATEGYTo achieve access and quality for our customers we will continue to relentlessly innovate how we plan, design and build - bringing new ideas home.Bellingsmore Kilmartin, Dublin Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
For more information on our
three business segments
See pages 32 to 37
22Glenveagh Properties PLC Annual Report and Accounts 2020Business Model & Strategy Strategic Report23STRATEGIC REPORTSuburban Urban PartnershipsWe have assembled a starter-home and affordable Private Residential Sector focused landbank with affordability and value-for-money at its core.Business Model and Organisational StructureGlenveagh is focused on strategically located developments in the Greater Dublin Area and Cork. The Group delivers across three distinct business segments – Suburban, Urban and Partnerships - as a single business, capitalising on scale advantages and investing to optimise return on capital. Each business segment benefits from the Group’s attractive landbank, proven delivery platform and industry leading central resources. We have facilitated each business segment to deliver its potential with the assistance of best in class pooled group resources covering the entire process outside of construction delivery. Our single underwriting team is complimented by centralised, planning and design, manufacturing, procurement, construction management and PLC functions. The four strategic priorities of the Group which are underpinned by our sustainability agenda are as follows:A. Disciplined investment across our three target segments;B. Putting our private and institutional customers at the heart of what we do; C. Scaling our construction capability across Suburban and Urban; andD. Optimisation of capital employed to drive returns for shareholders Marina Village Greystones, Co. WicklowSemple Woods Donabate, Co. Dublin Cluain Adain Clonmagadden, Navan
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
24Glenveagh Properties PLC Annual Report and Accounts 202025Business Model & Strategy Strategic ReportDisciplined Investment Across Three Business SegmentsWe have assembled a starter-home and PRS focused landbank with affordability and value-for-money at its core. Our landbank was acquired at attractive rates in the context of both cost per site and site cost as a percentage of Net Development Value (“NDV”).Glenveagh is positioned to deliver housing to the deepest segments of the market with 96% of Suburban units on forthcoming developments priced at €450k or less. With an average site size of 244 units coupled with a focus on starter-homes, the portfolio is monetisable in the current regulatory and market environment within a short time-frame. Our current low-density Suburban portfolio also has the optionality to deliver over 2,000 units to the Suburban PRS sector. Our valuable Urban sites also allow the Group to capitalise on the large quantum of capital currently seeking to access the Urban PRS opportunity in Ireland. The Group’s Urban sites include high density apartments focused on sustainable rental locations primarily in Dublin City and Cork City. Further 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.Customer Centric FocusOur approach to innovation, planning and design is geared towards bringing home ownership within reach of a broader range of people and addressing the undersupply of affordable quality housing in urban and suburban areas.Quality homes in flourishing communities should be within reach of everyone. This is a founding principle of Glenveagh Properties and it governs everything we do. In order to deliver on our promise, we are focused on ensuring that our homes are affordable for first time buyers and young families, that the customer journey is as seamless as possible, and that our build quality and customer service are second to none.Retail Customer FocusOur retail customer service offering is built around three core customer promises, Access, Quality and Innovation:• Access – We are giving more people the opportunity of owning their own new home —Building where they want to live and at a price that is more affordable.• Quality – We do not compromise on quality. We build homes that last, are energy and thermal efficient, and are designed for the way that people live today.• We achieve quality and greater accessibility to new homes by relentlessly innovating the way we plan, design and build. We bring new ideas home. This approach is driving our customer service reputation. Institutional Customer FocusIncreasingly our customers are institutions which is a feature of the market that we believe is here to stay. These institutions choose Glenveagh not only because we are one of the few companies delivering product which works in strong locations, but because:• We have a track record of delivering and a strong reputation;• Institutional investors know that when we say we’ll deliver, that’s what happens; and• The Glenveagh name offers peace of mind to organisations who are considering an investment in one of our developments. Increasingly these features are establishing Glenveagh as the partner of choice within the industry. Scaling Our Construction CapabilitiesWe are now actively constructing from 18 sites which are expected to deliver our 2021 unit guidance of 1,150 units7.In order to achieve Glenveagh’s medium-term construction objectives, the key priorities for the Group have been to:• Further develop the Groups low-rise and high-rise capabilities;• Standardise our processes and end product;• Invest in offsite construction; and• Utilise technology across our business. Develop Low-rise and High-rise CapabilitiesOur central Group resources have allowed the construction operations to focus on opening sites and controlling the build programme. This delivery of our developments is now aligned to our target markets and reflects the different skill sets involved in delivering Suburban and Urban product.For Suburban delivery we now have dedicated teams for site openings. The most challenging part of any development. These delivery teams are organised into clusters by region to maximise efficiencies but also to help train, retain and promote our construction talent in a structured and deliberate manner.We recognised early that Urban apartment delivery is a specialised segment. We’ve built on the track record of the team with specialised hires from the London market where high-rise apartment delivery has been the norm for a significant period of time. Our highly experienced Urban delivery team is well positioned to deliver the forthcoming Urban developments in a timely and cost-effective manner.Our Implementation StrategySuburban Urban PartnershipsDisciplined Investment Across Target SegmentsCustomer service Retail offering Institutional offeringCustomer-Centric FocusMinimise upfront land cost Control WIP investment Innovation to control the cost of deliveryDrive Shareholder ReturnsLow and high-rise Standardisation Offsite contruction Use of technologyScale Construction CapabilityOperating Responsibly People Health & Community Customers Environment Supply Safety ChainDelivering strong performance outcome for allOldbridge Manor Drogheda, Co. Louth 7. 1,000 core and 150 non-core units Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
26Glenveagh Properties PLC Annual Report and Accounts 202027Business Model & Strategy Strategic ReportStandardisation of Processes and ProductionOur 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. Supporting our standardised construction approach is our centralised procurement team that has established strong relationships with suppliers and subcontractors enabling us to enter into comparatively attractive contracts for key labour and materials thereby allowing the Group to manage our exposure to construction cost inflation.Offsite ConstructionThe Group continues to invest in more efficient and cost-effective construction techniques. Early initiatives have included the optimisation of our processes and finished product, in addition to adopting modern building practices, including utilising off site timber-frame and modular manufacturing systems.In order to further enhance the Group’s timber-frame construction solutions and guarantee long-term supply, Glenveagh has entered into an exclusive multi-year open book supply agreement with one of its existing timber-frame suppliers based in Ireland, Keenan Timber Frame Limited (“KTF”). In conjunction with the agreement, the Group has purchased a production facility in a strategic location close to its active construction sites. This manufacturing facility, which is leased to KTF, became operational in H1 2020 allowing KTF to supply timber frame product exclusively for Glenveagh. The open book supply agreement and the factory investment by Glenveagh will facilitate the expansion of KTF’s own operations and help de-risk Glenveagh’s medium and long-term housing delivery targets while also allowing the Group to benefit from any savings delivered as a result of the partnership. The factory has the capability to deliver approximately 800 timber frame units per annum with the option to expand this capacity in the future with limited investment.Separately, the Group’s quarry for the offsite disposal of inert material is also now operational further de-risking the costs associated with groundworks on site.TechnologyAlong with a stable and sustainable supply chain another asset that the Group is utilising to facilitate our continued growth is technology. The aim is to utilise technology to connect construction across our sites and the rest of the business. Our ability and motivation to invest in technology early ensures we have a stable platform for growth and helps deliver transparency and control throughout our projects. Examples of this include drone scans, document management and a mobile field app. This helps ensure that collaboration, cost management, quality control and health and safety are all managed effectively. Technology in action continuedTechnology used on our sites monitor quality and reduce costsRegular visual update of project status Certainty around dates Logistics planning Coordination of worksUpdated completion forecast Key data to improve accuracyRecord and inspection of works Overlay as built with designComplete 3D volumetric assessment and cut fill Valuation and progress claimCloud document managementTime and attendance tracking on-site3D modelling and surveyingOur ability and motivation to invest in technology early ensures we have a stable platform for growth and helps deliver transparency and control throughout our projects. CommunicationHealth & SafetyConstruction ProgrammeQualityCostManagement€Notwithstanding the challenging economic and operational environment, the Group benefitted from early efforts to make the customer experience more accessible by enhancing our digital offering and facilitating customers to complete their entire home buying journey remotely or in a contactless manner with our agents providing virtual assistance via video calling. The Group’s redeveloped digital strategy facilitated an online and private viewing led customer journey ensuring a high volume of potential home buyers viewed our homes, delivering more qualified prospects for the sales team. This strategy has also positively impacted website traffic and has delivered a substantial increase in leads which grew by 169.0% year-on-year in H2 2020.The combination of our revised digital strategy, improved customer experience and pent-up demand helped increase average weekly private reservation rate per site of 31.0% year-on-year H2 2020.Case Study: Technology in action Virtual Viewings Available Across Our Portfolio Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
28Glenveagh Properties PLC Annual Report and Accounts 202029Business Model & Strategy Strategic ReportDisciplined Investment across our three target segmentsScaling our construction capability across Suburban and UrbanSector-leading customer offeringOptimisation of capital employed to drive returns for shareholders1234Optimise Capital Employed to Drive Returns for ShareholdersAs 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. We’ve assembled a highly attractive landbank and are now at the peak of that investment trajectory with no net land spend envisaged. Having already grown the delivery capability threefold, we’re committing to doing the same again and more. This will require continued investment in work-in-progress which is a necessity to work the balance sheet appropriately. Where possible we’ll mitigate any WIP investment via the forward funding of our Urban projects. Operating ResponsiblyMeeting the demand for affordable housing is one part of the story; doing so responsibly is the other. We are taking the necessary steps to deliver the social benefit of affordable housing in a way that minimises impact on the environment, including using land in the most efficient way, driving down waste, reusing resources, reducing emissions during construction and delivering A rated energy efficient homes across all our developments.PeopleKey to scaling the business has been people. Growing the business from 75 employees at IPO to over 300 today has been supported by creating a culture which empowers talent and embraces equal opportunities, diversity and inclusion. We have a strong gender balance ratio compared with the industry average (Glenveagh 24% female, Industry average 9%)8. Glenveagh works closely with the Construction Industry Federation (“CIF”) on initiatives to encourage female participation in the industry and sponsored the CIF’s “International Women’s Day Conference” in 2020.At Glenveagh we encourage an inclusive culture, where employees have a voice and feel valued. We have signed the CIF Diversity Charter with the aim of achieving the Bronze Standard, and we are also planning to join the 30% Club Ireland with the goal of improving gender balance at all levels of the organisation.We use the Great Place to Work model to assess engagement and satisfaction levels across the business.We carry out annual employee surveys to ensure engagement with employees and encourage frequent engagement through line management. We work on the lowest scoring areas to improve in these areas and also focus on our highest scoring areas to ensure we maintain these results.Health and SafetyThe first duty of any organisation is to keep its people safe. Health and Safety is embedded into our culture and is one of our six sustainability pillars. Our main objective every day is that our employees, sub-contractors, suppliers and all those visiting sites come into work and go home from work safely. Health and Safety is the first item on our Board’s agenda. Health and Safety is at the heart of our operations. In 2020 the Group achieved the Highly Commended Construction House Building Award from NISO and a Grade A Safe T Certification. We believe there is always more that can be done in this area and as a market leader, it is incumbent upon us to continue to drive the health and safety agenda and, to further demonstrate this, the Group are currently implementing ISO 45001:2018 Occupational Health and Safety Management. Health and Safety drives an element of all staff’s variable remuneration with awards based on the results of site audits. CustomerExceeding customer expectations is central to the Group’s strategy of creating the leading home building platform in Ireland. Built around the objectives of access, quality and innovation our customer service offering has brought a new professionalism to the industry. Customer satisfaction has been a KPI for the entire business since inception and drives an element of all staff’s variable remuneration. Despite there being no published benchmarks in Ireland we engage an independent external firm to survey our customers. Full variable remuneration is not paid to employees unless the equivalent of 5 star status in the UK is achieved.Sustainable CommunitiesContributing to sustainable communities is a key feature of our approach to planning and design. We think carefully about how our developments should connect with existing transport nodes and amenities, and as part of each development we contribute to new infrastructure such as playgrounds, sports facilities, access roads, and walking routes. A number of our urban schemes are located on in-fill sites that have old housing stock and derelict industrial units. We are pleased to be able to bring these locations back to life, reintegrating them into the local community with mixed-use developments comprising housing, retail and amenities.Environmental and QualityThe environmental sustainability of our housing is at the forefront of business decisions. Our sustainability programme accelerated in 2020 where our initial focus was on ensuring that we fully-adopted and implemented the Governance, Strategy, and Risk Management processes necessary for delivering a comprehensive climate action plan. We participated in the Climate Disclosure Project 2020 for the first time where we achieved a B-rating. Our homes are A-Rated with electric vehicle charging points and low-energy heating, and we run our own energy-efficient fleet vehicles. Our reporting now includes disclosures of the level expected by TCFD, SASB and GRI. At Glenveagh we encourage an inclusive culture, where employees have a voice and feel valued. Group Strategy Objectives and Our Sustainability PillarsGovernanceCommitments & KPIsCreating sustainable homes and communitiesPutting customers at the heart of what we doKeeping people safe Environmentally considerate and efficient operationsAttracting, inspiring and investing in peopleSustainable and responsible sourcingRisk Management8. 2019 CSO data, no data available for 2020 Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
For more information on
Sustainability see our
Sustainability Report
on page 50
30Glenveagh Properties PLC Annual Report and Accounts 2020However, we want to do more. We are introducing a 25% Scope 1 and 2 emissions intensity reduction target to 2024 using 2019 baseline. We are also committing to implementing a Science Based Target using a 2024 baseline. For more detail on sustainability targets and strategy please see our Sustainability report on page 50.All houses and apartments delivered by the Group in 2020 had a BER rating of A3 or better and our efforts in providing sustainable energy and thermal efficient homes are also reflected in our commitment to reduce the environmental footprint of our operations. Initiatives to date have included the introduction of electric vehicles, the use of recycled materials on site and a minimisation of waste across the business. Glenveagh has also commenced the implementation of ISO 14001:2015 Environmental Management System.Quality control is integral to how we procure and run our sites. High risk materials such as stone, concrete, block, and mortar are certified at source with additional random sampling and testing carried out in the field. All materials are sent to design teams for approval prior to use and must carry a Declaration of Performance (“DOP”) or Conformitè Europëenne (“CE”) mark. As part of our ongoing training and development, we provide Building Control (Amendment) Regulations ("BCAR") training for all of our employees involved in this process and quality assurance training in relevant departments.Our Near-Term Strategic PrioritiesIn achieving our corporate strategy, the near-term strategic priorities for the Group are to:• Actively manage our landbank by acquiring sites at attractive rates through disciplined capital deployment while reducing the Group’s overall land investment by further having already re-allocated €100.0 million from land to growing construction output; • Triple construction output to 3,000 units as the Group continues to build a balanced and sustainable business throughout the cycle by focusing on Suburban, Urban and Partnerships while maintaining the highest standards of health and safety on our sites;• Deliver sector leading return on capital over the long term by optimising the capital employed within the business; and• Exceed our customers’ expectations with a continued commitment to access, quality and innovation.Exceeding customer expectations is central to the Group’s strategy of creating the leading home building platform in Ireland.All houses and apartments delivered by the Group in 2020 had a BER rating of A3 or better A3Silver Banks Stamullen, Co. Meath31Business Model & Strategy Strategic Report Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
32
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Business Units
33
BUSINESS
UNITS
Glenveagh is a leading Irish homebuilder with a focus on strategically located developments in the
Greater Dublin Area and Cork. The Group delivers across three distinct business segments Suburban,
Urban and Partnerships - as a single business, capitalising on scale advantages and investing to optimise
return on capital.
Our Business Segments - Key Characteristics
Suburban
Urban
Partnerships
Product
Houses and Low-rise
Apartments
Apartments
Houses and
Apartments
End-Market
Private / Institutions
Institutions
Private / State /
Institutions
Locations
Ireland
Dublin / Cork City
Ireland
Exit
Traditional /
Forward Sale (FS)
FS / Forward F
and (FF)
State / Traditional /
FF or FS
Investing across three segments to optimise return on capital
Suburban product is primarily housing with some low-rise
apartments with demand coming from private buyers and
institutions. This means affordable, high quality homes
in locations of choice at €450,000 or below. The Group
has an overwhelming Greater Dublin Area focus in our
portfolio however the product is required nationally.
Suburban sees private and institutional demand for our
product via traditional and forward sale structures.
Urban product consists of apartments to be delivered
to institutions primarily in Dublin and Cork but also on
sites adjacent to significant rail transportation hubs.
Demand in this segment is being driven by the shift to
rental by millennials and lifestyles and the exodus of
private landlords due to fiscal policy and regulation
who are being replaced by institutional investors.
Partnerships are critical to the business over the
long-term. A partnership typically involves the
Government or local authority or state agency
contributing their land on a reduced cost or phased
basis into a development agreement with Glenveagh.
It has a reduced risk from a sales perspective where
approximately 50% of the product will be delivered
back to the government or local authority for social
and affordable homes. This will de-risk the Glenveagh
market exposure and provide:
strong Return on Capital Employed ("ROCE");
increased business resilience;
reduced risk; and
•
•
•
• access to both land and deliveries for our Suburban
and Urban segments.
Urban offers significant attractions from a risk and return
on capital perspective given the opportunities that exist
to forward fund these developments. This provides longer
term earnings visibility due to early commitment from a
forward sale or forward fund transaction.
The Partnerships segment is going to take the
most time to come to fruition but it’s one where we
are investing significant time and effort given our
skillset and the attractions of the segment from a
ROCE perspective.
Attractions of Our Complementary Business Segments
Suburban
Deepest demand
Most fragmented supply
Alignment of buyer income
and aspirations
Easier optimisation of
construction process
Urban
Structural occupier
shift to rental
Institutionalisation of
rental sector
Capital light
(forward funds)
Long term earnings visibility
Partnerships
Strong ROCE
Increased business
resilience / reduced risk
Fit with both suburban and
urban segments
Access to land / deliveries
All developments sourced and delivered via single delivery platform
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
34
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Business Units
35
Business Unit Operating Environment
Each business unit operates in a different segment
of the market with its own supply, demand and cost
structure characteristics. Having the optionality to
invest across distinct business segments ensures there
is a continuous competition for capital within the
Group which helps drive ROCE over the longer-term.
Attractive Landbank Capable of
Supporting Our Business Unit Objectives
Central to delivering across our Suburban and
Urban segments is a landbank which can provide
homes which meets the needs of our customers.
We have focused our capital deployment on land
which supports high-quality, affordable homes in
communities where people want to live.
Suburban
Urban
Partnerships
Land
Availability
• Stable supply of
• On-market transactions
zoned land
more prevalent
• Primarily off-market
• Utilising PLC advantages
transactions
to compete for sites
• Driven by Local Authorities
and Land Development
Agency (“LDA”)
Land
Competition
• Limited for sites of scale
• More prevalent on
small sites
• Strong competition for
high-profile on-market
transactions
• Local developers and
contractors
• Developer / contractor
Demand
• Owner occupiers
• PRS rental product
• Social housing
• PRS rental product
• Social housing
consortiums
• Strong urban centres suit
owner occupier product
• Social and affordable
component de-risk each site
Supply
• Primarily small developers
• Investment fund / end
• Local developers and
owners utilising 3rd party
contractors
• Specialist developers
contractors
• Developer / contractor
consortiums
Optimising Mix Across Three Segments To Optimise Return On Capital
Attractive Development Portfolio Designed to Deliver On Our Strategy
78%
28%
Dublin (ex Docklands)
41%
GDA (ex Dublin)
16%
Cork
6%
Other
9%
Dublin
Docklands
GDA Focused9
96%
Starter-Homes10
69%
Suburban9
43%
PRS Potential11
9: by units
10: Suburban portfolio, <€450k
11: on each of Suburban / Urban
44%
Selling Price <€300k
33%
€300k - €350k
16%
€350k - €400k
7% €400k+
(4% > €450k+)
69%
Suburban
47%
Suburban Private
31%
Urban
15%
Suburban Private / PRS
28%
Urban PRS
10%
Part V11
Attractive Portfolio Delivering Homes To Underserved Segments Of The Market
Central to delivering across our Suburban and
Urban segments is a landbank which can provide
homes which meets the needs of our customers.
Given the Group’s scale and attractiveness as a counterparty for landowners we have the ability to augment our
existing portfolio with land acquisitions which further drive profitability and ROCE.
Increasingly Attractive Porfolio
Portfolio site cost percentage of NDV is increasingly attractive
This is beginning to be evidenced in our reported financials
Further porfolio attractions include a low average site size (244 units) with limited abnormal infrastructure/
remediation spend required <0.1% of NDV
Portfolio Spot Site Cost % of NDV
P&L Site Cost % of NDV
22%
23%
23%
22%
17%
15%
15%
At IPO Q4 2018 Q4 2019 Q4 2020
2018 2019 2020
14,100 Plots Acquired at Attractive Rates 15% of NDV/€42k per site
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
Our Lanbank - Balanced GDA Focused PortfolioSite Schedule1Active SuburbanSelling from1Barnhall Meadows20202Bellingsmore 20203Blackrock Villas 20194Belin Woods 20205Blackcastle 20206Cluain Adain20187Cois Glaisín20188Ledwill Park20199Mount Woods 201910Oldbridge Manor202011Ruxton Oaks202012Semple Woods 201913Silver Banks 202014Taylor Hill 201815The Hawthorns2021 Future Suburan 16Blessington 17Castleredmond18Citywest 19Clonmagadden 20Donabate East 21Dunboyne 22Grange Castle 23Great Connell Abbey 24Hollystown 25Killruddery26Keatingstown27Maple Woods28Millennium Park29MullingarActive Urban30Dargan Hall 202131Marina Quarter 201932The Collection 2021Future Urban 33Carpenterstown34Castleforbes 35Cluain Mhuire 36Cork Docklands 37East Road 38Howth Completed sites39Holsteiner Park40Proby Place 41Cnoc Dubh 42Knightsgate Landbank Highlights14,100 Total Units78% GDA Focused169% Suburban243% PRS Potential3Notes:1. by value 2. Suburban portfolio3. by units37Business Model & Strategy Business Units36Glenveagh Properties PLC Annual Report and Accounts 202016333923458961012131415171920212223242526272829303132353638740414234Key Active Suburban Future Suburban Active Urban Future Urban Completed Sites Motorway Network Rail networkSplit by Units69% Suburban Urban31%111837 Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
38Glenveagh Properties PLC Annual Report and Accounts 202039Business Model & Strategy Risk Management ReportRISK MANAGEMENT REPORTOur approach to risk management is embedded across all levels and departments of our business, with a focus on site level risk, to ensure that barriers to achieving strategic objectives are identified and mitigated. The Board and senior management set the tone for risk management in the business through regular interaction, review and ownership of key risks. The Board is responsible for ensuring the Group maintains the appropriate level of risk to achieve its objectives whilst also 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 are 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 ("ARC") is responsible for reviewing the adequacy and effectiveness of the Group’s internal controls and risk management process (page 110). The Group’s risk register and principal risks are a standing agenda item for each ARC 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 perspective. The risk register is not a static list, but a dynamic process to ensure risk is managed and mitigated effectively. The Board formally reviews and approves the risk register on at least a bi-annual basis.The Board has identified environmental concerns and sustainability driven social trends as emerging risks. The Group has undertaken an analysis of how we manage environmental and sustainability impacts, the potential risks and the key mitigating considerations. The Board will identify any such risk as principal risks if significant in the future. For more detail, please see our Sustainability Report on page 50.Impact of Covid-19The Group remains focused on the wellbeing of our people and we are taking all the necessary steps to maintain the health and welfare of our employees, our sub-contractors and our customers. Aligned with Government recommendations the Group has implemented wide ranging measures across our sites and head office to limit the spread of Covid-19. Covid-19 has required the Group to form new ways of working, including changes to our construction methods, flexible working arrangements and our interaction with customers, whilst also being mindful of the impact on the supply of labour and materials and the economic uncertain that exists.The Board continues to monitor the pandemic as it evolves and has reassessed its impact on the principal risks of the business. A comprehensive review has been completed of each risk outlining the pandemics impact, any heightening of risks and the additional key mitigating considerations taken. Any changes arising from the impact of Covid-19 on each risk and the key mitigating considerations are detailed on pages 42 to 48. Changes arising from the pandemic are denoted by the following symbol: Our Risk Management Framework:IdentifyAssessReportRiskMonitorMitigateThe Group has implemented a four line of defence model.Line of defenceFunctionResponsibilitiesFirst lineDepartment headsRisk owners within the business with responsibility for ensuring risk management is embedded in day to day activities and taking a proactive approach to risk identification and mitigation. Second lineExecutive committeeRisk monitoring within the business with responsibility for ensuring policies are implemented throughout the Group. Third lineInternal auditRisk assurance within the business with responsibility for providing additional assurance on the effectiveness of risk management and internal controls to the Executive committee and the Audit and Risk Committee.Fourth lineAudit & Risk CommitteeRisk oversight with responsibility for setting Group strategy through determining risk policy and procedures. Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
40Glenveagh Properties PLC Annual Report and Accounts 202041Business Model & Strategy Risk Management ReportRisk Management in ActionRisk management is embedded in the day to day activities of the business through aligning key strategic KPIs and remuneration metrics of executive and senior management with risk management objectives.Certain risk management and compliance activities across the Group are reported monthly to the Board and executive committee, with input received from across the business to respond to risk in line with the risk management framework.The Environmental, Health and Safety and Training ("EHS&T") department is a dedicated resource whose activities are mainly focused on risk management throughout the Group. There are a number of Corporate office departments whose activities support EHS&T and also assist in maintaining a focus on risk management including Information Technology, Human Resources and Internal Audit. In addition, third parties are engaged where necessary to assist and provide additional assurance in relation to risk management. A key component of financial risk management is the Executive and senior management led development of the annual budget and strategy planning, and quarterly reforecast processes which are used to monitor progress against plan and assess risk across all existing and emerging risk categories. The Group has also invested significantly in technology, site infrastructure and people to improve our control processes and systems to respond to the everyday operational risks that are faced by all companies in our industry. Principal Risks and UncertaintiesThe Board has carried out a robust assessment of the principal risks facing the business. Arising from the risk management process, principal risks and uncertainties have been identified which could have a material impact on the Group in achieving our strategic objectives. The Board and ARC have reviewed the Group’s principal risks and have considered the new risks introduced for 2020. The main risk categories that the Board considered are the following: The risks and uncertainties together with key mitigating considerations that fall into each of these risk categories are set out below. External riskOperational riskReputational riskRisk or uncertainty and potential impact1. Covid-19 2. Adverse Macroeconomic Conditions 3. Mortgage Availability and Affordability 4. Adverse changes to government policy and regulations 5. Availability and increased cost of materials and labour 6. Inadequate Project Management 7. Insufficient health and safety procedures 8. Employee development and retention 9. Data protection and cyber security 10. Decline in Product Quality Risk Categories Financial RiskInvestment 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 and Foreign Exchange ("FX") Risk is the risk to earnings and capital associated with changes in the level of foreign exchange rates. Non-Financial RiskCompliance 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.ESG Risk is the risk of financial loss or reputational damage arising from an ESG event or condition resulting in a material negative impact on the business. External RiskExternal 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.Risk rating change table legend: No change to risk rating Increased risk rating Decreased risk rating New riskKey: Very High Risk High Risk Medium Risk Low Risk 5311 3 5LikelihoodImpact98721051634 Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
42Glenveagh Properties PLC Annual Report and Accounts 202043Business Model & Strategy Risk Management ReportOur risk categoryRisk or uncertainty and potential impact Key Mitigating ConsiderationsRisk rating changeExternal riskCovid-19 Covid-19 has exposed the Company to the impact of a macro risk related to an economic slowdown and specific risks as a result of government measures taken to contain the virus impacting availability and supply of materials and labour, a reluctance of buyers to transact in the current environment and interruption to the business operations due to the absence of staff and sub-contractors.The Group has increased the frequency of Executive Committee meetings and Board updates to respond to the pandemic with Covid-19 being a standing agenda point at all meetings.The Group has increased the frequency of cashflow and sales reporting to facilitate accurate business continuity planning.The Group has updated and will continue to review on an on-going basis forecasts, cashflows and estimates about future business performance.The Group has kept in constant contact with Government and Local Authority representatives in addition to reviewing Government responses to Covid-19.The Group has put in place a transparent and timely communications strategy to update the market and all stakeholders (employees, sub-contractors, suppliers, investors etc.) of the business in relation to the plans put in place by the Group in response to Covid-19.The Group has put in place a number of specific actions related to on site health and safety and construction, project management, sales activity and office operations which are outlined in the risk specific to each area.External riskAdverse Macroeconomic ConditionsGlenveagh operates in a property market that is cyclical by nature which can lead to volatility of property values and market conditions. 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.The Group aims to maintain a reasonable but limited stock of land (c.5 years). The Group has made significant progress in 2020 in reducing its net investment in land in line with the strategic objectives of the Group.The Group avoids any long-term exposure through strict land acquisition policies which are reviewed and updated on a regular basis to meet market sentiment and demand.The Group has a robust acquisition policy and approval process in place to ensure the best value is achieved on assets and that they are aligned to the strategic objectives of the Group.The Urban and Partnerships segments will assist in reducing the cyclical nature of the business through the delivery of apartments and houses for the rental market as well as schemes with local authorities or other government bodies.Management and the Board actively monitor the geopolitical risks and seeks expert industry advice where required. Our risk categoryRisk or uncertainty and potential impact Key Mitigating ConsiderationsRisk rating changeExternal riskMortgage Availability and AffordabilityGlenveagh understands that affordable mortgage finance is a crucial funding source for buyers in the residential market in Ireland. Constraints on the availability and costs of mortgage financing and any adverse impact on this as a result of Covid-19 may have a negative impact on sales of the Group's products 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 to gain valuable insights into the market and the impact of regulatory changes impacting mortgage lending. The Group has increased the frequency of cashflow and sales reporting to facilitate accurate business continuity planning. The Group has increased the frequency of Executive Committee meetings and Board updates to respond to the pandemic with Covid-19 being a standing agenda point at all meetings.The Group’s strategy can facilitate the adjustment of delivery velocity if required.External riskAdverse changes to government policy and regulationsA 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) could adversely affect the Group’s financial performance.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.The Group has increased the frequency of Executive Committee and Board meetings to respond to the pandemic with Covid-19 being a standing agenda point at all meetings. Table legend: No change to risk rating Increased risk rating Decreased risk rating New riskTable legend: No change to risk rating Increased risk rating Decreased risk rating New risk Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
44Glenveagh Properties PLC Annual Report and Accounts 202045Business Model & Strategy Risk Management ReportOur risk categoryRisk or uncertainty and potential impact Key Mitigating ConsiderationsRisk rating changeOperational riskAvailability and increased cost of materials and labourShortages or increased costs of materials and labour could lead to an increase in construction costs and delays in the completion of units. As a result of Covid-19, there is a risk to the Group of shortages in skilled sub-contractors which are critical to construction operations and the delivery of units in line with the Group's delivery matrix. If the Group is unable to control its costs or pass on any increase in costs to the purchasers of the Group's product, 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.The Group has fixed cost contracts in place with sub- contractors and suppliers where possible. 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 budget versus actual costings.The Group continuously evaluates partnerships at a site level with outsource labour providers to ensure agreements are in line with the market rates.The Group has strong relationships across the construction industry in Ireland and with our existing and wider sub-contractor network.The Group's size and reputation in the market remains highly attractive to sub-contractors and suppliers.Our risk categoryRisk or uncertainty and potential impact Key Mitigating ConsiderationsRisk rating changeOperational riskInadequate Project ManagementInadequate oversight of the cost and delivery of development projects adversely affects expected return on investment. The delivery matrix of development projects could be impacted by the spread of Covid-19.The Group has fixed cost contracts in place with sub-contractors and suppliers where possible. The Group employs highly experienced and qualified project managers commercial and finance teams who oversee a robust financial planning process for each development and continuously monitor and review the budget versus actual costings. This includes regular updates to the Executive Committee and Board of Directors. The organisational structure of the Commercial department ensures oversight of all site costs as the business matures in line with the business plan.The Group's integrated ERP system provides bespoke commercial reporting eliminates manual processes and provides for real time reporting for more accurate decision making at a project, sub project, element and cost object level. The Group has updated and will continuously review all site delivery matrix and update these as necessary to reflect the impact of Covid-19. The Group has engaged in continuous communications with our sub-contractor network and supply chain to ensure they are aware of the Group's plans and to reduce the impact of current restrictions and to ensure a smooth return to normal operations.Table legend: No change to risk rating Increased risk rating Decreased risk rating New riskTable legend: No change to risk rating Increased risk rating Decreased risk rating New riskCluain Adain Clonmagadden, Navan Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
46Glenveagh Properties PLC Annual Report and Accounts 202047Business Model & Strategy Risk Management ReportOur risk categoryRisk or uncertainty and potential impact Key Mitigating ConsiderationsRisk rating changeOperational riskInsufficient health and safety proceduresGlenveagh 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 health, safety, 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 delays in responding to changes in health & safety regulations may result in financial and/or other penalties.The Group has an experienced Health & Safety team in place with a specific health & safety plan in place at each site.The Group has a wealth of experience, adopts best practice and regulations and has developed and implemented formal best practice policies and procedures to support and promote a robust Health & Safety environment.The Group ensures all staff are appropriately and adequately trained.The Group has a Grade A Safe-T certificate which is the industry Health & Safety auditing standard.The Group undertakes monthly Health & Safety audits through both internal and external parties.The Group circulates a weekly incident monitoring report to construction management. The Group has undertaken significant investment to implement best practice and public health advice for the return to working on site and in the office in response to Covid-19.There is adequate insurance cover in place to deal with any claims that may arise from claims due to injury.Our risk categoryRisk or uncertainty and potential impact Key Mitigating ConsiderationsRisk rating changeOperational riskEmployee development and retentionThe 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: • Poor operational and financial performance• Inadequate staff knowledge and understanding of policies and 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 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.There is a Graduate Programme in place across all departments to develop and ensure progression within the business for all employees.The Group has in place 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 has a dedicated Learning and Development manager with a focus on developing and deploying CPD and upskilling of staff. The Group has implemented flexible working arrangements for staff following the Covid-19 pandemic as well as offering support to ensure employees have suitable working from home arrangements. The Group ensures that all staff have access to relevant internal and external training.Operational & reputational riskData protection and cyber security The Group uses information technology to perform operational and marketing 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. The Group’s Head of IT leads the Group’s initiatives in mitigating the risk of cyber and data security breaches further.The Group has a personal data retention policy in place to appropriately manage the information held.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 has in place sensitive data password protection and all such information is stored in secure locations and fully encrypted systems.The Group is proactively managing the cyber threat, is continuously monitoring and evolving systems internally and have engaged a third party to assist and ensure that best practices are implemented to identify and remediate any potential weaknesses or control gaps.The Group has undertaken significant investment to implement best practice and public health advice for the return to working on site and in the office in response to Covid-19. Table legend: No change to risk rating Increased risk rating Decreased risk rating New riskTable legend: No change to risk rating Increased risk rating Decreased risk rating New risk Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
48Glenveagh Properties PLC Annual Report and Accounts 2020Our risk categoryRisk or uncertainty and potential impact Key Mitigating ConsiderationsRisk rating changeReputational riskDecline in Product QualityDelivery 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 has in place 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 a dedicated Quality Manager to manage and report on site quality. The Group has a dedicated Environmental Officer to advise on the business challenges from an environmental perspective on a daily basis. The Group has an experienced and professional support team in place.The Group has a dedicated customer service after-sales team.Table legend: No change to risk rating Increased risk rating Decreased risk rating New riskThe Board continues to monitor the pandemic as it evolves and has reassessed its impact on the principal risks of the business.49Business Model & Strategy Risk Management ReportBellingsmore Kilmartin, Dublin Oldbridge Manor Drogheda, Co. Louth Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
50Glenveagh Properties PLC Annual Report and Accounts 2020Business Model & Strategy Sustainability Report51SUSTAINABILITY REPORT13. Source: Central Statistics Office (CSO) Ireland14. Demand estimated by the Central Bank of Ireland (2019)15. From November 202016. Estimates provided by the International Energy Agency (IEA)CO2e Emissions Reduction Target 25% Scope 1 and 2 intensity reduction target for 2025 from 2020 baselineAffordable Homes The lack of affordable housing is a major inhibiting factor for the Irish economy. Projected trends in employment suggest that Ireland needs 300,000 additional dwellings in urban areas. It is incumbent on the construction industry, working in partnership with national government, local authorities, and multiple other stakeholders to accelerate the pace of construction of affordable homes for first time buyers and young families, and to create sustainable, thriving communities in the process.Sustainable CommunitiesDevelopers must ensure that new developments have a strong sense of place, and that they are integrated into existing communities. Energy efficient construction, EV charging points, and cycling & walking permeability should all come as standard.The Climate CrisisGlobally, the buildings and construction sector is a major consumer of energy and a significant contributor to GHG emissions. Developers have a duty to minimise the impact of their activities on the environment, not just in terms of emissions, but also in terms of efficient use of land and raw materials, waste reduction, and recycling.KEY DRIVERS OF OUR APPROACH TO SUSTAINABILITY21kNumber of new dwellings completed in 202013, which is below an estimated requirement of 34k14 100%Proportion of Glenveagh homes that are A2 or better15 39% Globally, the buildings and construction sector accounted for 39% of process-related carbon dioxide emissions in 201816 Our long-term ‘north star’ sustainability objective is to set a new benchmark in our sector by delivering the maximum possible social benefit at the lowest possible environmental cost.HIGHLIGHTSSustainability Pillars Built Around Our People And Our CommunitiesCreating sustainable homes and communitiesPutting customers at the heart of what we doKeeping people safe Environmentally considerate and efficient operationsAttracting, inspiring and investing in peopleSustainable and responsible sourcingDelivering On Our Commitment To Our Stakeholders And The EnvironmentBuilding Energy Ratings of Starter Homes 100% A212 option to upgrade to A1Affordable Homes 72% Of homes priced below the new home median12 2019: 73%Enhanced CLimate Reporting Disclosing against recognised international standardsTotal Recordable Incident Rate 2.4Including direct and contract employees Customer Satisfaction Score 83% of customers would recommend us to a friend 2019: 82%Delivering On Our Commitment To Our Stakeholders And The Environment12. Core Glenveagh homes compared to GDA and Cork Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
5352Glenveagh Properties PLC Annual Report and Accounts 2020Business Model & Strategy Sustainability ReportWe believe that everyone should have access to high-quality homes in flourishing communities, and we are determined that our contribution to that great endeavour is delivered in the context of the highest standards of environmental stewardship and responsible business.Our ambition is to set a new benchmark in our sector by delivering the maximum possible social benefit at the lowest possible environmental cost. This is consistent with our broader business vision objective which is to create the leading sustainable homebuilding platform in Ireland.In this, our first Sustainability Report since we became a public company in 2017, we set out our approach to reducing GHG emissions from our own operations and our supply chain, and the steps we are taking to reduce, re-use and recycle raw materials and resources. We also explain the measures we are taking to keep our people and our contractors safe, to source responsibly, to attract, retain and inspire our people, to put customers at the heart of everything we do, and to create flourishing, sustainable communities.We are passionate about the quality of our homes and about providing the highest standards of service for our private, institutional, and state customers. We focus on excellence and innovation across all aspects of construction to enhance build efficiency and minimise environmental impact.During FY20 we began to put in place systems to measure and reduce our impact on the environment – including reporting Scope 1 and Scope 2 emissions for the first time – and to ensure we continue to operate in a socially responsible and ethical way. As part of our environmental strategy, we have set an emissions intensity reduction target for 2025 of 25% reduction of Scope 1 and 2 from a 2020 baseline year. It is our vision to achieve a net zero emissions target by 2050 and use Science Based targets to account for future Scope 1, 2 and 3 emissions.We have also begun to integrate ISO 14001 – the international standard for environmental management – into our operations, with a view to achieving certification in 2021. As part of this process, we have developed and documented a comprehensive Environmental Management System.All these measures are merely steppingstones on the journey towards our goal of class leading standards of environmental and social responsibility. Stephen GarveyChief Executive Officer CEO’S STATEMENTThe Irish housing market has been chronically undersupplied for many years, creating profound structural challenges for our economy and for our people. The biggest pinch point is affordable homes for first time buyers and young families. Understanding Our Operating Context17The Irish housing market has been undersupplied for a number of years . Whilst some degree of undersupply is to be expected in any economy, the level of unfilled demand in Ireland has been increasing steadily. The number of young adults continuing to live at home has risen since 2011 while the number of people aged 25-34 who are registered as heads of household has fallen. The pressure on housing stock is likely to grow in view of projected trends in employment and the continued under-supply of housing. Notwithstanding the impact of the pandemic, growth is expected to continue to be concentrated in the services sector for the foreseeable future.Across the OECD, 79 per cent of the population lives in urban areas; in Ireland it is 63 per cent. Were Ireland to follow in the footsteps of other OECD nations it is estimated that there would need to be around 300,000 additional dwellings in urban areas. In its analysis of the Irish housing market, the Central Bank of Ireland suggests a number of possible explanations for the current state of supply and demand in the Irish housing market, including: changes to the cost base associated with the delivery of housing units, the availability and price of development land, structural issues within the building industry such as difficulties achieving economies of scale, and the time taken for the sector to recover from the property crash over a decade ago.It is against this backdrop that Glenveagh Properties emerged as a PLC in 2017. We are a young company dedicated to expanding access to high-quality new homes, with a focus on first time buyers and young families. We believe that everyone should have access to high quality homes in flourishing communities across Ireland. We are focused on three core markets - suburban housing, urban apartments and partnerships with local authorities and state agencies. Since IPO we have opened 23 sites, delivering more than 1,800 units (700 in 2020) with 1,150 in the pipeline for 2021. The landbank we’ve assembled can deliver housing that is both in demand and affordable. Meeting the demand for affordable housing is one part of the story; doing so responsibly is the other. In this report we address the steps we are taking to deliver the social benefit of affordable housing in a way that minimises impact on the environment, including using land in the most efficient way, driving down waste, reusing resources, reducing emissions during construction and delivering A rated energy efficient homes across all our developments.17. Data and analysis in this section, including OECD reference: An Overview of the Irish Housing Market, Central Bank of Ireland, 2019Marina Village Greystones, Co. Wicklow Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
1
2
3
Disciplined
Investment across
our three target
segments
Scaling our
construction
capability across
Suburban and
Urban
Sector-leading
customer offering
4
Optimisation
of capital
employed
Key Sustainability Objectives
Material Issues Addressed
Putting customers at
the heart of what we do
Read more on page 56
Attracting, inspiring and
investing in people
Read more on page 62
• Affordable Housing
• Build Quality
• Customer Service/Satisfaction
• Employee Engagement & Wellbeing
• Diversity & Inclusion
• Training & Development
Keeping people safe
Read more on page 68
• EHS Culture, Policies and Processes
• EHS Training & Awareness
• General H&S Performance
Creating sustainable
homes and communities
Read more on page 74
Environmentally considerate
and efficient operations
Read more on page 80
• Energy Efficient Buildings
• Sustainable Placemaking
• Land Use & Biodiversity
• Social Value & Community
• Climate Change & Energy Use
• Waste & Resource Use
• Water Usage
Innovation
•
Sustainable and
responsible sourcing
Read more on page 86
• Managing Our Supply Chain
• Energy Efficient and Low Carbon Supply Chain
• Ethical Sourcing & Human Rights
Governance Commitments & KPIs Risk Management
5455Glenveagh Properties PLC Annual Report and Accounts 2020Business Model & Strategy Sustainability ReportOur Material Issues We have assessed a wide range of issues against our business strategy to identify those that present the most significant risks and opportunities. We considered how important each issue is to our key stakeholders (including investors, customers, employees, communities and government) and the extent to which each issue could have a negative or positive impact on people, society or the environment.We have identified our material issues in the context of the Group’s six pillars: • Putting customers at the heart of what we do • Attracting, inspiring and investing in people• Keeping people safe• Creating sustainable homes and communities• Environmentally considerate and efficient operations• Sustainable and responsible sourcingMateriality assessment is an ongoing process, and we will continue to engage with our stakeholders to ensure we are addressing their most material issues. Group Strategy Objectives and Our Sustainability PillarsOur Approach and Link to Business StrategyAt Glenveagh, we are passionate and disciplined about creating a positive environmental, social and economic legacy for future generations. Our passion is manifested by the sheer scope of the topics we are managing and monitoring, whilst our discipline is evident from our rigorous management approach. Our approach to sustainability is holistic and integrated. Our six sustainability priorities address the most relevant issues to our stakeholders, whilst supporting our strategic priorities. Management of each topic is integrated into “business as usual” operations through commitments, KPIs, governance, accountability, and risk management processes and structures. Putting customers at the heart of what we do Environmentally considerate and efficient operations Attracting, inspiring and investing in people Creating sustainable homes and communities Sustainable and responsible sourcing Keeping people safe Leadership & GovernanceImportance to external stakeholdersImportance to internal stakeholdersHealth & SafetyBusiness ethicsCommunity EngagementEthical sourcing & Human rightsTaxBiodiversity & Land UseEmployee engagement Water use efficiency Sustainable placemaking Training & DevelopmentCustomer service/satisfactionLabour practicesAffordabilityBusiness model resilienceBuild quality Energy efficient and low carbon supply chainThe energy use and carbon emissions of our operationsPollution prevention Energy-efficient buildingsPrivacy, Data security Waste ManagementDiversity & InclusionMonitoringOngoing ImportanceFocus AreasWe support the United Nations Sustainable Development Goals. We are currently in the process of carefully examining each one and its underlying indicators in order to identify, which are most relevant to Glenveagh and where we can make the biggest contribution.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
56
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
57
Putting customers at the
heart of what we do
We believe that everyone should
have the opportunity to access
great-value, high-quality homes
in flourishing communities across
Ireland. This vision governs
everything we do at Glenveagh.
To best achieve our vision, we
focus on providing affordable
homes for first time buyers and
young families.
We strive to create a seamless
customer journey, to ensure the
highest levels of build quality and
to adapt to the changing needs
of our customers.
72%
Of homes priced
below the new
home median18
2019: 73%
83%
83% of our customers
would recommend
us to a friend
2019: 82%
Redeveloped our
digital strategy to
facilitate an online and
private viewing led
customer journey
Access & Affordability
We devote the majority of our portfolio to the first-time buyers (“FTB’s”) segment. We give more people access to new
homes by building at scale and by keeping our prices below the industry average for new-build homes. We plan our
developments with access to transportation, amenities and green spaces in mind. We’ve even partnered with national
broadband providers to futureproof developments for our customers.
Customer Spotlight: Supporting
First Time Buyers With Our
Approach to Placemaking
First-time buyer Lorraine is one of
the residents at our Cluain Adain
development in Navan, Co. Meath
“It is our absolute dream home! Location and amenities
were also very important to us. We love the Blackwater
park that is local to us here. We tend to bring our dog
over for a walk most evenings, it's very convenient and
there is nothing better than getting a bit of fresh air.
The whole process of buying the home went smoothly
enough for us! Dealing with Glenveagh was very easy.
We never had to wait for them to get back to us. It was
always prompt responses. The process went smoothly
from start to finish, which we are very thankful for!”
18. Core Glenveagh homes compared to GDA and Cork
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
58Glenveagh Properties PLC Annual Report and Accounts 202059Business Model & Strategy Sustainability ReportWe work to ensure our developments match repayment capabilities in the communities where we operate. Price transparency is important to us which is why typical monthly mortgage repayments are routinely promoted on site.Our land portfolio is positioned towards delivering affordable homes in attractive urban locations. We offer selling prices below €350k on the majority of our Suburban portfolio. Prices at the Group’s developments start from €240k, with our selling prices materially below the national average new home price.Furthermore, the current Part V (social housing) requirement in Ireland is 10% and we are delighted to meet this obligation and to offer additional homes to the state for social housing at affordable prices.Median new home prices (Inclusive of VAT)* Source: Property Price Register * Core Glenveagh homes compared to GDA and CorkBuild Quality We consider having a cohesive and robust Quality Management System ("QMS") essential to our success. Our QMS is built on best practice and we are aligning this with the standards of ISO 9001 which we will seek to fully implement over the next 24 months.Our QMS assists us in maintaining our currently high levels of quality and drives consistency across sites. With dedicated training and role-specific responsibilities under the QMS we are able to work towards improving our product efficiencies and empowering staff so that we can improve the quality of workmanship and reduce rework.Construction quality is overseen by our Head of Quality who is responsible for ensuring each project complies with the quality requirements of the business and that our Quality Policy is adhered to. Under our QMS we have a Quality Responsibility Matrix ("QRM")outlining the responsibility and reporting structure. At site level the Contracts Manger is responsible for ensuring that the project quality requirements are understood by all colleagues and sub-contractors. Throughout the build process Quality Control is observed inspected and recorded by our site team. It is also verified and validated by third party consultants and is internally audited by our Quality Team. We have a dedicated Quality Team with a Quality Manager and a Building Control (Amendment) Regulations (“BCAR”) Manager (who is responsible for ensuring compliance with Building Regulations). They work across all projects to ensure that each aspect of our quality approach is maintained. Our QMS guidelines and associated training ensure our management and sub-contractors have a consistent understanding of our quality and finishing requirements.Quality performance is presented at senior management meetings on a monthly basis. Quality targets are set and reviewed by the business annually. The targets relate to the high-grade finish of all our homes, consistency across sites, improvements in efficiencies and reduced rework.Customer ServiceWe seek to establish trusted long-term relationships with our customers. For this reason, we do not outsource the completion of the sales process to estate agents. From their first enquiry to after their move-in date Glenveagh builds our customer relationships on trust, transparency and respect.We foster a one team culture on site such that our construction representatives act as an extension of the sales team. This means all our people are focused on delighting the customer, for example by eliminating many of the pain points associated with moving into a new home, such as the installation of flooring and appliances and even setting up a broadband internet connection. We promote a professional and transparent snagging process while our dedicated landscaping team "Greencare" by Glenveagh is on hand to provide an ongoing service.Customer Satisfaction ‘Would you recommend Glenveagh to a friend?’* "Recommend to a friend” score introduced in 2020. 2018/2019 based on responses to 14 queries.2018* 2019* 202083%82%82%New Homes GlenveaghMarket 2020 2020€340k€385kQuality Management System ObjectivesHighlight the existing high level of quality we have 01Improve quality workmanship, recording and reporting 02Identify poor quality and non-conformance 03Set clear quality requirements for project at outset 04Ensure full traceability for all quality functions 05Bring consistency, efficiency and continuous improvement 06Key steps in our quality process include:1. PlanPre-Start Quality meeting held to develop project quality objectives and finalise project quality plan.2. Set-Up Consultant ITP, Quality Responsibility Matrix and BCAR requirements finalised with site team and consultants.3. Build Subcontractors pre-start meetings are held to communicate quality requirements and approved design. Workmanship monitored and recorded by site teams.4. Inspect & ValidateInternal Quality checks and material testing conducted as per the approved ITP and all works and results validated by consultant inspection and review.5. Monitor & ImproveInspections, quality observations and consultant reports are reviewed and analysed. Recommendations for improvement.Bellingsmore Kilmartin, Dublin Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
60
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
61
Targets, Goals, and Progress
Commitments
Targets
Progress Actions, Measurement, Evaluation
Maintain Group ASP
Below Greater Dublin
Area (“GDA”) and
Cork New Homes
Market ASP
Achieve ISO 9001:2015
Certification by 2022
Implement Integrated
Site QMS on all
Projects by 2022
Conduct over 2,000
Internal Quality
Inspections by the
end of 2021
Achieve customer
satisfaction rating
in excess of 86%
by 2022
Access &
Affordability
Continue to deliver
housing linked to
local affordability
Build Quality
Continue to
provide high
quality homes that
exceeds customer
expectations
Customer Service
and Satisfaction
Put customers
first, continually
striving for service
excellence in all
that we do
Achieved
On track
Off track
In 2020 we:
• Ensured sufficient range and choice was available to
our customers to help address local need with 82%
of our private sales made to first-time buyers.
• Delivered a Group ASP below the GDA new
homes market.
In 2021 we will:
• Continue to drive local affordability and
ensure sufficient range of choice is available to
our customers at prices they can afford.
In 2020 we:
• Developed and implemented a Site Quality
Responsibility Matrix and Inspection Plan.
• Conducted over 500 Internal Site Quality
•
Inspections.
Integrated our consultants into our quality
Management System.
• Conducted an external audit of our QMS.
In 2021 we will:
• Progress towards ISO 9001 with adoption targeted
for 2022.
• Begin to Integrate our major subcontractors into our
quality management system.
• Rollout Site Quality Responsibility Matrix and
•
Inspection Plan on all sites.
Strengthen and expand our quality culture among
site teams and sub-contractors.
In 2020 we:
•
Improved our overall customer satisfaction
rating to 83%.
• Made the customer experience more accessible
by enhancing our digital offering and facilitating
customers to complete their entire home buying
journey remotely or in a contactless manner.
• Redeveloped our digital strategy to facilitate an
online and private viewing led customer journey.
In 2021 we will:
• Develop an After Sales Department to provide
a central platform for our buyers to register any
queries they have after the sale of their property
has closed.
• Develop our website to enable buyers to be
self-sufficient by accessing a portal with links to
information on maintaining heating/ventilation
systems within their homes, energy saving tips and
local community initiatives that Glenveagh are
involved in.
Enhancing Customer
Experience during Covid-19
Despite the mobility restrictions brought about
by COVID-19 lockdowns our customers were able
to complete their home buying journey remotely.
We redeveloped our digital strategy to allow for
contactless, online and private viewing with our
agents providing virtual assistance via video calling.
The new system allowed prospective customers to
balance an intimate viewing-experience with on-call
assistance while allowing Glenveagh to refine data
collection on our prospective customers.
We ask our buyers to complete a survey, about eight
weeks after completion, to capture feedback on
design, build quality, the snagging process, and their
engagement with our people throughout the process.
way through reduced energy use and lower water
consumption. Our marketing team provides guidance to
our customers regarding behavioural change and how
to best use appliances in an energy efficient way.
Twenty per cent of the executive and senior team bonus
is dependent on the Group achieving the equivalent of
a 5 Star rating (90%+ recommending Glenveagh to a
friend). Feedback from the survey is reported at Board
level. In FY21 we will also be incorporating the survey
data into monthly reporting to relevant departments
to inform decision making. Furthermore, we have
enhanced the survey to capture more information about
sustainability topics.
Managing Complaints
We use several methods to capture complaints or issues,
including a services inbox, an aftersales inbox, and
queries that come in by email, telephone, social media
or directly from customers on site. Queries are escalated
to the relevant site or dealt with directly with the buyer
by the sales team. For 2021 we have established a
dedicated After Sales team to further improve our
services to customers.
In FY20, 83% per cent of customers said they would
recommend Glenveagh to a friend.
Communication with customers on sustainability
issues is key to our customer service process. We aim
to ensure that sustainability is communicated during
the purchasing process, in marketing brochures, and
we also aim to provide detailed information upon
the completion of a purchase. We encourage our
customers to operate their new homes in a sustainable
Responsible Marketing
We are committed to having clear, honest and truthful
advertising. We work with Marketing and Advertising
agencies that are required to follow the guidelines
established by The Advertising Standards Authority
for Ireland. There was one complaint made to the
Advertising Standards Authority in 2020. No complaints
have been upheld during the year.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
62
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
63
Attracting, inspiring and
investing in people
12
Graduates
On our first Graduate
Programme
Internal mentorship
programme aimed at
developing employees’
skills and experience in
areas outside of their
current role
11
Hours
Average hours
of training per
salaried employee
Be an employer of choice, attract,
and retain the best people by
investing in their development
and success.
Everything starts with our people. Delivering on our
commitment to expand access to home ownership;
creating thriving communities; leading the industry
on quality, safety and sustainability – all of these
material issues rely on a talented, dedicated and
motivated workforce.
Employee Engagement & Satisfaction
We use the Great Place to Work model to assess
engagement and satisfaction levels across the business.
We are proud to be the first housebuilder in Ireland to
be recognised as a Great Place to Work (2019).
The model measures five dimensions of the employee
experience. The first three – Credibility, Respect and
Fairness – measure employee trust in management,
while the final two, Pride and Camaraderie, assess
employees’ feelings about their jobs and their
colleagues. In addition, we run a number of periodic
employee pulse surveys to assess and improve the
employee experience.
A Great Place to Work Committee has been established
with a representation of employees from across the
business. The committee assesses survey results and
engages with the workforce to identify improvements.
One of its initiatives was to introduce “Pride in Place”
activity, which involves site visits for office employees
to witness the work that the site team have carried out
on their development. It is a great opportunity for office
based teams to meet the sites teams to gain a better
understanding of their roles and also to have a look at
the finished homes.
Employee Wellbeing
The health and wellbeing of our people is a priority
at the best of times, but the Covid-19 pandemic has
taken a particular toll this year. We have put in place a
number of initiatives to support our people during this
difficult time, including:
• A 12-week programme called Take Care Tuesday
which ran from June to September. Employees were
able to take advantage of a weekly live talk from a
subject matter expert on topics including Healthy
Eating, Physiotherapy, Skin Cancer Awareness,
Financial Wellbeing, Stress and Mindfulness;
• Online quizzes which brought teams of employees
together from across the business;
• A regular employee-led newsletter that includes
competitions, fun activities, employee interviews as
well as updates from across the business;
• An introduction to the Wheel of Life – a visual tool
designed to help people achieve balance in their
lives – which was shared with all employees during
Construction Safety Week;
• Weekly talks on topic including men’s health, self-
•
care, smoking cessation, and a GP led live webinar
on Cancers.
Subsidised catering on-site delivering a healthy, hot
food offering and reducing the need to leave the
site, further mitigating the spread of Covid-19 and
improving health & safety and productivity.
We regularly promote our Employee Assistance
Programme to remove any stigma around mental
health and in 2021 we will establish an employee
Wellness Committee.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
64
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
65
Our 2020 Employee
Wellness Programme
In 2020 we ran a Wellness
Programme which included talks
on pensions, cancer awareness,
healthy eating, and mindfulness
among numerous other topics
which are important to our staff.
We are rolling out training for Mental Health First
Aiders in 2021, ensuring the support of colleagues
across the business.
We have developed our own bespoke Mental Health
Management Training to provide key tools to enable
our managers to support employees.
Training & Development
We are committed to supporting and developing our
people to further their skills and experience. In 2020, we
concentrated on making space for employees to develop
new skills and techniques directly related to their
current roles and streamlining our internal processes.
We also updated our performance review processes to
incorporate competencies across the business, launched
our first Graduate Programme, and held a management
programme for our people managers.
Average Hours of Training per Salaried Employee
11hrs
7hrs
3hrs
2018 2019 2020
For 2021, the focus will be on strengthening our
teamwork and communication, both in and across
our departments. We will also be providing increased
targeted training interventions to complement our
growing workforce and we will look to develop long
term career mapping in all departments.
Glenveagh Career Path:
Dean Mulligan
– Contracts Manager
Dean joined Glenveagh’s founding company
Bridgedale in 2010 as a carpentry apprentice.
Upon completing his apprenticeship, he was
promoted to Finishing Foreman on the Cois
Glaisín site in Navan, Co. Meath. The Cois
Glaisín development played a central role in
the early part of Glenveagh’s story and was
completed to an exceptional standard by
Dean and his team in 2020. Towards the end
of his time at Cois Glaisín site Dean was
promoted to Contracts Manager. He is now
responsible for managing approximately 40
direct employees on the Bellingsmore and
Oldbridge Manor developments as well as a
large volume of subcontractors.
In his role as Contracts Manager Dean now
helps to guide and mentor junior members of
the Construction team with their career paths.
We have launched an internal mentorship programme
aimed at developing employees skills and experience in
areas outside of their current role.
Apprenticeships
Attracting a steady stream of apprentices into the
construction industry is crucial for the long-term health
of the sector and we are determined to play our part.
In 2020 we initiated a scheme for our sub-contractors to
match the government’s employer incentive of €3,000
per apprentice.
Transition Year Students & Graduate Placement
In addition to supporting apprenticeships, we offer
placements to second and third level students, providing
work experience and mentoring from a senior member of
our team. This programme will be expanded in FY21 as
part of our school outreach programme.
Reward and Remuneration
At Glenveagh, we offer attractive remuneration, and our
range of benefits exceeds industry benchmarks.
Our Benefits
Health
Insurance
Long Term
Disability
Wellbeing
Programme
SAYE Share
Scheme
Life
Insurance
Parenting
Policies
Education
Support
Sports & Social
club and activities
Annual
Bonus
Pension
Scheme
Income
Protection
Commuter travel
pass schemes
Attracting a steady stream of
apprentices into the construction
industry is crucial for the long-term
health of the sector and we are
determined to play our part.
24%
Female headcount in
Glenveagh (Construction
sector average 9%)
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
66
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
67
We encourage employee share ownership. All
employees can participate in the Glenveagh Save As
You Earn Scheme, which allows them to save with us for
3 or 5 years, enabling them to buy Glenveagh Properties
PLC shares at a discounted price.
Diversity & Inclusion
We are committed to attracting and supporting a
diverse workforce. Our commitment is outlined in our
Diversity and Inclusion Policy statement. However, at
Glenveagh we go beyond words. Here is how.
In 2020 we signed the Construction Industry Federation
(CIF) Diversity Charter with the aim of achieving the
Bronze Standard, and we are also planning to join the
Female headcount in Glenveagh
vs Irish Construction Sector
24%
28%
24%
7%
9%
2018 2019 2020
NA
Glenveagh
Ireland Construction Average*
*No CSO data available for 2020
30% Club Ireland with the goal of improving gender
balance at all levels of the organisation.
A new recruitment drive will take place in 2021 with
the aim of extending opportunities to a more diverse
range of candidates and by promoting the construction
industry as an employer of choice for all.
We have recently reviewed all our policies and procedures
to ensure they are suitable for a diverse workforce. For
example, we have introduced more flexibility in our
Parental Leave policy allowing all employees to apply
to take parental leave in short blocks. As part of our
CIF Diversity Charter commitments we will introduce a
number of new policies and initiatives in 2021.
All managers are currently undertaking unconscious
bias training and all job Interviews are carried out by
a two-person panel to reduce further the risk of any
bias in the process. A competency framework has been
developed for use as selection criteria at interview for
both hiring and promotion opportunities.
Age diversity in our workforce
Age employees % of full-time
<20
20 – 29
30-39
40-49
50-59
60>
1%
17%
33%
30%
17%
3%
3% 1%
17%
30%
17%
33%
Engagement &
Leadership on Diversity
We regularly attend job fairs at universities
and colleges with an emphasis on
promoting applications from women.
Where possible we arrange for our female
engineers to speak at these events.
We were the main sponsor for CIF’s
International Women’s Day event in 2020.
Targets, Goals, and Progress
Commitments
Targets
Progress Actions, Measurement, Evaluation
1. Aim to achieve 82% or
above in the employee
satisfaction survey in 2021
2. Aim to reduce employee
turnover rate to 10%
Employee Engagement
& Wellbeing
Demonstrate commitment
to improving the wellbeing
of our workforce.
Improve employee
communication and
engagement.
1. Invest in at least 13 hours
of training per salaried
employee in FY21
2. Continue graduate
intake and completion of
supporting programme
3. Align career mapping
with departmental strategy
and development plans
for all
Training & Development
Aim to be the industry
destination of choice
for graduate, trainee and
apprentice recruitment
Ensure we have appropriate
development programmes
to further encourage
promotion and career
development in the Group
Diversity & Inclusion
Create an inclusive
workplace that promotes
diversity and ensures
equal pay
Become a more accessible
employer for employees
with disabilities
Promote ethnicity in
the workplace
1. Maintain female
employees percentage
above industry average
2. Recruit at least 30%
females amongst new
college recruits in a
given year
3. Continue to drive and
ensure equal pay for
equal work
4. Ensure we reduce the
gender pay gap on an
on-going basis
Achieved
On track
Off track
In 2020 we:
• Ran a Wellness Programme which
included talks on pensions, cancer
awareness, healthy eating, and
mindfulness among numerous other
topics which are important to our staff.
• Reduced employee turnover to 11% from
15% in 2019.
In 2021 we will:
• Gain greater understanding of how
employees feel about working at
Glenveagh.
•
Set up Wellbeing Committee.
• Develop a Communication Charter
•
Improve communication technology.
In 2020 we:
•
Invested in 11 hours of training per
salaried employee.
Launched a Graduate Programme with
12 graduates.
Launched an internal mentorship
programme.
• Developed a competency framework
model as a human resource
management tool.
In 2021 we will:
•
Focus on targeted training and
development interventions, career
mapping, and developing
succession planning.
Improve internal communication
platform.
•
•
•
In 2020 we:
• Published Diversity & Inclusion Policy
and signed the CIF Diversity Charter as
a public commitment to D&I.
Introduced more flexibility in our
Parental Leave policy.
•
• Took part in Down syndrome Ireland’s
Accessibility Programme with one
part-time employee.
In 2021 we will:
• Embed D&I policy into all company
policy, procedures and practices.
• Achieve the Bronze Standard in CIF
Diversity Charter.
• Deliver D&I training to senior leaders
•
and managers.
Improve our recruitment advertising to
promote employment with the company
for people with disabilities.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
68
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
69
Keeping
people safe
2.4
Total Recordable
Incident Rate
NISO
Construction
Housebuilding
Award 2020
88%
Average achieved
across the Group on
monthly site audits,
up 4% vs 2019
Ensure our operations are safe
for all those employed and
affected by what we do.
Culture, Policies, and Processes
Environmental Health & Safety ("EHS") is at the
forefront of what we do at Glenveagh. Our main
objective every day is to ensure that our employees,
sub-contractors, suppliers and all those visiting sites
come into work and go home safely.
EHS is the first item on our Board’s agenda. For all
members of staff, 20 per cent of their bonus is tied to
our overall EHS performance.
Our 12-strong EHS team drives the H&S agenda
across the business. The team has developed a
comprehensive training programme and in 2020 it
delivered awareness courses on: Working at Height,
Plant Safety, Scaffolding, Craneage, and Managing
Safety In Construction. Due to the Covid-19 pandemic,
some planned courses have been postponed to 2021.
Our Safety Management System has been designed
to be consistent with ISO 45001 and we will be
applying for accreditation to this standard in the
first half of 2021.
AWARD WINNING
HEALTH & SAFETY TEAM
Glenveagh are thrilled to have been awarded
the NISO Construction Housebuilding Award
for 2020. We have also maintained our Safe
T Cert - Grade A in 2020. This is a great result
for the everybody in the company and reflects
all the work we put into maintaining and
improving our safety standards.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
70
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
71
Whiteboard
Meetings
White board meetings are
completed on each site at the
beginning of every day to agree
a safe plan of action for the
day's activities. The objective of
the meetings is to identify the
hazards and risks associated with
each area of work on the site.
Our Health & Safety policies
As part of our Health and Safety Culture, the Group has
adopted comprehensive Health & Safety policies which
are disclosed on our website. Adherence to robust health
and safety practices is integrated into all employees
remuneration.
Weekly safety meetings are held to look at any issues
that were raised during the previous seven days and to
identify any actions required in respect of new contractors
or works in the week ahead. There are also monthly
meetings with the Senior Leadership Team, monthly
review audits and trends as well as new projects.
Health & Safety audits
Every month three of our sites are audited via
independent inspections.
All our sub-contractors have to pass a pre-qualification
process that includes a comprehensive safety section.
Contractors are required to appoint a supervisor with
specific responsibility for Health and Safety.
Monthly Safety Awards
We hold monthly safety awards where our
employees and subcontractors are awarded
for H&S compliance, care to themselves, fellow
workers and the Environment.
At Glenveagh, H&S training is a
continuous process and investing in the
competency levels of all staff, particularly
site staff, is a key commitment Glenveagh
makes to its people.
88%
Average achieved
across the Group on
monthly site audits,
up 4% on 2019
Approach to training and awareness
At Glenveagh, Health and Safety training is a
continuous process and investing in the competency
levels of all staff, particularly site staff, is a key
commitment Glenveagh makes to its people. In-house
training for staff is provided in:
• Manual handling
• Abrasive wheels
• Working at height
•
Fire training
• Toolbox talks
In addition, external training consultants are brought
in to provide further training in Managing Safety in
Construction, and Safe Pass and Plant safety ("CSCS").
When we identify an area of competency that we need
to augment, staff are provided with the appropriate
level of training.
Glenveagh continually introduce initiatives to reduce
our Accident Frequency Rate ("AFR") in 2020 we
introduced Gloves and Glasses to our mandatory PPE.
This achieved a reduction of 18% in relation to hand
injuries across the Group from the previous year. We
believe with the implementation and certification of our
Integrated ISO EHS system will also led towards further
reduction of our AFR.
Total recordable incident rate ("TRIR")
2020: 2.4
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
72
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
73
Targets, Goals, and Progress
Commitments
Targets
Progress Actions, Measurement, Evaluation
Proportion of sites
with Independent
audits to be 20%
Achieve ISO45001
Certification by the
end of Q2 2020
Maintain Grade A
in Safe T Cert
Increase training
hours and
participation
per employee
Maintain low group
health and safety
Annual Injury
Incidence Rate
Culture, Policies,
and processes
Strive to ensure the
highest standards of
health and safety
across our workforce
and sites
H&S training &
awareness
Continue to raise health
and safety awareness
amongst our directly
employed and supply
chain workforce
General H&S
Performance
Maintain group health
and safety Annual Injury
Incidence Rate (AIIR)
Achieved
On track
Off track
In 2020 we:
• Maintained our Grade A in Safe T Cert.
• Were awarded the NISO construction
homebuilding award.
• Achieved an average of 88% across
the group on monthly audits up 4% on
previous year.
• Completed stage 1 pre assessment for ISO.
• Developed and implemented a Covid-19
management plan across the Group.
• Remote working procedures developed
and implemented.
In 2021 we will:
• Achieve ISO Certification.
• Maintain Grade A -Safe T Cert.
In 2020 we:
• Ensured 14 staff completed IOSH MSIC
•
Implemented Covid-19 management system
training for all Glenveagh staff.
• Delivered remote working training
• Delivered safe pass, manual handling and
working at heights training for Glenveagh
site staff and Contractors.
• Participated in CIF Safety Week in October.
In 2021 we will:
• Continue the roll out of IOSH MSIC.
• Participate in Safety Week 2021.
• Roll out Mental Health First aiders within
the Group.
In 2020 we:
• Delivered a TIRR of 2.43.
•
Introduced Gloves and Glasses to our
mandatory PPE. This achieved a reduction
of 18% in relation to hand injuries across
the Group from the previous year.
In 2021 we will:
• Target continual improvement in Group
health and safety accident frequency
rate (“AFR”).
• Reduce injuries and drive a positive
change in culture with our workforce.
Reopening Sites Post Lockdown
In line with the Irish Government’s Covid-19 guidance all
our construction sites closed between March 27 and May
18. The Health & Safety team designed a comprehensive
set of protocols so that our sites and offices were able to
reopen with all appropriate hygiene and social distancing
measures in place.
Working with Subcontractors on H&S
We have a rigorous system in place to ensure Health
& Safety of all our contractors. All contractors’ staff
are required to have Safe Pass and Manual Handling
training and be 100% compliant. This is tracked through
our TAG System.
Investing in Technology
We have deployed TAG (Time Attendance Glenveagh),
a biometric time and attendance software solution that
ensures only pre-qualified and competent people are
allowed access to sites. Individuals gaining access to site
have to have their certification and induction up to date
and recorded in TAG before the software will allow them
access. TAG also provides alerts when an individual’s
training is approaching expiry.
All contractors go through our vetting procedure prior to
being put on our approved suppliers list.
We have a 16-point Environmental, Health & Safety
minimum requirements document that is communicated
to all contractors and is included within their contract.
Each contractor must have a competent supervisor on
site, and these are identified by wearing a black hat.
The Black Hat’s responsibilities are set out by our safety
team member.
Each site must have a safety representative nominated
by the operatives on site. This allows for staff to raise
concerns and bring them to the attention of site
management.
The Health & Safety team designed a
comprehensive set of protocols so that our
sites and offices were able to reopen with all
appropriate hygiene and social distancing
measures in place.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
74
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
75
Creating sustainable
homes and communities
100%
of starter homes
are now A2 rated
with an option to
upgrade to A1
Emphasis on
local employment
and community
engagement with a
new social barometer
tool in development to
measure success
First high-density
suburban housing
scheme in planning
Deliver high quality homes with low environmental impact where
people can live a sustainable life.
How We Engage on
Biodiversity with Residents
We have been working closely with residents in
Taylor Hill on biodiversity projects including tree
planting and wildflower bed creation to help
enrich areas where we build. We look forward to
continuing our partnership work during 2021.
Land Use & Biodiversity
As part of the planning process, we assess for
sensitive ecosystems to ensure they are protected and
enhanced. We work closely with local authorities in
pre-planning to protect ecosystems and create areas
that promote biodiversity.
As part of the land acquisition process all our sites are
screened for their ecological attributes, proximity to
sensitive habitats, and areas of significant biodiversity
value. The sites are assessed by environmental
experts using the appropriate recognised Irish and
EU regulations.
Any sensitive or biodiverse habitats identified on
our sites are disclosed to the relevant authorities
and we work with the relevant expert-consultants on
how best to protect them. All resulting actions are
considered and implemented as part of a Construction
Environmental Management Plan.
As part of the planning process, we
“screen” for sensitive ecosystems to
ensure they are protected and enhanced.
Oldbridge Manor
Drogheda, Co. Louth
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
76
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
77
This year we plan to have each development sewn with
Wildflower Seed, this seed is most commonly affiliated
with farming areas and our aim is to reintroduce this
feature throughout our developments. Once the seed is
sewn we will manage the process and its growth until the
meadows become self-sufficient and almost maintenance
free. To add to this we are arranging 2 days of planting
these meadows in September which will include the
residents in four strategically chosen developments as
part of our community engagement initiative.
Efficient Use of Land
Meeting customer needs whilst also satisfying local
authority sustainable development standards is
a challenge using traditional residential typology
layouts. We have therefore started to research the
development of new housing typologies that satisfy
and exceed customers’ expectations, are more efficient
in terms of ground use and hence reduce the overall
environmental impact. It is our intention to introduce
these new typologies to the planning system in Q1 2021
and we are looking forward to working with the sector
in delivering this innovative solution to our customers.
Sustainable & Energy-Efficient Homes
There has been very little innovation in product type in
the housing industry over the last 40 years. As pressure
grows on land use, it is vital developers consider how
to utilise space better, meeting consumer needs while
using land more efficiently.
The overall energy demand of
our homes is reduced further by
a relentless focus on the highest
standards of insulation and air
tightness in all our properties.
All houses and apartments delivered by the Group
from November 2020 have a BER rating of A2 or
better. Indeed, an A-rating has been the benchmark
we set when the business was established in 2017, as
a result our homes are more energy efficient than the
market average.
Glenveagh has consistently delivered homes
to customer which exceed minimum regulatory
requirements. In 2020 the energy performance of our
dwellings improved by 12%. Delivering more efficient
buildings to the customer has a significant impact on
our Scope 3 emissions.
The key to achieving this standard is attention to detail
during the design and construction process along with
the use of renewable technologies. The overall energy
demand of our homes is reduced further by a relentless
focus on the highest standards of insulation and air
tightness in all our properties.
Delivering on Our Commitment to Our Customers and the Environment
100% of Homes
A-Rated
Reducing Scope 3
Emissions
A1 Rated Starter Homes
Available Today
41%
59%
62%
38%
2019 2020
A2 Rated
A3 Rated
2019 2020
m
u
n
n
a
r
e
p
2
m
/
h
w
k
e
g
a
r
e
v
A
30
40
50
60
70
80
90
BER Scale
Glenveagh
We are constantly innovating
and working with our supply
chain to reduce the energy
consumption of our homes,
and while we exceed our
obligations, we want to
do more
Today we offer the option
to upgrade to an A1 rated
starter-home via the
installation of additional
solar panel technology
All dwellings now A2 rated or better
Delivered a 12% improvement in
kwh/m2 performance
Glenveagh Homes Were Designed and Delivered to Achieve Greater Efficiency Than Regulations in 2020
Eco Energy Systems
We have transitioned away from gas boilers and since January
2020 air source heat pumps have been installed as standard
in all our new homes. Heat pumps represent the most efficient
alternative to fuel, oil and electric systems in regard to both
heating and cooling. They supply more heating and cooling
capacity than the amount of electricity used to run them, which
represents a long-term solution from a carbon footprint aspect
and lower energy cost for our customers.
The high energy efficiency of our homes not only brings
down customers’ bills – and hence contributes to the
overall affordability of home ownership – it also helps
homeowners reduce their personal carbon footprint;
this is an increasingly important consideration for many,
particularly those in the demographic groups we serve.
Average yearly heating bill for a 100m2
three-bed semi-detached home
€1,300
€380
A-rated C-rated
Source: Sustainable Energy Authority of Ireland
We are focused on achieving ‘beyond-NZEB’ standards
through the installation of renewable technologies such
as solar panels, heat pumps and further insulation
measures. As a result, with the addition of solar panels,
many of our properties can achieve an A1 energy
efficiency standard.
55%
Increase in the proportion
of A2 rated homes in 2020
Sustainable Placemaking
At Glenveagh, we consider where the house lives as
well as where people live. It is important to us that our
developments reflect the local built environment. We do
not want to create monocultures and, accordingly, have
evolved a variety of layouts suited to higher and lower
density sites while being cognisant of “placemaking”
within our developments. We take great pride in
restoring listed and protected features such as walled
gardens, existing hedgerows, stone walls, to mention
but a few.
We think carefully about how our developments should
connect with existing transport nodes and amenities,
and as part of each development we contribute to new
infrastructure such as playgrounds, sports facilities,
access roads, and walking routes.
On every scheme we design sustainable infrastructure
such as EV charging points, cycle lanes, connection to
public cycle lanes, and walking permeability.
A number of our urban schemes are located on in-fill
sites with old housing stock and derelict industrial units.
We are pleased to be able to bring these locations back
to life, reintegrating them back into the local community
with mixed-use developments comprising housing, retail
and amenities.
All potential sites are assessed within the context of
the national planning framework, local development
standards, local authority development plans, zoning
requirements, and development standards.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
78
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
79
Community
Engagement Spotlight:
DIY SOS: The Big Build Ireland
The Glenveagh team are proud to have been
part of The Big Build Ireland Project where we
helped to renovate the homes of deserving
families, changing their lives forever. Volunteer
builders, labourers, trades, suppliers, friends
& neighbours come together giving their time,
labour and materials to help a local family
whose lives have been impacted by a significant
loss or misfortune.
Green Transport
Access to sustainable transport infrastructure –
including public transport, cycle lanes and walking
routes – is central to the development process
for every scheme. In addition, all homes have the
necessary heavy cabling installed to allow for an
Electric Vehicle charging unit and these units are
fitted in show villages to demonstrate the option
to consumers.
Community Engagement
Traditionally, developers look for parcels of land and
then approach local authorities to initiate a planning
process. We take a different approach. We work in
partnership with local authorities to identify the needs
of local communities and then, together, we identify the
best ways of meeting those needs.
It’s a multi-disciplinary approach involving our
Acquisitions, Sales, Planning and Design teams. The
process starts with detailed research into the needs of
the consumer and the wider community. We engage
with public bodies and community groups, as well as
local authorities, to ensure we take into account all
aspects of infrastructure provision and social need.
How we Support Local Communities
We aim to be active participants in the communities we
serve and seek out ways in which we can contribute to
local and national causes. For instance, in Balbriggan
we organised a Biodiverse Planting Project with local
residents; in Greystones we sponsored the Christmas
market & Christmas lights; and in Kilcock we sponsor
GAA and Soccer teams.
Nationally and locally we support a number of
charities including Capuchin Day Centre, ALONE,
Irish Cancer Society, Jack & Jill, Cappagh Children’s
Hospital, Cappagh Kids Orthopaedic fund, Down
Syndrome Ireland Ability Programme, St. Vincent de
Paul Giving Tree, Irish Heart Foundation, Barretstown
and St. Francis Hospice.
In 2021, we will launch our Building Better Communities
initiative. This initiative will focus on sustainable
placemaking and enhancing the lives of our residents
and the wider community members. our community
initiative will focus on environment, biodiversity, health,
wellbeing, education and local charity support.
We aim to be active participants in
the communities we serve and seek
out ways in which we can contribute
to local and national causes.
Targets, Goals, and Progress
Commitments
Targets
Progress Actions, Measurement, Evaluation
Sustainable Communities
Exceeding local authority
development standards
Provide quality private
and public open spaces
for our customers
Sustainable & Energy-
efficient homes
Design and build
homes with reduced
carbon emissions over
their lifetime
Land use & biodiversity
Maximise efficiency
of land use on our
developments.
Promote biodiversity of
our developments and
connect communities
with nature.
Ensure all our developments
are designed based on
consumer needs and
latent needs
Incorporate quality
landscaping in public open
spaces and quality private
open space on all our
scheme designs
Research options for
reducing lifetime carbon
emissions of homes
Continue reducing Carbon
Emissions over time measured
by BER Ratings
Bring our new innovative
own-door high density
housing solution to planning
lodgement
Introduce landscaping
techniques that promote
biodiversity and support
natural habitat
Retain existing hedgerows
where possible in our
developments
Create a best practice hub
to enrich our community
engagement activities
Community engagement
Continually improve
engagement with local
communities
Achieved
On track
Off track
In 2020 we:
• Exceeded the development standards of
our relevant Local Authorities.
In 2021 we will:
• Complete Behaviours & Attitudes ("B&A")
•
survey and incorporate results into
scheme designs.
Implement a new procedure to evaluate
each parcel of land from
a social, environmental and
transport perspective.
In 2020 we:
•
Stopped using gas boilers in new
developments.
Increased the proportion of A2 rated
homes by 55%.
•
In 2021 we will:
• Participate in Sustainable Futures Lab.
• Endeavour to introduce Irish timber into
our timber frames houses.
In 2020 we:
• Established a new dedicated directly
employed landscaping team.
In 2021 we will:
•
•
Lodge our first new high density
housing scheme.
Introduce new Landscaping design
for all new developments (Biodiversity
Areas, Softer, more shrubs & tress.
Less Hedges).
• Update design team engagement forms
to reflect landscaping requirements
and include the relevance of protecting
existing hedgerows.
In 2021 we will:
•
Launch our building better
communities initiative.
• Roll out the communication of our
initiative on both consumer and
corporate websites.
• Develop a social barometer and
sentiment survey to measure success.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
80
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
81
Environmentally
considerate and
efficient operations
Focusing on excellence
and innovation across all
aspects of construction to
increase build efficiency
whilst minimising
environmental impacts.
Climate Change Mitigation
& Adaptation
The threat of climate change requires urgent actions by
governments and all businesses. At Glenveagh, we take
a holistic approach to climate change. At a corporate
level, we have governance and risk management systems
in place to evaluate our footprint. At a business level,
our approach to managing climate change is integrated
into how we operate, interact with our suppliers, and the
homes we deliver.
Governance, Strategy, and Risk
The Group’s approach to climate related risks and
opportunities is guided by a climate-related risk
management process, which is broadly aligned to the
recommendations of the Task Force on Climate related
Financial Disclosures. Our aim is to continue aligning
our disclosure to these recommendations. Further
information on our approach to climate risk is included
in our submission to CDP. We received a score of B for
2020 on our first submission.
consultants we have measured and externally verified
our emissions, set emission reduction targets, and
identified areas where emissions can be reduced, and
sustainable practices embedded.
Our current target is to achieve a 25% reduction in
our direct emissions (scope 1 and 2) intensity by 2025
against our 2020 baseline (tonnes of CO2e per 100 sqm
of completed homes).
Renewable Energy
Where possible we arrange for mains power to be
available on-site during construction rather than
generators, and thanks to our partnership with our
energy provider this is from 100 per cent renewable
sources. In addition to improving the environmental
performance of our developments, we are committed to
reducing the impact of central group functions. We have
retrofitted our office in Merrion Square, Dublin to make
it more energy efficient and have begun to replace our
fleet with electric vehicles.
Managing Energy and Greenhouse Gas
Emissions in Our Operations
Minimising the carbon emissions and energy use from
our operations is one of our key priorities. Throughout
2020, working in conjunction with environmental
Off-site Construction
Off-site manufacturing has been identified with
increased build capacity and reduced construction
times in mind. We aim to invest in these techniques so
as to improve our efficiency, minimise our impact on
the environment, and limit our reliance on traditional,
unsustainable building practices.
Greenhouse gas emissions (tonnes of CO2e) and energy use (MWh)
Scope 1 and 2 emissions
Scope 1 GHG emissions - combustion of fuel
Scope 2 GHG emissions - location based
Scope 2 GHG emissions - market based
Total Scopes 1 and 2 (market based)
Energy use
Tonnes CO2e
Tonnes CO2e
Tonnes CO2e
Tonnes CO2e
2020
2,700
214
62
2,762
2019
2,295
192
79
2,374
Operational energy use (fuel and electricity consumption
from sites and offices)
MWh
11,508
9,439
Operational energy intensity (site and office fuel and
electricity intensity)
MWh/100sqm
12.1
10.9
25%
Intensity reduction
target in Scope 1 and
2 Greenhouse Gas
emissions by 2025 from
a 2020 baseline
ISO 14001
Implemented in 2020
with certification
planned for 2021
Rated B
By CDP in 2020
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
8283Glenveagh Properties PLC Annual Report and Accounts 2020Business Model & Strategy Sustainability ReportFor instance, the KTF timber factory is in operation since Q2 2020 and is capable of delivering approximately 800 timber frame units per annum on a single shift. This investment will allow the Group to further reduce its carbon footprint in a cost-effective manner, as timber-frame houses make it easier to meet and exceed energy standards whilst producing less material waste during the building process. Managing Emissions in Our Value Chain (Scope 3) Most of our emissions are indirect. Namely, they are related to the life use of the homes we build, waste that gets generated, as well activities of our suppliers and the product they produce for us. Therefore, we have direct responsibility for the energy efficiency of the homes we build and how we interact with our suppliers to encourage them to become more energy efficient.We have started to measure and account for Scope 3 in our supply chain and home products. We propose to measure to Science Based Targets (Scope 1-3) as a next step as part of our focus on achieving a net zero emissions target by 2050.We take a holistic approach to our overall development process to minimise carbon emissions in the homes we deliver. This means we design our homes to be energy efficient, whilst also selecting materials with lower embodied carbon. We continuously explore new processes, materials, and home designs that have the potential to improve the environmental performance of the Group. A growing proportion of our properties are of timber frame construction. In FY20, 406 units were of timber frame construction, representing 58% of the total. This compares with 313 units in FY19, representing 37% of the total. Of all the main building materials, timber has the lowest energy consumption and the lowest carbon dioxide emissions. To further reduce our Scope 3 emissions, we will commence an engagement programme with our suppliers on sustainability issues.Environmental Management SystemDuring 2020 we began to integrate ISO 14001 into our operations, with a view to achieving certification in 2021. As part of this process, we have developed and documented a comprehensive Environmental Management System ("EMS"). The pre-assessment phase for ISO 14001 certification has been completed and the certification audit is due to take place in 2021.Environmental Management System ImplementationConstruction environmental management is overseen by the Sustainability Committee who is responsible for ensuring each project complies with the environmental requirements of the business and that the Environmental Policy is adhered to. We have a responsibility and reporting structure to ensure all people are involved in the maintenance of the EMS at a project and site level.Environmental and sustainability targets and KPIs are being implemented by the Sustainability Committee during 2021. All projects will be assigned targets to ensure they are contributing to the overall company strategy.Best practice sharing is at the heart of environmental improvements. Incentives to improve environmental performance at a site level have been undertake. Examples of awards for sub-contractors is on page 43.Waste & Resource UseWe work hard to minimise waste from our developments and to re-use resources wherever we can, driving both economic and environmental benefits. Before any project begins, under the EMS procedures, a Site Waste Management Plan is prepared and sent to the relevant local authority for approval and review. Internal waste procedures are managed following our Waste and Resource Management Policy.Case study: A First With A1 Ready Starter-homes All our homes are a minimum of A2 rated. Recognising the desire of some customers to upgrade the thermal efficiency of their homes further, we now offer the option to upgrade to an A1 rated starter-home via the installation of additional solar panel technology. We thermal model all our new development house designs to ensure that they can be easily converted to an A1 house by putting PV panels on the roof. I.e. no other upgrade works or technology needed.ScopeFocus AreaExample Initiatives Why?Status Scope 1 On-site77% Green Diesel EmissionsReduce use of Generators Behavioural Change (Energy)All power tools to be battery operated on-siteShift to Electricity Ongoing Solar lights on-siteGeneration Ongoing Standardise site set-up for efficiencyImproved Efficiency Ongoing Review of generators systemsImproved Efficiency Due to commence 2021Use of eco-portacabinImproved Efficiency Due to commence 2021Energy efficiency audits on-siteImproved Efficiency Due to commence 2021 Energy efficiency training for site manager Improved Efficiency Due to commence 2021 Scope 1 Off Site14% DieselEmissionsTransition to EVsBehavioural Change (Transport)Transition fleet to electricShift to Electricity OngoingElectric iInfrastructure in place where requiredShift to Electricity OngoingBusiness travel & flexible working policies reviewAvoided Emissions OngoingRemote working technologies Avoided Emissions Complete Scope 2 Electricity 9%Green EnergyBehavioural Change Purchase 100% green electricity from utilitiesEmissions are zero (market-based approach)OngoingEnergy efficiency audits & staff trainingDue to commence 2021 Emissions Reduction Roadmap for GlenveaghMinimising the carbon emissions and energy use from our operations is one of our key priorities. Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
84
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
85
All waste is sent to our waste management partner.
Recyclable materials such as paper, wood, plastic, and
inert materials are removed, and the residual waste
sent on for further processing into Solid Recovered Fuel
("SRF") and Refuse Derived Fuel ("RDF").
The Group’s Soil Recovery Facility for the offsite
disposal of inert material is also now operational,
further de-risking the costs associated with
groundworks on site.
In FY20 we have measured our waste for the first
time (3,661 tonnes of total construction waste) and we
are planning to introduce an intensity target going
forward. A key element to growing resource efficiency
is making the shift from traditional waste management
towards incorporating a circular economy. Collecting
waste management data, incorporating soil
stabilisation as part of groundwork packages and
using the groups Soil Recovery Facility are just three
areas which will contribute towards our circular
economy initiatives in 2021.
Reuse of Resources
One of the most effective ways to improve the
environmental performance of construction is to
reuse earthworks. During 2020 we started to test
soil stabilisation by adding lime to subsoil to reduce
moisture and improve stability. This means that soil that
would otherwise be removed from site can be recycled,
reducing waste and cutting emissions. Testing continues
and we will provide further updates in due course.
Water & Wastewater Management
We recognise the need to use water resources carefully
and aim to reduce water use in our operations and in our
homes, all of which have water efficiency features. We are
committed to protecting water quality during construction
and remediation, including managing surface water, and
reducing flood risk.
Targets, Goals, and Progress
Commitments
Targets
Progress Actions, Measurement, Evaluation
Achieve ISO 14001 by
end of Q2 2021
In 2020 we:
• Began implementation of ISO 14001.
100% of employees
to receive training
environmental
awareness training
in 2020
100% of site managers
to complete energy
efficiency training
in 2022
Reduce the carbon
intensity of our
construction
operations and offices
by 25% by 2025.
*2020 baseline
Environmental training,
awareness, and culture
Management
Improve environmental
awareness and knowledge
of the entire workforce
Emissions from
our operations
Achieve continuous
reduction in carbon
footprint from our
operations through:
- Energy-efficiency
improvements
- Systematic equipment
replacement
- Expanding power
generation projects
Waste & Resource Use
Achieve continuous
reduction in waste
intensity and increase
waste reuse/recycling rate
Innovation
Continue to invest in
offsite construction
techniques
Achieved
On track
Off track
Introduce energy efficiency training.
In 2021 we will:
•
• Achieve ISO certification.
• Will commence an engagement
programme with our suppliers on
sustainability issues.
In 2020 we:
• Participated in the CDP climate survey
achieving a rating at B (Management).
•
Set a target for Scope 1 & 2 emissions.
• Began monitoring fuel consumption on
company fleet vehicles.
•
Introduced electric vehicles to our fleet.
• Moved to utility supplier that guarantees
100% green electricity supply.
In 2021 we will:
•
Source from picking facilities close to sites to
reduce haulage impact.
• Migrate all power tools to battery
powered, which eliminates the use of
small generators on site.
• Differentiate all Glenveagh purchased
material into Standard & Bulk orders.
• Carry out an employee commuter survey.
In 2020 we:
• Opened our soil recovery facility.
• Moved to utilities provider that will recycle or
recover all Glenveagh waste.
• Began monitoring and measuring our waste.
In 2021 we will:
•
• Plan to optimise movements of soil off site;
Introduce recycling initiatives.
lime stabilisations reusing existing materials/
using waste material.
In 2020 we:
•
Started operations at timber frame factory.
In 2021 we will:
• Continue to invest in offsite construction.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
86
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
87
Sustainable
and responsible
sourcings
Innovating with
our supply chain to
improve the energy
efficiency of our homes
Circular economy
practices being
implemented with
our Soil Recovery
Facility in operation
and a shift towards
soil stabilization for
groundworks packages
Supporting our
suppliers through the
Covid-19 pandemic
Select suppliers who meet high standards on sustainability
issues and build meaningful, long-term relationships with them.
Our Supplier Standards
We expect our suppliers to adhere to our standards
on safety, quality, ethics, human rights and the
environment, which are set through our Sustainable
Procurement Policy and the Vendor Code of Conduct.
We expect these standards to be applied by all
Glenveagh staff involved in significant procurement
decisions relating to sourcing of products and services.
However, for greatest impact, we will focus attention on
larger contracts and areas of significant expenditure.
Glenveagh considers significant procurement decisions
as relating to Tier 1 suppliers and major contracts or
tenders in excess of €100k per annum.
In addition, we require suppliers to identify any major
environmental and social impacts in respect of the
goods and services they provide and whether they
have considered alternatives (e.g., reusing, leasing, or
hiring). We plan to further engage with suppliers on
sustainability issues in 2021.
Standardised Approach and Centralised Procurement
We go to great lengths to ensure our sub-contractors
understand the Glenveagh Way. These are our
standardised processes and procedures covering; site
set up, health & safety, environmental requirements,
procurement and valuations processes, and logistics
planning and coordination. By using our MEAT (Most
Economically Advantageous Tender) process we are able
to ensure our supply chain partners are aligned with
not just with our Health & Safety, programme, quality
requirements but also our sustainability goals too.
We centrally procure most high value items such as heat
pumps, sanitary ware, insulation and plasterboard. This
mitigates the effect of credit restrictions further down the
supply chain and minimises the administrative burden
for sub-contractors.
Efficient & Sustainable Sourcing
We aim to minimise waste and maximise efficiency
by working in partnership with vendors and logistics
partners. Just-in-time deliveries help to reduce emissions
by reducing the overall number of deliveries onto site.
New racking systems have been designed so that trucks
can carry smaller pallets, meaning that the majority of
trucks carry full loads, minimising waste.
Before construction begins on any site a plan is
developed with material suppliers for each unit type.
Every day, materials are packaged for each trade so
that when they arrive on site, the correct quantities of
materials needed for the day ahead – such as tiling,
grout, adhesive, trim and ancillary items – are on
site and at the right locations. This saves time, drives
efficiency and reduces waste.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
88Glenveagh Properties PLC Annual Report and Accounts 202089Business Model & Strategy Sustainability ReportIrish TimberThe primary source of timber for use in construction in Ireland is from Scandinavia. Traditionally, Irish timber has not been considered suitable for housing but recent advances in technology has opened up the prospect of sourcing a proportion of our timber locally.We are working closely with the National Standards Authority of Ireland ("NSAI") and our suppliers to certify Irish timber and we anticipate that we will be using Irish timber in component parts of our kits during 2021. Ethical Sourcing & Human RightsWe respect the human rights of employees, workers in our supply chain, customers, and people in the communities in which operate. We are guided in our approach by international standards, including the UN Universal Declaration of Human Rights and the European Convention on Human Rights.We respect the rights of our own employees and workers in our supply chain, including the rights to freedom of assembly and association and non-discrimination. We do not tolerate any form of slavery, forced labour, child labour or human trafficking in our business or supply chain. Local Employment and Local Sourcing Our approach to recruitment and to working with sub-contractors is designed to deliver a benefit in terms of reduced emissions, as well as binding us closer to the communities we serve. Where possible we seek to hire staff from the areas surrounding our developments and to build relationships with local sub-contractors. Hiring local sub-contractors keeps the economic benefit of our activities in the area and also reduces drive times, and hence emissions. We also endeavour to favour local hardware suppliers for certain materials. Agreements with distributors are structured so that materials can be purchased in wholesalers across the country, meaning we are able to support local hardware suppliers and other local vendors.Prompt Payment We take great pride in paying our suppliers on time. We want our sub-contractors to have the security they need to plan ahead and invest in people and skills. Sub-contractors- are generally paid monthly in accordance with the Construction Payment Act. Labourers and smaller sub-contractors are paid on a bi-weekly basis.CommitmentsTargetsProgress Actions, Measurement, Evaluation Energy efficient and low carbon supply chain 1. Engage with our suppliers to drive down emissions in our supply chain (Scope 3)2. Purchase sustainable materials to reduce embodied carbon in purchased materials (Scope 3)Hold Toolbox talks on every active site before Q3 2021 discussing sustainability issues and its importance to GlenveaghCarry out a feasibility study for using Irish FSC certified timber by end of Q4 2021Commence an engagement programme with our suppliers on sustainability issues In 2020 we: • Reviewed our Supplier Principles to further embed sustainability into our supply chain. In 2021 we will:• Will commence an engagement programme with our suppliers on sustainability issues.• Deliver responsible sourcing training.• Assess feasibility of Irish FSC certified timber.Ethical sourcing & human rightsPromote and improve the efficiency of sustainable procurement across the groupAll active suppliers to be signed up to Glenveagh's Supplier Code of Conduct Engage with our labour suppliers to ensure they have a robust process for managing and reducing modern slavery In 2020 we: • Ran advertising campaigns to recruit contractors from the local communities in which we operate.• Developed a Sustainable Procurement Policy and Supplier Code of Conduct. In 2021 we will:• Engage with suppliers who provide labour for our building sites to ensure they have robust processes for managing and reducing modern slavery risks. Targets, Goals, and ProgressCase study: How we reward our suppliers for climate action Tullamore Project Environmental AwardWe aim to recognise great work by our suppliers. In December 2020 the project team at our Tullamore development acknowledged the contribution of supply chain partners to better environmental performance with the Tullamore Project Environmental Awards. For instance, there were awards for Shawport Civil & Building Contractors Ltd, who ensured all generators were bunded with drip trays in place and installed new equipment to reduce the risk of hand arm vibration.Supplier Spotlight: Alan Cribben MD, Alan Cribben Electrical Ltd Alan Cribben has seen his electrical services business flourish, in part thanks to the strong relationship he has forged with Glenveagh. “For us, cashflow is the key to expanding our business,” he says. “When you’re running a small business you need certainty that you’ll be able to pay suppliers and pay wages. One of the big attractions of working with Glenveagh is you can look forward six months or even twelve months because of their output. Our business is growing hand in hand with Glenveagh.” Achieved On track Off track Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
9190Glenveagh Properties PLC Annual Report and Accounts 2020Business Model & Strategy Sustainability ReportGovernance and Reporting Disclosures2020 CDP Rating - B Reporting standards aligned Implementation of recommendations progressed Roles and Responsibilities Our sustainability strategy focuses on issues of material importance to our business and our stakeholders. We have policies in place setting out our commitments and plans for implementation in these key areas of our strategy. We communicate all our sustainability policies on our corporate website, www.glenveagh.ie/where it is available publicly.Our Chief Executive has ultimate executive authority for our sustainability policies and is accountable for all sustainability issues. Responsibility cascades down to our CFO and Director of Strategy & IR, who sit on the Sustainability Committee. We have made a commitment to placing sustainability issues on the agenda of the Glenveagh Board at least quarterly and more often where capacity allows. Our performance in the area of sustainability is reviewed with the support of our Sustainability Committee.The Sustainability Committee’s primary objective is to coordinate the Board’s sustainability strategy across the Group in a way which will see the strategy implemented on schedule. The Committee coordinates sustainability activities at an operational level, which ensure the implementation of the plan against clearly defined benchmarks & KPIs. The Committee is responsible for continuous assessment of sustainability issues, which of material importance to the business and our stakeholders.The members of our Sustainability Committee are comprised of representatives essential to the running of business and include the CFO, Strategy & IR Director, as well as senior executives from our Construction, Quality, Customer, Procurement, Planning & Manufacturing, HR, EHS departments. MaterialityWe carried out our first materiality assessment during 2020, to demonstrate the impact our ESG framework may have on the business. This has allowed us to focus on the key ESG issues for our business and stakeholders. This is an ongoing process which will be enhanced in time and we will continue to engage with all stakeholders to ensure we are communicating the materiality issues of most importance to them.Leadership and Engagement In 2020 we began measuring, monitoring, and reporting on our sustainability activities and performance.Reward structures have already been put in place for some of the objectives. For example, a proportion of our senior management bonus relates to our performance in the areas of customer service and health and safety.At operational and project levels, achieving commitments is integrated into our business model as an ongoing, constant activity through allocating responsibility to relevant leads. Planning is underway Well-structured governance and management systems are key to achieving our sustainability objectives as outlined in our ESG framework. Governance of Sustainability Non-ExecutiveThe Board of DirectorsSustainability on Board agenda at least quarterly. Audit Committee reviews sustainability risks and opportunities at least twice a yearExecutiveCEOUltimate executive accountability for sustainability issues, reviews performance against targetsOperationalSustainability CommitteeCoordinates sustainability strategy and programmesBusiness UnitsDepartment LeadsLead execution of specific sustainability commitments through operations activities, projects, etc.Oldbridge Manor Drogheda, Co. Louth Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
9293Glenveagh Properties PLC Annual Report and Accounts 2020Business Model & Strategy Sustainability ReportTopicCodeAccounting Metric2020 2019Land Use and Ecological ImpactsIF-HB-160a.1Number of (1) lots controlled and (2) homes delivered on redevelopment sites(1) 4,005 (2) 25(1) 3,881(2) 132IF-HB-160a.2Number of (1) lots controlled and (2) homes delivered in regions with High or Extremely High Baseline Water Stress(1) 0 (2) 0 (1) 0 (2) 0IF-HB-160a.3Total amount of monetary losses as a result of legal proceedings associated with environmental regulations€nill€nillIF-HB-160a.4Discussion of process to integrate environmental considerations into site selection, site design, and site development and constructionAs part of the land acquisition process all our sites are screened for their ecological attributes, proximity to sensitive habitats, and areas of significant biodiversity value. The sites are assessed by competent environmental experts using the appropriate recognised Irish and EU regulations.All potential sites are assessed and designed within the context of the national planning framework, local development standards, local authority development plans, zoning requirements, and development standards.In order to manage our environmental performance minimize ecological impacts during construction we maintain and continually improve our ISO 14001:2015 Environmental Management System. We manage our systems and work activities to facilitate continual improvement and enhance environmental performance. We also measure our environmental performance and level of compliance by conducting self-monitoring, regular inspections, audits and reviews.Workforce Health and SafetyIF-HB-320a.1(1) Total recordable incident rate (TRIR) and (2) fatality rate for (a) direct employees and (b) contract employeesAccident data includes Glenveagh employees, contractors, suppliers, and public. Our data collection process does not segregate employees from contactors *Reportable Incidents in Ireland are absent for more than 3 days not including the day of injury.(1) 2.4(2) 0 1) n.a. (2) 0We have chosen to disclose sustainability topics and accounting methods in line with the Home Builders Sustainability Accounting Standard issued by the SASB.According to the SASB Industry Level Materiality Map, the following categories are “the most likely material issues for companies” in the Home Builders industry. The below table references accounting metrics within this report and other sources. to further integrate sustainability initiatives into our operations by introducing e-learning programmes accessible to the relevant personnel. The programmes will cover topics related to energy efficiency, diversity & inclusion, and sustainable sourcing, for example.Management Systems We recognise the importance of robust management systems to ensure top quality standards, efficiency, and compliance with our sustainability initiatives. We have already begun making important progress in this area. For instance, we are currently on target of achieve ISO 14001:2015 Environmental Management and ISO 45001:2018 Health and Safety Management in FY21.Ratings, Certifications, and StandardsIn 2020, we participated in the CDP Climate report and received a score of B. In line with best practise, we now disclose sustainability topics and accounting methods in line with the Home Builders Sustainability Accounting Standard issued by the Sustainability Accounting Standards Board ("SASB"). Risk Management Sustainability risks have been integrated into our corporate risk management framework. A number of our risks in the areas of Quality, Environmental, Health and Safety, People, and Customer Services are included in our Principal risks. Climate change, biodiversity, and other sustainability risks are recorded and monitored through the Groups Sustainability Risk and Opportunity Register. Our Sustainability Committee maintains and regularly updates the Groups Sustainability Risk and Opportunity Register to ensure the data is up to date. The Audit & Risk committee formally reviews and approves the Group’s risk register on an annual basis.External Assurance We submit our greenhouse gas data for independent verification (scope 1 and 2) as part of our commitment to have third-party verification or assurance processes in place (standard: ISO14064-3). Our GHG Emissions data has been verified by an external consultant Clearstream Solutions and the findings have been published on our website at www.glenveagh.ieActivity metricCodeCategoryUnit of measure20202019Number of controlled lotsIF-HB-000.AQuantitativeNumber14,147 14,500 Number of homes deliveredIF-HB-000.BQuantitativeNumber700844Number of active selling communitiesIF-HB-000.CQuantitativeNumber16 14Sustainability Accounting Standards Board Disclosures Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
94
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
95
Topic
Design for
Resource
Efficiency
Code
IF-HB-
410a.1
Accounting Metric
(1) Number of homes that obtained a
certified HERS® Index Score and (2)
average score
2020
(1) 844
(2)
2019
(1) 700
(2)
59% of homes were
A2 rated
38% of homes were
A2 rated
41% of homes were
A3 rated
62% of homes were
A3 rated
Note that the HERS certification standard
is not applicable within the Republic
of Ireland.
Information on mandatory Energy
Performance Certificates is provided as
an alternative.
Note that ratings range from BER A1
to BER G
IF-HB-
410a.2
Percentage of installed water fixtures
certified to WaterSense® specifications
Note that WaterSense specifications are not applicable
within the Republic of Ireland.
IF-HB-
410a.4
Description of risks and opportunities
related to incorporating resource efficiency
into home design, and how benefits are
communicated to customers
All units in our developments include fixtures that have
flow restrictors and aerators or are sized to reduce the
water usage of our homes.
Building Control Acts 1990 to 2014, Local Government
requirements through planning, and the European Union
Regulations 2014 (SI 426 of 2014) are all integrated
into the energy efficiency of the homes Glenveagh
builds. Non-compliance with these standards implies a
substantial number of company-wide risks.
There are climate-related risks associated with unexpected
market outcomes that are included into the Sustainability
Risk and Opportunity Register, as they are could have
an impact on Glenveagh’s financial and operational
performance. One such risk is related to shifting consumer
preferences towards more energy efficient homes. New
homeowners are becoming more environmentally aware
and there is a risk that Glenveagh may lose market share
if the energy efficiency of our homes does not meet
customer expectations.
Glenveagh homes are more energy efficient than the
average house and from and from November 2020 all our
homes are A2 rated or better. The key to us building to
this standard is attention to detail during the design and
construction process, which includes improved insulation
measures, airtightness detailing, greater quality of
materials used, and the use of renewable technologies in
our homes, such as a heat pump.
Our marketing team communicates these sustainability
features to customers at all stages of the purchasing
process, from initial marketing brochures to detailed
information upon completion of the home
Topic
Community
Impacts of New
Developments
Code
IF-HB-
410b.1
Accounting Metric
2020
2019
Description of how proximity and
access to infrastructure, services, and
economic centers affect site selection and
development decisions
At Glenveagh, we consider where the house lives as
well as where people live. It is important to us that our
developments reflect the local built environment. Therefore,
we take a holistic approach to public infrastructure
understanding the needs and requirements specific
to each development with respect to the surrounding
environment, public infrastructure, and amenity. Access
to sustainable transport infrastructure – including public
transport, cycle lanes and walking routes – is central to
the development process for every scheme.
As part of this process, we engage with public bodies,
local communities and local authority policy to ensure
we consider all aspects of infrastructure provision, current
and future.
IF-HB-
410b.2
Number of (1) lots controlled and (2) homes
delivered on infill sites19
(1) 3,662
(2) 25
IF-HB-
410b.3
(1) Number of homes delivered in compact
developments and (2) average density20
(1) 313
(2) 16.1
Climate
Change
Adaptation
IF-HB-
420a.1
IF-HB-
420a.2
Number of lots located in 100-year
flood zones
0
(1) 3,848
(2) 132
(1) 309
(2) 19.8
0
Description of climate change risk exposure
analysis, degree of systematic portfolio
exposure, and strategies for mitigating risks
For each risk and opportunity, the register identifies
the: description of the risk/opportunity; its potential
impact; the time-horizon; the likely impact it will have
and the magnitude of this; as well as control description
and its effectiveness.
Risks and opportunities are ranked on a scale ranging
from insignificant risks (1) to catastrophic risks (5).
Any given risk with a score above 3 - 'Moderate' – is
considered to have a substantive financial or strategic
impact on the business, which would require greater
allocation of management effort.
This is aligned with our approach adapted through the
CDP reporting benchmarks.
19. Infill sites defined as those sites that are surrounded by other developments from both sides.
20. Compact developments are defined as those sites with 13 or more units per acre.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
96
Glenveagh Properties PLC Annual Report and Accounts 2020
Business Model & Strategy Sustainability Report
97
Feedback and Policies
We value your feedback on our
approach to sustainability and would
appreciate your comments on this
report and our performance.
You can email us at
investors@glenveagh.ie
or write to:
Conor Murtagh
Director
Strategy & IR
Glenveagh Properties PLC
Digital Office
Block B
Maynooth Business Campus
Maynooth
County Kildare
Ireland
Further information on the following policies that support Glenveagh’s
approach to sustainability can be found on our website:
Sustainability Policy
Environmental Policy
Climate Change Policy
Health & Safety Policy
Diversity & Inclusion Policy
Waste & Resources Policy
Human Rights Policy
Customer Service Policy
Community Engagement Policy
Charitable Giving Policy
Sustainable Procurement Policy
Vendor Code of Conduct
Anti-Bribery Policy
Whistleblowing Policy
Task Force on Climate-related
Financial Disclosure
Glenveagh welcomes the recommendations of the
Financial Stability Board’s ("FSB") Task Force on
Climate-related Financial Disclosures ("TCFD"). Climate-
related governance, strategy, risk management, and
metrics and targets are communicated in this report
and as part of our annual response to CDP’s Climate
Change Programme. Climate change mitigation and
adaptation are key areas of focus for Glenveagh and
we are addressing these issues is integrated into our
sustainability priorities as evident in this report.
Glenveagh continues to take actions to further
implement the TCFD recommendations through the
evolution of our processes and reporting mechanisms.
The table below summarises the key areas where
Glenveagh has already made progress.
Governance
Disclose the organisation’s
governance around climate-
related risks and opportunities.
Strategy
Disclose the actual and
potential impacts of climate-
related risks and opportunities
on the organisation’s
businesses, strategy, and
financial planning where such
information is material.
Risk Management
Disclose how the organisation
identifies, assesses and
manages climate-related risks.
Metrics and Targets
Disclose the metrics and targets
used to assess and manage
relevant climate related risks
and opportunities where such
information is material.
The Chief Executive Officer leads the board and is ultimately responsible for environmental
matters within the organisation. The CEO has put in place the personnel structures to ensure that
climate-related issues reported in the Annual Report will be complete and accurate. Responsibility
cascades down to our CFO and Director of Strategy & IR, who sit on the Sustainability
Committee. From July 2020, climate-related issues are reported to the board on a quarterly basis
will be reviewed by the board in those meetings.
Appropriate risks and opportunities that are considered to have substantive strategic,
operational, and financial impacts are recorded in the Group Sustainability Risk and Opportunity
Register. The Audit & Risk committee formally reviews and approves the Group’s risk register.
Certain climate change risks and opportunities have the potential to impact our business
strategy. Namely, increased costs, reduced productivity and reputational damage. We assess
climate risks to the business using short (0-3 years), medium (4-10 years) and long term (11 years
on) horizons.
Acute and chronic physical climate change risks are the most material. Namely, the frequency
and severity of extreme weather events such as floods or intense winds. For instance, a flood
might damage homes that are being built or reduce the value of land on the Group’s balance
sheet. In such a case, some assets could be impaired and may have to be written down.
Participation in renewable energy programs and adoption of energy-efficiency measures and
shift in consumer preferences are the most material opportunities over the medium term, as there
are considerable financial benefits associated with using low carbon materials for our homes.
The allocation of management efforts is based on the level of financial impact of each individual
risk or opportunity. The process is intended to cover risks and opportunities across all stages
in the value chain, if a substantial financial impact has been identified. Therefore, risks and
opportunities are ranked on a scale ranging from insignificant risks (1) to catastrophic risks (5).
Any given risk with a score above 3 - 'Moderate' – is considered to have a substantive financial
or strategic impact on the business, which would require greater allocation of management effort.
The financial impact of a given risk to the business is estimated as an aggregate % change
across three categories: Total Assets, Gross Margin, and Overheads. Risks with a score above 3
have a potential to reduce Total Assets by more than 1.5%, reduce Gross Margin by more than
5%, and increase overhead by more than 5%.
The responsibility for management of those risks and implementation of opportunities are then
allocated to appropriate heads of departments.
The Group monitors its Scope 1 and Scope 2 Green House Gas Emissions. It has a target of
reducing the intensity of these emissions by 25% from 2020 to 2025.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
98
Glenveagh Properties PLC Annual Report and Accounts 2020
99
Quality is a promise we
do not compromise on.
GOVERNANCE
Bellingsmore
Kilmartin, Dublin
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
101Governance Introduction from the ChairmanJohn Mulcahy ChairmanThe Board’s focus for much of 2020 has been on assessing the impact on the Covid-19 pandemic and providing well-informed, timely, strategic guidance of the Group’s business and operations. Despite the unprecedented challenges presented during 2020, the role of the Board in providing effective leadership to promote long-term sustainable value for our shareholders and stakeholders remains unchanged. The Board’s continued commitment to the highest standards of corporate governance is a key element in its effective leadership of the Group and ensures that the appropriate framework of policies, practices and controls is in place to promote sustainable corporate behaviour. In this Corporate Governance Report we describe how we have applied the principles and provisions of the 2018 UK Corporate Governance Code (the “Code”) and the Irish Corporate Governance Annex (‘the Annex”) which underpin the corporate governance framework for listed companies and, in line with its ‘comply or explain’ model, we detail any departures from its provisions. The Board made a number of changes to its committee composition and announced Robert Dix as successor to the role of Senior Independent INTRODUCTION FROM THE CHAIRMANI am pleased to present our latest Corporate Governance Report for the year 2020. It was an extremely challenging year for many people and businesses here in Ireland and across the world, and I am particularly grateful to my fellow Board members and to all of our employees across the Group for their hard work, commitment and support this year.Director. Cara Ryan succeeded Robert as Chair of the Audit and Risk Committee and the Board established a Remuneration Committee and, separately, a Nomination Committee, in place of the existing Remuneration and Nomination Committee. Richard Cherry continues to serve as Chair of the Remuneration Committee, while Pat McCann assumed the role of Chair of the Nomination Committee. A key focus for the newly established Nomination Committee has been the commencement of a process to identify a replacement independent Non-Executive Director following the passing away of Lady Barbara. This process has been informed by the Board’s completion of its first externally facilitated performance evaluation at the end of 2020 and the assessment of existing skills, experience, knowledge and diversity on the Board.The work of the Board committees is central to ensuring the robustness of the Group’s corporate governance framework. Our Board committees have continued to work effectively during the year and reports from the Audit and Risk Committee, the Remuneration Committee and the Nomination Committee are set out at pages 110 to 115, 116 to 135 and 136 to 137 respectively, providing details of each committee’s membership and key areas of activities during the year. Looking ahead to 2021, the Board remains confident in the Group’s ability to deliver on its strategy to complete 1,150 units21 in 2021.John Mulcahy Executive Chairman100Glenveagh Properties PLC Annual Report and Accounts 2020The work of the Board committees is central to ensuring the robustness of the Group’s corporate governance framework. Barnhall Meadows Leixlip, Co. Kildare 21. 1,000 core and 150 non-core units Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
102Glenveagh Properties PLC Annual Report and Accounts 2020103Governance Corporate Governance ReportCORPORATE GOVERNANCE REPORTThe Corporate Governance Report, in conjunction with the Audit and Risk Committee Report, the Remuneration Committee Report and the Nomination Committee Report, describes how the Group has applied the principles and followed the provisions of the new 2018 UK Corporate Governance Code (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.ukwww.euronext.com Board Leadership and PurposePurpose & CultureThe Group’s overarching purpose is the provision of access to high quality, energy and thermal efficient homes in flourishing communities across Ireland. The Group has positioned itself as ‘Home of the New’ in Irish residential development, not only in how it builds energy and thermal efficient, high quality homes but in how it selects land and partners, how it plans on land, how it fosters and embeds relationships with communities and how it utilises technology to innovate in delivering on land. The Group has a clear vision to create the leading and most sustainable homebuilding platform in Ireland and it recognises and reinforces the pivotal role played by its people in achieving its aims. To this end, the Group has developed a culture that is safety-led, customer-centred, collaborative and innovative.The Board is committed to ensuring the continued alignment of the Group’s strategic decisions with its purpose and culture, through both the setting of non-financial KPIs in Health and Safety and Customer Satisfaction and through its regular assessment of policies and practices across the business. The Board supports and encourages two-way communication with the workforce and has established formal channels for the workforce to raise any matters of concern directly. Role of the BoardThe Board is responsible for setting and guiding the strategic direction of the Group, 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 and for the long-term success of the Group. There is a clear division of responsibilities within the Group between the Board and executive management. Responsibility for day-to-day running of the Group’s operations is delegated by the Board to the Executive Committee, with the Board reserving to itself a formal schedule of matters over which it retains control. To assist in discharging its responsibilities, the Board has established an Audit and Risk Committee, a Remuneration Committee and a Nomination Committee. The decision to establish a Remuneration Committee and, separately, a Nomination Committee, in place of the previous Remuneration and Nomination Committee was made in October 2020. The composition of each of the new committees is fully aligned with the provisions of the Code and is detailed in the reports of the Committee Chairs at pages 116 to 135 and 136 to 137 respectively.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. Engagement with ShareholdersThe Board recognises the importance of effective engagement with, and active participation from, its shareholders and is committed to building and maintaining successful shareholder relationships through regular and transparent communication. This commitment is formalised through the Group’s comprehensive investor relations program. In addition to the detailed presentations and roadshows conducted after the announcement of interim and full-year results, the Chief Executive Officer, Chief Financial Officer and the Director of Investor Relations and Strategy regularly meet with institutional investors and analysts throughout the year and participate in a number of industry conferences. Investor engagement during the course of 2020 was largely focused on the impact of, and the Group’s response to, the Covid-19 pandemic. Interactions with investors and analysts shifted to virtual meetings from March onwards, with conferences also moving online successfully.The Chairman and Senior Independent Director remain available to meet with shareholders on request, should they have any issues or concerns that cannot be resolved through the usual investor relations channels. The views of shareholders are communicated to the Board through the Executive Directors and they receive monthly updates on institutional shareholder meetings, broker reporting and general market commentary from the Director of Investor Relations & Strategy, all of which assists the Board in understanding and taking account of the view of shareholders. Annual General MeetingThe Annual General Meeting ("AGM") gives shareholders an opportunity to hear a presentation on the Group’s activities and performance during the year, to ask questions of the Chairman and, through him, the Board Committee Chairs and members, 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 Glenveagh 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.As a result of social distancing requirements, prohibition on non-essential travel and limitation on public gatherings introduced by the Irish Government in response to Covid-19, the 2020 AGM was moved to the Company’s registered office address and attendance in person was limited to the minimum number of directors required to establish a quorum.Shareholder participation at the AGM is valued by the Company, and while it was not possible for shareholders to attend the 2020 AGM in person, shareholders were encouraged to use proxy voting services to ensure their votes counted. A teleconference facility for shareholders to follow proceedings of the AGM, and a mechanism for lodging questions in advance, was provided by the Company. The 2021 AGM will be held on 27 May at 15 Merrion Square, Dublin 2. While the Company remains hopeful that attendance in person at the 2021 AGM will be possible, similar arrangements will be put in place if required.Workforce EngagementThe Board is committed to meeting its responsibilities to all stakeholders in the business and places Glenveagh Properties plc BoardGlenveagh PLC BoardAudit & Risk CommitteeRemuneration CommitteeNomination CommitteeExecutive Committee Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
104
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Corporate Governance Report
105
significant value on the maintenance of successful
relationships with the Group’s workforce, suppliers,
customers and the communities in which it operates.
Following her appointment to the role of Workforce
Engagement Director in 2019, Cara Ryan has continued
to work with the Company Secretary and the Head
of Human Resources to develop meaningful two-way
dialogue between the employee-led Great Place to
Work Committee and the boardroom. As Workforce
Engagement Director, Cara meets with the Great Place to
Work Committee at key intervals in the Group’s workforce
engagement calendar and delivers succinct and accurate
feedback both up-to and back-from the Board.
During 2020, Cara met with the Great Place to Work
Committee virtually due to the Covid-19 pandemic. The
Group prioritised the health and safety of its employees
by ensuring that those who could work from home did
so using technology and internal systems, while also
reviewing and adapting processes and practices on
site to ensure a safe working environment for those
employees engaged in construction activities that could
not be performed remotely. Cara’s continued engagement
with the employee representatives throughout 2020
served as an additional tool for the Board’s assessment of
the Group’s handling of the pandemic.
At the end of 2020, the Group engaged Great Place
to Work Ireland to conduct an externally facilitated
employee pulse survey, taking feedback from all
employees on the impact that Covid-19 has had on the
workforce and suggestions for areas of improvement.
The feedback received from the workforce will inform the
recommendations of the Workforce Engagement Director
to the Board for the year ahead, as the Group continues
to adapt to the challenges presented by ongoing Covid-19
restrictions on its employees and its workplaces into 2021.
The Board recognises the importance of ongoing
communication and ‘reporting back’ to the workforce,
to demonstrate that it has listened to and acted upon
feedback, and the Board is committed to continuing to
build upon its engagement activities and strengthen its
relationship with the workforce over the course of 2021.
Conflicts of Interest
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.
The Group has established a comprehensive Conflict of
Interest Policy and, in line with that 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.
Division of Responsibilities
Chairman and Chief Executive
The roles of the Chairman and the Chief Executive
Officer 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, John Mulcahy, 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 Company’s strategy. He is responsible for creating
an environment which encourages open dialogue and
constructive challenge, and he ensures that there is
effective communication with the shareholders.
The Chief Executive Officer, Stephen Garvey, is
accountable to and reports to the Board and is
responsible for running the Group’s business. He is
charged with 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. The Chief Executive Officer is
ultimately responsible for all day-to-day management
decisions, acting as a direct liaison between the Board
Towards the end of 2020, the Group
engaged Great Place to Work Ireland
to conduct an externally facilitated
employee pulse survey, taking feedback
from all employees on the impact that
Covid-19 has had on the workforce and
suggestions for areas of improvement.
and management and communicating to the Board on
behalf of the Group’s external stakeholders.
Senior Independent Director
Robert Dix succeeded Lady Barbara Judge CBE as
Senior Independent Directors in September 2020. Robert
is available to shareholders who have concerns that
cannot be addressed through the Chairman or Chief
Executive Officer and will attend meetings with major
shareholders as necessary.
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 is willing and available to
assume additional responsibilities, as required. There
also continues to be a clear division of responsibilities
between the Chairman and the Chief Executive Officer.
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.
The Senior Independent Director acts as a sounding
board for the Chairman and serves as an intermediary
for the other Directors as necessary. He is also
responsible for leading the annual performance review
of the Chairman.
Non-Executive Directors
Of the seven Board members, four are independent
Non-Executive Directors. The Group’s Non-Executive
Directors have a key role in the appointment and
removal of Executive Directors, and the assessment
of their performance. The Non-Executive Directors
constructively challenge and debate management
proposals and hold to account the performance of
management and of individual Executive Directors
against the agreed performance objectives.
The Non-Executive Directors have direct access to the
senior management team within the Group and contact
with the business is encouraged by the Board and
assists the Non-Executive Directors in constructively
challenging management and offering advice and
guidance on strategic decisions.
Company Secretary
The Company Secretary, Chloe McCarthy, supports the
Chairman and the Executive Directors in fulfilling their
duties and is available to all Directors for advice and
support. She is responsible for ensuring compliance with
Board procedures and for the Group’s commitment to
best practice in corporate governance. The Company
Secretary is also responsible for ensuring compliance
with the Group’s legal and regulatory requirements.
Independence
Provision 9 of the Code prescribes that the Chairman
should be independent on appointment. The Board is of
the 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 implements its ambitious growth strategy following
admission to trading in October 2017.
The independence of each of the Non-Executive
Directors is considered on appointment, and on an
annual basis by the Board. The Board has reviewed
the independence of all Non-Executive Directors and
determined that they continue to be independent within
the provisions of the Code.
The Board gave detailed consideration to the
continued independence of Robert Dix and Pat
McCann, noting that Robert Dix also serves as a Non-
Executive Director of Dalata Hotel Group plc where
Pat McCann is Chief Executive, and both currently
act as Non-Executive Directors at The Quinn Property
Group. The Board was aware of this relationship on
appointing Pat McCann to the Board in 2019 and
concluded that his experience, knowledge and skills in
leading and growing a company post-IPO would be
of immeasurable value to the Board and in the best
interests of the Group and its shareholders.
The Board remains satisfied that Robert Dix and Pat
McCann continue to demonstrate objectivity and
autonomy in both character and judgement, irrespective
of their relationship outside the Group, and will continue
to act objectively and in the best interests of the Group.
Board Meeting Attendance
The Board convenes with sufficient frequency to ensure
the effective discharge of its duties during the year. In
2020, the Board held nine formal Board meetings.
In adherence to the travel restrictions and social
distancing guidelines introduced by the Irish Government
in response to Covid-19, the Board met virtually, using
audio-video conferencing, from March 2020.
The table on page 106 provides of the attendance
details record of all board meetings held in 2020.
Directors are expected to attend all meetings of the
Board and of the Committees on which they serve, and
the Annual General Meeting.
Time Commitment
The time commitment required of Directors is considered
on appointment, and on an annual basis by the Board.
All Directors are expected to allocate sufficient time to
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
106
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Corporate Governance Report
107
Board Meeting Attendance 2020
Meetings held
while a Director
Meetings Attended
Attendance Record
John Mulcahy
Stephen Garvey
Michael Rice
Robert Dix
Richard Cherry
Cara Ryan
Pat McCann
Lady Barbara Judge CBE
9
9
9
9
9
9
9
6
9
9
9
9
9
9
9
6
100%
100%
100%
100%
100%
100%
100%
100%
discharge their duties effectively and confirm this as part
of the annual Board evaluation each year.
Each year, the schedule of regular meetings to be held
in the following calendar year is agreed with each of the
Directors. If a Director is unable to attend a scheduled
meeting, they are encouraged to communicate their
views on the relevant agenda items in advance to the
Chairman or the Company Secretary for noting at the
Board meeting.
Supplementary to its formal meetings, the Board
encourages its Non-Executive Directors to communicate
directly with both the Executive Directors and the senior
management team.
Composition, Succession
and Evaluation
Board Composition
While there were no planned changes to the
membership of the Board in 2020 following a very
active year for appointments in 2019, the Nomination
Committee has commenced a process to identify a
suitable Non-Executive Director for recommendation
to the Board in early 2021 following the unexpected
passing away of Lady Barbara Judge CBE during
the year.
The Board is currently comprised of seven Directors:
three Executive Directors, including the Executive
Chairman, and four independent Non-Executive
Directors. It is expected that one additional independent
Non-Executive Director will be appointed to the Board
in Q1 2021.
As part of the annual Board evaluation process, the
Board reviewed the overall balance of skill, experience,
knowledge and independence of the Board and its
Committees. The Board is satisfied that it is of an
appropriate size for the requirements of the business
and that its composition provides a suitable balance of
skills and experience across a number of industry sectors
including construction, property development, capital
markets, legal and financial services, which equip the
Board members in effectively discharging their duties to
the Group and its shareholders.
The Board is satisfied that the balance of Executive
and Non-Executive Directors is suitable to facilitate
constructive and effective challenge and debate.
Biographies of the Directors are set out on pages
138 to 140.
Appointments to the Board
The Nomination Committee is responsible for leading
the process for new director appointments and
has established a formal, rigorous and transparent
procedure for the selection and nomination of
candidates to the Board.
All members of the Nomination Committee are
independent Non-Executive Directors and the details
of its activities in 2020 are set out in the Committee
Chairman’s report at pages 136 to 137.
The Non-Executive Directors are appointed for a term
of three years, 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 Company as Directors are set out in formal letters
of appointment. Following the conclusion of their initial
three-year terms in October 2020, both Robert Dix and
Richard Cherry were re-engaged by the Company for a
second three-year term.
The Executive Directors have service agreements
with the Company, which provide for notice periods
of six months. Full details of the remuneration
of the Directors can be found at page 128 of the
Remuneration Report.
All Directors will submit themselves for re-election at the
2021 AGM.
Board Diversity
The Board has adopted a Board Diversity Policy,
intended to assist the Board, through the Nomination
Committee, in achieving optimum Board and
Committee composition.
The Board recognises the clear benefits of a diverse
Board including with regard to diversity of experience,
skills, background and gender and agrees that these
differences should be considered in determining the
optimum composition of the Board.
While all Board appointments are made on merit
and with regard to the skills and experience that the
Board requires to be effective, it is the Group's policy
to develop over time the diversity of its Board without
compromising the calibre of new directors.
The Nomination Committee reviews the Board
Diversity Policy annually, including assessing its
effectiveness and will discuss any revisions that may
be required, recommending any such revisions to the
Board for approval.
Following changes to Board composition in 2019, female
representation on the Board increased to 25% and
the Group was commended by the Balance for Better
Business Review Group for achieving its interim target
of 25% female directors on the boards of ISEQ 20
companies by 2020. Sadly, following the passing away
of Lady Barbara in the latter part of the year, female
representation on the Board as at 31 December 2020
had reduced to 14%. The identification of a replacement
Independent Non-Executive Director is a key focus of
the Nomination Committee for 2021 and the nomination
process will be undertaken in line with the Board
Diversity Policy.
Female employees account for 25% of the senior
management22, as defined by the Code, and 11% of
senior management direct reports. Further details on
diversity within the Group can be found on pages 66
and 67.
Secretary’s assistance and guidance around the
workings of the Board, in addition to the experience
gained with attendance at regular meetings.
The Group is committed to the ongoing development of
the Board and all Directors receive regular 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.
As a result of Covid-19 restrictions, the Board was
unable to meet in person for its scheduled annual full-
day strategy and training session and instead received
a number of targeted virtual presentations from internal
heads of departments including Environmental, Health
and Safety and Training, Construction, Sales and Land
Acquisition as well as external advisors from the Group’s
broker and corporate law firm. The key focus of these
presentations in 2020 was on the impact of the Covid-19
pandemic on the Group’s strategy and operations.
Board Evaluation
The performance and effectiveness of the Board and
its Committees is reviewed on an ongoing basis and is
subject to a formal and rigorous annual evaluation.
The Board completed its first externally facilitated
performance evaluation in 2020. Following a
detailed tender process, the Board engaged the
Institute of Directors in Ireland (the “IoD”) to facilitate
its annual evaluation of its own performance and that
of its committees.
The IoD assessor presented their report at a meeting of
the Board, noting that the Board was performing very
effectively and demonstrated many examples of good
corporate governance practice against the backdrop
of a young and growing company. The assessor
concluded that the business of the Board was well
organised and that relationships around the Board
table were strong, with the Chairman acting as an
inclusive and effective leader.
Directors’ Induction, Training
and Development
The Group has established a formal induction process
for new Non-Executive Directors, providing them with
a comprehensive understanding of their role and
responsibilities as Directors, the business of the Group
and the operations of the Board and allowing for the
efficient and effective integration of new Board members.
The induction of Non-Executive Directors is overseen
by the Chairman with the assistance of the Company
Secretary and includes meetings with respective
management teams in each of the Group’s business
lines and site tours of active construction projects.
Newly appointed Directors have access to the Company
Areas for increased focus highlighted by the 2020
evaluation, and the agreed action items for 2021, are
summarised below:
• The Board will continue to enhance its focus on
succession planning, both in relation to its own
membership and for key members of the senior
management team.
• The Board will expand its use of audio-visual
conferencing facilities to increase engagement
outside of formal meetings during the ongoing
Covid-19 restrictions. Site tours, training sessions
and strategy days will be held virtually while travel
restrictions and physical distancing requirements
remain in place.
22. Senior management definition in line with the UK Corporate Governance Code, under which the Executive Committee and Company
Secretary is included in our senior management definition.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
108
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Corporate Governance Report
109
• The Board will continue to monitor and ensure that
the appropriate Board Committees are in place and
will formalise the arrangements for regular meetings
between the Chairman and the Independent Non-
Executive Directors.
• The Board will continue to expand its focus on ESG
and on culture within the Group.
The Company Secretary will work with the Chairman to
ensure that the agreed actions arising from the 2020
Board Evaluation are implemented during the year.
The Board will continue to review and evaluate its own
performance, the individual Directors and the Chairman
on an annual basis.
Audit, Risk and Internal Control
Audit and Risk Committee
The Board has established an Audit and Risk
Committee comprised entirely of independent
Non-Executive Directors.
The Audit and Risk Committee is responsible for
monitoring the integrity of the Group’s financial
reporting and the effective application of the Group’s
internal controls and risk management procedures.
The Board is satisfied that the combined qualification
and experience of the individual members provides the
Committee with the financial and risk management
expertise necessary to discharge its responsibilities.
A detailed overview of the key roles and responsibilities
of the Audit and Risk Committee and the work of the
Committee in discharging its responsibilities during
2020 is set out in the Committee Chair’s report on
pages 110 to 115.
Internal Control and Risk Management
The Board recognises its ultimate responsibility for
establishing and maintaining Group procedures to
manage risk, oversee the internal control framework and
determine the nature and extent of the principal and
emerging risks that the Group is willing to take in order
to achieve its long-term objectives.
The Board confirms that a robust process for identifying,
evaluating and managing significant risks has been
in place for the financial year and up to the date of
approval of the Annual Report and Financial Statements.
Details of the annual assessment of the principal risks
facing the Group are set out at pages 38 to 48.
The key elements of the Group’s system of internal
controls are as follows:
• A clearly defined organisation structure and lines
of authority;
• Group policies for financial reporting, treasury
management, tax, risk management, information
technology and security and site acquisition
and investment;
• Approval of annual budgets and strategic business
plans by the Board, with performance against
budgets and forecasts monitored and reported back
to the Board on a regular basis;
• An Audit and Risk Committee comprised of
independent Non-Executive Directors; and
• An independent internal audit function reporting
directly to the Audit and Risk Committee.
The preparation and issue of financial reports is
managed by the Group Finance Department in
accordance with Group accounting policies and
reporting systems, and under the direction of the Chief
Financial Officer. The interim and preliminary results
and the Annual Report and Financial Statements of the
Group are reviewed by the Audit and Risk Committee
and recommended for approval to the Board.
Remuneration
Remuneration Committee
The Board has established a Remuneration Committee
comprised entirely of independent Non-Executive
Directors. The Remuneration Committee has been
delegated responsibility for determining Group policy
on executive remuneration and for setting remuneration
for the Chairman, Executive Directors and senior
management.
A detailed description of the work undertaken by the
Remuneration Committee in its assessment, development
and application of the Group’s executive remuneration
policy is set out in the Committee Chairman’s Report on
pages 116 to 135.
Non-Executive Director Remuneration
The remuneration of Non-Executive Directors is set on
appointment by the Board, on advice from independent
professional advisors, and is reflective of the time
commitment and responsibilities of their role.
The full details of fees paid to Non-Executive Directors is
set out on page 127.
Oldbridge Manor
Drogheda, Co. Louth
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
111Glenveagh Properties PLC Annual Report and Accounts 2020110Governance Report of the Audit and Risk CommitteeCara RyanChair Audit and Risk CommitteeIn common with most businesses, 2020 has been a challenging year and the Committee continues to focus its efforts on assisting the Board by proactively managing its core areas of responsibility. The arrival of Covid-19 has created new challenges for the business which increased the Committee’s focus on risk management and the integrity of the financial statements. The Committee will continue to proactively monitor the on-going developments of the pandemic and the related impact on internal controls, risk management and financial reporting. The principal duties and responsibilities of the Committee together with an overview of its activities for the year has been outlined in detail on page 112 to 115 and is summarised below. In February, the Committee reviewed the Director’s statements on compliance, viability and going concern from the 2019 Annual Report prior to recommending approval of these to the Board. This review was revisited as part of the approval of the condensed consolidated interim financial statements in September.REPORT OF THE AUDIT AND RISK COMMITTEEI am pleased to present the Audit and Risk Committee Report for financial year ended 31 December 2020. I was appointed to the Committee and succeeded Robert Dix as Chair in September 2020. I would like to thank Robert, who chaired the Committee from October 2017 until my appointment and with whom I have worked closely since joining the Board. As part of the February and May meetings, the Committee received presentations from and reviewed the findings of Group internal audit in relation to their review of sales and contractor management. In May, the Committee received an update from the Group external auditor, KPMG, on the impact Covid-19 would have on the interim review process. The Committee also reviewed and approved the updated Sales Manual and Procurement Policy documents. As part of the August and September meetings the Committee received presentations on the Group going concern position and the 2020 interim results for the six months ended 30 June 2020. The Committee confirmed the appropriateness of the preparation of the interim financial statements on a going concern basis and approved the condensed consolidated interim financial statements.In December, the Committee received a presentation from and reviewed the findings of Group internal audit in relation to a specific review completed at the request of the Committee. This review was completed in line with the Group’s Whistleblowing policy and procedures with no findings being reported. In addition, the Committee reviewed and approved the 3-year plan for internal audit. The external auditor also presented their audit plan for the year end audit to the Committee. Finally, the Committee received a presentation from management on the Group insurance cover as well as reviewing the updated risk register for inclusion in the Annual Report. With regard to the half year and year-end financial statements, the Committee continues to be particularly focused on the areas of the financial statements with which a high degree of judgement and estimation uncertainty is associated. The primary area of estimation uncertainty reviewed by the Committee is the carrying value of inventory and profit recognition. The issue considered and activities undertaken by the Committee are outlined on page 114. The underlying valuation models for inventory are thoroughly scrutinised by the external auditor with no disagreement in estimates used by the Company being reported. The Committee is conscious of the impact of the ongoing Covid-19 pandemic on the Group’s employees and operations. Against that background, we have engaged with Group management to seek to ensure that robust internal controls and risk management systems continue to apply. We have also discussed with Group management the additional work completed in respect of the viability and going concern statements to seek to assess the impact, in the short to medium term, of the Covid-19 pandemic on the prospects of the Group.The risk register and the principal risks and uncertainties faced by the Group outlined on pages 42 to 48 of this report are a standing agenda point on all Committee meetings. Discussions are focused on emerging risk areas and existing risks where the risk rating has increased or decreased significantly. The Committee continues to give careful consideration to the impact of Covid-19 on risk management and ensuring the controls put in place by senior management to respond to these risks are appropriate. The Committee is also aware of the emergence of ESG related risks, the responsibility the business has to respond proactively to these risks and the increased reporting of such activities.I am pleased to conclude that the Audit and Risk Committee has met its obligations for 2020 and is looking forward to further adapting the Group’s risk management framework to respond to the opportunities and challenges that 2021 will bring as the Group continues to deliver on its strategic objectives and 5 year plan.Cara RyanChair Audit and Risk CommitteeIn common with most businesses 2020 has been a challenging year and the Committee continues to focus its efforts on assisting the Board by proactively managing its core areas of responsibility. Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
112
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Audit and Risk Committee
113
Audit and Risk Committee Composition
During 2020, the Audit and Risk Committee comprised
three independent non-executive Directors; Cara Ryan
(Chair), Robert Dix and Richard Cherry. Lady Barbara
Judge CBE served as a member of the committee
until her untimely bereavement in August 2020. The
biographies of these Directors can be found on pages
138 to 140.
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
Chair 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 five
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 Chair.
The Committee meet with the internal and external
auditor without other executive management being
present, on an annual basis in order to discuss any
issues which may have arisen during the financial year.
Committee Member
In
Attendance
Committee
member as of
Cara Ryan*
Robert Dix
Richard Cherry
Lady Barbara Judge
CBE**
2/2
5/5
5/5
3/3
2020
2017
2017
2017
* Cara Ryan was appointed to the Committee on
3 September 2020
** Lady Barbara Judge CBE resigned from the Committee
on 31 August 2020
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/external auditors.
The key function of the Committee is oversight of the
Group’s internal control and risk management systems.
This involves the following responsibilities:
• Monitor the integrity of the financial statements of
the Company and any other formal announcement;
• Reporting to the Board on significant financial
reporting issues and judgements and estimates;
• Review the content of the annual report;
• Review the adequacy and effectiveness of the
Group’s internal controls;
• Review and approve the risk management policy,
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;
• Review the Groups’ arrangements for its employees
to raise concerns, in confidence, about possible
wrongdoing in financial reporting or other matters;
and
• Monitoring and reviewing the effectiveness of the
Group’s internal and external auditors.
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, Bribery, Conflict of interest,
Whistleblowing and Fraud
(iii) Internal Audit
(iv) External Audit
(v) Committee Effectiveness
Activities
2020 has been a year of significant change and
development for the Group. The Group’s risk profile
continues to evolve as it works towards achieving its
strategic objectives and executing on its strategic plan.
To respond and mitigate against risks as they emerge
or evolve, the Group implements a risk management
approach that is dynamic rather than static in nature.
Further detail in relation to the Group’s approach to
Activity in 2020
Topic
Description of activity
risk management is set out on pages 38 to 48. The
Group continues to embed risk management across
all levels and departments of the Group through a
top down approach with the tone being set by the
Committee, Board and senior management. Set out
below is a summary of the Committee’s activity during
the financial year.
Financial Reporting
The Committee assessed whether suitable accounting policies had been adopted in the
preparation of the results for the relevant period 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.
The Committee assessed the Group’s ability to continue as a going concern. The
Committee considered the potential and likely implications of the Covid-19 pandemic on
the Group’s financial performance and position including but not limited to the impact
on selling prices and strategies, development costs and construction programs and put a
focus on the adequacy of liquidity when reaching its conclusion on going concern.
During the financial year, the Committee reviewed and recommended the Group’s 2019
Annual Report and the consolidated condensed interim financial statements for the half
year ended 30 June 2020 to the Board for approval.
The Committee considered the requirements of the Irish Companies Act 2014 in relation
to the Directors’ Compliance Statement and is satisfied that appropriate steps were
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.
Risk Management
In respect of the 2020 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 the updated Sales Manual and Procurement
Policy documents.
Internal Audit
The Committee met representatives from the outsourced internal audit function (Deloitte)
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 2021-2023.
External Audit
The Committee met representatives from the external auditor throughout the financial
year both with and without management present.
During 2020, the Committee reviewed KPMG’s reports on their 2019 audit and their
interim review for the six months ended 30 June 2020. It also reviewed and approved
KPMG’s audit plan in respect of the audit for the year ended 31 December 2020.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
114
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Audit and Risk Committee
115
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. To satisfy this
responsibility the Committee considered the following:
• The timetable, communications and co-ordinated
approach to the preparation of the annual report
and financial statements by senior management;
• The systematic and timely approach to review
and sign off with a focus on transparency and
understandability by senior management;
• The detailed presentation of the annual report and
financial statements to the Committee by senior
management outlining the process undertaken
to ensure the report is fair, balanced and
understandable;
• Timely submission of the draft annual report and
financial statements to the Committee to facilitate
adequate review and discussion prior to approval by
the Committee; and
• The presentation by KPMG on their audit process
and conclusions reached on the annual report and
financial statements.
Having considered the above, the Committee
confirmed to the Board that the annual report and
financial statements taken as a whole, is fair, balanced
and understandable and provided the information
necessary for shareholders to assess the Group’s and
the Company’s financial position, 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 2020 was the Group’s
assessment of the carrying value of inventory at the
reporting date and profit recognised on completed units
during the year.
Significant Issue Considered
Committee Activity
Carrying value of inventory
The carrying value of the Group’s inventory was
€821.2 million at 31 December 2020 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.
At 30 June 2020 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 estimation 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.
As part of the assessment, the Group has re-evaluated
its most likely exit strategies on all developments in the
context of the current market environment and reflected
these in revenue assumptions within the forecast models.
The results of this exercise required an impairment
charge on two of our higher Average Selling Price (“ASP”)
non-core active sites and three non-core assets on which
construction has not commenced.
A similar exercise was undertaken at financial year
end by management. The exercise indicated no further
evidence of impairment and therefore no additional
adjustment to the carrying value was required at 31
December 2020.
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, its policy for profit
recognition on completed units, 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.
The Committee robustly challenged management
on the additional work completed in respect of the
carrying value of inventory both at 30 June 2020 and
31 December 2020 to seek to assess the impact of the
Covid-19 pandemic on the profitability of the Group’s
development sites and to understand the different
scenario analysis completed.
The Committee considered the approach taken at 30
June 2020 and 31 December 2020 to the net realisable
carrying value of the inventory balance. It also
considered the external auditor’s conclusion regarding
management’s assessment that an impairment charge
was required at 30 June 2020 and no further impairment
was required at 31 December 2020.
Based on the results of the process undertaken by
management, the Committee was satisfied with the
carrying value of inventory at year end and the profit
recognised in the consolidated statement of profit or
loss on units closed in 2020.
Auditor independence and non-audit services
KPMG have formally confirmed their independence
to the Audit and Risk Committee. 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
Total
€ ‘000
220
15
109
324
At the end of the financial year, non-audit fees paid to
KPMG represented 62% 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. KPMG provided certain tax services in
the financial year which were considered and deemed
appropriate by the Committee.
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 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.
Internal Audit
The Committee is responsible for the scope and
operation of the internal audit function. The Committee
approves and monitors the planned work of internal
audit considering any identified ineffective controls and
findings. The Committee places a particular focus on
control weaknesses and the remediation plans put in
place by management.
The Committee met representatives from the outsourced
internal audit function (Deloitte) on four occasions
during the financial year and considered the reports
from the internal audit function on their reviews of sales,
contractor management and compliance with legislation
and regulation. The Committee has also approved the
planned programme of work for 2021-2023.
Whistleblowing, Fraud and Anti Bribery
The Group has Whistleblowing, Fraud and Anti Bribery
policies and reporting procedures in place that have
been reviewed and approved by the Board. The policies
are detailed in the employee handbook and published
on the Group’s intranet. All employees are required
to acknowledge and confirm that they have read
and understand these policies. Any reported cases of
whistleblowing, fraud and bribery or alleged breach of
these policies are appropriately investigated, with the
results reported to the Committee.
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 2020.
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.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
117Governance Report of the Remuneration CommitteeRichard CherryChairmanRemuneration CommitteeI was delighted to welcome two new members to the Committee during 2020, Cara Ryan and Pat McCann, both of whom proved to be a considerable asset as we addressed the extraordinary events of the year. I would also like to express my thanks to Robert Dix, who stepped down from the Committee during the year, and to pay tribute to Lady Barbara Judge CBE, whose contributions to the Committee and to the Board are much missed.During 2020, the Committee monitored the impact of the Covid-19 pandemic across Glenveagh and considered carefully the implications for the remuneration of Executive Directors and others in the business. Separately, having received an excellent level of support for the Directors’ Remuneration Policy at the AGM in May, we reviewed the Policy against the Irish Government’s new regulations on remuneration voting and disclosure and also started to consider how the Policy should develop over the longer-term to keep pace with the development of the business and the expectations of shareholders.REPORT OF THE REMUNERATION COMMITTEE I am pleased to present the report of the Remuneration Committee (“the Committee”) for the financial year ended 31 December 2020. The Committee operated as a combined Remuneration and Nomination Committee until 9 October 2020, when it was separated into two new committees. The report of the Nomination Committee report is included on pages 136 to 137.Performance during 2020As communicated to the market during 2020, and as explained throughout this Annual Report, Glenveagh’s performance was impacted as construction sites were closed for six weeks as part of a Government enforced industry-wide lockdown in response to the first wave of the Covid-19 pandemic. We developed extensive health and safety protocols in line with Government and Health Organisation protocols and guidance to ensure a safe return to work for our people when sites began to reopen in May. The Group put in a resilient performance for the remainder of the year despite the ongoing challenges posed by the continued spread of the virus. As we announced to the market in May 2020, a number of mitigating actions were put in place in reaction to the outbreak of the pandemic and the site closures. This included some temporary lay-offs and furlough arrangements for certain staff. Salaries for all employees were temporarily reduced, and all employer pension contributions temporarily ceased. For the Executive Directors, this resulted in a salary reduction of approximately 20%. Fees for the Non-Executive Directors were reduced by 25%. All salaries and fees were restored to their full levels on 1 September and employer pension contributions resumed. Recognising the underlying strength of the business, we have since repaid to all employees, including the Executive Directors, the salaries and pensions foregone as a result of the temporary reductions. The unexpected events of 2020 meant that the financial targets set for the annual bonus scheme at the start of the year became very difficult to achieve. Although performance against the non-financial targets would have merited a bonus payment, the Executive Directors and other senior executives within the business waived their entitlement to any bonus payment for the year.Long-term incentives were also significantly impacted. The Long-Term Incentive Plan ("LTIP") award granted to certain employees (including the CFO) at the time of Glenveagh’s IPO in October 2017 did not vest, as the total shareholder return ("TSR") performance condition was not met. For the legacy Founder Share Scheme – in which both the Executive Chairman and the CEO participate – the performance condition was not met when tested during the year and, accordingly, no Founder Shares converted into ordinary shares.The Committee did not exercise any discretion in terms of these incentive outcomes for the year.Remuneration for 2021The Committee has made no changes to the way the Remuneration Policy operates for 2021. The salary levels for the Executive Directors and other aspects of their fixed remuneration remain unchanged. The measures used for the annual bonus scheme remain the key metrics of revenue (20%), adjusted EBITDA (20%), adjusted EBITDA margin (20%), health and safety (20%) and customer satisfaction (20%), all of which are critical indicators of Glenveagh’s ability to meet its strategic objectives over the short-term. The specific targets have been set in the context of the business environment for the year and will be disclosed in the 2021 Remuneration Report.The Committee continues to recognise the preference of a number of shareholders for a return on capital employed (“ROCE”) metric to be included in the bonus scheme. Optimising the capital employed within the business remains an important strategic priority for Glenveagh. However, in light of the impact of the events of 2020 on the broader market environment, the Committee wishes to review business performance during 2021 before committing to introduce a new measure to the scheme. The maximum bonus opportunity for the Executive Directors will remain unchanged for 2021 (100% of salary for the CEO and CFO and 75% of salary for the Executive Chairman).At present, the CFO is the only Executive Director to participate in the LTIP. We intend to grant a further LTIP award to him in 2021 at a level of 100% of basic salary, the same level as the grant he received in early 2020. The performance measures will also remain the same as 2020, a mix of absolute TSR (for 50% of the award) and EPS (the remaining 50%). Further detail in relation to the specific targets for the award is provided on pages 131 and 132. The Executive Chairman and the CEO continue to participate in the Founder Share Scheme and will not receive an LTIP award in 2021.We developed extensive health and safety protocols to ensure a safe return to work for our people when sites began to reopen in May.116Glenveagh Properties PLC Annual Report and Accounts 2020 Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
118
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Remuneration Committee
119
Directors’ Remuneration Policy
As discussed in last year’s report, during late 2019 and
early 2020 the Committee reviewed the Remuneration
Policy for the Executive Directors and made a number
of changes to bring the Policy into line with good
market practice. This included introducing shareholding
requirements for the Executive Directors, adding a
two-year post-vesting holding period to the LTIP,
reducing the amount of annual bonus payable for
target performance and making a commitment that
all new Executive Directors would receive a pension
contribution rate set in line with the rate attributable to
the majority of the wider workforce. The Remuneration
Policy was presented to shareholders by way of a
separate resolution at the AGM in May 2020 and the
Committee was delighted to receive the support of
99.9% of those voting.
Shortly after the proposed Remuneration Policy was
finalised by the Board and set out for shareholders
in the 2019 Annual Report, the Government published
the regulations transposing the EU Shareholder Rights
Directive into Irish law. These regulations set out in
detail the specific requirements for remuneration
policies and remuneration reports, in terms of both
required levels of disclosure and the shareholding
voting regime. While nothing in the Remuneration
Policy approved at the 2020 AGM contradicts the
regulations, in order to achieve full compliance we
are required to seek reapproval of the Policy at the
2021 AGM. The Policy is broadly unchanged from
that approved overwhelmingly by shareholders in
2020, although we have included some extra detail
on certain minor areas of disclosure and procedure to
ensure complete consistency with the regulations.
Looking further ahead, the Committee intends
to undertake a more fundamental review of the
Remuneration Policy later in 2021 to ensure that the
executives are aligned, incentivised and appropriately
rewarded to drive Glenveagh’s longer-term business
strategy and growth profile, while also taking into
account the changing economic and business
environment and evolving investor expectations. This
review will encompass matters such as quantum and
the structure of long-term incentives, in particular
recognising that the Founder Share Scheme will
run its course in early 2022. We will also review the
current position on the pension contribution rate
for incumbent Executive Directors, post-employment
shareholding requirements and annual bonus deferral.
Any proposed changes to the Policy which emerge
from this review will be the subject of appropriate
shareholder consultation before being presented to
shareholders for formal approval at the AGM in 2022.
to undertake a fuller review later in the year. I am
pleased to report that all of those who responded
were supportive of this plan of action.
2018 UK Corporate Governance Code
Glenveagh remains committed to complying with the
UK Corporate Governance Code wherever appropriate
or explaining its reasons for non-compliance. The
Committee believes that the Remuneration Policy for
Executive Directors is consistent with the key principles
set out in the 2018 Code. The arrangements are
simple and transparent, with a clear link between the
performance of the Group and the rewards available to
individual Executive Directors. The Policy for Executive
Directors is aligned with Glenveagh’s culture of
rewarding excellent performance across the organisation
and also provides for a strong level of alignment with
the interests of shareholders in Glenveagh.
The Committee is satisfied that Glenveagh complies in
all material respects with the remuneration provisions
of the 2018 Code, with the following minor exceptions.
First, the Committee has not developed a formal policy
on post-employment shareholding requirements. As
noted above, shareholding requirements to apply
in employment were introduced last year and the
Committee decided not to go further than this,
recognising also that the post-vesting holding period
in the LTIP continues to apply for awards held by
leavers. Second, the pension contribution rate for
existing Executive Directors is not aligned with the rate
for the wider workforce, although is consistent with
the arrangements in place for senior executives below
Board level. The Committee has decided not to change
its current approach on these matters at this stage, but
this position will be reviewed very carefully as part of the
detailed review of the Remuneration Policy to take place
later in 2021.
AGM
As explained above, at the AGM on 27 May 2021
shareholders will be asked to reapprove the Directors’
Remuneration Policy by way of an advisory vote. In
addition, there will be a separate resolution to approve
the Remuneration Committee Report, also by way of an
advisory vote.
I hope you will support both the Policy and the Report
resolutions, and I welcome any comments or feedback
you may have on our activities in 2020, our plans for
2021, or any other relevant matters.
In late 2020, I wrote to major shareholders and the
proxy advisory services to explain our approach to
the rollover of the Policy for 2021 and the intention
Richard Cherry
Chairman,
Remuneration Committee
During 2020, the Committee monitored the
impact of the Covid-19 pandemic across
Glenveagh and considered carefully the
implications for the remuneration of Executive
Directors and others in the business.
Roles and Responsibilities
The principal responsibilities and duties of the
Remuneration Committee include:
• Having responsibility for setting the Remuneration
Policy for all Executive Directors including pension
rights and any other compensation payments;
• Recommending and monitoring the level and
structure of remuneration for senior management;
• Reviewing 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
and culture;
• Reviewing 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
• Overseeing any major changes in employee benefits
structures throughout the Group.
Committee Composition
The Committee comprises three Independent Non-
Executive Directors; Richard Cherry (Chairman), Cara
Ryan and Pat McCann. The biographies of these
Directors can be found on pages 138 to 140. Richard
Cherry served on the Committee for the entire year.
Cara Ryan and Pat McCann were appointed to the
Committee on 4 September 2020 and 3 September
2020 respectively. Lady Barbara Judge CBE was a
member of the Committee until her death on 31 August
2020. Robert Dix was a member of the Committee until
4 September 2020.
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 of the members enables the Committee
to carry out its duties and responsibilities as detailed in
the Committee Terms of Reference.
Meetings
The Committee met on seven occasions during the
financial year ended 31 December 2020. On occasion,
additional attendees including the Board Chairman,
the CEO, the CFO, the Head of HR, the Group
Company Secretary 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
Richard Cherry
Robert Dix
Lady Barbara
Judge CBE
Cara Ryan
Pat McCann
In
Attendance
Committee
member as of
7/7
3/3
2/2
4/4
5/5
2017 to date
2017 to 2020
2017 to 2020
2020 to date
2020 to date
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
120
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Remuneration Committee
121
Other Activities
Set out below is a summary of the Committee’s key activities during the financial year.
Activity in 2020
Topic
Annual Bonus
Long Term Incentive Plan (LTIP)
Review of AGM voting
Review of Remuneration Policy and Shareholder
Consultation
Executive Committee
Committee Evaluation
Description of activity
The Committee formally assessed performance against the
targets set for the 2019 annual bonus scheme, agreeing bonus
payments as disclosed in last year’s report. Later in the year,
the Committee also considered the position with regards to
the 2020 annual bonus scheme, and noted the waiver by the
Executive Directors and other senior executives of any bonus
for 2020.
The Committee approved the granting of LTIP awards to
certain members of the senior management team (including
the CFO) during 2020, having considered the appropriate
employee population and performance conditions for
these awards.
The Committee considered the outcome of the 2020
AGM votes on the Directors’ Remuneration Policy and the
Remuneration Committee Report.
The Committee considered the Directors’ Remuneration Policy
in the context of the European Union (Shareholders’ Rights)
Regulations 2020 published in March 2020 and agreed to
seek shareholder reapproval for the Policy at the AGM in
2021 to ensure full compliance with the regulations. The
Committee also agreed to conduct a fuller review of executive
remuneration in 2021. Major shareholders and proxy advisers
were consulted on this approach.
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.
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.
Reporting
The Chairman of the Committee reports to the Board
on the activities of the Committee. The Chairman
of the Committee will attend the Annual General
Meeting 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 continued
to obtain independent advice from Korn Ferry in
relation to market trends, comparator benchmarking,
developments in remuneration policies and practice and
governance best practice. Korn Ferry are members of
the Remuneration Consultants Group and signatories
to its Code of Conduct, and all advice is provided in
accordance with this Code. The Committee is entirely
comfortable that the advice it received from Korn Ferry
on executive remuneration matters was independent
and robust.
Remuneration Policy
Background
The Remuneration Policy was approved by shareholders
at the AGM held on 19 May 2020, with a vote in favour
of 99.9%.
To ensure full compliance with the European Union
(Shareholders’ Rights) Regulations 2020 published in
March 2020, the Committee will be presenting the
Remuneration Policy to shareholders for reapproval
by way of an advisory vote at the AGM to be held on
27 May 2021. There are no substantive changes to the
Remuneration Policy approved in 2020: the reward
opportunities are not being increased, and the incentive
schemes will continue to operate as set out in the Policy
approved in 2020. However, some additional detail has
been added in terms of disclosure and procedure to
bring the Policy fully into line with the new regulations.
Remuneration Principles
In designing the 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 the
views of shareholders and other stakeholders, as well as
pay and conditions across the Group as a whole. The
Committee is satisfied that the remuneration framework
is in alignment with the Group’s risk appetite, purpose
and culture, while also being supportive of its long-term
strategic goals.
The Policy contributes to Glenveagh’s business strategy
by setting the framework by which the Executive
Directors and other senior employees are incentivised
and rewarded. The performance and reward of
these individuals is critical in ensuring the Group’s
ongoing success. The Policy incorporates a mix of
fixed and variable remuneration which provides both
a meaningful level of guaranteed pay appropriate for
senior leaders of a major listed company and incentives
which are structured to drive performance over the short
and long-term. Glenveagh’s Long-Term Incentive Plan
assesses performance over a three-year period using
performance conditions which are relevant indicators of
long-term growth and value creation. Achievement of
these performance conditions will demonstrate success
in ensuring the long-term viability and sustainability of
the business.
Determination of the
Remuneration Policy
The Remuneration Policy as approved at the 2020
AGM was agreed by the Remuneration Committee
taking into account (among other things) Glenveagh’s
business strategy and objectives, expectations of future
performance, market practice at similar companies
and the views of institutional shareholders and
advisory bodies. The Committee received input from
its independent external advisers in the form of a
number of presentations and direct discussions. The
Committee also took on board the views of Glenveagh
management. Shareholder feedback on the Policy and
its implementation was sought through a consultation
exercise in late 2019 and early 2020. The Committee
subsequently presented the Policy to the AGM in May
2020 by way of a separate resolution and, as noted
above, received overwhelming shareholder support.
A further review of the Policy took place during 2020 to
assess its compliance with the terms of the European
Union (Shareholders’ Rights) Regulations 2020. As
a result of this review, a number of minor changes
were agreed to bring the Policy fully into line with the
regulations. Given the level of shareholder support
for the Policy at the 2020 AGM, and the 100% support
received for the separate vote on the Annual Report on
Remuneration, the Committee decided not to make any
fundamental changes to the Policy ahead of submitting
it for a further shareholder vote at the AGM in 2021.
The Committee consulted with major shareholders on
this approach in late 2020 and those who responded
indicated their support.
The Committee intends to undertake another full review
of the Policy later in 2021 to ensure that the executives
are aligned, incentivised and appropriately rewarded
to drive Glenveagh’s long-term business strategy
and growth profile as well as reflecting the changing
economic and business environment and evolving
investor expectations.
Implementation of the Policy is reviewed every year, for
example in terms of the performance measures and
targets which apply to variable remuneration and the
quantum of fixed remuneration. Proposals are presented
to the Remuneration Committee and are subject to
rigorous debate.
Conflicts of interest are avoided. Committee members
are required to disclose any conflicts or potential
conflicts ahead of Committee meetings. No Executive
Director or other member of management is present
when his or her own remuneration is under discussion.
The Committee’s external advisers are responsible
for providing advice to the Committee and not to
management.
Remuneration of the Non-Executive Directors ("NEDs")
is a matter for the Board (excluding the NEDs) rather
than the Remuneration Committee. From time to
time the Board (excluding the NEDs) reviews the fees
payable to NEDs, taking into account any changes in
Board responsibilities and levels of fees paid to NEDs of
similar companies to Glenveagh. No NED is involved in
discussions regarding his or her own remuneration.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
122
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Remuneration Committee
123
Changes to the Remuneration Policy
The key changes to the Policy approved by shareholders at the 2020 AGM are set out below:
• Additional information has been added to explain how the Policy contributes to Glenveagh’s business strategy
and long-term interests and sustainability;
• The relative proportion of the different components of fixed and variable remuneration has been indicated;
• Clarification has been provided on how the financial and non-financial performance conditions used for the
annual bonus scheme and the LTIP contribute to Glenveagh’s business strategy and long-term interests and
sustainability;
• An explanation has been included of the methods applied to determine the extent to which the performance
•
criteria are fulfilled; and
Information has been provided on the decision-making process followed for the determination, review and
implementation of the Policy and the measures to avoid or manage conflicts of interest.
Components of Remuneration for Executive Directors
The following table outlines the key elements of the Executive Directors’ Remuneration Policy.
Element/Purpose
Operation
Maximum Opportunity
Fixed Remuneration
Base Salary
To attract and
retain high calibre
individuals
Base salaries are normally 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 (whether
temporary or permanent) 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.
Benefits
To be competitive
with the market
Retirement Benefits
To attract and
retain high calibre
individuals as part
of competitive
package.
In addition to their base salaries, Executive Directors’
benefits currently include life and health insurance and a
car allowance in line with typical market practice. Other
benefits may be provided if considered appropriate.
No maximum levels are
prescribed as benefits will be
related to each individual’s
circumstances.
The Group operates a defined contribution pension
scheme for Executive Directors. Pension contributions
are calculated on base salary only.
For current Executive Directors,
15% of basic salary.
Any new Executive Director
appointed after the 2020 AGM
will have their contribution
rate set in line with the rate
attributable to the majority of
the wider workforce.
Variable Remuneration
Annual Bonus
To reward the
achievement of
annual performance
targets
Individuals will receive annual bonus awards based on
the achievement of financial and/or non-financial targets.
Threshold, target and maximum performance levels will be
set, with pro-rata payments between the points based on
relative achievement levels against the agreed targets.
The maximum award for
Executive Directors as a
percentage of basic salary is
as follows:
Executive Chairman 75%
CEO 100%
CFO 100%
The amount payable for target
performance is limited to 50%
of the maximum award.
Bonuses are paid in cash
although the Committee will
keep under review whether
it would be appropriate to
require a portion of any
cash bonus to be invested in
Glenveagh shares.
The LTIP rules permit awards
to be granted up to 150%
of basic salary, or 200% in
exceptional circumstances.
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 for the year
ahead, based on the budget and strategic plan process
carried out in Q3/Q4 of the preceding year. Appropriate
details of the specific targets will be included on a
retrospective basis in the Remuneration Committee report
each year.
The Committee retains discretion to adjust any award to
reflect the underlying financial position of the Group.
Long Term Incentive Plan (LTIP)
To incentivise long-
term sustainable
performance by
granting shares
which vest subject
to the achievement
of targets which
are linked to
Glenveagh’s
business strategy
and central to its
long-term success.
The LTIP also
contributes to
Glenveagh’s
long-term interests
by ensuring
alignment between
participants and
the interests of
shareholders.
Senior executives are eligible to participate in the LTIP.
The CFO is the only Executive Director who currently
participates in the plan. The Executive Chairman and the
CEO do not currently participate in the LTIP given their
participation in the Founder Share Scheme although this
will be kept under review (see page 135).
The LTIP involves the grant of nil-cost options over ordinary
shares to participants based on a percentage of their gross
basic salary.
LTIP awards vest subject to the satisfaction of performance
conditions over a three-year period. The Committee selects
the performance condition ahead of each grant taking
into account Glenveagh’s strategic priorities and business
circumstances. A majority of the metrics chosen will be
financial metrics.
Full details of the chosen metrics and specific targets for
recent awards and for awards to be granted in 2021 are set
out pages 131 to 132.
The vesting of any award is subject to Committee
discretion that it is satisfied the Group’s underlying
performance has shown a sustained improvement in the
period since date of grant.
With effect from 2020, LTIP awards granted to Executive
Directors are subject to a holding period of at least two
years following the date of exercise of their options. Shares
that are subject to a holding period post-exercise may be
placed in a restricted share trust for the duration of the
restricted period.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
124Glenveagh Properties PLC Annual Report and Accounts 2020125Governance Report of the Remuneration CommitteeRelative Proportion of Fixed and Variable RemunerationAs indicated in the table above, the remuneration of the Executive Directors includes both fixed and variable remuneration. The charts below indicate the relative proportion of the fixed and variable remuneration for each Executive Director.Performance ConditionsFor both the annual bonus scheme and the LTIP, the Committee sets performance conditions based on business circumstances and the key strategic priorities. Specific targets are chosen based on the business plan and budget, the Board’s expectations of performance and external market estimates (where relevant). The performance conditions are designed to be relevant to achieving Glenveagh’s vision of being the leading sustainable homebuilding platform in Ireland.The performance conditions which apply to the annual bonus scheme to operate in 2021 are based on a mix of financial and non-financial criteria as set out below:• Revenue: This is a key measure of top-line business improvement and takes into account the number of units sold, the average selling price of those units and non-core land disposals. The long-term success of Glenveagh depends in part upon revenue growth. • Adjusted EBITDA and Adjusted EBITDA margin: Adjusted EBITDA is an important measure for assessing the profitability of the Group which is closely tracked by the market. Adjusted EBITDA margin represents this metric as a percentage of Group revenue. By using these metrics in the bonus scheme, we ensure that Executive Directors are incentivised to focus on profitability in addition to revenue growth. • Health and safety: Glenveagh’s health and safety audit score is an indicator of the ability of the business to provide a safe working environment for our people. Among other things, this ensures we operate as a responsible employer and can attract and retain the best people in the industry. • Customer satisfaction: Customers are central to the success of the business. An independent external firm is used to survey customers on topics linked to their experience with Glenveagh. Annual bonuses are based on the survey results. Ultimately, Glenveagh’s long-term success will depend upon its ability to meet and exceed customer expectations. For the LTIP award to be granted in 2021, the following performance conditions have been chosen:• TSR: This is a measure of the returns to Glenveagh shareholders in the form of share price growth and dividend payments over the performance period. TSR growth is indicative of the market’s appreciation of Glenveagh’s business strategy, its performance and its long-term prospects.• EPS: This is a key measure of profitability. Growth in EPS over time reflects our ability to grow earnings responsibly while having due regards to the interests of shareholders. The Remuneration Committee is responsible for assessing the extent of the achievement of the performance conditions for both the bonus scheme and the LTIP. In the case of the financial metrics such as revenue, Adjusted EBITDA, Adjusted EBITDA margin and EPS, this involves reviewing Glenveagh’s financial performance as determined by its audited results and comparing the specific targets against the performance achieved. The assessment of TSR is based on Glenveagh’s TSR performance as calculated by external data sources. Health and safety is measured by considering the result of internal and external site safety audits. Customer satisfaction is determined through the results of the surveys conducted on Glenveagh’s behalf by an independent external firm.Malus and ClawbackFor both the annual bonus scheme and the LTIP, recovery provisions are in place which permit the Committee to claw back awards if certain trigger events occur within two years of the payment or vesting date:• If the award was determined on the basis of materially incorrect information, including as a result of any material misstatement of the financial results; and/or• If the participant has engaged in any wilful misconduct, recklessness, fraud and/or criminal activity (including actions which have impacted the reputation of the Company); and/or• If the participant commits an act which constitutes a material breach of his/her contract, restrictive covenants and/or any confidentiality obligations. Shareholding GuidelinesAll Executive Directors are required to build a shareholding equivalent in value to 200% of their basic salary. Until this guideline is met, individuals will be required to retain at least 50% of any shares which vest following the end of the performance and holding periods for the LTIP (excluding any shares which are required to be sold to pay tax due at vesting).As explained on page 118, the Committee has at this stage decided not to introduce a requirement for shares to be held for a set period of time following termination of employment. However, this matter will be kept under review.Notes:(1) Max Variable Pay assumes a full annual bonus pay-out and (for the CFO, as the only Director who currently participates in the LTIP) the vesting of LTIP awards at the maximum level. No account has been taken of share price appreciation since the date of grant.(2) Target Variable Pay assumes a bonus pay-out at a target level of 50% of the maximum and LTIP vesting at a target level of 50% of the maximum.(3) No Variable Pay assumes no annual bonus pay-out and no LTIP vesting.(4) The value of benefits will fluctuate and therefore for simplicity have not been included in the charts.(5) The Founder Share Scheme (in which the CEO and the Executive Chairman participate) has not been included in the charts as it is not part of the Remuneration Policy. Salary Pension BonusCEO0% 20% 40% 60% 80% 100%Max Variable PayTarget Variable PayNo Variable Pay Salary Pension BonusExecutive Chairman0% 20% 40% 60% 80% 100%Max Variable PayTarget Variable PayNo Variable Pay Salary Pension Bonus LTIPCFO0% 20% 40% 60% 80% 100%Max Variable PayTarget Variable PayNo Variable Pay Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
126
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Remuneration Committee
127
Approach to Recruitment Remuneration
The package for any new Executive Director would be
based on the elements set out in the Remuneration
Policy table above. For certain elements of the package,
the following approach would apply.
• Basic salary: The salary offered to a new Executive
Director would take into account a number
of relevant factors including the individual’s
background and experience, the responsibilities of
the role and wider market practice. The Committee
has the discretion to appoint a new Executive
Director on a salary below the prevailing market
rate, with a view to increasing the salary over time
depending on performance and development in the
role. Such increases may be at a level higher than
would otherwise apply.
• Benefits: The benefits package will be consistent
with that provided to existing Executive Directors.
The Committee may provide other benefits (e.g. a
relocation package in the event of a new Executive
Director being required to relocate in order to
join Glenveagh).
• Retirement benefits: As stated in the Remuneration
Policy table, any new Executive Director will have
their pension contribution rate set in line with
the rate attributable to the majority of the wider
workforce.
• Annual bonus: A new Executive Director will
normally be eligible to participate in the annual
bonus scheme, on the same basis as the other
Executive Directors. Participation will normally be
pro-rated to reflect the period of service during the
financial year. The maximum bonus opportunity for
a new Executive Director is 100% of basic salary.
•
LTIP: A new Executive Director will normally be
eligible to participate in the LTIP on the same basis
as the other Executive Directors. An LTIP award may
be granted as part of the arrangements agreed on
appointment. In line with the Remuneration Policy,
any LTIP award will be limited in size to 150% of
basic salary, or 200% in the event the Committee
considers the circumstances to be sufficiently
exceptional to justify an award at this level.
• Buyout awards: In certain circumstances – for
example to attract an external candidate of
exceptional calibre – the Committee may consider
providing a buyout award as compensation for
incentives provided by the candidate’s previous
employer which will lapse as a result of the
individual joining Glenveagh. The value of any
buyout award will take into account the performance
conditions attached to the forfeited incentives, the
likelihood of them being satisfied, the proportion
of the performance period completed as at the
date of cessation of employment, the mechanism
of delivery (e.g. in cash or equity) and any other
relevant factors. The Committee may grant a buyout
award under Glenveagh’s existing incentive plans or,
if necessary, may use a bespoke arrangement.
The Committee reserves the right to appoint a
new Executive Director on a service agreement with
a twelve-month notice period, in line with standard
market practice.
Service Agreements
The current Executive Directors all have service
agreements with Glenveagh of no fixed term. The
agreements are terminable on six months’ notice from
both the Group and the Executive. The agreements do
not provide for any additional compensation to be paid
in the event of a change of control of Glenveagh.
Policy for Leavers
Salary and Benefits
For leavers, any termination payments are made only
in respect of annual salary excluding benefits for the
relevant notice period.
Annual Bonus
In order for annual bonus payments to be made,
Executive Directors must normally be employed by the
Group on the bonus payment date.
Long-Term Incentive Plan
Under the rules of the LTIP, the vesting of awards for
good leavers depends on the satisfaction of the relevant
performance conditions. Awards are reduced on a pro
rata basis to reflect the proportion of the vesting period
which has not elapsed at the date of cessation.
For other leavers, unvested awards lapse on cessation.
In the event of a change of control, the Committee
has discretion under the LTIP rules to determine the
extent of vesting of outstanding awards, having regard
to the extent that performance conditions have been
met and the length of the performance period which
has elapsed.
Wider Executive/Employee
Remuneration Considerations
In addition to setting the pay for the Executive Directors,
the Remuneration Committee has responsibility for
setting the pay of members of senior management
immediately below Board level (including the Group
Company Secretary). The Committee also considers
matters relating to pay across the Group as a whole,
including workforce remuneration policies and incentives
for the wider employee population. The Committee
has not engaged directly with employees on executive
remuneration matters but has considered in detail
the issue of alignment between Executive Director
remuneration and the pay for the employee population
more broadly. In designing the Directors’ Remuneration
Policy the Committee has been cognisant of pay
arrangements across the Group and has sought to
ensure consistency where appropriate.
For example, senior managers participate in a bonus
scheme which is reflective of the structure in place for
the Executive Directors. A number of senior managers
below the Board participate in the LTIP, with the same
performance conditions applying to all awards granted
under the plan. A separate bonus scheme applies for
the main employee group, under which the majority
of bonus payments are subject to the achievement of
targets linked to personal performance.
Engaging with Shareholders
The Committee is committed to an open line of
communication with shareholders and will seek the
views of major investors when considering significant
changes to remuneration practices or policies (as
evidenced by recent consultation exercises with
major shareholders).
Committee Discretions
The Committee retains discretion to make any payments,
notwithstanding that they are not in line with the
policy set out above, where the terms of the payment
were agreed (i) before the policy came into effect, or
(ii) at a time when the relevant individual was not a
Director of the Company and, in the opinion of the
Committee, the payment was not in consideration of
the individual becoming a Director of the Company.
For these purposes ‘payments’ includes the Committee
satisfying awards of variable remuneration and, in
relation to an award over shares, the terms of the
payment are determined at the time the award is
granted. Details of any such payments will be disclosed
in the Remuneration Committee Report for the relevant
year. The Committee also has the discretion to amend
the policy with regard to minor or administrative matters
where it would be, in the opinion of the Committee,
disproportionate to seek or await shareholder approval.
The Committee will operate the annual bonus and
long-term incentive arrangements according to their
respective rules. Consistent with market practice the
Committee retains certain discretions in respect of the
operation and administration of these arrangements.
External Appointments
The Board recognises the benefit which the Company
can obtain if Executive Directors serve as non-Executive
Directors of other companies. Subject to review in each
case, the Board’s general policy is that an Executive
Director can accept non-executive directorships of
other companies (provide this does not prejudice the
individual’s ability to undertake their duties at Glenveagh)
and can retain the fees in respect of such appointment.
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 advisers. The NEDs are
paid a basic fee of €60,000 per annum with additional
fees payable to the Senior Independent Non-Executive
Director of €30,000 per annum. NEDs receive an
additional €15,000 for chairing the Audit and Risk,
Remuneration and Nomination Committees.
Accordingly, the NED letters of appointment detail the
following annual fees:
Robert Dix
Cara Ryan
Role
Senior Independent
Non- Executive Director
Chair, Audit and Risk
Committee
€
90,000
75,000
Richard Cherry Chairman, Remuneration
75,000
Committee
Pat McCann
Chairman, Nomination
Committee
75,000
No changes to the above fees are proposed for 2021.
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. NEDs may receive benefits if considered
appropriate. All remuneration received by the NEDs is
fixed remuneration.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
128
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Remuneration Committee
129
Annual Remuneration Report for 2020
The following table illustrates remuneration awarded to Directors for the financial year ended 31 December 2020:
9
1
0
2
0
2
0
2
9
1
0
2
0
2
0
2
9
1
0
2
0
2
0
2
9
1
0
2
0
2
0
2
9
1
0
2
0
2
0
2
9
1
0
2
0
2
0
2
9
1
0
2
0
2
0
2
9
1
0
2
0
2
0
2
)
€
(
l
a
t
o
T
)
€
(
l
e
b
a
i
r
a
V
l
a
t
o
T
)
€
(
P
I
T
L
s
e
s
u
n
o
B
l
a
u
n
n
A
)
€
(
d
e
x
F
i
l
a
t
o
T
n
o
i
s
n
e
P
r
e
y
o
p
m
E
l
)
2
(
)
€
(
s
t
i
f
e
n
e
B
)
1
(
)
€
(
s
e
e
F
/
y
r
a
a
S
l
e
m
a
N
)
4
(
)
€
(
)
3
(
)
€
(
n
o
i
t
u
b
i
r
t
n
o
C
,
6
9
5
0
8
4
0
0
5
8
1
3
,
6
9
0
2
6
1
,
9
3
4
0
5
7
,
1
2
8
,
1
4
5
,
1
8
8
6
8
2
8
1
9
9
9
,
6
7
1
,
8
7
3
5
7
3
9
3
,
0
0
0
5
7
,
5
7
8
9
7
,
0
0
0
5
7
,
0
0
0
5
7
,
0
0
0
0
9
,
0
0
5
2
5
,
0
0
0
0
2
,
7
2
4
3
6
,
0
0
0
0
2
,
5
7
8
4
6
,
-
-
-
-
-
,
3
5
9
0
1
6
,
1
4
7
1
,
4
7
5
,
1
,
2
5
3
8
8
4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6
9
0
2
6
1
,
,
1
8
8
6
8
2
5
7
3
9
3
,
-
-
-
-
-
,
2
5
3
8
8
4
-
-
-
-
-
-
-
-
-
0
0
5
8
1
3
,
0
0
5
8
1
3
,
-
-
0
0
5
8
1
,
0
0
5
8
1
,
0
0
0
0
0
3
,
0
0
0
0
0
3
,
l
y
h
a
c
u
M
n
h
o
J
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
,
8
5
5
3
6
4
1
2
8
,
1
4
5
0
0
5
7,
5
0
0
5
7
6
,
5
2
7
,
2
2
1
2
3
4
2
,
,
3
3
3
3
8
3
0
0
0
0
5
4
,
3
4
5
0
6
,
6
7
1
,
8
7
3
5
7
8
7,
0
5
2
7
4
,
8
6
1
6
2
9
5
1
,
0
0
5
2
5
,
0
0
0
5
1
3
,
n
e
h
p
e
t
S
y
e
v
r
a
G
l
e
a
h
c
M
i
)
5
(
e
c
R
i
0
0
0
5
7
,
5
7
8
9
7
,
0
0
0
5
7
,
0
0
0
5
7
,
0
0
0
0
9
,
0
0
5
2
5
,
0
0
0
0
2
,
7
2
4
3
6
,
0
0
0
0
2
,
5
7
8
4
6
,
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0
0
0
5
7
,
5
7
8
9
7
,
i
x
D
t
r
e
b
o
R
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N
0
0
0
5
7
,
0
0
0
5
7
,
0
0
0
0
9
,
0
0
5
2
5
,
a
r
a
b
r
a
B
y
d
a
L
)
6
(
E
B
C
e
g
d
u
J
d
r
a
h
c
R
i
y
r
r
e
h
C
0
0
0
0
2
,
7
2
4
3
6
,
)
7
(
n
n
a
C
c
M
t
a
P
0
0
0
0
2
,
5
7
8
4
6
,
)
7
(
n
a
y
R
a
r
a
C
,
1
0
6
2
2
1
,
1
4
7
1
,
4
7
5
,
1
5
7
3
5
6
,
0
5
7
4
1
1
,
3
9
3
,
1
4
7
4
7
8
5
,
,
3
3
8
5
1
0
,
1
,
7
7
6
0
0
4
,
1
l
a
t
o
T
.
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
n
a
s
a
d
e
v
r
e
s
d
o
i
r
e
p
o
t
e
t
a
e
r
l
9
1
0
2
r
o
f
d
e
s
o
c
s
i
d
l
s
t
n
e
m
y
a
P
.
9
1
0
2
r
e
b
m
e
v
o
N
1
n
o
d
r
a
o
B
e
h
t
o
t
i
d
e
t
n
o
p
p
a
s
a
w
e
c
R
i
l
e
a
h
c
M
i
.
0
2
0
2
r
o
f
s
u
n
o
b
l
a
u
n
n
a
n
a
o
t
t
n
e
m
e
l
t
i
t
n
e
r
i
e
h
t
i
d
e
v
a
w
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
e
h
T
.
9
1
0
2
r
e
b
m
e
t
p
e
S
1
n
o
d
r
a
o
B
e
h
t
o
t
i
d
e
t
n
o
p
p
a
e
r
e
w
n
a
y
R
a
r
a
C
d
n
a
n
n
a
C
c
M
t
a
P
.
0
2
0
2
t
s
u
g
u
A
1
3
n
o
y
a
w
a
d
e
s
s
a
p
E
B
C
e
g
d
u
J
a
r
a
b
r
a
B
y
d
a
L
Cluain Adain
Clonmagadden, Navan
Total Remuneration Received for 2020
All elements of the remuneration received by the
Directors for 2020 were consistent with the Directors’
Remuneration Policy as approved by shareholders at
the AGM in 2020. All remuneration received in respect
of 2020 was fixed remuneration, reflecting the Executive
Directors’ decision to waive any entitlement to an annual
bonus pay-out and the lapsing of the LTIP award
granted in 2017. The lapsing of this award, although
disappointing, reflected the failure to achieve the TSR
performance condition set at the time of grant and
was therefore consistent with Glenveagh’s share price
performance over the three-year performance period.
During the financial year ended 31 December 2020:
• There were no deviations from the procedure for
implementing the Remuneration Policy;
• There were no derogations from the Remuneration
Policy; and
• No use was made of the possibility to reclaim
variable remuneration using the malus and
clawback mechanisms described in the
Remuneration Policy.
The Remuneration and Nomination Committee Report
for 2019 was the subject of an advisory shareholder vote
at the AGM in 2020. The resolution was passed with the
support of 100% of those voting. The Committee took
this overwhelming level of shareholder support into
account when reflecting on the appropriate approach
to executive remuneration to take in respect of 2020.
The Committee concluded that the vote result indicated
shareholder satisfaction with the current approach and
that no changes were required to be made in response.
Base Salary and Fees
The actual salaries paid to the Executive Directors for
the financial year ended 31 December 2020 are set
out in the table above. The annual salaries for the
Executive Directors were €300,000 for John Mulcahy,
€450,000 for Stephen Garvey and €315,000 for Michael
Rice. For the period from 1 May to 31 August 2020 the
salaries for the Directors and other salaried staff were
temporarily reduced and all pension contributions
ceased. All salaries were restored to their full levels with
effect from 1 September 2020 and employer pension
contributions resumed. In addition, Glenveagh has
since repaid to all employees (including the Executive
Directors) all salaries and pensions foregone as a result
of the temporary reductions.
The base salaries of Executive Directors will remain
unchanged for the 2021 financial year.
As part of Glenveagh’s response to the Covid-19
pandemic, fees for the Non-Executive Directors were
temporarily reduced for the period from 1 May 2020
to 31 August 2020. The fees were restored to their full
levels with effect from 1 September 2020. In addition,
Glenveagh repaid to the NEDs all fees foregone as a
result of the temporary reductions.
.
s
t
c
a
r
t
n
o
c
t
n
e
m
y
o
p
m
e
l
r
i
e
h
t
h
t
i
w
e
c
n
a
d
r
o
c
c
a
n
i
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
o
t
i
d
e
d
v
o
r
p
e
r
a
c
h
t
l
a
e
h
d
n
a
s
e
c
n
a
w
o
l
l
a
r
a
c
o
t
e
t
a
e
r
l
l
y
e
g
r
a
l
s
t
i
f
e
n
e
B
.
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N
f
o
t
c
e
p
s
e
r
n
i
s
e
e
f
'
s
r
o
t
c
e
r
i
D
d
n
a
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
f
o
t
c
e
p
s
e
r
n
i
s
e
i
r
a
a
s
l
t
c
e
l
f
e
r
s
t
n
u
o
m
A
.
s
n
o
i
t
u
b
i
r
t
n
o
c
n
o
i
s
n
e
p
i
e
v
e
c
e
r
t
o
n
o
d
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
-
n
o
N
.
s
n
o
i
t
u
b
i
r
t
n
o
c
n
o
i
s
n
e
p
i
e
v
e
c
e
r
o
t
l
e
b
g
i
i
l
e
e
r
a
s
r
o
t
c
e
r
i
D
e
v
i
t
u
c
e
x
E
l
y
n
O
)
1
(
)
2
(
)
3
(
)
4
(
)
5
(
)
6
(
)
7
(
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
130
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Remuneration Committee
131
Annual Bonus
2020 Outcome
The Executive Directors participated in an annual bonus scheme for 2020 with performance measured against a mix
of financial (60%) and non-financial (40%) performance conditions.
As noted in the statement from the Chairman of the Remuneration Committee on page 117, during the year the
Executive Directors voluntarily waived any entitlement to an annual bonus payment for 2020.
Long-Term Incentive Plan (LTIP)
Awards Granted in 2020
Michael Rice is the only Executive Director who participates in the LTIP. During 2020 he received an LTIP award as
set out in the table below.
Award date
% of salary
award
Grant date
share price
Face value of
award
Number of
shares
Performance
period
Date of
vesting
The specific targets that were set for the bonus scheme in 2020 are set out in the table below:
28 Feb 2020
100%
€0.75
€315,000
420,000
1 Jan 2020 to
31 Dec 2022
27 Feb 2023
MetricMetric
Revenue
WeightWeight
% Payable
% Payable
20%
Threshold 25%
Adjusted EBITDA
20%
Threshold 25%
Target 50%
Max 100%
Target 50%
Max 100%
Adjusted EBITDA margin
20%
Threshold 25%
Health and Safety
20%
Threshold 25%
Target 50%
Max 100%
Target 50%
Max 100%
Targets
Targets
€329.1m
€370.2m
€452.5m
€41.1m
€46.2m
€56.5m
11.5%
12.0%
13.0%
65% Audit Score
70% Audit Score
85%+ Audit Score
Performance
Performance
Achieved
Achieved
€232.3m
(€10.7m)
(4.6%)
88.0%
Customer Satisfaction
20%
Threshold 25%
75% Survey Score
83.0%
Target 50%
Max 100%
80% Survey Score
90%+ Survey Score
In light of their bonus waivers, no bonuses were paid to the Executive Directors for performance against the
2020 targets.
2021 Bonus Arrangements
For 2021, the annual bonus scheme will continue to operate in the same manner as in 2020, with a 60%/40% split
between financial and non-financial metrics. The performance metrics will remain the same:
Financial metrics
Revenue
Adjusted EBITDA
Adjusted EBITDA margin
Non-financial metrics
Safety
Customer service
Weighting
20%
20%
20%
Weighting
20%
20%
Full details of the targets – including information on the extent of achievement against them – will be included in
next year’s report.
The maximum annual bonus opportunity for 2021 will be 100% of basic salary for the CEO and CFO and 75% of
basic salary for the Executive Chairman. As set out in the Remuneration Policy table, the amount payable for target
performance will be set at 50% of the maximum opportunity.
The performance conditions for this award are set out below:
TSR performance (applies to 50% of the award)
- compound growth per annum
12.5%
6.25%
Less than 6.25%
Awards vest on a straight-line basis for performance between 6.25% and 12.5%
EPS performance (applies to 50% of the award)
- Adjusted EPS to be achieved in FY2022
12.5c
9.5c
Less than 9.5c
Level of vesting
100%
25%
Nil
Level of vesting
100%
25%
Nil
Awards vest on a straight-line basis for performance between 9.5c and 12.5c
In addition, the vesting of the 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.
The TSR performance conditions for the award are the same as those applying to earlier LTIP awards and are
considered appropriately challenging. The EPS performance targets were set taking into account the internal budget
and strategic plan as well as external expectations of Glenveagh’s performance over the period up to the end of
2022. Achievement of the maximum target would represent significant outperformance of both internal and external
forecasts as at the time of grant. Given the events of 2020, the performance targets are now considered even more
challenging than at the time they were set.
Awards to be Granted in 2021
For 2021, the Remuneration Committee intends to grant an LTIP award to Michael Rice at a level of 100% of salary,
the same as in 2020. The performance conditions to apply to this award will be as follows:
TSR performance (applies to 50% of the award)
- compound growth per annum
12.5%
6.25%
Less than 6.25%
Level of vesting
100%
25%
Nil
Awards vest on a straight-line basis for performance between 6.25% and 12.5%
The TSR performance conditions for the award are considered appropriately challenging given expectations of
performance over the medium term.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
132
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Report of the Remuneration Committee
133
At the time of finalising this report, the Committee had not made a final decision on the EPS targets to apply to 50%
of the award to be granted in 2021. These targets will be included in the necessary regulatory announcement of the
award at the time it is granted, which is expected to be in March or April 2021. The Committee confirms that the
chosen EPS targets will be challenging in the context of relevant internal and external forecasts.
In addition, the vesting of the awards will be 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.
LTIP Awards Held by Directors
Details of all LTIP awards held by Michael Rice are set out in the table below:
Award
date*
Share price
used
13 Oct 2017
17 Apr 2019
28 Feb 2020
€1.00
€0.84
€0.75
Share
awards
held at 1
Jan 2020
225,000
200,893
Award
during the
year
Vested
during the
year
Lapsed
during the
year
Share
awards
held at 31
Dec 2020
Vesting
date
-
-
-
420,000
-
-
-
225,000
-
-
-
-
200,893
16 Apr 2022
420,000
27 Feb 2023
*The awards are granted as options with an exercise price of nil.
The vesting of the award granted in October 2017 was subject to a performance condition based on the satisfaction
of absolute total shareholder return (TSR) targets over the three-year vesting period, as set out in the table below.
TSR performance – compound growth per annum
Level of vesting
12.5%
6.25%
Less than 6.25%
100%
25%
Nil
Awards vest on a straight-line basis for performance between 6.25% and 12.5%
TSR performance over the performance period was not achieved. As a result, the performance condition was not
met and the award lapsed.
The vesting of the award granted in April 2019 is subject to the TSR performance condition set out in the table
above.
In addition to the TSR performance condition, the vesting of any 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.
In line with the Directors’ Remuneration Policy (as set out in the table on pages 122 and 123), LTIP awards granted to
Executive Directors from 2020 onwards include a holding period of at least two years post-exercise. Shares that are
subject to a post-exercise holding period may be placed in a restricted share trust.
Change in Remuneration of all Directors and all Employees
As required by the European Union (Shareholders’ Rights) Regulations 2020, the table below sets out the annual
change of remuneration for each Director compared with the performance of Glenveagh. Where individual Directors
did not serve for the full year in either 2019 or 2020 the percentage change calculation has not been provided as it
is not representative of annual year-on-year changes.
2020
2019
2018
2017(4)
% Change
2020 v 2109
Executive Directors
John Mulcahy
Stephen Garvey
Michael Rice (1)
Non-Executive Directors
Robert Dix
Richard Cherry
Lady Barbara Judge CBE (2)
Pat McCann (3)
Cara Ryan (3)
Company performance
Adjusted EBITDA
Health & safety
Customer satisfaction
€318,500
€480,596
€419,000
€541,821
€378,176
€750,439
€564,401
€99,918
-
€75,000
€75,000
€90,000
-
-
€79,875
€75,000
€52,500
€63,427
€64,875
(€10.7m)
88.0%
83.0%
€75,000
€75,000
€90,000
€20,000
€20,000
€31.9m
75.0%
82.0%
€72,387
€93,309
-
€16,438
€16,438
€19,726
-
-
(33.7%)
(27.8%)
278.5%
6.5%
-
(41.7%)
217.1%
224.4%
(€2.0m)
(€3.6m)
(133.5%)
N/A
N/A
N/A
N/A
17.3%
1.2%
(1) Michael Rice was appointed to the Board on 1 November 2019. Remuneration for 2019 relates to period served as an Executive Director.
(2) Lady Barbara Judge CBE passed away on 31 August 2020.
(3) Pat McCann and Cara Ryan were appointed to the Board on 1 September 2019.
(4) From period of incorporation 9 August 2017 to 31 December 2017
The table below sets out the change in average remuneration (on a full-time equivalent basis) of Glenveagh
employees (other than the Directors).
Average full time employee
remuneration
Average remuneration
Employees of the Group
2020
2019
2018
2017(1)
€73,610
€84,286
€90,110
€25,990
(1) From period of incorporation 9 August 2017 to 31 December 2017
Directors’ and Secretary’s Interest in Shares
The biographical information for the Directors and the Company Secretary at the time of this report can be found
on pages 138 to 140 of the Director’s Report. The table below sets out the interests of the Directors and Company
Secretary in Ordinary Shares of the Group as at 31 December 2020. As stated in the Directors’ Remuneration
Policy, the Executive Directors are required to build a shareholding equivalent in value to 200% of their basic
salary. Until this guideline is met, individuals will be required to retain at least 50% of any shares which vest
following the end of the performance and holding periods for the LTIP (excluding any shares which are required
to be sold to pay tax due at vesting).
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
134Glenveagh Properties PLC Annual Report and Accounts 2020135Governance Report of the Remuneration CommitteeOrdinary SharesFounder SharesDeferred SharesLapsed sharesOrdinary Shares under option***Name 2020201920202019202020192020201920202019John Mulcahy2,682,7662,682,76618,100,68418,100,684------Stephen Garvey13,411,32913,261,32981,453,07781,453,077------Michael Rice23,33323,333----(225,000)-650,893*455,893*Lady Barbara Judge CBE**109,880109,880--------Richard Cherry1,371,0691,371,069--------Robert Dix350,000350,000--------Cara Ryan28,000---------Pat McCann70,00070,000--------Chloe McCarthy------(65,000)-264,048*142,381** The exercise price of the ordinary shares under options detailed above is €nil. The expiry date for the options granted during 2019 and 2020 are 7 years from 16 April 2022 and 27 February 2023 respectively.** Shares held for 2020 are at the date of Lady Barbara Judge’s death on 31 August 2020. *** Shares under options include options from both LTIP and SAYE schemes Any shares converted in accordance with the terms and conditions of the Founder Share Scheme are subject to a one-year lock-up period, with 50% of the converted shares subject to a further one-year lock-up period thereafter.The table below sets out the ownership split between the holders of Founder Shares: Name31 December 202031 December 2019Justin Bickle*81,453,07781,453,077Stephen Garvey81,453,07781,453,077John Mulcahy18,100,68418,100,684Total181,006,838181,006,838* Beneficially held by Durrow Ventures.The Group put in a resilient performance despite the ongoing challenges posed by the continued spread of the virus.Founder Share SchemeThis scheme was established in 2017 in advance of the Company’s IPO to incentivise the three founders of Glenveagh (John Mulcahy, Stephen Garvey and Justin Bickle) to grow the business over the initial five-year period following listing. Each of the founders holds a number of Founder Shares, which are a specific class of shares in the share capital of the Company, with their terms set out in the Memorandum and Articles of Association. The Founder Shares are converted into ordinary shares (or a cash equivalent) subject to the achievement of a performance condition linked to Glenveagh’s share price.The scheme runs over the five years from 2018 to 2022. Performance is assessed separately over five separate test periods, with Founder Shares converting into ordinary shares based on performance in each test period. The test period is from 1 March to 30 June each year.Under the performance condition, the closing Glenveagh share price must, for a period of 15 or more consecutive business days during the test period, exceed the adjusted issue price23 by 12.5%. This percentage increase is measured 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.” This is calculated as 20% of the 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.The performance condition was satisfied during the first test period from 1 March 2018 to 30 June 2018, resulting in the conversion of Founder Shares into 18,993,162 ordinary shares in 2018. The performance condition was not satisfied during the test period from 1 March 2019 to 30 June 2019, or during the test period from 1 March 2020 to 30 June 2020. As a result, there was no conversion of Founder Shares into ordinary shares in either 2019 or 2020.23. 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.Marina Village Greystones, Co. Wicklow Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
137Governance Nomination Committee ReportHaving considered the corporate governance arrangements of the Company during the year, the Board approved the separation of the existing Remuneration and Nomination Committee into two new committees, with effect from 9 October 2020. Richard Cherry continues to serve as the Chair of the Remuneration Committee, while I have assumed the role of Chair of the Nomination Committee. I was delighted to welcome my fellow non-Executive Directors as members of this dedicated Nomination Committee, each of whom bring their individual experience and specific areas of expertise as we collectively address the nomination and succession planning requirements of the Company. The Committee is focused on ensuring that the Board is of sufficient size and structure, and comprised of individuals with an appropriate mix of skills, experience, independence, knowledge and diversity to effectively discharge its responsibilities and promote the long-term success of the Company. As its first order of formal business, the Board mandated that the Committee commence a process of identifying a replacement independent non-executive director following the very sad passing of Lady Barbara Judge CBE in 2020. An update on the selection and appointment process is provided in this report and I look forward to welcoming a new director to the Board in due course. Looking ahead to 2021, the Committee will keep under review the leadership needs of the Company, both executive and non-executive, giving full consideration to succession planning for directors and members of senior management and taking into account the challenges and opportunities facing the Company. Pat McCannChairman, Nomination CommitteeNOMINATION COMMITTEE REPORT I am pleased to present the report of the newly established Nomination Committee (“the Committee”) for the financial year ended 31 December 2020. Role of the CommitteeThe Committee is responsible for reviewing the size, structure and composition of the Board, undertaking succession planning and leading the process for new Board appointment recommendations.The Committee regularly reviews the structure, size and composition (including the skills, knowledge, experience, independence and diversity) of the Board and makes recommendations to the Board with regard to any proposed changes. The Committee is also tasked with succession planning for directors and members of the Executive Team in the course of its work, taking into account the challenges and opportunities facing the Company, and the skills and expertise needed at both an executive and non-executive level in the future.The Committee is responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise. The recruitment process for Non-Executive Directors includes the development of a candidate profile and the engagement of a professional search agency specialising in the recruitment of high-calibre Non-Executive Directors. Reports on potential appointees are provided to the Committee, which, after careful consideration, makes a recommendation to the Board.Each year, the Committee reviews the results of the Board performance evaluation process that relate to the composition of the Board and the time commitment required from Non-Executive Directors. The full role of the Nomination Committee is prescribed in detail in its formal Terms of Reference, which are available at https://glenveagh.ie/corporate-governance/Committee Composition The Committee is comprised of the Company’s four Independent Non-Executive Directors; Pat McCann (Chair), Robert Dix, Richard Cherry and Cara Ryan. The biographies of these Directors can be found on page 138 to 140. All members were appointed to the Committee with effect from its establishment on 9 October 2020. The Committee meets at least once per annum, and additionally as circumstances require. The Committee met once during the period under review, in its new composition. Committee MemberIn AttendanceCommittee member as ofPat McCann1/12020 to dateRobert Dix1/12020 to dateRichard Cherry1/12020 to dateCara Ryan1/12020 to dateKey Areas of Activity During 2020The principal activities of the Nomination Committee during the year were:• Appointment of a new Senior Independent Director• Commencement of the process to identify and nominate a new independent non-executive director to the Board. The Committee has engaged Korn Ferry, a leading independent recruitment firm, to assist in this process. To date, the Committee has completed a detailed market review and a subsequent interview and short-listing process is currently underway. • Review of Board, Committee and individual Director performance as part of the annual evaluation process.DiversityThe Board adopted a formal Diversity Policy in 2019. The Committee reviews the Board Diversity Policy annually, including assessing its effectiveness and discussing any revisions that may be required, recommending any such revisions to the Board for approval. Diversity continues to be a key focus area for the Board and across the wider Group.An overview of the Board’s Diversity Policy, as well as details on the diversity of the Board and Executive Committee, can be found on page 107. Further details on diversity within the Group can be found on pages 66 and 67.EvaluationAs part of the annual Board evaluation, all members of the Committee participated in an evaluation of the performance of the Board and its Committees. The evaluation concluded that the establishment of a separately constituted Nomination Committee during 2020 had improved focus on nomination and succession planning activities, with a number of actions noted for prioritisation in 2021. Further details of the annual Board evaluation can be found on pages 107 and 108.136Glenveagh Properties PLC Annual Report and Accounts 2020 Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
139Governance Board of DirectorsGlenveagh Properties PLC Annual Report and Accounts 2020138John Mulcahy (71)Executive Chairman Nationality: IrishAppointed: 11 August 2017John Mulcahy is a chartered surveyor with over 40 years’ experience in the Irish real estate sector. He is currently the chairman of IPUT plc and 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 National Asset Management Agency 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.Other Appointments:• Chairman of IPUT plc• Board member of TIO ICAV, and Quinta do Lago S.A., a Portuguese resort developer. Stephen Garvey (41)CEO Nationality: IrishAppointed: 9 August 2017Stephen was appointed Chief Executive Officer on 22 August 2019. As CEO of Glenveagh, Stephen is responsible for delivering on the Group’s vision to create Ireland’s leading and most sustainable homebuilder. Stephen has over 20 years’ experience in the construction and property industry in Ireland. Prior to founding his own successful residential development business, Bridgedale Homes, Stephen worked with a number of Ireland’s largest property developers. From 2014 to 2017, Stephen advised and managed the acquisition of Irish residential development opportunities on behalf of TIO RLF. A co-founder of Glenveagh who assumed the CEO role in 2019, Stephen had led the growth and development of the Group since IPO. Stephen is also a member of Irish Institutional Property, the voice of institutionally financed investors with significant international backing in the Irish real estate market.Michael Rice (38)CFO Nationality: Irish Appointed: 1 November 2019Michael is the Group Chief Financial Officer. He joined the Group in September 2017 and was appointed to the Board in November 2019. Prior to joining Glenveagh, he was the Group Financial Controller of Kingspan Group plc. He is a qualified chartered accountant with extensive experience in financial and risk management, internal and external reporting frameworks, and capital markets.BOARD OF DIRECTORSRobert Dix (68)Senior Independent Director Nationality: IrishAppointed: 26 September 2017Robert Dix was formerly a partner and head of Transaction Services at KPMG Ireland, where he worked for 20 years before his retirement in 2008. He now 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 a Fellow of Chartered Accountants Ireland. Other Appointments:• CEO of Sopal Limited.• Non-executive Director and Chairman of Quinn Property Group. • Non-executive Director and Chairman of the Audit Committee of Allianz plc and Dalata Hotel Group plc.• Robert also holds non-executive directorships at a number of private companies. Committee Memberships:• Member of the Audit and Risk Committee (3 years).• Member of the Nomination Committee (1 year). Richard Cherry (59) Independent Non-Executive Director & Chair of the Remuneration Committee Nationality: BritishAppointed: 2 October 2017Richard Cherry 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. Other Appointments:• Richard holds directorships at a small number of private companiesCommittee Memberships:• Chair of the Remuneration Committee (3 years).• Member of the Audit and Risk Committee (3 years).• Member of the Nomination Committee (1 year). Cara Ryan (48)Independent Non-Executive Director, Chair of the Audit and Risk Committee & Workforce Engagement NED Nationality: Irish Appointed: 1 September 2019Cara Ryan is an experienced Non-executive Director, with 20 years’ experience at board level in publicly listed and private companies in both regulated and non-regulated entities. Until recently, she was a Non-executive Director of IFG Group plc, a listed financial services Group, where she chaired the Nominations Committee and was a member of the Audit and Risk and Remuneration Committees. In March 2019 she was appointed as a Non-executive Director of Mercer Ireland, where she chairs the Risk Committee and sits on the Audit Committee. Cara was also a Non-executive Director of the Children’s Medical Research Foundation, supporting Our Lady’s Children’s Hospital in Crumlin and the National Children’s Research Centre. She has held Board positions at various investment funds, was the MD of IFG Investment Managers until 2006 and is the former Director of Finance of Manor Park Homebuilders, where she held responsibility for financial and legal matters of the Group until 2012.Other Appointments:• Non-executive Director and Chair of the Risk Committee and member of the Audit Committee of Mercer Ireland Limited. • Non-executive Director of Harmony Capital Partners Limited Committee Memberships:• Chair of the Audit and Risk Committee (1 year).• Member of the Remuneration Committee (1 year).• Member of the Nomination Committee (1 year). Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
141Governance Directors' ReportGlenveagh Properties PLC Annual Report and Accounts 2020140DIRECTORS’ REPORTThe Directors present their report and the consolidated financial statements of Glenveagh Properties plc (“Glenveagh” or the “Company”) and its subsidiaries (the “Group”) for the year ended 31 December 2020.Principal Activities and Business ReviewGlenveagh is a leading Irish homebuilder listed on Euronext Dublin and the London Stock Exchange. With a focus on strategically located developments in the Greater Dublin Area and Cork. The Group delivers across there distinct business segments – Suburban, Urban and Partnerships – as a single business capitalising on scale advantages and investing to optimise return on capital. Shareholders are referred to the Chairman’s Letter, the CEO’s Review and the CFO’s Review on pages 6, 10 and 14 respectively, which set out management’s review of the Group’s operations and financial performance in 2020 and the outlook for 2021. These are deemed to be incorporated into the Directors' Report.Results and DividendsGroup revenue for the year ended 31 December 2020 was €232.3 million (2019: €284.6 million), gross profit was €9.5 million (2019: €51.5 million), loss after tax was €13.9 million (2019: profit of €22.8 million) and basic loss per share of 1.60 cent (2019: earnings per share of 2.62 cent). Glenveagh did not pay a dividend during the financial year ended 31 December 2020 (2019: €Nil). Key Performance Indicators Group performance against 2020 key performance indicators is outlined in the table below. A detailed commentary incorporating key performance indicators is contained within the Our KPIs section on page 19 in this Annual Report. A number of key performance indicators have been included in more detail on pages 205 to 207 ‘Alternative Performance Measures’. The key performance indicators for Glenveagh upon which particular emphasis is placed are listed below.Pat McCann (69)Independent Non-Executive Director & Chair of the Nomination CommitteeNationality: IrishAppointed: 1 September 2019Pat McCann has 50 years’ experience in the hotel industry, having begun his career in 1969 with Ryan Hotels plc. He joined Jurys Hotel Group plc in 1989 and became Chief Executive of Jurys Doyle Hotel Group plc in 2000. In 2007, Pat founded Dalata Hotel Group plc. He is a Non-executive Director of a number of private companies and was appointed to the board of Ibec in 2017. Pat completed his term as President of Ibec in September 2020. He is a former Non-executive Director of EBS Building Society, Greencore Group plc and Whitfield Private Hospital. He has served as National President of the Irish Hotels Federation and as a member of the National Tourism Council.Other Appointments:• CEO and Executive Director of Dalata Hotel Group plc.• Non-executive Director of Ibec and Quinn Property Group. Committee Memberships:• Chair of the Nomination Committee (1 year).• Member of the Remuneration Committee (1 year). Company SecretaryChloe McCarthy (35) Chloe McCarthy is an ICSA qualified Company Secretary and a Barrister-at-Law in Ireland. Chloe was called to the Bar in 2008 and was a member of the Law Library for a number of years before gaining experience at international law firms including Taylor Wessing in London, Allens Linklaters in Sydney and A&L Goodbody in Dublin. Prior to joining Glenveagh at IPO in 2017, Chloe was the Assistant Company Secretary at Aegon Ireland PLC. 20202019% ChangeKPIs financialRevenue€232.3m€284.6m(18.4%)Adjusted EBITDA(€10.7m)€31.9m(133.5%)KPIs Non-financialCustomer satisfaction83.0%84.0%(1.0%)Health and safety 88.0%75.0%17.3% Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
142
Glenveagh Properties PLC Annual Report and Accounts 2020
Governance Directors' Report
143
Group Strategy
A review of the Group’s strategic priorities is set
out in the Strategic Report, which is deemed to be
incorporated into the Directors’ Report.
Principal Risks and Uncertainties
In accordance with Section 327(1)(b) of the Companies
Act 2014, Glenveagh is required to give a description of
the principal risks and uncertainties faced by the Group.
These principal risks and uncertainties, and the steps
taken by the Group to mitigate them, are detailed at
pages 42 to 48 of the Risk Management Report and
deemed to be incorporated into the Directors’ Report.
Directors and Company Secretary
The names of the Directors and Company Secretary
and a biographical note on each appear on pages
138 to 140.
In accordance with the provisions contained in the
UK Corporate Governance Code (2018), all directors
will voluntarily retire and be subject to election by
shareholders at the 2021 Annual General Meeting.
Directors’ and Company Secretary’s
Interests in Shares
Details of the Directors’ and Company Secretary’s share
interests and interests in unvested share awards of the
Company are set out in the Remuneration Committee
Report on page 134.
Share Capital
The issued share capital of the Group as at 25
February 2021 consists of 871,333,550 ordinary shares
and 181,006,838 Founder Shares. Each share class has
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 information on the Group’s share capital
and the rights attaching to the different classes
of shares is set out in Note 26 to the consolidated
financial statements.
The Group also has a Long-Term Incentive Plan in place,
the details of which are set out at pages 131 and 132 of
the Remuneration Committee Report and in Note 15 to
the consolidated financial statements.
Significant Shareholdings
As at 31 December 2020 and 25 February 2021, the
Group has been notified of the following interests of
3% or more in its ordinary share capital:
Shareholder
1
2
3
4
5
6
7
8
Teleios Capital Partners
FIL Investment International
Rye Bay Capital
GIC
Helikon Investments
Oaktree Capital Mgt
Paradice Investment Mgt
Pelham Capital Mgt
9 Man GLG
10 Kinney Asset Mgt
31 December 2020
25 February 2021
Ordinary
Shares held
%
Ordinary
Shares held
%
96,390,989
11.06
111,132,991
12.75
83,473,048
78,538,649
9.58
9.01
86,944,808
61,108,849
77,492,088
8.89
77,492,088
69,802,763
8.01
69,802,763
55,250,000
6.34
54,990,614
40,086,102
4.60
38,846,589
30,078,255
29,277,693
26,369,903
3.45
3.36
3.03
30,078,255
24,540,554
25,516,886
9.98
7.01
8.89
8.01
6.31
4.46
3.45
2.82
2.93
Accounting Records
The Directors are responsible for ensuring that
adequate accounting records are maintained by the
Group, as required under Sections 281 to 285 of the
Companies Act, 2014. The Directors believe that they
have complied with this requirement through the
implementation and maintenance of appropriate
accounting systems and resources, including the
employment of suitably qualified accounting personnel
and the provision of adequate resources to the Group
Finance Department. The accounting records of the
Group are maintained at Block B, Maynooth Business
Campus, Maynooth, Co. Kildare.
Takeover Regulations 2006
For the purposes of Regulation 21 of Statutory Instrument
255/2006 “European Communities (Takeover Bids
(Directive 2004/25/EC)) Regulations 2006”, the details
provided on share capital and substantial shareholdings
above, and the disclosures in relation directors’
remuneration and interests in the Remuneration
Committee Report on pages 116 to 135 are deemed to be
incorporated in this section of the Directors’ Report.
Further required information in relation to the
change of control provisions contained in the Group’s
Founder Share Scheme and Long-Term Incentive
Plan is set out below.
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 Total Shareholder Return (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 Committee will determine the extent
to which any outstanding awards will vest with regard
to the extent that the applicable performance condition
has been satisfied up to the date of the change of
control event.
Transparency Regulations 2007
For the purposes of information required by Statutory
Instrument 277/2007 ‘Transparency (Directive 2004/109/
EC) Regulations 2007’ concerning the development and
performance of the Group, and the principal risks and
uncertainties faced, the Chairman’s Letter on pages
6 to 9, the CEO’s Review on pages 10 to 13, the CFO’s
Review on pages 14 to 17 and the Principal Risks and
Uncertainties detailed at pages 42 to 48 are deemed to
be incorporated in this part of the Directors' Report.
Corporate Governance
The directors of Glenveagh are committed to achieving
the highest standards of corporate governance. The
directors have prepared a Corporate Governance
Report, which is set out on pages 102 to 108 and, for the
purposes of s1373 of the Companies Act 2014, is deemed
to be incorporated into the Directors’ Report.
The Corporate Governance Report includes a detailed
description of the way in which Glenveagh has applied
the principles of good governance set out in the UK
Corporate Governance Code (2018) and the Irish
Corporate Governance Annex.
Directors’ Compliance Statement
The directors acknowledge their responsibility for
securing the Group’s compliance with its relevant
obligations under Section 225(2)(a) of the Companies
Act 2014 (the “Act”) (the “Relevant Obligations”).
In accordance with Section 225 (2) (b) of the Act, the
directors confirm that they have:
1. 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 Company with its
Relevant Obligations;
2. 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
3. Conducted a review of the arrangements or
structures that the directors have put in place to
ensure material compliance with the Company’s
Relevant Obligations during the financial year to
which this report relates.
Going Concern
The Directors have assessed the financial position of
the Group in light of the principal business risks facing
the construction industry as a whole and the Group’s
strategic plan. In light of Covid-19 a number of extra
considerations have been assessed as outlined in Note
7 of the consolidated financial statements. The Directors
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. For this
reason, the directors consider it appropriate to adopt the
going concern basis in preparing the financial statements.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
144Glenveagh Properties PLC Annual Report and Accounts 2020Governance145Viability StatementIn accordance with the provisions of the UK Corporate Governance Code (2018), 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. The directors assessed the prospects of the Group over the three-year period to February 2023. The directors concluded that three years was an appropriate period for the assessment, having regard to the following: • The Group’s strategic plan is predominantly based on a 3-year horizon with longer term strategic forecasting and any statement with foresight greater than three years having to be made with a considerable level of estimation; and• In general, the inherent short-cycle 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 approved by the Board at its meeting in February 2021 and is based on forecasts undertaken by management of the relevant business functions. The forecast reflects construction cost and house price inflationary assumptions which were reviewed at Board and management level. The underlying assumptions of the Group’s three year forecast is subject to sensitivity analysis for scenarios that could reasonably materialise. The risk factors outlined in the Risk Management Report on pages 38 to 48 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.Political DonationsNo political donations were made by the Group during the year that require disclosure under the Electoral Act 1997.Subsidiary Companies Information in relation to the Group’s subsidiaries is set out in Note 25 to the financial statements. The Group does not have any branches outside of Ireland.Subsequent EventsInformation in respect of events since the year end is contained in Note 31 to the consolidated financial statements.Audit and Risk CommitteeThe Group has an established Audit and Risk Committee comprising of three independent Non-Executive Directors. Details of the Committee and its activities are set out on pages 110 to 115.AuditorKPMG, Chartered Accountants, were appointed statutory auditor on 21 August 2017 and have been re-appointed annually since that date. Pursuant to section 383(2) KPMG will continue in office and a resolution authorising the directors to fix the auditor’s remuneration will be proposed at the Annual General Meeting.Relevant Audit InformationThe Directors confirm that so far as they are each aware, there is no relevant audit information of which the Group’s auditors are unaware and that each director has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.Approval of Financial StatementsThe financial statements were approved by the Board on 25 February 2021.On behalf of the BoardMichael Rice Stephen Garvey Director Director Our ambition is to set a new benchmark in our sector by delivering the maximum possible social benefit at the lowest possible environmental cost.Bellingsmore Kilmartin, Dublin Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
146
Glenveagh Properties PLC Annual Report and Accounts 2020
147
FINANCIAL
STATEMENTS
Bellingsmore
Kilmartin, Dublin
Statement of directors’ responsibilities
Independent Auditor’s Report
Consolidated statement of profit or loss and other comprehensive income
Consolidated balance sheet
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
Alternative Performance Measures (APMs)
Company Information
148
150
156
157
158
160
161
199
200
202
205
208
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
148
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
149
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 2020. 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 138 to 140 of this annual report, confirm that,
to the best of each person’s knowledge and belief:
» The Group 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, give a true
and fair view of the assets, liabilities, and financial position of the Group and Company at 31 December 2020
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
Michael Rice
Director
Stephen Garvey
Director
25 February 2021
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
150
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
151
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
Conclusions relating to going concern
Opinion
We have audited the statements of Glenveagh Properties PLC (‘the Company’) and its consolidated undertakings
(‘the Group’) for the year ended 31 December 2020 set out on pages 156 to 207 which comprise the Consolidated
statement of profit or loss and other comprehensive income, the Consolidated and Company Balance Sheets, the
Consolidated and Company Statements of Changes in Equity, the Consolidated Cash Flow Statement and related
notes, including the summary of significant accounting policies set out in note 8 and note 1 of the Company financial
statements. 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 issued in
the United Kingdom by the Financial Reporting Council..
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 2020 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 4 years ended 31 December 2020. 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.
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the director’s assessment
of the Group’s and Company’s ability to continue to adopt the going concern basis of accounting included the
inherent risks to the Group’s and Company’s business model and analysed how those risks might affect the Group’s
and Company’s financial resources or ability to continue operations over the going concern period.
The risk that we considered most likely to adversely affect the Group’s and Company’s available financial resources
over this period were:
» The impact of Covid-19 on the Group’s revenue and the ability to complete construction activities.
As this was the risk that could potentially cast significant doubt on the Group’s and the Company’s ability to
continue as a going concern, we considered sensitivities over the level of available financial resources indicated
by the Group’s financial forecasts taking account of reasonably possible (but not unrealistic) adverse effects that
could arise from these risks individually and collectively and evaluated the achievability of the actions the Directors
consider they would take to improve the position should the risks materialise.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group or the Company’s ability to
continue as a going concern for a period of at least twelve months from the date when the financial statements are
authorised for issue.
In relation to the Group and the Company’s reporting on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.
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: (unchanged from 2019):
Carrying value of Inventory €821.2 million (2019 - €840.5 million) and profit recognition.
Refer to page 110 (Audit and Risk Committee Report), page 167 (accounting policy for inventories) page 165
(accounting policy for expenditure) and page 184 (financial disclosures - inventories)
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
152
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
153
Independent Auditor’s Report
to the Members of Glenveagh Properties plc (continued)
Independent Auditor’s Report
to the Members of Glenveagh Properties plc (continued)
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 comprises of the
costs of the land being built on,
direct materials, and direct labour
costs that have been incurred in
bringing the inventories to their
present location and condition.
Work-in-progress per site 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 to complete is inherently
judgemental and may be subject
to estimation error.
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.
The Group recognises profit on
each unit sale by reference to the
overall expected margin to be
achieved on the site.
There is a risk that the assumptions
of such forecasts and estimations
may be inaccurate with a resulting
impact on the carrying value
of inventory or the amount of
profit recognised.
Our audit procedures included, amongst others:
» We obtained and documented our understanding of the process to
determine the NRV of the Group’s work-in-progress and tested the
design and implementation of the key controls therein.
» For all new land acquisitions, we inspected purchase contracts and
agreed the costs of acquisition including related purchase costs.
» We agreed a sample of costs incurred and included in inventory in the
year such as direct materials, and direct labour costs to supporting
documentary evidence, which included checking that they were
allocated to the appropriate site.
» We inspected the Group’s NRV reports on a sample basis and
challenged the key inputs and assumptions in the following ways:
a) We agreed a sample of forecast costs to purchase contracts,
supplier agreements or tenders and other relevant documentation.
b) We compared the forecast sales prices against recent prices
achieved for similar properties and properties that were reserved/
contracted to support the validity of the estimated sales
price in the forecast.
c) We enquired as to whether there were any site-specific factors
which may indicate that an individual site could be impaired.
d) For sites where impairment indicators were present, we inspected
the Group’s calculation of the impairment recognised.
e) We evaluated the sensitivity of the certain development margin
f)
to a change in sales prices and costs and considered whether this
indicated a risk of impairment of the inventory balance.
For sites in development, we compared actual unit sales and
costs incurred to NRV estimates to assess that NRV estimates
were updated and that the overall expected site margin was
adjusted accordingly.
» For completed sales, we tested the accuracy of the release from
inventory to cost of sales recorded in the general ledger for consistency
with the NRV reports for the relevant sites.
» We considered the adequacy of the Group’s disclosures regarding
the carrying value of inventory.
We found that the profit margins recognised on completed sales during
the year appropriately reflected the attributable costs of the units sold.
We found that the key assumptions used in the calculations of NRV were
within a reasonable range and supported the carrying value of inventory
as at 31 December 2020, 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 €4.9 million (2019: €4.8 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 (2019 €0.2 million). In addition, we applied a
lower specific materiality level of €1.1 million (2019: €1.1 million) for testing certain profit and loss items, representing
approximately 0.5% of total revenues for the year. In our judgement, the application of this specific materiality is
appropriate due to key performance indicators of the Group.
Materiality for the Company financial statements as a whole was set at €4.3 million (2019: €4.3 million). This was
determined with reference to a 0.5% benchmark of total assets. We reported to the Audit and Risk Committee any
corrected or uncorrected identified misstatements exceeding €0.2 million (2019 €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.
Other information
The directors are responsible for the preparation of 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, Strategic Report, Business Unit Update, Risk Management Report,
Sustainability Report, Corporate Governance Report, Audit and Risk Committee Report, Remuneration Committee
Report 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 undertaken during the course of the audit, we report that, in
those parts of the directors’ report specified for our consideration:
» 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; and
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 the Viability Statement page 144 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.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
154
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
155
Independent Auditor’s Report
to the Members of Glenveagh Properties plc (continued)
Independent Auditor’s Report
to the Members of Glenveagh Properties plc (continued)
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 of
Euronext Dublin and the UK Listing Authority for our review.
If the directors’ statement relating to Going Concern required under the Listing Rules of Euronext Dublin and the
UK Listing Authority set out on page 143 is materially inconsistent with our audit knowledge.
»
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 100 to 109, 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
Non-Financial and 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
The Listing Rules of the Euronext Dublin and the UK Listing Authority require us to review:
»
»
the Directors’ Statement, set out on pages 143 and 144, in relation to going concern and longer-term viability;
the part of the Corporate Governance Statement on pages 100 to 109, 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.
We have nothing to report in this regard.
Respective responsibilities and restrictions on use
Directors’ responsibilities
As explained more fully in their statement set out on pages 148 and 149, 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 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 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
We have obtained all the information and explanations which we consider necessary for the purpose of our audit.
The purpose of our audit work and to whom we owe our responsibilities
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 Company has not provided the information required by Section 1110N in relation to its remuneration report for
the financial year 31 December 2019;
the Company has not provided the information required by section 5(2) to (7) of the European Union (Disclosure
of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 for the
year ended 31 December 2019 as required by the European Union (Disclosure of Non-Financial and Diversity
Information by certain large undertakings and groups) (amendment) Regulations 2018.
We have nothing to report in this regard.
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.
Michael Gibbons
for and on behalf of KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2 Ireland
25 February 2021
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
156
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
157
Consolidated statement of profit or loss
and other comprehensive income
For the financial year ended 31 December 2020
2020
Total
€’000
2019
Before
exceptional
items
€’000
Exceptional
items
€’000
232,296
(202,530)
(20,291)
284,637
(233,150)
-
9,475
51,487
-
-
-
-
Total
€’000
284,637
(233,150)
-
51,487
Note
10
20
Revenue
Cost of sales
Impairment of inventories
Gross profit
Administrative expenses
11
(22,188)
(21,005)
(1,125)
(22,130)
Operating (loss)/profit
(12,713)
30,482
(1,125)
29,357
Finance expense
(Loss)/profit before tax
Income tax credit/(charge)
(Loss)/profit after tax attributable to
the owners of the Company
Other comprehensive income
Total comprehensive (loss)/income for the year
attributable of the owners of the Company
Basic (loss)/earnings per share (cents)
Diluted (loss)/earnings per share (cents)
12
13
17
16
16
(3,033)
(2,666)
-
(2,666)
(15,746)
27,816
(1,125)
26,691
1,844
(3,944)
93
(3,851)
(13,902)
23,872
(1,032)
22,840
-
- - -
(13,902)
(1.60)
(1.60)
22,840
2.62
2.62
Consolidated balance sheet
as at 31 December 2020
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
Lease liabilities
Current liabilities
Trade and other payables
Income tax payable
Loans and borrowings
Lease liabilities
Total liabilities
Total liabilities and equity
On behalf of the board
Note
2020
€’000
2019
€’000
18
19
17
24
20
21
27
26
26
28
22
23
28
21,087
712
1,415
708
23,922
821,169
14,605
21
137,276
973,071
996,993
1,052
179,281
629,044
44,129
18,142
944
128
1,500
20,714
840,487
12,241
-
93,224
945,952
966,666
1,052
879,281
(57,821)
44,035
853,506
866,547
287
287
319
319
42,237
-
99,934
1,029
143,200
143,487
56,218
3,737
39,569
276
99,800
100,119
996,993
966,666
Michael Rice
Director
Stephen Garvey
Director
25 February 2021
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
158
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
159
Consolidated statement of changes in equity
for the financial year ended 31 December 2020
Consolidated statement of changes in equity
for the financial year ended 31 December 2019
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
Founder
shares
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
Balance as at 1 January 2020
871
181
879,281
44,035
(57,821)
866,547
Balance as at 1 January 2019
871
181
879,281
43,443
(80,661)
843,115
Total comprehensive loss
for the financial year
Loss for the financial year
Other comprehensive income
Transactions with owners
of the Company
Equity-settled share-based payments
Lapsed share options (Note 15)
Share premium reduction and transfer
to distributable reserves (Note 26)
-
-
-
-
-
-
-
-
(13,902)
-
(13,902)
-
Total comprehensive income for
the financial year
Profit for the financial year
Other comprehensive income
-
-
-
-
-
-
-
-
22,840
-
22,840
-
871
181
879,281
44,035
(71,723)
852,645
871
181
879,281
43,443
(57,821)
865,955
-
-
-
-
-
-
-
-
-
-
861
(767)
-
767
(700,000)
-
700,000
861
-
-
(700,000)
94
700,767
861
Transactions with owners
of the Company
Equity-settled share-based payments
-
-
-
-
-
-
592
592
-
-
592
592
Balance as at 31 December 2019
871
181
879,281
44,035
(57,821)
866,547
Balance as at 31 December 2020
871
181
179,281
44,129
629,044
853,506
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
160
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
161
Consolidated statement of cash flows
For the financial year ended 31 December 2020
Notes to the consolidated financial statements
For the financial year ended 31 December 2020
Cash flows from operating activities
(Loss)/profit for the financial year
Adjustments for:
Depreciation and amortisation
Impairment of inventories
Finance costs
Equity-settled share-based payment expense
Tax (credit)/charge
Profit on disposal of property, plant and equipment
Changes in:
Inventories
Trade and other receivables
Trade and other payables
Cash used in operating activities
Interest paid
Tax (paid)/refund
Transfer from restricted cash
Net cash used in operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Proceeds from the sale of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from loans and borrowings
Repayment of loans and borrowings
Payment of lease liabilities
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Note
2020
€’000
2019
€’000
20
12
15
17
13
24
18
19
23
23
(13,902)
22,840
2,031
20,291
3,033
861
(1,844)
(33)
10,437
1,391
-
2,666
592
3,851
(456)
30,884
124
(2,343)
(13,916)
(118,605)
(1,036)
21,346
(5,698)
(67,411)
(2,638)
(3,201)
792
(2,472)
276
-
(10,745)
(69,607)
(3,982)
(174)
41
(7,747)
(491)
1,160
(4,115)
(7,078)
70,000
(10,000)
(1,088)
120,000
(80,000)
(792)
58,912
39,208
44,052
(37,477)
93,224
130,701
137,276
93,224
1 Reporting entity
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 2020. The Group’s
principal activities are the construction and sale of houses and apartments for the private buyer, local authorities
and the private rental sector.
2 Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS’s) as adopted by the European Union which comprise standards and interpretations approved by
the International Accounting Standards Board (IASB), and those parts of the Companies Act 2014 applicable to
companies reporting under IFRS and Article 4 of the IAS regulation.
3 Functional and presentation currency
These consolidated financial statements are presented in Euro which is the Company’s functional currency. All
amounts have been rounded to the nearest thousand unless otherwise indicated.
4 Use of judgements and estimates
The preparation of the Group’s financial statements under International Financial Reporting Standards (“IFRS”), as
adopted by the European Union, requires the Directors to make judgments and estimates that affect the application
of policies and the reported amounts of assets, liabilities, income, expenses and related disclosures. Actual results
may differ from these estimates.
Critical accounting judgements
Management applies the Group’s accounting policies as described in Note 8 when making critical accounting
judgements, of which no individual judgement is deemed to have a significant impact upon the financial statements.
Key sources of estimation uncertainty
The key source of significant estimation uncertainty impacting these financial statements involves assessing the
carrying value of inventories as detailed below.
(a) Carrying value of work-in-progress, estimation of costs to complete and impact on profit recognition
The Group holds inventories stated at the lower of cost and net realisable value. Such inventories include land and
development rights, work-in-progress and completed units. As residential development is largely speculative by
nature, not all inventories are covered by forward sales contracts. Furthermore, due to the nature of the Group’s
activity and, in particular the scale of its developments and the length of the development cycle, the Group has
to allocate site-wide development costs between units being built and/or completed in the current year and
those for future years. It also has to forecast the costs to complete on such developments. These estimates impact
management’s assessment of the net realisable value of the Group’s inventory balance and also determine the
extent of profit or loss that should be recognised in respect of each development in each reporting period.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
162
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
163
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
4 Use of judgements and estimates (continued)
Key sources of estimation uncertainty (continued)
(a) Carrying value of work-in-progress, estimation of costs to complete and impact on profit recognition (continued)
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.
Covid-19 was declared a global pandemic by the World Health Organisation during the year and the impact of the
pandemic has been considered in the Group’s assessment of the carrying value of its inventories at 31 December
2020, particularly with regard to the potential implications for future selling prices, development expenditure and
construction programming. While the exact impact of Covid-19 remains uncertain, management has considered a
number of scenarios on each of its active developments and the consequential impact on future profitability based
on current facts and circumstances together with any implications for future projects in undertaking its net realisable
value calculations.
As part of the assessment, which included a consideration of the market capitalisation of the Group and the
macro-economic factors that influenced such market capitalisation, the Group has re-evaluated its most likely exit
strategies on its remaining high end, private customer units in the context of the current market environment and
reflected these in its net realisable value calculations at the balance sheet date. The revised sales strategy on these
developments is to exit within 12 months versus in excess of 48 months at previously forecasted sales rates. The
results of this exercise required an impairment charge on two of our higher Average Selling Price (“ASP”) active sites
and a small number of other higher ASP sites in the portfolio where construction has not commenced. Further detail
in respect of the impairment charge for the year is included in Note 20.
Management have performed a sensitivity analysis to assess the impact of a change in estimated costs for
developments on which sales were recognised in the year. A 1% increase in estimated costs recognised in the year,
which is considered to be reasonably possible, would reduce the Group’s gross margin by approximately 58bps.
5 Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, both for
financial and non-financial assets and liabilities. 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 15 Share-based payments; and
» Note 27 Financial instruments and financial risk management.
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
6 Changes in significant accounting policies
A number of amendments to standards (IFRS 3 Business Combinations and Interest Rate Benchmark Reform) are
effective from 1 January 2020 but they do not have a material effect on the Group’s financial statements.
(i) New significant accounting policies
(a) Accounting for government grants and disclosure of government assistance
Grants that compensate the group for expenses incurred are recognised in the consolidated statement of profit or
loss and other comprehensive income by offsetting against expenses on a systematic basis in the periods in which
the expenses are recognised, unless the conditions for receiving the grant are met after the related expenses have
been recognised. In this case, the grant is recognised when it becomes receivable.
There have been no other changes to significant accounting policies during the financial year ended to 31
December 2020.
(ii) Standards not yet effective
(b) Interest rate benchmark reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16)
The amendments address issues that might affect financial reporting as a result of the reform of an interest
rate benchmark, including the effects of changes to contractual cashflows, arising from the replacement of an
interest rate benchmark with an alternative benchmark rate. The amendments provide practical relief from certain
requirements in IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 relating to:
» changes in the basis for determining contractual cash flows of financial assets, financial liabilities and
lease liabilities.
The amendments will require an entity to account for a change in the basis for determining the contractual cash
flows of a financial asset or financial liability that is required by interest rate benchmark reform by updating the
effective interest rate of the financial asset or financial liability.
At 31 December 2020, the Group has €250.0 million (of which €125.0 million is committed) EURIBOR secured bank
loans that will be subject to IBOR reform. The Group expects that the interest rate benchmark for these loans will
be changed to Euro Short-Term Rate (€STR) in 2021 and that no significant modification gain or loss will arise as a
result of applying the amendments to these changes.
The amendments will require the Group to disclose additional information about the entity’s exposure to risks arising
from interest rate benchmark reform and related risk management activities.
The Group plans to apply the amendments from 1 January 2021. Application will not impact amounts reported for
2020 or prior periods.
(iii) Other standards
The following new and amended standards are not expected to have a significant impact on the Group’s
consolidated financial statements.
»
»
»
»
IFRS 16 Leases: Covid-19 related rent concessions (amendment)
IAS 16 Property, Plant and Equipment: Proceeds for intend use (amendment)
IFRS 3 Business Combinations: Reference to conceptual framework (amendment)
IAS 1 Presentation of Financial Statements: Reference to Conceptual Framework (amendment)
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
164
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
165
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
7 Going concern
The Group has recorded a loss before tax of €15.7 million (2019: Profit of €26.7 million) which included a non-cash
impairment charge of €20.3 million (2019: €Nil) relating to the Group’s inventory balance. The Group has a cash balance
of €137.3 million (31 December 2019: €93.2 million) and under the terms of its current debt facility, the Group is required
to maintain a minimum cash balance of €25.0 million. It has committed undrawn funds available of €25.0 million (31
December 2019: €85.0 million) with a further uncommitted facility of €125.0 million (31 December 2019: €125.0 million).
The Group has successfully completed a debt refinancing process and has put in place a new €250.0 million facility.
The new facility is for a period of five years and has a term component of €100.0 million and a committed Revolving
Credit Facility of €150.0 million. The facility is with a syndicate of domestic and international banks and will provide
the debt funding the business. The Directors are satisfied that this facility will support the growth of the business
and provide adequate funding to allow the business to achieve its strategic objectives. The Group’s forecast includes
the terms of the new debt facility in advance of the expiration of the current facility in April 2021 to complement the
Group’s future operating cash flow in financing its working capital requirement over the forecast period.
Management has prepared a detailed cash flow forecast in order to assess the Group’s ability to continue as a
going concern for at least a period of twelve months from the signing of these financial statements. The preparation
of this forecast considered the potential and likely implications of the Covid-19 pandemic on the Group’s financial
performance and position over the forecast period including but not limited to the impact on selling prices and
strategies, development costs and construction programs.
The Group is forecasting compliance with all covenant requirements under the current and future facility including
the interest cover covenant which is based on earnings before interest, tax, depreciation and amortisation (EBITDA)
excluding the non-cash impairment charge. In addition, the Group expects to be profitable, generate positive
cashflows and be in a net cash position next year. Other assumptions within the forecast include the Group’s
expected selling prices and sales strategies as well as its investment in work in progress which reflect updated
development programs as a result of the ongoing impact of Covid-19.
While acknowledging the uncertainty that remains with regard to the exact impact of Covid-19 including the
potential risk of further Government restrictions on construction activity on the Group’s cash flow forecast,
the Directors confirm that they believe the Group has the appropriate working capital management strategy,
operational flexibility and resources in place to continue in operational existence for the foreseeable future and has
accordingly prepared the consolidated 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.
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
The Group develops and sells residential properties and non-core land. 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 expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in equity or in OCI.
(i) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to
income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current
tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
(ii) Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
166
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
167
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
8 Significant accounting policies (continued)
8.4 Taxation (continued)
(ii) Deferred tax (continued)
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 assets are recognised for unused tax losses, unused tax credits and deductible temporary differences
to the extent that it is probable that future taxable profits will be available against which they can be used. Future
taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of
taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual
subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the
probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has
become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary difference when they
reverse, using tax rates enacted or substantively enacted at the reporting date, and reflects uncertainty related to
income taxes, if any.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the
Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this
purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through
sale, and the Group has not rebutted this presumption.
Deferred tax assets and liabilities are offset only if certain criteria are met.
8.5 Share-based payment arrangements
The grant date fair value of equity-settled share-based payment arrangements granted to employees is generally
recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The
amount recognised as an expense is adjusted to reflect the number of awards for which the related service and
non-market performance conditions are expected to be met, such that the amount ultimately recognised is based
on the number of awards that meet the related service and non-market performance conditions at the vesting
date. For share-based payment awards with non-vesting conditions or market conditions, the grant date fair value
of the share-based payment is measured to reflect such conditions and there is no true-up for differences between
expected and actual outcomes.
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
8 Significant accounting policies (continued)
8.6 Exceptional items
Exceptional items are those that are separately disclosed by virtue of their nature or amount in order to highlight
such items within the consolidated statement of profit or loss for the financial year. Group management exercises
judgement in assessing each particular item which, by virtue of its scale or nature, should be highlighted as an
exceptional item. Exceptional items are included within the profit or loss caption to which they relate.
During the financial year, there were no costs considered exceptional items (Note 11). The Directors believe that
separate presentation of 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.
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 on a straight-line basis over its
estimated useful life of 3 years, in line with the period over which economic benefit from the software is expected to
be derived.
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.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
168
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
169
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
8 Significant accounting policies (continued)
8 Significant accounting policies (continued)
8.10 Financial instruments
Financial assets and financial liabilities
Under IFRS 9, financial assets and financial liabilities are initially recognised at fair value and are subsequently
measured based on their classification as described below. Their classification depends on the purpose for
which the financial instruments were acquired or issued, their characteristics and the Group’s designation of such
instruments. The standards require that all financial assets and financial liabilities be classified as fair value through
profit or loss (“FVTPL”), amortised cost, or fair value through other comprehensive income (“FVOCI”).
Classification of financial instruments
The following summarises the classification and measurement the Group has elected to apply to each of its
significant categories of financial instruments:
Type
Financial assets
Cash and cash equivalents
Other receivables
Restricted cash
Construction bonds
IFRS 9 Classification
Amortised cost
Amortised cost
Amortised cost
Amortised cost
Financial liabilities
Bank indebtedness
Accounts payable and accrued liabilities
Amortised cost
Amortised cost
Cash and cash equivalents
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. The Group
recognises impairment losses on an ‘expected credit loss’ model (ECL model) basis in line with the requirements
of IFRS 9. Interest income and impairment are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Restricted cash
Restricted cash includes cash amounts which are classified as non-current assets and held in escrow until the
completion of certain criteria.
Construction bonds
Construction bonds includes amounts receivable in relation to the completion of construction activities on sites.
These assets are included in trade and other receivables on the consolidated balance sheets and are accounted for
at amortised cost.
Other liabilities
Such financial liabilities are recorded at amortised cost and include all liabilities.
8.11 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events
and it is probable that an outflow of resources will be required to settle that obligation, and the amount has been
reliably estimated.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability, where the effect of discounting
is considered significant. The unwinding of the discount is recognised as a finance cost.
8.12 Pensions
The Group operates a defined contribution scheme. The assets of the scheme are held separately from those of the
Group in a separate fund. Obligations for contributions to defined contribution plans are expensed as the related
service is provided.
8.13 Leases
(i) As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component and non-lease component on the basis of its relative stand-
alone prices. However, for the leases of property the Group has elected not to separate non-lease components and
account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of
the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that
case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on
the same basis as those of property and motor vehicles. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease, or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate
as the discount rate.
The Group determines its incremental borrowing rate with reference to its current financing sources and makes
certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
fixed payments, including in-substance fixed payments;
»
» variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
» amounts expected to be payable under a residual value guarantee; and
»
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in
an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for
early termination of a lease unless the Group is reasonably certain not to terminate early.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
170
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
171
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
8 Significant accounting policies (continued)
9 Segmental information
8.13 Leases (continued)
(i) As a lessee (continued)
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in the future lease payments arising from a change in an index or rate, if there is a change in the
Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes
its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-
substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and
equipment’ and lease liabilities in ‘lease liability’ in the statement of financial position.
The Group has considered the requirements of IFRS 8 Operating Segments in the context of how the business is
managed and resources are allocated.
In 2019, the Group was organised into two key reportable operating segments being Glenveagh Homes and
Glenveagh Living.
During the year, the Group’s operating segments changed in line with our refined strategy and are set out below. As
a result of the change in the Group’s reportable segments, the Group has restated the previously reported segment
information for the year ended 31 December 2019.
The Group is organised into three key reportable segments, being Suburban, Urban and Partnerships. Internal
reporting to the Chief Operating Decision Maker (“CODM”) is provided on this basis. The CODM has been identified
as the Executive Committee.
The Group currently operates solely in the Republic of Ireland and therefore no geographically segmented financial
information is provided.
Short-term leases and leases of low-value assets
Suburban
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and
short-term lease. The Group recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
The Suburban segment is focussed primarily on high quality housing (with some low rise apartments) with demand
coming from private buyers and institutions. Our core Suburban product is affordable (€450,000 or below) and
located in well serviced communities predominantly in the Greater Dublin Area and Cork.
(ii) As a lessor
In certain instances the Group acts as a lessor in relation to certain property assets. These arrangements are not
material to the Group’s consolidated financial statements.
8.14 Government Grants
Grants that compensate the group for expenses incurred are recognised in the consolidated statement of profit or
loss and other comprehensive income by offsetting against expenses on a systematic basis in the periods in which
the expenses are recognised, unless the conditions for receiving the grant are met after the related expenses have
been recognised. In this case, the grant is recognised when it becomes receivable.
8.15 Share capital
(i) Ordinary shares
Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity
(retained earnings).
(ii) Founder Shares
Founder Shares were initially issued as ordinary shares and subsequently re-designated as Founder Shares.
Following re-designation, the instruments are accounted for as equity-settled share-based payments as set out at
Note 8.5 above.
8.16 Finance income and costs
The Group’s finance income and finance costs include:
»
»
Interest income
Interest expense
Interest income and expense is recognised using the effective interest method.
Urban
Urban’s strategic focus is developing apartments to deliver to institutional investors. The apartments are located
primarily in Dublin and Cork, but also on sites adjacent to significant rail transportation hubs. Urban’s strategy is to
deliver the product to institutional investors through a forward sale, or forward fund transaction providing longer
term earnings visibility.
Partnerships
A Partnership will typically involve the Government, local authorities, or state agencies contributing their land
on a reduced cost, or phased basis into a development agreement with Glenveagh. Approx. 50% of the product
is delivered back to the government or local authority via social and affordable homes. This provides longer
term access to both land and deliveries for the business and provides financial incentive by reducing risk from a
sales perspective.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
172
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
173
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
9 Segmental information (continued)
Segmental financial results
Revenue
Suburban
Urban
Partnerships
Revenue for reportable segments
Operating (loss)/profit
Suburban
Urban
Partnerships
Operating (loss)/profit for reportable segments
Reconciliation to results for the period
Segment results – operating (loss)/profit
Finance expense
Directors’ remuneration
Corporate function payroll costs
Depreciation
Professional fees
Share-based payment expense
Gain on sale of property, plant and equipment
Other corporate costs
(Loss)/profit before tax
31 December
2020
€’000
Restated
31 December
2019
€’000
201,973
30,323
-
232,296
255,405
29,232
-
284,637
15,399
(15,662)
(1,166)
(1,429)
(1,429)
(3,033)
(1,574)
(2,741)
(2,031)
(1,736)
(861)
33
(2,374)
(15,746)
38,799
2,312
(349)
40,762
40,762
(2,666)
(2,712)
(3,816)
(1,155)
(1,257)
(592)
456
(2,329)
26,691
There are no individual costs included within other corporate costs that is greater than the amounts listed in the
above table.
d
e
t
a
t
s
e
R
9
1
0
2
r
e
b
m
e
c
e
D
1
3
0
2
0
2
r
e
b
m
e
c
e
D
1
3
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
l
a
t
o
T
i
s
p
h
s
r
e
n
t
r
a
P
n
a
b
r
U
n
a
b
r
u
b
u
S
l
a
t
o
T
i
s
p
h
s
r
e
n
t
r
a
P
n
a
b
r
U
n
a
b
r
u
b
u
S
2
6
1
1
4
8
,
5
7
6
6
0
8
,
4
9
2
1
8
6
,
5
4
5
6
3
6
,
1
2
8
7
6
4
1
9
6
,
8
9
2
8
7
4
,
2
2
5
s
t
e
s
s
a
t
n
e
m
g
e
S
)
d
e
u
n
i
t
n
o
c
(
n
o
i
t
a
m
r
o
f
n
i
l
a
t
n
e
m
g
e
S
9
s
e
i
t
i
l
i
b
a
i
l
d
n
a
s
t
e
s
s
a
t
n
e
m
g
e
S
-
8
2
1
6
6
5
1
1
,
4
4
9
0
0
5
1
,
4
2
2
3
9
,
2
4
1
8
1
,
6
6
6
6
6
9
,
1
2
5
1
4
,
1
8
3
1
,
4
1
8
0
7
2
1
7
7
8
0
,
1
2
6
7
2
,
7
3
1
3
9
9
,
6
9
9
8
1
2
6
5
,
9
6
5
9
3
,
5
9
5
7
3
7
3
,
9
1
1
0
0
1
,
-
1
9
1
,
2
4
4
3
9
,
9
9
6
1
3
,
1
7
8
4
,
3
4
1
-
-
-
-
6
4
6
4
-
-
t
e
e
h
S
e
c
n
a
a
B
d
e
t
a
d
l
i
l
o
s
n
o
C
o
t
n
o
i
t
a
i
l
i
c
n
o
c
e
R
i
t
n
e
m
p
u
q
e
d
n
a
t
n
a
p
l
,
y
t
r
e
p
o
r
P
h
s
a
c
d
e
t
c
i
r
t
s
e
R
s
t
e
s
s
a
e
b
g
n
a
t
n
l
i
I
l
i
s
t
n
e
a
v
u
q
e
h
s
a
c
d
n
a
h
s
a
C
l
i
e
b
a
v
e
c
e
r
x
a
t
e
m
o
c
n
I
l
s
e
b
a
v
e
c
e
r
i
r
e
h
t
o
d
n
a
e
d
a
r
T
t
e
s
s
a
x
a
t
d
e
r
r
e
f
e
D
s
e
i
t
i
l
i
b
a
i
l
t
n
e
m
g
e
S
t
e
e
h
S
e
c
n
a
a
B
d
e
t
a
d
l
i
l
o
s
n
o
C
o
t
n
o
i
t
a
i
l
i
c
n
o
c
e
R
l
s
e
b
a
y
a
p
r
e
h
t
o
d
n
a
e
d
a
r
T
i
s
g
n
w
o
r
r
o
B
d
n
a
s
n
a
o
L
l
e
b
a
y
a
p
x
a
t
e
m
o
c
n
I
s
e
i
t
i
l
i
b
a
i
l
e
s
a
e
L
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
174
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
175
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
10 Revenue
13 Statutory and other information
Residential property sales
Land sales
Income from property rental and other income
All revenue is earned in the Republic of Ireland.
11 Exceptional items
Redundancy costs
Hollystown Golf and Leisure Limited closure costs
2020
€’000
230,879
673
744
232,296
2019
€’000
280,035
4,300
302
284,637
2020
€’000
-
-
-
2019
€’000
817
308
1,125
There were no costs classified as exceptional items in accordance with the Group’s accounting policy set out at Note
8.6 in the financial year.
In the prior financial year, redundancy and restructuring costs and costs associated with the cessation of the
Hollystown Golf and Leisure Limited business of €1.1m were classified as exceptional items.
12 Finance Expense
Interest on secured bank loans
Finance cost on lease liabilities
2020
€’000
3,006
27
3,033
2019
€’000
2,634
32
2,666
Amortisation of intangible assets (Note 19)
Depreciation of property, plant and equipment (Note 18)*
Employment costs (Note 14)
Profit on disposal of property, plant and equipment
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
2020
€’000
406
2,722
24,400
(33)
200
15
78
31
324
1,459
115
1,574
2019
€’000
299
1,937
28,567
(456)
120
15
18
32
185
2,605
88
2,693
*Includes €1.1 million (2019: €0.8 million) capitalised in inventory during the year ended 31 December 2020
**Included in the auditor’s remuneration for the Group is an amount of €0.015 million (2019: €0.015 million) that
relates to the Company’s financial statements.
14 Employment costs
The average number of persons employed by the Group (including executive directors) during the financial year
was 315 (Executive Committee: 3; Non-executive Directors: 5, Construction: 188; and Other: 119). (2019: Executive
Committee: 4; Non-executive Directors: 4, Construction: 198; and Other: 107)
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 15)
2020
Total
€’000
20,535
2,064
940
861
24,400
Before
Exceptional
items
€’000
2019
Exceptional
items
€’000
23,723
2,316
1,119
592
27,750
745
72
-
-
817
Total
€’000
24,468
2,388
1,119
592
28,567
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
176
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
177
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
14 Employment costs (continued)
€11.2 million (2019: €12.9 million) of employment costs were capitalised in inventory during the financial year.
As a result of the impact of the Covid-19 pandemic, the Group availed of the Temporary Wage Subsidy Scheme in
Ireland from 17 April 2020 to 2 August 2020. The Group fully withdrew from the scheme effective from 3 August 2020.
The Temporary Wage Subsidy Scheme is available to employers who have lost a minimum of 25% of turnover as a
result of the Covid-19 pandemic and who kept employees on their payroll during this time. The scheme has been
availed of for employees who were temporarily not working (laid off) or on reduced hours and/or reduced pay. All
grants received by the Group has been offset against the related costs in cost of sales and administrative expenses
in the statement of comprehensive income.
Throughout the duration of involvement the Group was in compliance with all the conditions of the scheme.
15 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). As described below, options were granted under the terms of the LTIP and SAYE schemes during the
financial 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 2017,
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.
Following the completion of the third test period (which ran from 1 March 2020 until 31 December 2020), it was
confirmed that, the performance condition related to the Company’s share price was not satisfied and therefore the
Founder Share Value in respect of the test period was €Nil and accordingly no Founder Shares were converted to
ordinary shares during the financial year.
(b) LTIP
On 28 February 2020, the Remuneration Committee approved the grant of 5,185,560 options to certain members
of the management team (which do not include the Founders) in accordance with the terms of the Company’s LTIP.
These options will vest on completion of a three-year service period from grant date subject to the achievement of
certain performance condition hurdles based on the Company’s Total Shareholder Return (TSR) and Earnings per
Share (EPS) across the vesting period. 50% of the awards will vest based on the Company’s TSR with 50% based
on EPS targets. The EPS based options will vest based on the Group’s Adjusted EPS* for the financial year ended 31
December 2022. 25% of the options will vest should the Group achieve 9.5 cents per share with 100% vesting at 12.5
cents per share. Options will vest on a pro rata basis for performance between 9.5 cents and 12.5 cents per share.
The TSR targets are in line with all previous grants under the scheme with 25% of the award vesting 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. The entire grant of options remain outstanding at 31 December 2020. In line with the Group’s
remuneration policy, LTIP awards granted to Executive Directors from 2020 onwards include a holding period of at
least two years post exercise.
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
15 Share-based payment arrangements (continued)
(b) LTIP (continued)
LTIP options in issue at 1 January
Granted during the financial year
Forfeited during the financial year
Lapsed during the financial year
LTIP options in issue at 31 December
Number of
Options
2020
Number of
Options
2019
4,685,800
5,185,560
(991,726)
(1,204,178)
2,351,743
2,750,293
(416,236)
-
7,675,456
4,685,800
Exercisable at 31 December
-
-
The fair value of LTIP options granted in the period was measured using a Monte Carlo simulation. Service and non-
market conditions attached to the arrangements were not taken into account when measuring fair value. The inputs
used in measuring fair value at grant date were as follows:
Fair value at grant date
Share price at grant date
Valuation methodology
Exercise price
Expected volatility
Expected life
Expected dividend yield
Risk free rate
2020
Tranche 1
2019
Tranche 1
€0.23
€0.75
Monte Carlo
€0.001
26.6%
3 years
0%
-0.8%
€0.32
€0.85
Monte Carlo
€0.001
27.0%
3 years
0%
-0.55%
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 €0.8 million (2019: €0.6 million) in the consolidated statement of profit or loss
in respect of options granted under the LTIP.
(*Adjusted EPS is defined as Basic Earnings Per Share as calculated in accordance with IAS 33 Earnings Per Share
subject to adjustment by the Remuneration Committee at its discretion, for items deemed not reflective of the
Group’s underlying performance for the financial year.)
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
178
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
179
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
15 Share-based payment arrangements (continued)
(c) SAYE Scheme
On 1 October 2020, the Remuneration Committee approved the grant of 445,500 options to employees of the
Group. Under the terms of the scheme, employees may save up to €500 per month (2019: €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 of €0.60.
Details of options outstanding and grant date fair value assumptions
SAYE options in issue at 1 January
Granted during the financial year
Cancelled during the financial year
SAYE options in issue at 31 December
Fair value at grant date
Share price at grant date
Valuation Methodology
Exercise price
Expected volatility
Expected life
Expected dividend yield
Risk free rate
Number of
Options
3 Year
806,340
355,500
(202,800)
959,040
3 Year
€0.25
€0.76
Monte Carlo
€0.60
34.3%
3 years
0%
-0.83%
2020
Number of
Options
5 Year
202,000
90,000
(37,000)
255,000
2020
5 Year
€0.25
€0.76
Monte Carlo
€0.60
35.5%
5 years
1.37%
-0.81%
Number of
Options
3 Year
341,640
771,420
(306,720)
806,340
3 Year
€0.21
€0.75
Monte Carlo
€0.60
27.5%
3 years
0%
-0.82%
2019
Number of
Options
5 Year
150,000
195,000
(143,000)
202,000
2019
5 Year
€0.21
€0.75
Monte Carlo
€0.60
29.6%
5 years
1.4%
-0.78%
The weighted average exercise price of all options granted under the SAYE to date is €0.71.
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 €0.05 million (2019: €0.01 million) in the consolidated statement of profit or
loss in respect of options granted under the SAYE scheme.
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
16 (Loss)/earnings per share
(a) Basic (loss)/earnings per share
The calculation of basic (loss)/earnings per share has been based on the profit attributable to ordinary shareholders
and the weighted average numbers of shares outstanding for the financial year. There were 871,333,550 ordinary
shares in issue at 31 December 2020 (2019: 871,333,550).
2020
2019
(Loss)/profit for the financial year attributable to ordinary shareholders (€’000)
Weighted average number of shares for the financial year
(13,902)
871,333,550
22,840
871,333,550
Basic (loss)/earnings per share (cents)
(1.60)
2.62
2020
2019
No. of shares No. of shares
Reconciliation of weighted average number of shares (basic)
Issued ordinary shares at beginning and end of financial year
871,333,550
871,333,550
Diluted (loss)/earnings per share
2020
2019
(Loss)/profit for the financial year attributable to ordinary shareholders (€’000)
Weighted average number of shares for the financial year
(13,902)
871,333,550
22,840
871,333,550
Diluted (loss)/earnings per share (cents)
(1.60)
2.62
Reconciliation of weighted average number of shares (diluted)
Weighted average number of ordinary shares (basic)
Effect of share options on issue**
2020*
2019
No. of shares No. of shares
871,333,550
-
871,333,550
-
871,333,550
871,333,550
*The number of potentially issuable shares in the Group held under option or Founder Share arrangements at 31
December 2020 is 188,682,294 (2019: 185,692,638).
**Under IAS 33, Founders Shares and LTIP arrangements have an assumed test period ending on 31 December 2020.
Based on this assumed test period no ordinary shares would be issued through the conversion of Founder Shares
and LTIP as the performance conditions were not met.
At 31 December 2020 1,202,040 options (2019: 1,116,340) were excluded from the diluted weighted average number
of ordinary shares because their effect would have been anti-dilutive. As a result, there was no difference between
basic and diluted earnings per share.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
180
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
181
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
17 Income tax
18 Property, plant and equipment
Current tax (credit)/charge for the financial year
Deferred tax (credit)/charge for the financial year
Total income tax (credit)/charge
2020
2019
Before
Exceptional
items
€’000
Exceptional
Items
€’000
3,864
80
3,944
(93)
-
(93)
€’000
(557)
(1,287)
(1,844)
Total
€’000
3,771
80
3,851
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.
2020
€’000
2019
€’000
Cost
At 1 January 2020
Additions
Disposals
Land &
buildings
€’000
Fixtures &
fittings
€’000
Plant &
machinery
€’000
Computer
equipment
€’000
13,166
2,097
-
762
420
(20)
6,308
3,137
(400)
553
143
(2)
Total
€’000
20,789
5,797
(422)
At 31 December 2020
15,263
1,162
9,045
694
26,164
Accumulated depreciation
At 1 January 2020
Charge for the financial year
Disposals
(779)
(914)
-
(228)
(171)
10
(1,396)
(1,436)
281
(244)
(201)
1
(2,647)
(2,722)
292
(Loss)/profit before tax for the financial year
(15,746)
26,691
At 31 December 2020
(1,693)
(389)
(2,551)
(444)
(5,077)
Net book value
At 31 December 2020
13,570
773
6,494
250
21,087
Tax (credit)/charge at standard Irish income tax rate of 12.5%
(1,968)
3,336
Tax effect of:
Income taxed at the higher rate of corporation tax
Non-deductible expenses – other
Adjustment in respect of prior year (over)/under accrual
Other adjustments
Total income tax (credit)/charge
Movement in deferred tax balances
Tax losses carried forward
40
359
(5)
(270)
222
230
-
63
(1,844)
3,851
Balance at
1 January
2020
€’000
Recognised
in profit
or loss
€’000
Balance at
31 December
2020
€’000
128
128
1,287
1,287
1,415
1,415
The deferred tax asset accrues in Ireland and therefore has no expiry date. Based on the return to profitability
forecast in the Group’s 3-year strategy plan and the sensitivities that have been applied therein, 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.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
182
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
183
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
18 Property, plant and equipment (continued)
19 Intangible assets
Cost
At 1 January 2019
Recognition of right-of-use asset
on initial application of IFRS 16
Adjusted at 1 January 2019
Additions
Disposals
At 31 December 2019
Accumulated depreciation
At 1 January 2019
Charge for the financial year
Disposals
At 31 December 2019
Net book value
At 31 December 2019
Land &
buildings
€’000
Fixtures &
fittings
€’000
Plant &
machinery
€’000
Computer
equipment
€’000
7,713
876
8,589
5,281
(704)
13,166
(36)
(743)
-
(779)
748
-
748
21
(7)
762
(89)
(141)
2
(228)
3,341
351
3,692
2,616
-
6,308
(500)
(896)
-
(1,396)
407
-
407
146
-
553
(87)
(157)
-
(244)
Total
€’000
12,209
1,227
13,436
8,064
(711)
20,789
(712)
(1,937)
2
(2,647)
12,387
534
4,912
309
18,142
The depreciation charge for the year includes €1.1 million (2019: €0.8 million) which was capitalised in inventory at 31
December 2020.
Property plant and equipment includes right of use assets of €1.3 million (2019: €0.6 million) related to leased
properties and motor vehicles. During the year, the Group entered into new lease agreements for the use of motor
vehicles (€0.3 million) and land and buildings for its office facility in Maynooth, Co. Kildare (€1.5 million). The land
and buildings lease commenced in June 2020 for a duration of two years. On lease commencement, the Group
recognised €1.8 million (2019: €0.1 million) of right-of-use assets and lease liabilities.
Cost
At 1 January 2020
Additions
Disposals
At 31 December 2020
Accumulated amortisation
At 1 January 2020
Charge for the year
Disposals
At 31 December 2020
Net book value
At 31 December 2020
Cost
At 1 January 2019
Additions
At 31 December 2019
Accumulated amortisation
At 1 January 2019
Charge for the year
At 31 December 2019
Net book value
At 31 December 2019
Licence
€’000
Computer
Software
€’000
Total
€’000
1,374
194
(60)
1,225
194
(60)
1,359
1,508
(330)
(406)
40
(696)
(430)
(406)
40
(796)
149
-
-
149
(100)
-
-
(100)
49
663
712
Licence
€’000
Computer
Software
€’000
149
-
149
-
(100)
(100)
709
516
1,225
(131)
(199)
(330)
Total
€’000
858
516
1,374
(131)
(299)
(430)
49
895
944
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
184
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
185
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
20 Inventory
Land held for development
Development expenditure (ii)
Development rights (iii)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
21 Trade and other receivables
2020
€’000
605,244
201,917
14,008
821,169
2019
€’000
647,513
172,683
20,291
840,487
Trade receivables
Other receivables
Prepayments
Construction bonds
Deposits for sites
2020
€’000
1,948
1,985
462
7,670
2,540
2019
€’000
3,412
2,482
393
4,401
1,553
14,605
12,241
€198.9 million (2019: €227.3 million) of inventory was recognised in ‘cost of sales’ during the year ended 31
December 2020.
(i) Impairment of inventories
During the financial year, the Group amended its sales strategy on its remaining high end, private customer units
which was reflected in its net realisable value calculations at the balance sheet date. The revised sales strategy on
these developments is to exit within 12 months versus in excess of 48 months at previously forecasted sales rates. The
Group also identified three non-core assets which are also suited to higher ASP product on which construction has
not commenced and has amended its exit strategy on these sites from development to site sale.
This assessment has resulted in an impairment charge of €20.3 million which was recognised in cost of sales in the
financial year with €10.3 million allocated to land and the remainder (€10.0 million) allocated to work in progress.
(ii) Employment cost capitalised
€11.2 million of employment costs (net of Temporary Wage Subsidy Scheme Payments received which have been
accounted for in accordance with IAS 20 ‘Accounting for Government Grants and Disclosure of Government
Assistance’) incurred in the year have been capitalised in inventory (2019: €12.9 million).
(iii) Development rights
Tallaght, Dublin 24/Gateway Retail Park, Co. Galway
In March 2018, the Group entered into an Acquisition and Profit Share Agreement (“APSA”) with Targeted Investment
Opportunities ICAV (“TIO”), a wholly owned subsidiary of OCM Luxembourg EPF III S.a.r.l. Under the terms of the
APSA, the Group acquired certain development rights in respect of 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.
During 2020, the Group accelerated the licence fee payments required to exit the agreement. At 31 December 2020,
an amount of €6.9 million (2019: €6.4 million) that was previously included in development rights is now included
within land held for development.
The carrying value of all financial assets and trade and other receivables is approximate to their fair value and are
repayable on demand.
22 Trade and other payables
Trade payables
Payroll and other taxes
Inventory accruals
Other accruals
VAT payable
Non-current
Current
2020
€’000
3,457
1,671
17,416
5,874
13,819
42,237
-
42,237
42,237
2019
€’000
7,455
2,755
22,017
5,709
18,282
56,218
-
56,218
56,218
The carrying value of all financial liabilities and trade and other payables is approximate to their fair value and are
repayable on demand.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
186
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
187
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
23 Loans and Borrowings
(a) Loans and borrowings
The Group is party to a Revolving Credit Facility 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 of 2.5%. At 31 December 2020, €100.0 million (31 December
2019: €40.0 million) had been drawn on the facility. Pursuant to the RCF agreement, there is a fixed and floating
charge in place over certain land assets of the Group as continuing security for the discharge of any amounts
drawn down.
Revolving Credit Facility
Unamortised borrowing costs
Interest accrued
Total loans and borrowings
31 December
2020
€’000
31 December
2019
€’000
100,000
(104)
38
99,934
40,000
(446)
15
39,569
The Group’s RCF was entered into with AIB, Barclays and HSBC and is subject to primary financial covenants
calculated on a quarterly basis:
» A maximum net debt to net assets ratio; and
» A minimum EBITDA to net interest coverage ratio calculated on a trailing 12 month basis.
s
e
i
t
i
v
i
t
c
a
g
n
i
c
n
a
n
i
f
m
o
r
f
g
n
i
s
i
r
a
s
w
o
l
f
h
s
a
c
o
t
s
e
i
t
i
l
i
b
a
i
l
f
o
s
t
n
e
m
e
v
o
m
f
o
n
o
i
t
a
i
l
i
c
n
o
c
e
R
)
b
(
)
d
e
u
n
i
t
n
o
c
(
i
s
g
n
w
o
r
r
o
B
d
n
a
s
n
a
o
L
3
2
0
2
0
2
0
0
0
€
’
s
e
s
a
e
l
0
0
0
€
’
y
t
i
l
i
b
a
i
l
F
C
R
n
o
s
t
s
o
c
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
i
d
a
P
0
0
0
€
’
g
n
i
s
o
C
l
w
e
N
e
s
a
e
l
n
o
t
s
e
r
e
t
n
I
n
o
i
t
c
a
s
n
a
r
t
f
o
t
s
e
r
e
t
n
I
s
e
g
n
a
h
c
h
s
a
c
-
n
o
N
t
s
e
r
e
t
n
I
n
o
i
t
a
s
i
t
r
o
m
A
8
3
)
4
0
1
(
6
1
3
1
,
0
0
0
0
0
1
,
-
-
-
2
8
7
1
,
0
5
2
1
0
1
,
2
8
7
1
,
-
-
-
7
2
7
2
-
-
-
0
6
6
,
2
0
6
6
,
2
-
-
-
2
4
3
2
4
3
-
-
-
)
8
3
6
,
2
(
-
-
e
s
a
e
l
f
o
y
t
i
l
i
b
a
i
l
0
0
0
€
’
t
n
e
m
y
a
P
-
)
8
8
0
,
1
(
s
w
o
l
f
h
s
a
C
t
i
d
e
r
C
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
t
n
e
m
y
a
p
e
r
n
w
o
d
w
a
r
d
0
2
0
2
y
t
i
l
i
c
a
f
t
i
d
e
r
C
y
t
i
l
i
c
a
f
i
g
n
n
e
p
O
0
2
0
2
-
-
-
)
0
0
0
,
0
1
(
0
0
0
,
0
7
0
0
0
,
0
4
i
s
g
n
w
o
r
r
o
b
d
n
a
s
n
a
o
L
-
-
-
)
6
4
4
(
5
1
5
9
5
s
t
s
o
c
n
o
i
t
c
a
s
n
a
r
t
d
e
s
i
t
r
o
m
a
n
U
l
a
u
r
c
c
a
t
s
e
r
e
t
n
I
y
t
i
l
i
b
a
i
l
e
s
a
e
L
s
e
i
t
i
l
i
b
a
L
i
)
8
3
6
,
2
(
)
8
8
0
,
1
(
)
0
0
0
,
0
1
(
0
0
0
,
0
7
4
6
1
,
0
4
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
188
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
189
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
9
1
0
2
s
e
s
a
e
l
t
n
e
m
t
s
u
d
a
j
y
t
i
l
i
b
a
i
l
F
C
R
n
o
s
t
s
o
c
i
d
a
P
y
t
i
l
i
b
a
i
l
t
n
e
m
y
a
p
e
r
n
w
o
d
w
a
r
d
9
1
0
2
g
n
i
s
o
C
l
w
e
N
–
6
1
S
R
F
I
n
o
i
t
i
s
n
a
r
t
t
s
e
r
e
t
n
I
n
o
i
t
a
s
i
t
r
o
m
A
t
n
e
m
y
a
P
t
i
d
e
r
C
e
s
a
e
l
n
o
t
s
e
r
e
t
n
I
n
o
i
t
c
a
s
n
a
r
t
f
o
t
s
e
r
e
t
n
I
e
s
a
e
l
f
o
y
t
i
l
i
c
a
f
t
i
d
e
r
C
y
t
i
l
i
c
a
f
i
g
n
n
e
p
O
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
0
0
0
€
’
s
e
g
n
a
h
c
h
s
a
c
n
o
N
s
w
o
l
f
h
s
a
C
9
1
0
2
)
d
e
u
n
i
t
n
o
c
(
s
e
i
t
i
v
i
t
c
a
g
n
i
c
n
a
n
i
f
m
o
r
f
g
n
i
s
i
r
a
s
w
o
l
f
h
s
a
c
o
t
s
e
i
t
i
l
i
b
a
i
l
f
o
s
t
n
e
m
e
v
o
m
f
o
n
o
i
t
a
i
l
i
c
n
o
c
e
R
)
b
(
)
d
e
u
n
i
t
n
o
c
(
i
s
g
n
w
o
r
r
o
B
d
n
a
s
n
a
o
L
3
2
)
6
4
4
(
5
1
5
9
5
0
0
0
0
4
,
-
-
-
0
9
-
-
-
7
2
2
1
,
4
6
1
0
4
,
0
9
7
2
2
1
,
-
-
-
2
3
2
3
-
-
-
1
9
2
,
2
-
-
-
2
4
3
1
9
2
,
2
2
4
3
-
-
-
)
2
7
4
,
2
(
)
2
7
4
,
2
(
-
-
-
)
2
9
7
(
)
2
9
7
(
)
0
0
0
,
0
8
(
0
0
0
,
0
2
1
-
i
s
g
n
w
o
r
r
o
b
d
n
a
s
n
a
o
L
s
e
i
t
i
l
i
b
a
L
i
-
-
-
)
0
0
0
,
0
8
(
-
-
-
0
0
0
,
0
2
1
)
4
5
5
(
)
8
8
7
(
8
3
6
9
1
s
t
s
o
c
n
o
i
t
c
a
s
n
a
r
t
d
e
s
i
t
r
o
m
a
n
U
l
a
u
r
c
c
a
t
s
e
r
e
t
n
I
y
t
i
l
i
b
a
i
l
e
s
a
e
L
23 Loans and Borrowings (continued)
(c) Net funds reconciliation
Cash and cash equivalents
Loans and borrowings
Lease liabilities
Total net funds
(d) Lease Liabilities
Lease liabilities are payable as follows:
Less than one year
Between one and two years
More than two years
24 Restricted cash
Balance at 1 January
Transfers to cash and cash equivalents
31 December
2020
€’000
31 December
2019
€’000
137,276
(99,934)
(1,316)
36,026
93,224
(39,569)
(595)
53,060
31 December 2020
Present value of
minimum lease
payments
€’000
Future value of
minimum lease
payments
€’000
Interest
€’000
1,029
283
4
1,316
49
11
1
61
2020
€’000
1,500
(792)
708
1,078
294
5
1,377
2019
€’000
1,500
-
1,500
The restricted cash balance relates to funds held in escrow until the completion of certain infrastructural works
relating to the Group’s residential development at Balbriggan, Co. Dublin. In November 2020, €0.8 million of the
funds were received following the completion of the first phase of these works. At 31 December 2020, the estimated
fair value of restricted cash is equivalent to its carrying value.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
190
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
191
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
25 Subsidiaries
The principal subsidiary companies and the percentage shareholdings held by Glenveagh Properties PLC, either
directly or indirectly, pursuant to Section 314 of the Companies Act 2014 at 31 December 2020 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
Castleforbes Development Company DAC*
Hollystown Golf & Leisure Limited
Holding company
Financing activities
Property development
Property development
Property development
Property development
Property development
Property development
Property development
Property development
Golf Club operations
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1
2
2
2
2
2
2
1
1
1
2
1 15 Merrion Square North, Dublin 2, D02 YN15
2 Block B, Maynooth Business Campus, Maynooth, Co. Kildare, W23W5X7
*In July 2020 by special resolution and approval of the Registrar of Companies the entity formally know as GL
Partnerships Opportunities II DAC was renamed Castleforbes Development Company DAC.
Pursuant to section 316 of the Companies Act 2014, a full list of subsidiaries will be annexed to the Company’s
Annual Return to be filed in the Companies Registration Office in Ireland.
26 Capital and reserves
(a) Authorised share capital
Ordinary Shares of €0.001 each
Founder Shares of €0.001 each
Deferred Shares of €0.001 each
Number of
shares
1,000,000,000
200,000,000
200,000,000
1,400,000,000
2020
€’000
Number of
shares
1,000 1,000,000,000
200,000,000
200,000,000
200
200
1,400 1,400,000,000
2019
€’000
1,000
200
200
1,400
26 Capital and reserves (continued)
(b) Issued and fully paid share capital and share premium
At 31 December 2020
Number of shares
Share capital
€‘000
Share premium
€’000
Ordinary Shares of €0.001 each
Founder Shares of €0.001 each
At 31 December 2019
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 2020
Share premium transfer to
distributable reserves
In respect of prior year
In issue at 1 January 2019
871,333,550
181,006,838
1,052,340,388
871
181
1,052
179,281
-
179,281
Number of shares
Share Capital
€‘000
Share premium
€’000
871,333,550
181,006,838
1,052,340,388
871
181
1,052
879,281
-
879,281
Ordinary shares Founder shares
‘000
‘000
Share capital Share premium
€’000
€‘000
871,333
181,007
1,052
879,281
-
-
871,333
181,007
-
1,052
(700,000)
179,281
Ordinary shares Founder shares
‘000
‘000
Share capital Share premium
€’000
€‘000
871,333
871,333
181,007
181,007
1,052
1,052
879,281
879,281
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
192
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
193
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.
The consolidated financial assets can be summarised as follows:
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
26 Capital and reserves (continued)
(d) Rights of shares in issue
Ordinary Shares
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 (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 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 third test period (which ran from 1 March 2020 until 31 December 2020), it was confirmed
that, the performance hurdle condition was not satisfied and therefore the Founder Shares Value for the test period
was zero, and accordingly no Founder Shares were converted to ordinary shares in respect of this test period.
Capital re-organisation
During the year, further to resolutions passed by shareholders of the Company on 17 December 2019, the Irish High
Court approved the Group’s application on 16 March 2020 to redesignate €700.0 million of Share Premium to
Retained Earnings to allow for future distributions under section 117 of the Companies Act 2014.
(e) Nature and purpose of reserves
Share based payment reserve
The share-based payment reserve comprises amounts equivalent to the cumulative cost of awards by the Group under
equity settled share-based payment arrangements being the Group’s Long Term Incentive Plan and the SAYE scheme.
On vesting, the cost of awards previously recognised in the share-based payments reserve is transferred to retained
earnings. Details of the share awards, in addition to awards which lapsed in the year, are disclosed in Note 15.
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).
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
27 Financial instruments and financial risk management (continued)
Financial instruments: financial assets
Trade receivables
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
Lease liabilities
Inventory accruals
Other accruals
Loans & borrowings
Total financial liabilities
2020
€’000
1,948
1,985
7,670
2,540
137,276
708
152,127
2020
€’000
3,457
1,316
17,416
5,874
99,934
127,997
2019
€’000
3,412
2,482
4,401
1,553
93,224
1,500
106,572
2019
€’000
7,455
595
22,017
5,709
39,569
75,345
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
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.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
194
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
195
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
27 Financial instruments and financial risk management (continued)
27 Financial instruments and financial risk management (continued)
Financial risk management objectives and policies (continued)
Financial risk management objectives and policies (continued)
Liquidity risk (continued)
Credit risk
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.
Carrying
amount
€’000
1,316
3,457
17,416
5,874
99,934
127,997
Contractual
cash flows
€’000
31 December 2020
Less than 1
year
€’000
1 year to 2
years
€’000
More than 2
years
€’000
1,377
3,457
17,416
5,874
100,010
128,134
1,078
3,457
17,416
5,874
100,010
127,835
295
-
-
-
-
295
4
-
-
-
-
4
Carrying
amount
€’000
Contractual
cash flows
€’000
31 December 2019
Less than 1
year
€’000
1 year to 2
years
€’000
More than 2
years
€’000
595
7,455
22,017
5,709
39,569
75,345
595
7,455
22,017
5,709
41,244
77,020
276
7,455
22,017
5,709
40,862
76,319
319
-
-
-
382
701
-
-
-
-
-
-
Lease liabilities
Trade payables
Inventory accruals
Other accruals
Loans and borrowings
Finance lease obligations
Trade payables
Inventory accruals
Other accruals
Loans and borrowings
Funds available
Revolving credit facility* (undrawn committed)
Cash and cash equivalents
2020
€’000
25,000
137,526
162,526
2019
€’000
85,000
93,224
178,224
*The Group’s RCF contains a mechanism through which the committed amount can be increased up to
€250.0 million.
The Group’s RCF is subject to primary financial covenants calculated on a quarterly basis:
» A maximum net debt to net assets ratio; and
» A minimum EBITDA to net interest coverage ratio.
The Group’s exposure to credit risk encompasses the financial assets being: trade and 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 2018, the Group entered in to 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%.) plus 2.5%. €100.0 million (2019: €40.0 million) had been drawn on the facility at 31 December 2020.
The Group has an exposure to cash flow interest rate risk where there are changes in the EURIBOR rates.
Interest rate risk reflects the Group’s exposure to fluctuations in interest rates in the market. This risk arises from bank
loans that are drawn under the Group’s RCF with variable interest rates based upon EURIBOR. At the year ended 31
December 2020 it is estimated that an increase of 100 basis points to EURIBOR would have decreased the Group’s
profit before tax by €0.093 million assuming all other variables remain constant and the rate change is only applied
to the loans that are exposed to movements in EURIBOR.
A fundamental review and reform of major interest rate benchmarks has been undertaken globally. There is now roadmap
setting out actions to ensure a transition from interbank offered rates (IBORs) by the end of 2021. From 2021 financial firms
will be able to offer non-IBOR linked interest rates and have formalised plans to amend legacy agreements.
IBOR continues to be used as a reference rate in financial markets and is used in the valuation of instruments with
maturities. Therefore, the Group believes the current market structure supports the valuation of our debt obligations
as at 31 December 2020.
The Group expects that the interest rate benchmark will be changed to Euro Short-Term Rate (€STR) in 2021 and
that no significant modification gain or loss will arise as a result of applying the amendments to these changes.
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 Leases
(a) Leases as a lessee (IFRS 16)
The Group leases a property and motor vehicles. The leases typically run for a period of 1-3 years, with an option to
renew the lease after that date. Lease payments are renegotiated every 1-3 years to reflect market rentals.
The Group leases certain motor vehicles with contract terms of one year. These leases are short term and leases of
low-value items. The Group has elected not to recognise right-of-use assets and lease liabilities for these leases.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
196
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
197
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
28 Leases (continued)
(a) Leases as a lessee (IFRS 16) (continued)
Information about leases for which the Group is a lessee is presented below.
(i) Right-of-use assets
Right-of-use assets related to leased properties (that do not meet the definition of investment property) and motor
vehicles are presented as property, plant and equipment (see Note 18).
2020
Balance at 1 January
Additions to right-of-use assets
Depreciation charge for the year
Balance at 31 December
2019
Balance at 1 January
Additions to right-of-use assets
Depreciation charge for the year
Balance at 31 December
(ii) Amounts recognised in profit or loss
2020 – Leases under IFRS 16
Interest on lease liabilities
Expenses relating to short-term leases
(iii) Amounts recognised in statement of cash flows
Total cash outflow on leases
(b) Leases as lessor
Property
€’000
Motor
Vehicles
€’000
280
1,455
(711)
1,024
293
303
(304)
292
Property
€’000
Motor
Vehicles
€’000
876
-
(596)
280
351
90
(148)
293
Total
€’000
573
1,758
(1,015)
1,316
Total
€’000
1,227
90
(744)
573
2020
€’000
2019
€’000
27
12
32
80
2020
€’000
2019
€’000
1,088
792
In certain instances, the Group acts as a lessor in relation to certain property assets. These arrangements are not
material to the Group’s consolidated financial statements.
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
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
2020
€’000
1,460
115
99
1,674
2019
€’000
2,912
116
66
3,094
Compensation of the Group’s key management personnel includes salaries, non-cash benefits and contributions to
a post-employment defined contribution plan.
(ii) Other related party transaction
Acquisition of development rights
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 is a director) 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. This accounting treatment was re-assessed at
the end of the reporting period and the Directors concluded that it remains appropriate.
The APSA also stipulates that TIO would be entitled to share, on a 50/50 basis, any residual profit remaining after
the Group’s purchase consideration plus interest and residential development cost plus 20% has been deducted from
sales revenue in relation to the residential development opportunity at The Square Shopping Centre, Tallaght, Dublin
24, Gateway Retail Park, Knocknacarra, Co. Galway and a third site, Bray Retail Park, Bray, Co. Wicklow.
The agreement defines certain default events including TIO not possessing good and marketable title over
the development sites and TIO not transferring good and marketable title over the development sites. On the
occurrence of a default event, the Group shall be entitled to recover the aggregate purchase consideration in
respect of the development rights. OCM has agreed to guarantee this obligation of TIO.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
198
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
199
Company balance sheet
as at 31 December 2020
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
2020
€’000
5,924
5,924
2019
€’000
5,063
5,063
196
843,154
1,559
844,909
170
845,700
1
845,871
850,833
850,934
1,052
179,281
625,775
44,129
850,237
1,052
879,281
(75,026)
44,035
849,342
596
596
1,592
1,592
850,833
850,934
Notes to the consolidated financial statements
For the financial year ended 31 December 2020 (continued)
30 Commitments and contingent liabilities
(a) Commitments arising from development land acquisitions
In addition to the contingent liabilities outlined in Note 29 above, the Group had the following commitments at 31
December 2020 relating to development land acquisitions:
Land acquisition subject to re-zoning
During 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.
Hollystown Golf and Leisure Limited (“HGL”)
During 2018, the Group acquired 100 per cent of the share capital of HGL. Under the terms of an overage covenant
signed in connection with the acquisition, the Group has committed to paying the vendor an amount equal to
an agreed percentage of the uplift in market value of the property should any lands owned by HGL, that are not
currently zoned for residential development be awarded a residential zoning. This commitment has been treated
as contingent consideration and the fair value of the contingent consideration at the acquisition date was initially
recognised at €nil. At the reporting date, the fair value of this contingent consideration was considered insignificant.
Contracted acquisitions
At 31 December 2020, the Group had contracted to acquire five development sites; two in North County Dublin, two
in Co. Kildare and one in Co. Kilkenny for aggregate consideration of approximately €24.0 million (excluding stamp
duty and legal fees). Deposits totaling €2.3 million were paid pre-year end and are included within trade and other
receivables at 31 December 2020.
31 Subsequent events
On 12 February 2021, the Group has successfully completed a debt refinancing process and has put in place a new
€250.0 million facility. The new facility is for a period of five years and has a term component of €100.0 million and
a committed Revolving Credit Facility of €150.0 million. The facility is with a syndicate of domestic and international
banks and will provide the debt funding for the business.
At 31 December 2020, the Group had contracted to sell 134 units in Marina Village, Greystones, Co. Wicklow, 71 units
in Dargan Hall, Bray, Co. Wicklow and 61 units in Barnhall Meadows, Leixlip, Co. Kildare for a total consideration of
€119.0 million.
On 3 February 2021, the Group completed the first phase of the contracted sales at the Marina Village development
comprising of 65 units for a consideration of €31.7 million.
On 6 January 2021, the Government announced a third national lockdown in response to Covid-19 which required
all non-essential construction to stop on 8 January 2021 with the exception of private housing that will be completed
by 31 January 2021 and social housing that will be completed by 28 February 2021. Selling activity has continued
virtually throughout the period and our forecast sales activity for 2021 remains unchanged subject to Government
confirmation that a reopening of the sites will commence on 5 April 2021. The third national Covid-19 lockdown is a
non-adjusting post balance sheet event.
32 Profit/(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 profit after tax for the financial year was €0.034 million (for the period ended 31 December 2019: loss of €1.1m).
33 Approved financial statements
The Board of Directors approved the financial statements on 25 February 2021.
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
200
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
201
Company statement of changes in equity
for the financial year ended 31 December 2020
Company statement of changes in equity
for the financial year ended 31 December 2019
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
Founder
shares
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
Balance as at 1 January 2020
871
181
879,281
44,035
(75,026)
849,342
Balance as at 1 January 2019
871
181
879,281
43,443
(73,893)
849,883
Total comprehensive income
for the financial year
Profit for the financial year
Other comprehensive income
Transactions with owners of the
Company
Equity-settled share-based payments
Lapsed share options
Share premium reduction and transfer
to distributable reserves
-
-
871
-
-
181
-
-
879,281
-
-
44,035
34
-
(74,992)
34
-
849,376
-
-
-
-
-
-
-
-
-
-
861
(767)
-
767
(700,000)
-
700,000
861
-
-
(700,000)
94
700,767
861
Balance as at 31 December 2020
871
181
179,281
44,129
625,775
850,237
Total comprehensive loss
for the financial year
Loss for the financial year
Other comprehensive income
Transactions with owners of
the Company
Equity-settled share-based payments
-
-
871
-
-
181
-
-
879,281
-
-
43,443
(1,133)
-
(75,026)
(1,133)
-
848,750
-
-
-
-
-
-
592
592
-
-
592
592
Balance as at 31 December 2019
871
181
879,281
44,035
(75,026)
849,342
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
202
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
203
Notes to the Company financial statements
For the financial year ended 31 December 2020
Notes to the Company financial statements
For the financial year ended 31 December 2020 (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 profit for the
financial year was €0.034 million. (2019: Loss of €1.1 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.
(a) Investments in subsidiaries
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
2020
€’000
4,025
1,899
5,924
2019
€’000
4,025
1,038
5,063
Details of subsidiary undertakings are given in Note 25 of the consolidated financial statements. The Company has
considered triggers for impairment, including market capitalisation and determined there was no trigger.
4 Trade and other receivables
VAT receivable
Prepayments and other receivables
5 Amounts due from subsidiaries
Amounts due from subsidiaries
2020
€’000
38
158
196
2019
€’000
35
135
170
2020
€’000
843,154
843,154
2019
€’000
845,700
845,700
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
2020
€’000
16
534
46
596
2019
€’000
44
1,476
72
1,592
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
204
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
205
Notes to the Company financial statements
For the financial year ended 31 December 2020 (continued)
7 Share capital and share premium
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 15 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.
Alternative Performance Measures (APMs)
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.
A new performance measure, core gross margin percentage, is being used by management to evaluate the business
in 2020. During the financial year, the Group amended its sales strategy on its remaining high end, private customer
units. The revised sales strategy on these developments is to exit within 12 months versus in excess of 48 months at
previously forecasted sales rates. The Group also identified three non-core assets which are also suited to higher
ASP product on which construction has not commenced and has amended its exit strategy on these sites from
development to site sale. The calculation of core gross margin omits these sites as they are no longer considered as
part of the core strategy or reflective of the core performance of the Group.
These performance measures are referred to throughout our strategy and business update and the discussion of
our reported financial 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 by other companies.
The principal APMs used by the Group are defined as follows:
1 Gross margin percentage
Gross profit
Revenue
Gross margin percentage
Financial statements reference
Statement of profit or loss
Note 10
2020
€’000
9,475
232,296
4.1%
2019
€’000
51,487
284,637
18.1%
Gross margin percentage is calculated after charging an impairment of €20.3m (2019: €nil).
2 Core gross margin percentage
Suburban
Core revenue
Non-core revenue
Total revenue
Urban
Core revenue
Non-core revenue
Total revenue
Note 9
Note 9
2020
€’000
2019
€’000
201,300
673
201,973
251,105
4,300
255,405
7,390
22,933
30,323
9,213
20,019
29,232
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
206
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
207
Alternative Performance Measures (APMs) (continued)
Alternative Performance Measures (APMs) (continued)
2 Core gross margin percentage (continued)
4 Return on capital employed (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 and 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.
5 Net Development Value (NDV)
An APM representing a metric the Group uses to estimate 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.
6 Adjusted EPS
This metric will be used as a performance condition for grants under the Group’s LTIP from 2020 onwards. It
is defined as Basic Earnings Per Share as calculated in accordance with IAS 33 Earnings Per Share subject to
adjustment by the Remuneration and Nomination Committee at its discretion, for items deemed not reflective of the
Group’s underlying performance for the period.
Core cost of sales
Non-core cost of sales
Total cost of sales
Core gross profit
Core revenue
Core gross margin percentage
Statement of profit or loss
2020
€’000
2019
€’000
(179,169)
(23,361)
(202,530)
(214,050)
(19,100)
(233,150)
29,521
208,690
14.1%
46,268
260,318
17.8%
Core gross margin represents gross margin before impairment and non-core revenue and cost of sales is applied.
Core gross margin is calculated from Suburban and Urban core revenue unit sales and rental income less the
equivalent cost of sales. Non-core revenue is mostly attributable to the Urban segment.
3 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA)
pre-exceptional items, pre-impairment and related margin
An APM representing earnings before interest, tax, depreciation, amortisation, impairment and exceptional items
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, and also adding back exceptional items and impairment. Adjusted
EBITDA margin pre-exceptional items, pre-impairment and related margin represents this metric as a percentage of
the Group’s revenue.
Depreciation - capitalised
Depreciation - expensed
Total depreciation
Operating (loss)/profit
Impairment
Exceptional items
Depreciation – expensed
Amortisation
Adjusted EBITDA pre-exceptional items
Adjusted EBITDA margin pre- exceptional items
Financial statements reference
Note 18
Statement of profit or loss
Note 20
Note 11
As above
Note 19
2020
€’000
1,097
1,625
2,722
(12,713)
20,291
-
1,625
406
9,609
4.1%
2019
€’000
845
1,092
1,937
29,357
-
1,125
1,092
299
31,873
11.2%
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
Financial Statements
208
Glenveagh Properties PLC Annual Report and Accounts 2020
FInancial Statements
209
Company Information
Directors
Executive Directors
John Mulcahy
Stephen Garvey
Michael Rice
Non-Executive Directors
Robert Dix
Richard Cherry
Pat McCann
Cara Ryan
Company Secretary
Chloe McCarthy
Registered Office
Glenveagh Properties PLC
15 Merrion Square North
Dublin 2
Ireland
Registrars
Computershare Investor Services
(Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
Auditor
KPMG
Chartered Accountants
1 Stokes Place
St. Stephen’s Green
Dublin 2
Solicitor
A&L Goodbody
North Wall Quay
Dublin 1
Kane Tuohy
Hambleden House,
19-26 Pembroke Street Lower,
Dublin 2
Mason Hayes and Curran
South Bank House,
Barrow St,
Dublin 4
Bankers
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
Chairman’s Letter
CEO’s Review
CFO’s Review
Business Model & Strategy
Governance
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