Glenveagh Properties PLC
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Glenveagh Properties plc Annual Report and Accounts 2022
Building
Better
ANNUAL REPORT AND ACCOUNTS 2022
etter strategy
URE
Placing the
customer first
We will be recognised as the leading
provider of affordable, high-quality
homes for all tenures, offering a
best-in-class customer experience.
See
page
31
to read more
Driving operational
excellence
We will plan, design and assemble
high-quality products using best-in-class
Valuing and developing
our colleagues
We will be an employer of choice and the
best place to work in our sector for diverse
and high-calibre talent, with a safe and
inclusive working environment and a culture
built on teamwork and trust.
See
page
32
to read more
INTRODUCTION
Welcome
STRATEGIC REPORT
1
Company highlights
2
Our integrated approach
4
Our vision, mission
and culture
8
Our investment case
10
Chair’s letter
14
Chief Executive
Officer’s review
18
Market overview
20
Our business model
24
Our material issues
26
Our stakeholders
30
Our strategy
38
Our impact
40
Our land bank
42
Environment, social and
governance performance
48
Sustainability accounting
standards board disclosures
51
Action and disclosure
on climate change
57
Risk management report
67
Financial review
GOVERNANCE
70
Corporate
governance report
82
Nomination
Committee report
86
Audit and Risk
Committee report
90
Remuneration
Committee report
104
Environmental and
Social Responsibility
Committee report
106
Directors’ report
109
Statement of Directors’
responsibilities
FINANCIAL
STATEMENTS
110
Independent
Auditor’s report
115
Consolidated statement
of profit or loss and other
comprehensive income
116
Consolidated balance sheet
117
Consolidated statement
of changes in equity
119
Consolidated statement
of cash flows
120
Notes to the consolidated
financial statements
147
Company balance sheet
148
Company statement of
changes in equity
150
Notes to the Company
financial statements
152
Supplementary information
154
Company information
OUR NEW BUILDING
BETTER STRATEGY
BUILDS ON WHAT
WE HAVE ACHIEVED
AND IS GUIDED BY
OUR VISION.
2
Our integrated
approach
67
Continued growth
70
Strong Governance
14
Focused on
consistently
delivering
6
Our culture
30
Building Better
strategy
We made excellent progress in 2022
in driving strong growth in our key
suburban business, strengthening our
partnerships business and de-risking
our urban land portfolio.
annualreports.glenveagh.ie/2022
1
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
€232.3m
€476.8m
€644.7m
2022
2021
2020
700
1,150
1,358
2022
2021
2020
14,100
16,800
15,100
2022
2021
2020
83%
89%
91%
2022
2021
2020
88%
89%
88%
2022
2021
2020
950
1,921
803
2022
2021
2020
€7.6m
€46.4m
€70.1m
2022
2021
2020
(1.6 cent)
4.5 cent
7.6 cent
2022
2021
2020
€619.2m
€562.7m
€458.5m
2022
2021
2020
COMPANY HIGHLIGHTS
€644.7m
Revenue
FINANCIAL HIGHLIGHTS
€70.1m
Adjusted operating profit*
7.6 cent
EPS
€458.5m
Carrying value of land
15,100
No. of sites in land bank
NON-FINANCIAL HIGHLIGHTS
1,358
No. of units sold
803
Units contracted/reserved**
OPERATIONAL AND SUSTAINABILITY
Customer satisfaction
H&S audits
B
CDP
AA
MSCI
78%
Employment
engagement
Low Risk
Sustainalytics
*
Operating profit has been presented before exceptional items and impairment reversals/charges.
**
As at the Annual Report approval date.
2
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR INTEGRATED APPROACH
Creating value
for our customers,
our shareholders,
employees and
our communities.
At Glenveagh, we take pride in our commitment
to providing high-quality, affordable and
sustainable homes. We believe that our vision,
mission and culture are the foundation of
our success.
Our vision
Our vision is that everyone should have the
opportunity to access great-value, high-quality
homes in flourishing communities across Ireland.
See
page 4
to find out more
Our mission
Our mission is to innovate how new homes
are planned, designed, built and marketed in
Ireland, and to make the journey for customers
transparent, easy and joyful.
See
page 5
to find out more
Our culture
At Glenveagh, we foster a culture of fresh thinking,
teamwork and trust to challenge the status quo in
our industry. We believe that building homes and
communities is a worthy cause and will positively
impact Irish society. We want to forge a new
path, relentlessly innovating every stage of the
homebuilding process.
See
page 6
to find out more
Our focus on sustainability
We are committed to building sustainable homes
and believe that sustainable building practices not
only benefit the environment but also improve the
quality of life for our homeowners. From the selection
of materials to the design of our homes, we prioritise
sustainability at every stage of the construction
process. Our focus on sustainability extends beyond
the construction phase, and we work closely with
our homeowners to ensure they have the tools and
resources needed to reduce their environmental
impact and lead a sustainable lifestyle.
See
page 42
to find out more
Our values
SAFETY FIRST
Before everything else, safety comes first.
The health and wellbeing of everyone who we engage and work with is
the most important thing to us. This is why we are committed to maintaining
the health and safety of all those who work with us and who are impacted
by what we do. We do this by integrating health and safety into all our
decision-making.
COLLABORATIVE
We believe in the power of teamwork to create new possibilities.
Building homes at scale requires the close collaboration of many different
people with specialist skills and distinct perspectives. We respect and trust
each other while acting responsibly and with integrity, believing that how we
get things done is just as important as our achievements.
INNOVATIVE
Each day we work to bring new ideas home.
We constantly seek to innovate to satisfy customer needs, drive sustainability
and deliver value for money. We find new ways of solving current and future
challenges to create flourishing communities across Ireland.
CUSTOMER-CENTRED
Customers are at the heart of every decision we make.
We build for the people who call our developments ‘home’. To do this well,
we take the time to understand them, their lives and their ever changing needs.
By putting our customers at the centre of everything we do, we create homes
and communities that have lasting value.
CAN-DO
With the right attitude we can achieve anything.
We positively impact each other, our partners and our customers through
our dedication, grit, and can-do attitude. We are continuously learning and
growing our skills to ensure we realise our vision.
3
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Our strategic
p
r
i
o
r
i
t
i
e
s
OUR INTEGRATED APPROACH
CONTINUED
Our drivers of success
Our stakeholders
OUR CULTURE
OUR VALUES
Our vision
That everyone should have the opportunity to access great-value,
high-quality homes in flourishing communities across Ireland.
Placing the
customer first
Driving
operational
excellence
Valuing and
developing our
colleagues
Embracing
innovation
Creating
sustainable and
thriving places
Talented and dedicated
individuals
Customers
Shareholders
A strong financial position
A strategic land bank
Employees
Suppliers and subcontractors
A trusted brand
Strong relationships
Communities
Government
and regulators
See
pages 21 to 23
to find out more
See
pages 26 to 29
to find out more
4
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Can you explain how
Glenveagh works to achieve
its vision that everyone
should have the opportunity
to access great-value, high-
quality homes in flourishing
communities across Ireland?
We deliver housing particularly for the
affordable end of the market – people
starting out, people buying through the
affordable purchase scheme, people
who may be social tenants.
We’re proud to be one of the leading
developers providing A1-rated homes.
We’re not required by regulation to do this
but it was the right thing to do. Particularly
given what’s happened with inflation and
the cost of energy, this is making a real
difference to families.
Our CEO Stephen Garvey explains how
Glenveagh’s vision guides decision-making
throughout the organisation.
Our vision
OUR VISION, MISSION AND CULTURE
Q&A with
Stephen Garvey
Chief Executive Officer
When looking at affordability, people tend
to focus on mortgage repayments as a
percentage of their net disposable income.
We think more broadly, taking into account
the wider costs of maintaining a home such
as utility costs, insurance, life insurance, and
consider how we can make things better for
customers in the long-term. Thinking that
way has led us to invest in technology and
a better standard of product. In addition
to addressing macro-climate and energy
issues, over the lifecycle of a property
families will make substantial savings
on energy costs.
We have also innovated in the way
we deliver in order to help affordability.
We have adopted manufacturing, which
gives us the capability to significantly
increase output.
It is important to us to be a key participant
for the long-term in the communities we
help create. We don’t simply seek to buy
land and build the products, we want to
be here for decades and be a reliable,
trusted pillar of the community, providing
employment, supporting sports clubs and
the like.
How does the vision guide
decision-making and inspire
people within Glenveagh?
Our vision is based on where we see the
future of housing, how it will be produced,
how our workforce will work, and how we
make the sector more attractive for people.
We’ve been early adopters, not only around
product and manufacturing innovation, but
also in how we supply our customers, how
we can make housing more affordable and
accessible for home ownership, and how we
can operate on a larger scale. We’re willing
to try new things.
We’ve been working with government as
we have sought to reduce the income-level
at which home ownership becomes an
option and also to address demand from
a growing population. Collaboration is a
key part of our culture and is exemplified
in our Partnerships business. We have
been working with the local authority on
the Oscar Traynor Road development, and
we hope the scheme will demonstrate the
ability of the public and private sectors to
work together and make a real impact.
Looking ahead, how do you
see the outlook for fulfilling
Glenveagh’s vision?
There is a huge societal need for housing.
We will be at the heart of working with
government and other stakeholders on the
solution. This gives us the opportunity to run
a business with a long-term, stable future,
allowing us to innovate and grow.
5
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Our Managing Director of Planning, Design,
Manufacturing and Operations, Tony McLoughlin,
and Head of Sustainability, Lorraine Fitzgerald, talk
about Glenveagh’s approach to innovation.
What is Glenveagh’s approach
to innovation?
TML:
We are always trying to push the
boundaries of what’s possible, whether that’s
streamlining processes or thinking about our
environmental impact, while also balancing
regulations, what customers want, and any
resource-availability issues to provide the best
outcomes for our stakeholders.
We encourage a culture of innovation
and improvement throughout the business.
Whether you work in an office or in
manufacturing, as a site labourer or on
the gate, it’s never a problem to ask why,
or what if we did this? It’s also about being
agile in evaluating and incorporating ideas
and sharing them with contractors and
business partners.
What are the areas that
Glenveagh is focused on
innovating within?
TML:
Innovation runs through every
strand of our business. We’ve done a lot
of work to optimise our processes, all the
way from a greenfield to a finished product,
to make them as efficient as possible. We
have brought in a lot of lean behaviours
and are now ISO 14001 accredited. As well
as innovation in our product-offering, to
achieve the densities needed to facilitate
the planning process, we have looked at
what we can do to streamline the way
we deliver and our use of materials, to
add value off-site and limit our impact
on the environment.
OUR VISION, MISSION AND CULTURE
CONTINUED
Q&A with
Tony McLoughlin
Managing Director
of Planning, Design,
Manufacturing and
Operations
Lorraine Fitzgerald
Head of Sustainability
Our mission
LF:
Sustainability from an innovation
perspective is beginning to influence
everything from land selection, the
materials we use and the suppliers we
work with – we pride ourselves on working
with local suppliers and subcontractors.
With our acquisition of timber frame
supplier Harmony Timber Solutions and light
gauge steel capabilities, we’re looking to do
more in the factory. This helps with quality
control, reduces waste, and helps manage
our exposure to the market in terms of
material costs or skilled labour shortages.
Looking ahead, where do you
see the greatest opportunities
for innovation?
TML:
There are skills shortages worldwide,
but there is an opportunity with technology,
robotics and AI to change the way we do
things. We have a longer-term vision and
the financial strength to develop solutions
for the future. There are challenges but also
a world of opportunity.
LF:
Sustainability is a priority for the
business – as important as safety and
financial performance – and impacts
everything we do. We have to think in
different ways about how to reduce
emissions and embodied carbon. Over 90%
of our emissions aren’t within our direct
control, so we need to bring our materials,
suppliers and subcontractors on the journey
so that we can decarbonise together.
6
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Head of HR, Sinead Tolan and Sales Administrator,
Craig Doolan discuss our culture and how this
contributes to Glenveagh’s long-term success.
Our
culture
How would you describe
Glenveagh’s culture?
Q&A with
Sinead Tolan
Head of HR
Craig Doolan
Sales Administrator
ST:
When I ask colleagues to describe our
culture, the recurring themes are people-
centric, innovative, energetic, agile and
resilient. As these last few years have
demonstrated, there are always things
that need to be worked around, and our
people have an innovative, forward-moving
mindset – no one says, I can’t or won’t do
that. Teamwork is core to the business –
we all have the same agenda, no matter
where we are in the business.
CD:
My role wouldn’t be possible without
trust, collaboration, and teamwork, both
internally and with external stakeholders.
Our strong culture is reflected to our
customers in how we work with and
support them.
OUR VISION, MISSION AND CULTURE
CONTINUED
7
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR CULTURE AND VALUES RUN THROUGH
EVERYTHING WE DO, FROM THE MOMENT
A COLLEAGUE IS WELCOMED WITH THEIR
INDUCTION AND ONBOARDING, AND
THROUGHOUT OUR TRAINING, DEVELOPMENT
AND COMMUNICATION.
Sinead Tolan
Head of HR
How are culture and values
embedded in the organisation?
ST:
Our culture and values run through
everything we do, from the moment a
colleague is welcomed with their induction
and onboarding, and throughout our
training, development and communication.
Last year we introduced a quarterly
employee recognition scheme based on
our values, which is proving very popular.
CD:
Our values – safety first, collaborative,
innovative, customer-centred and can-do
– are not just words on posters around the
office, they come from the top in how Senior
Leadership behaves and are visible in
everyone’s behaviours and ways of working.
How does the organisation’s
culture contribute to achieving
Glenveagh’s vision, and
influence behaviours and
decision-making?
ST:
A strong culture helps bring everyone on
the journey to achieving our vision. It takes
the whole company to come together to
realise the vision, and we wouldn’t be
able to do this without our culture.
OUR VISION, MISSION AND CULTURE
CONTINUED
CD:
A lot of us work across functions, so
trust in the information you’re receiving and
giving to other teams is vital. For example,
the sales team is involved at the very start
when land is purchased, when considering
the spread of units on the land, how many
houses fit, the costings, and likely buyer
types, and we’re constantly in touch with
the construction team to be able to give
status reports to buyers. We’ve sometimes
had to be flexible to manage supply-chain
constraints, and it is much easier to liaise
with different departments when there’s trust.
A key aspect of trust relates
to operating sustainably. How
does this influence how things
are done?
CD:
Our top priority is to promote
sustainability in all aspects of our work,
including our initiatives on equity, diversity,
and inclusion, safety, energy efficiency, solar
panel usage, and heat-recovery systems.
We also strive to make our developments
as accessible as possible, as seen in our
Kilcock development which is conveniently
located within walking distance of the train
station and features a dedicated path for
walking and cycling to the town, as well as
plenty of green spaces.
8
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR INVESTMENT CASE
A unique proposition
with
exciting growth
potential.
Supported by innovation and supply-chain
integration, Glenveagh is committed to opening
access to sustainable, high-quality homes
to as many people as possible in flourishing
communities across Ireland.
We are focused on three core markets – suburban
housing, urban apartments and partnerships with
local authorities and state agencies.
Compelling market
opportunity
>
Highly resilient domestic economy with
population and wage growth.
>
Significant private customer demand
in a market already undersupplied for
many years.
>
Supportive government policy via demand
and supply-side initiatives.
Scale operator with
attractive product
>
One of the largest developers in
an undersupplied housing market,
underpinned by a balanced land
bank in exceptional locations.
>
Targeting product offering at segments
with deepest demand, focused on
affordable suburban starter homes
in GDA (Greater Dublin Area).
>
Building momentum in the Partnerships
business with first completions planned
for FY24.
Sustainable
operational excellence
>
Building a strong track record of effective
delivery, build quality and customer service.
>
Embedding sustainability into our
land use, our energy efficient homes,
people development and helping
communities thrive.
>
Enhancing our efficiencies and supply-
chain security through standardisation
and vertical integration, supported by
innovation in off-site manufacturing and
our net zero transition pathway.
1,354
Suburban units completed in FY 2022
15,100
Available land bank units
100%
A1/A2 energy rated units, FY 2022
71%
Units using off-site manufacturing,
FY 2022
12.2%
GDP growth in Ireland, FY 2022
535,000
Growth in Irish population since Census 2011
See
page 40
to find out more
See
page 18
to find out more
See
pages 31 to 37
to find out more
9
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR INVESTMENT CASE
CONTINUED
Highly developed
portfolio skills
>
Highly experienced Board and Executive
team with relevant and diversified
sector expertise.
>
Agile senior management structure that
allows business to respond rapidly and
effectively to market developments.
>
Expert in-house planning team to navigate
the challenges and opportunities of the
Irish market.
Effective capital
allocation
>
Driving efficiency in land investment
through minimising upfront cost and
effective control of WIP investment.
>
Strong balance sheet, managed prudently
with low leverage and high efficiency.
>
Clearly defined capital allocation
framework focused on investment in
supply chain, land, and WIP – and
to return excess cash identified to
shareholders.
€200m+
Reduction in land bank value since FY 2019
€250m+
Value returned to shareholders since FY 2021
€600m
Revenue generated to date from
urban asset monetisation
3,600
Units lodged for planning, FY 2022
See
pages 67 to 69
to find out more
See
page 72
to find out more
THE GROUP CONTINUES TO SEE A VERY
POSITIVE LONG-TERM OUTLOOK IN THE IRISH
RESIDENTIAL HOUSING MARKET AND WE
BELIEVE WE ARE VERY WELL-POSITIONED TO
TAKE ADVANTAGE OF THAT OPPORTUNITY.
Michael Rice
Chief Financial Officer
10
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
CHAIR’S LETTER
Focused on
strong growth
and strategic
progress
.
John Mulcahy
Chairman
11
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
I am pleased to share with you Glenveagh’s
Annual Report for the year ended 31 December
2022. It has been a busy year for the business,
one of strong growth and important strategic
progress, supported by the hard work and
dedication of the whole team.
As always there were plenty of challenges to
contend with – no sooner had the disruption of
COVID-19 began to ease than it was replaced by
the war in Ukraine, inflation, consequent interest
rate increases and the threat of impending
recession across Europe and the world.
I am glad to report that our strategy and platform
enabled us to face and overcome these conditions
and challenges.
Growing a diversified and sustainable business
Our three business segments – Suburban, Urban
and Partnerships – provide an ideal platform to
address the largest and most resilient parts of the
Irish housing market. Our strategic priorities which
evolved during the year, build on the successes of
our strategy to date and position us optimally to
address the needs of stakeholders and to manage
for the future: accomplishing our clear priorities,
achieving our vision and driving the financial
performance of our business – thus increasing
revenue, driving productivity and improving our
disciplined capital allocation.
I am pleased to report that Glenveagh delivered
another impressive performance in 2022.
Total revenue for the year grew by 35% to €644.7
million (2021: €476.8 million) in what remained
a challenging operational environment. This
primarily comprised 1,354 suburban unit sales
completed (2021: 902) and urban revenue from
ongoing completions and several transactions.
For FY 2023 we have framed our approach
to match supply and commercial activity with
the emerging demand that will come from
government initiatives and the impact of the
change in the macroprudential rules. Read more
about these in the Market Overview on page 18.
Looking ahead, we expect the market
environment to remain favourable,
notwithstanding the broader economic and
inflationary challenges that face us. This will
be supported by a resilient domestic economy
supported by population and wage growth,
significant private customer demand in a market
that has been undersupplied for many years,
and supportive government policy via demand
and supply-side initiatives.
Advancing our business segments
Our Suburban segment made considerable
progress in FY 2022, with an attractive product
offering and increased brand awareness following
an extensive marketing campaign
‘Love Where
You Live
’. The introduction of the First Home
scheme in July 2022 also supported customer
demand. We completed 1,354 suburban units
during the year, up 50% on FY 2021 levels.
In our Urban segment we monetised a significant
portion of our land assets, enabling us to improve
the Group’s Return on Equity and return excess
capital to shareholders. It has also allowed us to
de-risk our portfolio in what is a more challenging
environment for urban apartment construction.
We will continue to assess our investment strategy
in this segment and will be ready to become more
active in the event that trading conditions become
more favourable.
Our Partnerships business progressed well in
FY 2022. We submitted planning applications
for both our 1,200 home development (with our
partners Fingal County Council) at Ballymastone
in Donabate and the 853 home development
(with our partners Dublin City Council) at our
Oscar Traynor Road site in Coolock in H2, and
received an initial planning decision in favour
of both applications, subject to any ongoing
appeals. We are looking forward to busy and
productive years ahead in this area as we deepen
our relationships in these forms of partnerships.
Our colleagues
The Board continues to recognise and appreciate
the significant role all our Glenveagh colleagues
have played in delivering our success to date.
None of our progress would have been possible
without their energy and dedication.
In line with our strategic priority
‘Valuing And
Developing Our Colleagues’
, our ambition is
to be recognised as an employer of choice and
as the best place to work in our sector, driven
by an engaging and trusting culture and a safe
working environment. All our colleagues are
empowered to make decisions and know how
they are contributing to our overall success, and
an employee recognition scheme was introduced
in 2022 to further strengthen engagement in
this regard.
The health and safety of our colleagues is
paramount and we work relentlessly to embed this
in everything we do. In FY 2022 we were delighted
to be recognised with the President’s Award for
Construction and the Healthy Workplace Award
at the Annual Occupational Health and Safety
Awards 2022.
Sustainability
2022 was an important year for sustainability
globally, domestically and for Glenveagh.
Set against a difficult geopolitical backdrop,
COP27 resulted in a package of decisions that
reaffirmed the commitment to limit global
temperature rise to 1.5 °C above pre-industrial
levels. In Ireland, as noted last year, the
Climate Action and Low Carbon Development
(Amendment) Act 2021 was signed into law in
2021. In July 2022, a range of sectoral emission
ceilings were announced that are designed to
enable an overall target of 51% reduction of
GHG emissions by 2030 (relative to 2018 levels).
CHAIR’S LETTER
CONTINUED
1,354
Suburban units delivered in FY 2022
€645m
FY 2022 Revenue
12
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
CHAIR’S LETTER
CONTINUED
OUR THREE BUSINESS SEGMENTS –
SUBURBAN, URBAN AND PARTNERSHIPS
– PROVIDE AN IDEAL PLATFORM
TO ADDRESS THE LARGEST AND
MOST RESILIENT PARTS OF THE
IRISH HOUSING MARKET.
At Glenveagh, our evolved
Building Better
strategy incorporates sustainability explicitly into
each of the pillars and individual projects that
bring to life our strategic priorities. Central to this
is our own Net Zero Transition Plan. The Group
has developed both near-term and long-term
GHG emissions reduction targets for Scopes 1,
2 and 3 in line with guidance from the Science
Based Targets initiative (SBTi). These targets call
for a 46% absolute reduction in Scopes 1 & 2 by
2031 and a 55% reduction in Scope 3 emissions
intensity (tCO
2
e/100sqm) by 2031. Longer term net
zero targets have been set for Scopes 1,2 & 3 by
2050. All targets have been submitted to the SBTi
for validation.
We acknowledge that partnering will be crucial
to how effectively we all reach our sustainability
goals. We are working with industry and cross-
sectoral working groups and membership bodies
including the Irish Green Building Council,
Business in the Community Ireland and the
Build Digital Project.
of our debt facilities and the continuation of
share buyback programmes as the preferred
method of returning value to shareholders. We
returned approximately €146 million of capital
to shareholders via share buyback programmes
conducted during the year and have already
returned approximately €30 million so far in
FY 2023.
We took the opportunity to acquire timber
frame manufacturer Harmony Timber Solution Ltd.
during the year, which is a key strategic acquisition
for us, and I would like to welcome our Harmony
colleagues to the Glenveagh team.
Our capital allocation framework remains effective
and appropriate for our business and for our
stakeholders as we position ourselves for long-
term growth. The Board will continue to review
this policy as the business, finance and market
environment evolves.
Governance
2022 was a year of transition for the Board, its
committees and for the senior executive team.
As announced at the 2021 AGM, I transitioned
to the role of Non-executive Chairman with
effect from 1 January 2022 and, as part of the
succession planning for the smooth transition of
my executive functions, the composition of the
Group’s executive committee was expanded.
There were no new appointments to the Board
during 2022, but during the year the committee
commenced the process of identifying a new
Independent Non-executive Director following
Richard Cherry’s decision to step down from the
Board at the conclusion of the 2022 AGM.
Full details of the activities of the Board and its
committee during 2022, and our priorities for
the year ahead, can be found in the Corporate
Governance Report on pages 74 to 81.
We launched our Equity, Diversity & Inclusion
(ED&I) strategy, Building a Better Workplace, with
three overarching objectives in relation to ‘Better
Representation’, ‘An Inclusive Environment’ and
‘Using our Influence’, along with a number of
targets and goals which we aim to achieve over
the coming years. We published our inaugural
Gender Pay Gap (GPG) report in December 2022
and, while the results are not where we wish them
to be, we are transparent and committed to being
at the forefront of organisations reducing this gap
in the Irish homebuilding industry.
Capital allocation
The Group continues to implement a disciplined
capital allocation strategy, focused on three
priorities: investment in supply-chain, land,
and work-in-progress. Once these priorities
are satisfied, the Group’s policy is to return
any excess cash to shareholders.
Capital efficiency improved further in FY
2022 through an ongoing reduction in our
net investment in land, a more efficient use
Conclusion and outlook
In what was a rewarding but also challenging
year in many respects, I would like to offer my
sincere thanks to my fellow Board members, our
colleagues, customers, suppliers and investors for
their ongoing commitment and support.
I am more convinced than ever about the long-
term growth opportunity for Glenveagh and our
capability to provide great-value, high-quality
sustainable homes in flourishing communities
across Ireland. We are very well-positioned as
a scale operator with attractive product and
highly developed portfolio skills, underpinned
by sustainable operational excellence. We
will continue to invest sensibly to avail of the
compelling market opportunity open to us. The
Board remains very confident about the future
and we look forward to further progress in 2023
and beyond.
John Mulcahy
28 February 2023
13
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Justin Bickle
In July 2022, we learnt of the untimely death of
our friend and former colleague, Justin Bickle.
In 2017, Justin, John Mulcahy and Stephen Garvey
listed Glenveagh Properties plc on the stock
market. Justin led the business as CEO through
the initial IPO and on to 2019. In those early
months and years, Justin travelled the world’s
capital markets generating support for our vision
of creating a best-in-class construction firm for
the Irish residential market.
Justin’s vision, hard work and expertise
contributed greatly to getting Glenveagh
to where it is today, and we know that he
took great satisfaction from the progress
that Glenveagh made on the journey which
was mapped all those years ago.
We remember him fondly in our thoughts
and prayers.
14
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
CHIEF EXECUTIVE OFFICER’S REVIEW
Focused on
consistently
delivering for our
colleagues and
customers
.
Stephen Garvey
Chief Executive Officer
15
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
I am pleased to report that 2022 was another
year of strong growth at Glenveagh as we
rebounded from the challenges of COVID-19
disruption and regained strong momentum
towards achieving our operational and
financial goals.
Five years of exciting progress
October 2022 marked our fifth anniversary on
public markets and is an appropriate milestone to
reflect on our progress over that period. To scale a
business to profitable and cash-generative growth
is a huge task, particularly against the backdrop
of the COVID-19 pandemic, war in Europe and the
return of inflation. Our performance is thanks in no
small part to the commitment of our colleagues,
and the culture we have cultivated at Glenveagh.
We have continued to evolve our business
model to reflect our own progress and to adapt
to the external environment. Firstly, we have
successfully managed rapid growth in our
Suburban business segment which now delivers
a wide range of homes across multiple tenures
from private buyers, cost rental tenants, social
housing tenants, and homes for Approved
Housing Bodies. Our developments have delivered
thousands of homes to families across Ireland,
with over 1,350 units completed in 2022 alone.
Secondly, we have been agile in our Urban
business segment, building a team and capabiliity
to deliver large-scale projects. We have been
de-risking the portfolio in the last 18 months by
monetising assets, while retaining the option
to reinvest in this segment in future. Thirdly, we
have established and made great progress in
our Partnerships business segment and anticipate
first revenue and profit generation from 2024.
We have also evolved our business model to
develop off-site manufacturing capabilities, and
to this end in FY 2022 we completed our first
business acquisition of timber frame manufacturer,
Harmony Timber Solutions, as we invest in our
supply chain to drive more efficiencies.
Enhancing our balance sheet efficiency has been
an ongoing priority. We continued to reshape
our investment in inventory, with approximately
65% related to land in FY 2022, down from
80% at the end of FY 2019. Our net investment
in land has reduced by over €200 million over
the last three years. At the same time we have
broadly maintained our available units through
a combination of owned suburban, owned
and forward-funded urban, and modest capital
in the Partnerships-business. There is more to
come in our drive to make our balance sheet
more efficient.
During FY 2022 we evolved our strategy to
provide renewed impetus to ensure that everyone
is working towards the same objectives. Our
new
Building Better
strategy builds on what we
have achieved and is guided by our vision – that
everyone should have the opportunity to access
great-value, high-quality homes in flourishing
communities across Ireland. Our strategy is guided
by the values that we live by every day, and by
our commitment to sustainable development.
We discuss this in more detail on pages 30 to 37.
We should be rightfully proud of what we have
achieved over the last five years. It gives us the
platform as well as the confidence to advance
and develop further in the coming years.
Business update
Health and safety is central to what we do every
day, and putting safety first is a core value of the
business, for all those working with us as well as
those impacted by what we do. The leadership
demonstrated across the business was exemplary
and indicates how seriously we take the health
and wellbeing of our people.
Operationally we advanced strongly, with 1,354
suburban units delivered over the course of FY
2022, a 50% increase on FY 2021 levels and a
90% increase on pre-pandemic levels in FY 2019.
During the year we opened five sites, capable
of delivering approximately 600 homes. It was
a very busy year for planning, with planning
applications submitted for 3,600 new units
across our business segments.
We made significant additions to our
manufacturing and supply-chain capabilities in
2022, which will benefit the long-term ambitions
of the business. Our manufacturing capabilities
allow us to align further with our sustainability
pillars while also guaranteeing high-quality supply
in a more volatile environment.
A highlight was the acquisition of Harmony, a
timber frame manufacturer based in Wicklow,
in August 2022. We have worked successfully
with Harmony for the last five years and were
delighted to retain key management who will
both grow the business itself and also assist in
accelerating timber frame production at our
Suburban South (Carlow) facility. When combined
with our existing Suburban North facility (Dundalk)
and the Carlow facility that will be operational this
year, this will provide the capability to produce in
excess of 2,000 timber frames per annum from FY
2024 onwards. Furthermore, our supply agreement
with a Light Gauge Steel (‘LGS’) manufacturer
will allow us to develop enhanced steel frame
panelised systems at the Carlow site.
These developments will help meet our ambition
to incorporate high-density and standardised
house types into our manufacturing and delivery
process, allowing the business to deliver on
its long term growth ambitions, improving the
efficiency of our land use in a sustainable fashion,
while also better controlling costs, thereby
ensuring long-term value creation.
In FY 2022 the Glenveagh family grew significantly,
with colleague numbers increasing by 36%. This
pace of recruitment requires careful management,
investment in training and development, and a clear
commitment to employee safety and wellbeing.
CHIEF EXECUTIVE OFFICER’S REVIEW
CONTINUED
69%
EPS growth in FY 2022
€146m
Capital returned to shareholders during the year
16
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
CHIEF EXECUTIVE OFFICER’S REVIEW
CONTINUED
CASE STUDY
Science-based
emissions targets
We understand the importance of setting
targets that are aligned with the latest climate
science and that will ultimately put us on a
pathway aligned with the goals of the Paris
Climate Agreement.
We have developed both near-term and
long-term GHG emissions reduction targets
for Scopes 1, 2 and 3. These targets have been
developed in line with guidance from the Science
Based Targets initiative (SBTi) and have been
submitted to the SBTi for validation. They form
a core element of our Net Zero Transition Plan.
46%
absolute reduction in Scopes 1
and 2 by 2031.
Net Zero
in Scopes 1 and 2 emissions by 2050.
55%
reduction in Scope 3 emissions
intensity (tCO
2
e/100sqm) by 2031.
Net Zero
in Scope 3 emissions by 2050.
More information on Glenveagh’s baseline
emissions including the methodology used,
verification and standards can be found at
https://glenveagh.ie/corporate/sustainability
17
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
CHIEF EXECUTIVE OFFICER’S REVIEW
CONTINUED
We are committed to attracting and supporting
and enabling a diverse workforce and to
cultivating a culture of equity and inclusion,
in which everyone feels empowered to be
themselves and think differently to drive
positive change and innovation.
Sustainability
Sustainability is at the heart of our
Building
Better
strategy. Each individual project and pillar
that underpins our five strategic priorities has
been designed with clear links to our broader
ESG initiatives, ensuring that sustainability is a
driver of, not an attachment to, strategy.
Each project and pillar must also be relevant to
and address our material issues. A comprehensive
exercise was undertaken in 2022 to identify the
Environmental, Social and Governance issues most
important to Glenveagh, and to inform the further
development of our corporate and sustainability
strategy, as well as supporting sustainability
reporting aims. Our materiality assessment
and matrix are detailed on pages 24 and 25.
We are delighted to have published our Net
Zero Transition Plan that addresses our longer-
term approach to climate change and that
includes demanding targets that we must hold our
business to achieving. Energy efficient homes are
leading our pathway to net zero. Our high energy
standards go beyond regulatory compliance
and our Building Energy Ratings (BER) are sector
leading – in FY 2022 55% of our homes achieved
the highest rating, A1. We have now started to
explore how we reduce the embodied carbon
of our homes.
As part of our commitment to enhancing our
ESG reporting, we have added to our Task Force
on Climate-related Financial Disclosures (TCFD),
including additional assessment of key climate
risks and how we are responding to these. Further
work on this will be a key focus for 2023, including
scenario analysis.
But the true solution to the longer-term structural
supply issues the sector faces is planning policy
reform. Clearer alignment of the Housing for All
strategy and the National Planning Framework is
essential to resolve a disconnect on unit output,
compounded by inconsistent approaches to
population projections in the policies.
Our decision to seek Judicial Reviews of both the
Wicklow and Kildare County Development plans
reflects our frustration in this regard. Excessively
limiting the development of much-needed homes in
these counties and elsewhere – regions that have
seen unprecedented population growth, significant
foreign direct investment, with associated job
creation, as well as substantial investments in critical
infrastructure by the government – makes no sense.
Capital allocation
Glenveagh ended the year with modest net debt,
in line with our prudent leverage policy and also
reflective of the significant investment in work in
progress and our commitment to utilise excess
cash in a more capital efficient manner.
The Group continues to implement a prudent
capital allocation strategy focused on three
priorities: land, work-in-progress, and investment
in supply chain. Once these priorities are satisfied,
we intend to return any excess cash identified
to shareholders.
We invested over €80 million across a range
of investments during FY 2022, including land
opportunities for over 1,150 units, the acquisition
of Harmony, additional capabilities and facilities,
and incremental work-in-progress through the
opening of new sites.
In FY 2022 we returned approximately €146
million of capital to shareholders. This brings to
over €250 million the total capital returned to
shareholders since the beginning of FY 2021,
with another €30 million returned to date as part
of our latest buyback initiated in January 2023.
We are careful to respect and address the
social aspects of sustainability. We place a strong
emphasis on the wellbeing of our colleagues,
developing our senior leaders and improving
our employee engagement. In recognition of
this, we are delighted to have been certified as
a Great Place to Work for 2023.
Addressing the planning system
The strong underlying demand in the Irish market
continues to be driven by a combination of a robust
economic environment, a fast-growing population
and increasing levels of inward migration. These
factors are putting further pressure on an already
undersupplied housing market. Efforts to address
this significant undersupply continue to be
obstructed by dysfunctional planning policy.
We welcomed the government’s timely and
proactive demand-side initiatives that have
supported customer affordability, most notably
for first-time buyers.
On the supply-side, we are doing our part by
delivering a wide range of homes across multiple
tenures that can be accessed in conjunction with the
government’s demand-led supports and initiatives.
We engage regularly with state bodies and local
authorities to accelerate delivery on planning-
consented residential land that is currently in their
control. We will also deliver a substantial number
of affordable homes through our Partnerships
business, initially via our proposed developments
in Oscar Traynor Road and Ballymastone.
Despite these developments, much more needs
to be done to address supply in the short and
longer term. Planning system reform requires an
effective national planning appeals board in the
first instance, with sufficient resources allocated
to it as a matter of urgency so that the current
backlog of applications can be addressed.
The draft Planning and Development Bill is a
necessary first step to address how the approvals
process itself can be streamlined for the future.
Outlook
We begin FY 2023 with confidence in our business
and in the fundamentals of our sector. We are very
well-positioned to grow longer-term revenue and
profitability, with a busy development schedule
across our sites. We are building a strong track
record of effective delivery, build quality and
customer service, and embedding sustainability
into everything we do. We operate in a highly
resilient domestic economy underpinned by
population and wage growth, and significant
housing demand in a market that has been
undersupplied for many years.
Although the near-term outlook has been shaped
by lags in planning momentum, we expect this to
resolve as FY 2023 progresses. Coupled with our
healthy land portfolio, we are confident in our
capacity to achieve our target of 2,000 suburban
units, as well as the continued delivery of urban
projects and to generate the first revenue from
our developing Partnerships business in FY 2024.
We will continue our focus on generating greater
balance sheet efficiency, which will underpin our
target of achieving a Return on Equity of 15%
by 2024.
In conclusion, I would as always like to
acknowledge the work and support of our senior
team, our wider organisation and stakeholders
and I look forward with ambition and confidence
in Glenveagh for the years ahead.
Stephen Garvey
28 February 2023
18
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
MARKET OVERVIEW
The Irish economy again delivered a stellar
performance in 2022, achieving double digit
GDP growth notwithstanding the emergence of
higher energy prices and recessionary conditions
across Europe in the second half of the year.
Strong GDP growth in 2020, 2021 and 2022
marks Ireland out as one of very few economies
delivering growth throughout that period.
As in the pandemic, Ireland’s buoyant and
defensive export sector is expected to prove
resilient to likely recessions across Europe and
the UK, helping GDP growth to stay in positive
territory entering 2023.
Ireland is also expected to remain one of the
best performing economies in the eurozone for
domestic demand. This will support continued
growth in consumer spending and employment.
Ireland’s public finances continued to beat
expectations in 2022 and this provided the
government with flexibility to support households
prudently in its Budget 2023 plans.
These factors underpin the buying power in the
population and consequent demand in the economy.
A strong level of consumer confidence is returning
to the Irish economy, notwithstanding the more
challenging economic environment more generally.
Affordability supported by legislation
and policy changes
A combination of new legislation and updated
policy measures from the Government and other
bodies such as the Central Bank of Ireland (CBI)
should help support affordability in this more
challenging economic environment of rising
interest rates and high inflation.
The benefits of Housing For All, introduced in
2021 as the government’s housing delivery plan
to 2030, are slowly beginning to materialise.
A range of schemes, discussed below, have
been introduced to secure delivery of large
scale sustainable mixed-tenure communities,
representing an overall investment of €20 billion
over the five years to 2026. The plan is designed
to cater for prospective buyers and renters for
which market dynamics and market rules have
made either owning or renting a property a
difficult prospect.
The Help to Buy (‘HTB’) scheme helps first-
time buyers of newly-built homes to buy a new
house or apartment. This incentive of €30,000
per qualifying property is in place until at least
December 2024. In FY 2022, 87% of our first home
purchasers availed of this scheme.
The cost rental scheme is designed to relieve
the burden on renters, where the state will take
ownership of new build properties at market cost
and rent them to the tenant at a rate that is at
least a 25% discount to the private market.
The First Home scheme was launched in July
2022 and is designed to support first-time
buyers in purchasing new-build homes in private
developments. Prospective buyers can use this
scheme in conjunction with the HTB scheme.
The government will take up to a 30% stake in
the property to reduce the burden on the buyer
from a financing perspective. The regional limits
The Irish economy is resilient
in a challenging environment.
19
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
18,102
18,969
14,671
19,829
16,442
4,365
7,268
7,015
10,895
10,515
2018
2019
2020
2021
2022
22,467
26,237
21,686
30,724
29,957
Housing Units*
Apartments Units*
Austria
Sweden
Denmark
Italy
Euro Area 19
UK
France
Spain
Netherlands
US
Ireland
2.5%
0.9%
0.5%
0.41%
0.4%
-0.5%
-1.0%
-2.5%
-2.7%
2.9%
14.7%
GDP GROWTH 2022
2011
10
0
20
30
40
50
60
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total Mortgages Approved (k)
4.59m
4.76m
5.12m
2011
2016
2022
POPULATION GROWTH
HOUSING COMPLETIONS
MORTGAGE APPROVALS
MARKET OVERVIEW
CONTINUED
The growth in mortgage approvals has reflected
this underlying demand trend. There has been
almost continual growth in approvals since 2011
and in 2022 the volume of approvals grew by 9%
D
,
albeit driven in the second half of the year by re-
mortgaging and switching to minimise the impact
of rising interest rates.
Supply shortages persist
The long term under-supply of housing in Ireland
has created a latent housing demand that, when
combined with the continued demand drivers of
economic growth and demographics, can only be
solved with accelerated supply and an effective
planning system and policy.
Data from the 2022 Census indicated that the
total housing stock increased by just over 6% since
2011, only half of the 12% increase in the number of
households over the same period.
There has been some improvement in liquidity in
2022 as measured by the stock of homes listed
for sale
E
. At the end of 2022, there was a total of
15,200 homes listed for sale, an increase from the
trough of 11,200 earlier in 2022 but still well down
from the 20,000 average through 2017-2019. These
low levels reflect years of under-supply and also
the disruption caused by the COVID-19 pandemic.
on purchase prices that apply in this scheme were
increased in January 2023, further supporting
buyers here.
The CBI also introduced a significant policy
amendment in October 2022, that became
effective in January 2023. In its annual review of
macroprudential rules, the CBI eased the loan-to-
income (‘LTI’) multiple from 3.5x to 4x for first-time
buyers while also adjusting exceptions and easing
loan-to-value (‘LTV’) requirements for second and
subsequent borrowers. This is an important support
to affordability for first-time buyers in particular.
Macroprudential rules continue to remain very
conservative by European standards.
Demand remains strong
Demand for housing continues to be very
strong in Ireland. Alongside private demand,
the state is also contributing to demand with
homes also being purchased by the Land
Development Agency, Approved Housing Bodies
and local authorities. Underlying demand is being
driven by a combination of population growth,
economic growth, and insufficient underlying
supply. Latent demand, built up over the course
of a decade of under-supply in the aftermath
of the financial crisis, is also contributing to the
existing imbalance.
The preliminary results from Census 2022
indicates that the Irish population totalled over
5.1 million people, the first time the population
has exceeded 5 million in a census since 1851
A
.
Domestic population growth as well as increasing
net inward migration has resulted in an increase
in population of approximately 535,000 people
since 2011. Additional housing stock is an essential
requirement in this context.
Economic growth is also a main driver of demand
for housing in Ireland. Ireland has high GDP versus
the OECD average, a high employment rate, with
above-average salaries and solid wage growth.
Average employment growth was estimated at
over 6% in FY 2022 and is forecast to grow further
in 2023 and 2024
B
. Employment has risen by more
than 650,000 since 2012
C
. This has created the
capacity and the desire among the population to
own their own homes.
In addition, during 2022 the employment rate
was at levels last reached in 2007. This high
employment rate, combined with wage inflation
which is forecast to average 3-4% per annum in
coming years, will create further capacity and
increased affordability for people to purchase
new homes in Ireland.
However, the pace of new development is
being impacted negatively by supply-chain
issues, input price inflation and ECB rate increases.
There is now evidence of a marked slowdown
in the level of housing commencements. In 2022,
commencements fell by 12% year-on-year and
were up just 3% compared to 2019, prior to any
COVID-19 related volatility. The annual total for
2022 was 27,000, compared to a peak rolling
12-month total of approximately 35,000 earlier
in the year. The annual total lagged that of
housing completions at 30,000.
These challenges can disproportionately impact
what is a fragmented homebuilding industry. There
is a risk that smaller scale developers will be unable
to provide supply while these challenges persist.
The planning system has also been a major
factor in the lack of supply of housing in Ireland.
Planning system reform requires an effective
national planning appeals board in the first
instance, with sufficient resources to address
the current backlog of applications and to
ensure efficient streamlining of new applications.
The longer-term structural supply issues need
to be addressed with reform of planning policy,
including a clearer alignment of the Housing for
All strategy and the National Planning Framework.
A: Source: CSO
B: Source: Goodbody
C: Source: Labour Force Survey Q3-2022
D: Source: BPFI
E: Source: MyHome.ie report Q4-2022
20
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR BUSINESS MODEL
OUR BUSINESS SEGMENTS
OUR DRIVERS OF SUCCESS
As one of Ireland’s
leading homebuilders,
Glenveagh is focused
on delivering high-quality
homes in flourishing
communities. We achieve
quality and great
accessibility to new
homes by relentlessly
innovating the way we
plan, design and build.
We bring new
ideas home.
ABOUT US
Supported by innovation and supply-chain
integration, Glenveagh is committed to
opening access to sustainable high-quality
homes to as many people as possible in
flourishing communities across Ireland.
We provide homes for our private, institutional
and state customers via three business segments
– Suburban, Urban and Partnerships. Each
business segment benefits from our proven
delivery platform and industry-leading central
resources. These central resources span the
entire process outside of construction delivery.
Partnerships
Description
A partnership typically involves the government,
local authority or state agency contributing their land
on a reduced cost or phased basis into a development
agreement with Glenveagh.
Product
Houses and apartments.
End market
Private/State/Institutions.
Locations
Ireland.
Exit
State/traditional/FF/FS.
Revenue (FY 2022)
Anticipated to begin FY 2024
See
page 40
to find out more
Urban
Description
Urban product consists of apartments to be delivered
to institutional investors primarily in Dublin and Cork but
also on sites adjacent to significant rail transportation
hubs.
Product
Apartments.
End market
Institutions.
Locations
Dublin City/Cork City.
Exit
FS/forward fund (‘FF’).
Revenue (FY 2022)
€190m
See
page 40
to find out more
Suburban
Description
Our suburban business is focused on delivering affordable,
high-quality homes in locations of choice at €450,000
or below. Our focus is in particular on affordable starter
homes in the Greater Dublin Area (GDA), the deepest
demand segment of the Irish market, however the portfolio
also has other potential sites nationally.
Product
Houses and low-rise apartments.
End market
Private/Institutions.
Locations
Ireland.
Exit
Traditional/forward sale (‘FS’).
Revenue (FY 2022)
€455m
See
page 40
to find out more
Talented and
dedicated individuals
A strategic
land bank
Strong
relationships
A strong
financial position
A trusted
brand
21
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Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR BUSINESS MODEL
CONTINUED
OUR DRIVERS OF SUCCESS
Talented and
dedicated
individuals
Our talented and motivated employees
have the expertise and dedication to
deliver our commitment to expand access
to home ownership and create flourishing
communities. Experienced professionals
in fields such as architecture, engineering,
and project management help ensure that
projects are completed on time and within
budget. Additionally, their knowledge of
industry trends and regulations can help
the business stay competitive and make
well-informed decisions.
Furthermore, talented individuals can drive
innovation and growth within our business,
bringing fresh ideas, new technologies, and
new ways of thinking to the Company. Their
creativity and vision can help the business
stay ahead of the curve and respond quickly
to changes in the market. Additionally, their
leadership and management skills can help
the business attract and retain other talented
professionals, creating a positive feedback
loop of growth and success.
423
Average number of Glenveagh
colleagues employed during FY 2022
ALONGSIDE ONGOING EVALUATION OF
OPPORTUNITIES TO EXPAND CAPACITY IN
OUR OWN HOUSING MARKET, WE CONTINUE
TO EXPLORE WAYS TO DIVERSIFY INTO
COMPLEMENTARY BUSINESS AREAS.
Our integrated business model
Our clear vision and strong culture and values
underpin everything that we do and shape the
positive contributions we make to society. Our
operational excellence and financial strength
enable us to generate social and economic
value for our stakeholders.
Our model operates by acquiring land, obtaining
planning permission, and then constructing houses
on that land to sell to customers, with a key focus
on sustainable practices and materials. Being one
of the largest homebuilders in Ireland, we have
access to a larger pool of financial and human
capital to undertake large-scale development
projects. Our established relationships with
key stakeholders in the industry such as local
authorities, suppliers, and contractors, can also
help to streamline the development process.
Our stakeholder engagement enables us to align
our activities to our stakeholders’ expectations
on environmental, social and governance-
related matters. The integration of sustainability
throughout our business allows us to create value
for all stakeholders, mitigating risk whilst actively
seeking opportunities to differentiate and unlock
improvement in margins and returns.
Enabling our model to succeed
Alongside our ongoing evaluation of opportunities
to expand capacity in our own housing market,
we continue to explore ways to diversify into
complementary business areas. These would
leverage our existing capabilities and resources
to generate new revenue and profit streams for
the business in excess of our cost of capital.
Our
drivers for success
are the critical inputs that
enable our integrated business model to succeed.
These support our ability to execute effectively
against our strategic priorities. By achieving this
we can create value for all our stakeholders.
22
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Annual Report and Accounts 2022
Strategic Report
OUR DRIVERS OF SUCCESS
A strategic
land bank
Our strategic land bank allows the company
to manage the supply of land available for
future development, ensuring a steady supply
in key locations. This stability in land supply
can help the business plan for the long-term,
as well as negotiate better deals with local
authorities and other stakeholders.
Our land bank is focused on starter-homes and
the private rental sector with affordability and
value for money at its core. Our land bank was
acquired at attractive rates in the context of
both cost per site and site cost as a percentage
of net development value.
€458m
Land bank value
OUR DRIVERS OF SUCCESS
Strong
relationships
We are a recognised and trusted partner, with
a track record of building deep relationships
with our partners, communities, suppliers
and customers.
Having strong supplier relationships is
a key driver of success as it allows us to
access the resources and materials needed
for development at a competitive price.
Reliable suppliers can also help to ensure
that projects are completed on time, which
is critical for maintaining a good reputation
and attracting new customers.
Without a strong set of relationships in
our communities, our business cannot
thrive. Constructive state and government
relationships are increasingly crucial as we
build out our Partnerships business segment,
and are also important to facilitate the
planning permission and approval process.
91%
Customer satisfaction rating
OUR BUSINESS MODEL
CONTINUED
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Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR BUSINESS MODEL
CONTINUED
OUR DRIVERS OF SUCCESS
A strong
financial position
Financial capital fuels the achievement of
our strategic priorities. We remain disciplined
in our approach to the allocation of capital
with the overriding objective of enhancing
shareholder value. Our capital allocation
strategy is focused on three priorities: land,
work-in-progress, and investment in supply-
chain. Once these priorities are satisfied,
we intend to return any excess cash identified
to shareholders. This is all underpinned by
the maintenance of a strong balance sheet,
good visibility on forward sales, and a
rigorous investment appraisal process.
€645m
Revenue FY 2022
€693m
Equity FY 2022
OUR DRIVERS OF SUCCESS
A trusted
brand
We have an established and trusted brand
that is built on a customer-focused and
high-quality approach. This helps us to
differentiate the business, making it more
likely that customers will choose us in future
purchase decisions.
Furthermore, a trusted brand can help to
drive innovation and growth as customers
who trust the brand are more likely to be
willing to try new products and services
offered. We are exploring how to effectively
expand our branding and product offerings to
increase sales and grow the customer base.
Our strong brand also helps us to attract top
talent to the company, as people are more
likely to want to work for a reputable and
successful business like ours.
+16%
Improvement in overall brand
awareness score
24
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Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR MATERIAL ISSUES
The external challenges that face our business
are constantly changing and we acknowledge
the importance of staying updated on these.
Actively engaging with our stakeholders enables
us to understand their views more clearly and to
ensure our business is responding appropriately
and rapidly. We do this through customer and
staff surveys, market research, peer review,
participation in industry forums and networks
as well as one-to-one engagement. More
information on our stakeholder engagement
approach can be found on page 26. In 2022,
we undertook a specific engagement process
to review and evolve our understanding of our
most material issues.
Our materiality assessment
The first step in our assessment was to produce a
long list of issues based on a wide range of inputs.
These included Glenveagh’s own information, a
peer review, sustainability and industry trends,
current and forthcoming legislation and policy, ESG
rating requirements, international standards and
frameworks. A total of 80 issues were identified
from across this literature. A shortlist was created
by identifying issues most frequently mentioned
in the literature and grouping together similar
issues. A shortlist of 31 issues was agreed spanning
environmental, social and governance factors.
A broad range of stakeholders were identified
including investors, lenders, Board members,
subcontractors and suppliers, institutional
customers, NGOs, Executive Committee members
and employees. 15 semi-structured interviews took
place, while 31 external stakeholders participated
in a survey.
Understanding
what matters most
to
our stakeholders
.
Stakeholders were asked to rate the issues
considering its relevance, risk, opportunity
and urgency. Employees were also given the
opportunity to input into the process through
a dedicated survey.
The information and ratings from the stakeholder
engagement process were prioritised in two ways
– a simple ranking based on the average score for
each issue across all stakeholders as well plotting
internal and external stakeholders scores on a
materiality matrix.
The results were then analysed to understand the
insights that had emerged at a macro level and
the relative priorities of each stakeholder group.
Finally, the findings were validated with our
Executive Committee. Briefings were also
delivered for various business units, where
relevant, to explore the insights from specific
stakeholder groups.
Engage
Engage stakeholders in scoring
and discussing the issues.
OUR MATERIALITY
ASSESSMENT METHODOLOGY
Validate
Validate the findings/insights
with our Executive Committee.
Analyse
Analyse the results of the
stakeholder feedback.
Prioritise
Prioritise the issues in a list
and on a materiality matrix.
Refine
Refine into a shortlist and clearly
define each issue: 31 issues.
Identify
Identify a long list of relevant
sustainability issues: 80 issues.
03
06
05
04
02
01
We carried out a review of our material sustainability
issues to inform the evolution of our business strategy
and to ensure we are focusing and reporting on the
most important issues for our stakeholders.
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Annual Report and Accounts 2022
Strategic Report
OUR MATERIAL ISSUES
CONTINUED
The outputs of our materiality
assessment are illustrated in our
materiality matrix which plots the
views of external stakeholders against
those of internal stakeholders.
Many of the material topics have remained the
same as in our previous assessment. However,
some areas have seen more specificity – for
example, climate is now divided into a number
of discrete topics. We have also seen the
emergence of innovation and digitalisation
as particularly important issues internally.
The insights from this process were used to
inform the evolution of our strategy, which fully
integrates our sustainability approach with
our business strategy. Our section on strategy
(pages 30 to 37) demonstrates which material
issues are addressed by each of our strategic
priorities and the progress we are making in
these areas.
In line with the requirements of the Corporate
Sustainability Reporting Directive, in 2023 we
will build on the work we have already completed
and will carry out a double materiality assessment.
This will involve assessing ‘impact materiality’ i.e.
actual or potential significant impacts on people
or the environment as well as ‘financial materiality’
i.e. where a sustainability topic triggers financial
effects on the Group. We have already mapped
the topics identified in our materiality assessment
to the ESG topics defined under the European
Sustainability Reporting Standards (‘ESRS’) and
will evolve our reporting to align with these
requirements over the next two years.
Internal
More important for Glenveagh
High priority for all
More important for external
stakeholders
Less important for all
External
2
3
4
7
5
6
11
12
8
10
9
13
14
15
25
24
23
22
20
19
17
18
26
16
21
31
30
29
28
27
Environmental
01
Water management
02
Indoor air quality
03
Biodiversity
04
Climate risk – physical
05
Pollution prevention
06
Circular construction
07
Land use and green infrastructure
08
Renewable energy
09
Sustainable mobility
10
Digitalisation
11
Innovation
12
Carbon emissions
13
Climate risk – transition
14
Energy efficiency
Social
15
Diversity, equity and inclusion
16
Responsible sourcing
17
Working conditions
18
Build quality
19
Customer
20
Placemaking and community engagement
21
Affordability
22
Skilled workforce
23
Supply-chain
24
Health, safety and wellbeing
25
Employee engagement
Governance
26
Cyber security and data protection
27
Sustainable building certifications/labels
28
Transparency
29
Governance
30
Human rights
31
Business ethics
Numbers do not indicate ranking.
1
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Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR STAKEHOLDERS
How the Board
considered
stakeholders
during the year.
The Board believes that to secure Glenveagh’s
long-term success, it must take account of
the perspectives, insights and opinions of
stakeholders when key strategic, financial
and operational decisions are being made.
Glenveagh has identified six key stakeholder
groups, with each requiring tailored engagement.
By fostering business relationships and maintaining
effective engagement with these stakeholder
groups, it should help to ensure that Glenveagh is
a Company in which people want to invest, from
which people want to buy, with which people want
to partner and for which people want to work.
The Board engages with each stakeholder group
on a regular basis. Further information on how
the Board directly engaged with shareholders
and employees is outlined in the Corporate
Governance Report on pages 79 to 81. Details
of how Glenveagh engaged with employees,
suppliers, shareholders, customers, communities,
government and regulators and outcomes from
these engagements are outlined on pages 27
to 29.
The Board is continuously kept up-to-date on the
feedback received from each stakeholder group
through the various reports and presentations
received from executive management. This
feedback is carefully considered when making
decisions that may impact stakeholders either
collectively or individually.
STAKEHOLDER CONSIDERATIONS OF THE BOARD
Manufacturing Strategy
Description
Controlling and innovating with our supply-chain
is a key priority of Glenveagh. To that end, our
Manufacturing Strategy, inclusive of expanding
our manufacturing operations, was approved by
the Board in March 2022.
Relevant stakeholders
>
Suppliers and subcontractors.
Board considerations
>
Received and considered an update on the
manufacturing strategy reiterating support.
>
Approved completion of supply agreement
with a Light Gauge Steel (‘LGS’) manufacturer.
>
Approved acquisition of Harmony Timber
Solutions Limited.
Links to values
See
pages 5, 34 and 35
to find out more
Materiality Assessment
Description
Glenveagh completed a materiality assessment to
identify, assess and prioritise the potential Environmental,
Social and Governance issues that could affect the
business and stakeholders to inform strategy and long-
term value creation.
Relevant stakeholders
>
Customers and communities.
>
Employees.
>
Suppliers and subcontractors.
>
Shareholders.
>
Government and regulations.
Board considerations
>
Considered hot topics from the peer review such
as whole life carbon, innovation and biodiversity.
>
Considered the top 10 issues identified across the
stakeholder groups.
>
Received an update on the changing reporting
requirements, specifically Corporate Sustainability
Reporting Directive, EU Taxonomy and the Corporate
Sustainability Due Diligence Directive.
Links to values
See
pages 24 and 25
to find out more
Equity, Diversity and
Inclusion Strategy
Description
This strategy document sets out the roadmap for how
Glenveagh will ensure that equity, diversity and inclusion
are embedded within the company.
Relevant stakeholders
>
Employees.
>
Customers.
>
Suppliers and subcontractors.
Board considerations
>
Received and considered the strategic themes of
better representation, inclusive environment and
using our influence.
>
Approved the strategic objectives and the specific
targets and goals related to each.
>
Approved the addition of governance structure and
progress reporting to future Board meeting agendas.
Links to values
See
pages 32 and 33
to find out more
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Annual Report and Accounts 2022
Strategic Report
OUR STAKEHOLDERS
CONTINUED
Employees
Why we engage
We understand that our employees are at the
heart of our success and are our most valuable
asset. We are committed to creating a positive
and inclusive workplace culture that promotes
teamwork, collaboration, and innovation. By
actively engaging with our employees, we
can ensure that their needs are met, and they
feel valued and motivated to contribute to the
company’s success.
How we engage
We engage with our employees using a variety
of methods including one-to-one meetings, team
meetings, online training platforms, performance
reviews, employee recognition awards, town
halls, leadership correspondence, surveys and site
visits. During November 2022, 77% of employees
participated in the Great Place to Work culture
and engagement survey. Our Corporate Affairs
team provided regular internal communication
through our dedicated employee app. Our
Workforce Engagement Director, Cara Ryan,
engaged directly with employees every six months
and presented her findings to the Board. Details
of these activities are outlined in the Corporate
Governance Report on pages 76 and 81.
How is effectiveness measured?
>
Feedback and scoring received through the Great
Places to Work culture and engagement survey.
>
Feedback from employee committees.
>
Monthly reporting including health and safety audits,
turnover rates, training and development levels.
>
Feedback from the Workforce Engagement Director.
>
Participation in our materiality assessment.
>
Engagement with staff email communications
and surveys.
Interests and concerns
>
Employee engagement.
>
Culture and Employer Value Proposition (‘EVP’).
>
Opportunities for training, development and career
progression.
>
Health, safety and wellbeing of employees in work
environment and processes.
>
Equity, diversity and inclusion (‘ED&I’).
Outcome from engagement
>
Publication of the Group’s ED&I strategy and Gender
Pay Gap report.
>
The Board approved the movement of head office
to modernise and improve the work environment.
>
The Board received and considered feedback from
the Workforce Engagement Director.
>
Investment in Internal Communications function,
increasing output thereof.
>
Creation of Glenveagh’s EVP pillars.
>
Senior Leadership sponsorship of employee
committees.
FY 2023 Priorities
>
Our priorities for FY 2023 are outlined as part of
the valuing and developing our colleagues strategic
priority on page 32 of this report.
Customers
Why we engage
Our customers are at the centre of everything we
do, and we understand that their satisfaction is
essential to building a reputable and successful
business. We believe that by engaging with
our customers, we can better understand their
evolving needs and preferences, and ensure that
we are providing sustainable, high-quality homes
that exceed their expectations.
How we engage
We are committed to engaging with our
customers throughout their customer journey.
We believe that by actively listening to their
feedback, responding to their needs and
concerns, and delivering high-quality homes that
exceed their expectations, we can build trust,
loyalty, and a positive reputation in the market. To
achieve this, we engage with customers through
our website which provides advice and tips on
each step of the home buying journey together
with a best-in-class digital home viewing platform.
We also update our buyers from the time of
purchase through automated site updates and
the latest news within their communities. Our
How is effectiveness measured?
>
Customer satisfaction and brand awareness surveys.
>
Reservations and enquiries from our customer
website.
>
Performance versus budget, forecast and market
data.
>
Resident surveys.
>
Customer care reporting and metrics.
Interests and concerns
>
Regular and consistent communication in the home
buying process.
>
The ability to conduct a virtual home buying journey.
>
Clarity on moving dates.
>
Location and community information.
>
The quality and affordability of the house.
Outcome from engagement
>
Establishment of a dedicated customer care team
and development of the homeowner’s guide.
>
Leads are up 68% year-on-year.
>
Increased brand awareness by 16%.
>
Improvements to our customer website and
investment in state of the art CGI walkthrough tours.
>
Customer satisfaction rating of 91%.
FY 2023 Priorities
>
Our priorities for FY 2023 are outlined as part of
the Placing the Customer First strategic priority on
page 31 of this report.
Monthly updates are provided to the Board
by the CEO on various HR KPIs, key employee
priorities and the plans to address these priorities.
HR initiatives are also presented to the executive
committee by the Chief Strategy Officer, several
times a year.
Customer Care Department is also available to
provide support throughout the customer journey
and has developed a homeowner’s guide as a
reference point for customers. We conduct monthly
customer satisfaction surveys and bi-annual brand
surveys to obtain customer feedback.
28
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Annual Report and Accounts 2022
Strategic Report
Shareholders
Why we engage
We understand that our shareholders are
key stakeholders who invest in our business.
We are committed to maximising value for
them by achieving sustainable growth through
our strategic priorities. We engage with our
shareholders through regular communication
and transparent reporting, providing updates
on our business performance, financial results,
and strategic initiatives.
How we engage
We maintain an active dialogue with our
shareholders through various channels, such
as regular meetings, shareholder presentations,
investor conferences and online updates. We also
engage with shareholders on specific topics, and
where relevant, provide feedback to the Board,
which we then consider as part of our decision-
making processes. Our commitment to engaging
with our shareholders is a fundamental part of our
business strategy, and we strive to build long-term
relationships based on transparency, trust, and
mutual benefit. We will continue to work closely
and consistently with our shareholders to ensure
that we deliver value to them.
Communities
Why we engage
We understand that our business operations have
an impact on the communities in which we operate,
and we are committed to contributing positively
to the social, economic, and environmental well-
being of our communities. By engaging with our
communities in a collaborative and transparent
manner, we can build trust, enhance our reputation,
and create sustainable, thriving communities
and a responsible business model that benefits
all stakeholders.
How we engage
We engage with our communities through various
initiatives such as community events, sponsorships,
and charitable donations. We also work closely
with local authorities and community groups to
ensure that our projects are designed and built
in a way that benefits the wider community. By
adopting a multi-disciplinary approach, involving
our acquisitions, sales, planning and design teams,
we identify the needs of local community groups
and, in partnership with community groups and
local authorities, decide on the best way to meet
these needs.
How is effectiveness measured?
>
Feedback received from investor meetings.
>
Brokerage reports.
>
Participation at AGM and EGMs.
>
Weekly and monthly investor relations internal
reporting.
>
Updates on institutional shareholding.
Interests and concerns
>
The impact of supply-chain and planning challenges
on Glenveagh’s performance and outlook.
>
The impact of global inflation on operating costs.
>
The need for progress updates on the long-term
targets of the business.
>
Build quality.
>
Capital allocation policy.
>
An increased focus on ESG matters.
>
The Board’s composition and diversity.
Outcome from engagement
>
111 investor meetings in 2022.
>
Attendance at four conferences.
>
Shareholder consent for our capital returns
programme.
>
Share register activity and trading volumes.
>
New investor interest.
FY23 Priorities
>
Continue our programme of investor meetings.
>
Attendance at investor conferences, participation
in site visits.
>
Availability of the Chair and Senior Independent
Director to meet with investors.
>
Regular engagement with shareholders on
specific topics.
How is effectiveness measured?
>
Our Annual Community Report.
>
Progress against our Community Engagement
Strategy objectives.
>
Independent stakeholder research.
Interests and concerns
>
Being responsive to the views of the local community.
>
The efficient use of land and sustainable place
making.
>
The protection of biodiversity, investment in local
infrastructure, restoration of listed and protected
features.
>
Support for local sports clubs, schools and community
groups.
Outcome from engagement
>
Increased ‘Building Communities not just Homes’
brand score.
>
126 community activities in 23 communities nationally.
>
Launch of Nature Hero Awards and Community
Report in 2022.
>
First community stakeholder survey completed.
>
Development of community hubs to update on new
community activity.
>
Excellence in the Community award win in Kildare.
FY23 Priorities
>
Increase in the number of schools engaging in
biodiversity workshops, construction site safety
talks and careers in construction days.
>
Community days with increased resident and local
business participation.
>
Increase employee volunteering hours and charity
fundraising.
>
Community engagement launch in new communities.
>
Improved community communication through
community newsletter reports and digital hubs.
>
Development of new social value tools.
>
Publication of our Biodiversity Transition Plan.
OUR STAKEHOLDERS
CONTINUED
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Strategic Report
Government and
Regulators
Why we engage
We believe that engaging with government
and regulators is essential to ensure that we
can continue to deliver high-quality homes that
meet our customers’ needs. By engaging with
government and regulators, we can also provide
input into policy and regulatory developments that
affect our industry and promote the adoption of
sustainable and responsible practices that benefit
the wider community.
How we engage
We engage with government departments, state
agencies and local authorities on an ongoing
basis directly or through membership of trade
associations. We also attend and contribute to
webinars and policy consultation events. Our
environmental health and safety teams work
closely with state agencies via health and safety
and environmental audits, and our planning
teams engage with local authorities through the
statutory plan making processes and through the
planning application process in accordance with
statutory provisions.
How is effectiveness measured?
>
Progress of planning applications and planning
grants.
>
Social and affordable housing deliveries.
>
Outcomes of statutory policy consultation processes.
>
Implementation and application of legislative
amendments.
Interests and concerns
>
Planning policies.
>
Building and environmental regulations.
>
Health and safety matters.
>
Social and community issues.
>
Home affordability.
>
Economic policy to underpin a sustainable
housebuilding industry in Ireland.
Outcome from engagement
>
Social and affordable housing deliveries pipeline.
>
Review of the National Planning Framework, which
recognises rapid population growth and the need
to provide homes in sustainable locations where
demand is greatest.
FY23 Priorities
>
Continue to engage with relevant authorities on
planning and development legislation being enacted
this year.
>
Ensure the key developments in our Partnerships
business efficiently progressed through the planning
system.
>
Work with Authorised Housing Bodies and Local
Authorities to deliver social and affordable housing.
OUR STAKEHOLDERS
CONTINUED
Suppliers and
Subcontractors
Why we engage
We recognise that the success of our business
is dependent on our relationships with suppliers
and subcontractors. We believe in creating
strong and mutually beneficial partnerships that
enable us to deliver high-quality projects that
exceed our customers’ expectations. By fostering
open communication, promoting fair and ethical
practices, and working together towards shared
goals, we can create a sustainable and responsible
supply-chain that delivers value for all parties.
How we engage
We have implemented various initiatives to
promote communication, collaboration, and
trust between our company and our suppliers
and subcontractors. These include regular site
meetings and workshops to share best practices,
address challenges, and identify opportunities for
improvement on topics such as health and safety,
project performance and upcoming work. We also
promote fair and ethical practices and encourage
our partners to adopt sustainable and responsible
practices that align with our values and strategic
How is effectiveness measured?
>
ISO 9001:2015 Quality Management System has
been implemented which informs the subcontractor
evaluation process.
>
Participation in our materiality assessment.
>
Customer satisfaction survey.
Interests and concerns
>
Visibility of future projects and workloads.
>
Delivery of an energy-efficient and low carbon
supply-chain.
>
Ethical business practices.
>
Prompt payment of invoices.
>
Safety practices and business conduct.
>
Impact of global supply-chain challenges on the
availability and cost of materials.
Outcome from engagement
>
Supply arrangements were put in place to limit any
potential disruption arising from global supply-chain
challenges.
>
The Board approved our manufacturing strategy and
the purchase of Harmony Timber Solutions Limited.
>
Monitoring of subcontractor performance through
inspection plans.
>
Engagement with subcontractors on corrective action
plans.
>
Informs our customer journey experience and
handover guide.
FY23 Priorities
>
Continue to implement efficiencies across our sites
in line with our ISO 14001 accredited Environmental
Management System.
>
Publication of our circular economy plan.
>
Supplier engagement programme to support the
implementation of our Net Zero Transition Plan.
>
Community engagement initiatives to generate local
employment for vendors and subcontractors.
priorities. Our aim is to create a supply-chain
that is resilient, efficient, and effective, delivering
quality projects that meet or exceed our customers’
expectations which benefits all parties involved.
We engage with local authorities on housing
partnerships via the e-tendering process.
30
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Strategic Report
Guided by our
vision, our
Building
Better
strategy
will create
long-term,
sustainable
value.
2022 marked five years since IPO, an opportune milestone to undertake an extensive
review of our strategy. Shaped by our vision –
that everyone should have the
opportunity to access great-value, high-quality homes in flourishing communities
across Ireland
– our mission, our values and our commitment to sustainability,
we aimed to build on the successes of our existing strategic and sustainability priorities,
while positioning ourselves optimally to create long-term value for stakeholders.
The development of our evolved strategy was informed by rigorous research, peer
analysis and our materiality assessment (see pages 24 and 25) as well as internal
working groups and engagement with colleagues across the business.
Each of our five strategic priorities is supported by action-oriented pillars, which in turn
are underpinned by projects, many of which are already underway. We have identified
KPIs to measure our performance.
Our Building Better strategy
OUR CULTURE
OUR VALUES
Placing the
customer first
We will be recognised as the leading
provider of affordable, high-quality
homes for all tenures, offering a
best-in-class customer experience.
See
page
31
to read more
Creating sustainable
and thriving places
We will be known for developing
great places for people to live,
where communities and nature
can flourish for the long term.
See
page
36
to read more
Driving operational
excellence
We will plan, design and assemble
high-quality products using best-in-class
processes across the build lifecycle.
Clear accountability will enable us to
make operational choices rapidly and
decisively, and to allocate resources as
efficiently as possible.
See
page
34
to read more
Valuing and developing
our colleagues
We will be an employer of choice and the
best place to work in our sector for diverse
and high-calibre talent, with a safe and
inclusive working environment and a culture
built on teamwork and trust.
See
page
32
to read more
Embracing
innovation
We will be at the cutting edge
of innovation in the homebuilding
sector, allowing us to transition to
a low-carbon economy with the best-
value, circular construction.
See
page
35
to read more
OUR STRATEGY
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Placing the
customer first
STRATEGIC PRIORITY
We will be recognised as
the leading provider of
affordable, high-quality
homes for all tenures,
offering a best-in-class
customer experience.
Pillars
Customer journey
Transform our customer journey to
a best-in-class experience.
Affordability
Ensure that we focus on affordability in
everything that we do. Position ourselves
as the partner of choice for affordable and
high-quality housing, appealing to private,
institutional and state-supported customers.
Build quality
Deliver high-quality homes across all
our developments. Embed a quality-first
approach in the workmanship, materials
and products that we use. Extend our quality
culture across the value chain, in particular
with subcontractors and professional teams.
Highlights from 2022
>
73% of all units delivered in 2022 were
priced below the median price of new homes
sold in the GDA and Cork (2021: 69%), and
approximately 35% of our suburban units were
part of social and affordable government-
supported initiatives.
>
100% of our sites now operate under our
construction quality-management system
(2021: 81%). This formed part of our broader
commitment to ISO 9001: 2015 certification,
which we achieved in 2022.
>
Our Partnerships business advanced, with
two planning applications submitted for our
first developments with local authorities.
>
We invested in state of the art CGI walk-
through tours for customers, ensuring sales
and forecasting can be managed long before
our homes are built.
>
Improvements to our customer website and
communication with home-buyers contributed
to a 91% customer satisfaction rating (2021:
89%). More than 70% of enquiries now come
to Glenveagh.ie, reducing our reliance on
third-party property portals. We saw a 68%
increase in enquiries in 2022.
>
Our strategic communications increased our
brand awareness by 16% points, making us the
most recognised Irish home-building company.
Focus for FY 2023 and beyond
>
Launch a web series to highlight the
affordability of our own product alongside
government’s demand-side initiatives, while
also outlining new solutions for own-door
affordable housing.
>
Enhance the digital customer journey by
integrating this with the end-to-end planning,
design and construction processes.
>
Broaden our after-sales service by offering
adjacent products and services from an
approved pool of suppliers at competitive rates.
>
Roll out revised inspection checklists and new
quality bulletins to target key focus areas to
enhance build quality.
>
Utilise new reporting software in the build
quality team to provide live quality performance
data from all active projects.
>
Complete development of existing projects for
institutional customers and continue to assess
market opportunities in this area.
>
Begin construction immediately once planning
approval is granted for our Partnerships
developments at Ballymastone and Oscar
Traynor Road.
>
Develop a visual model for customers to track
progress of their homes.
>
Build integrated marketing campaigns
including social media, customer journey and
all sales collateral.
How we measure progress
>
Customer satisfaction rating.
>
ASP FY 2023.
>
% homes priced below median in relevant regions.
>
% sites operating under our construction QMS.
See
page 45
to find out more
Relevant principal risks
and uncertainties
04
05
07
11
See
page 59
to find out more
Relevant material issues
02
14
18
19
21
28
31
See
page 25
to find out more
Contribution to UN SDGs
See
pages 43 to 46
to find out more
Relevant values
See
page 2
to find out more
OUR STRATEGY
CONTINUED
IMPROVEMENTS TO OUR CUSTOMER WEBSITE AND
COMMUNICATION WITH HOME BUYERS CONTRIBUTED
TO A 91% CUSTOMER SATISFACTION RATING.
Accreditations, certifications,
external commitments and
partnerships
Quality ISO (ISO 9001)
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Valuing and
developing
our colleagues
STRATEGIC PRIORITY
We will be an employer
of choice and the best
place to work in our
sector for diverse and
high-calibre talent, with
a safe and inclusive
working environment
and a culture built on
teamwork and trust.
Pillars
Talent
Attract and retain high-calibre talent,
ensuring we have an organisation that
is fit for the future.
Culture
Create a strong culture centred on our
values, with an ethos of equity, diversity
and inclusion.
Safety
Foster a culture of safety for all those
employed and affected by what we do.
Highlights from 2022
>
We worked with the Irish Management Institute
(‘IMI’) to enhance our leadership and graduate
training, and developed a new programme
focused on softer skills for site managers.
>
We co-created Glenveagh’s Employer Value
Proposition (‘EVP’) pillars with colleagues and
informed by executive committee interviews,
external market research and analysis of our
Great Place to Work and Investor in Diversity
survey results.
>
We launched our first equity, diversity and
inclusion (‘EDI’) strategy in December 2022,
setting out three objectives, underpinned by
eight workstreams. The associated targets
include to increase the number of women on
our Board and at senior management-level.
>
We focused on raising awareness of our values
and started to embed them throughout our
communications and processes, supported by
the launch of quarterly employee recognition
awards for individuals who have embraced
our values.
>
We initiated a programme to nurture a sense
of ownership and accountability with respect
to safety culture.
Focus for FY 2023 and beyond
>
Complete the move to a new head office
to accommodate our growing business and
offer improved facilities.
>
Roll out a streamlined performance
management process, supported by a learning
management system.
>
Following the launch of our ED&I strategy in
late 2022, set up the workstreams necessary to
achieve our objectives and establish employee
network groups, each with an Executive
Committee sponsor.
>
Address the areas identified for improvement
in our approach to safety, and establish a
safety commitment.
>
Establish a Learning Academy that attracts
and retains highly-skilled team members.
CASE STUDY
Environmental Health
and Safety (‘EHS’)
Advisor Luke O’Dea
describes his journey
at Glenveagh.
I joined Glenveagh in 2018 as a
general operative responsible for duties
such as setting up walkways, snagging
and boundary inspections.
After a couple of years I got involved with
helping with paperwork at the Kilcock
site in Co. Kildare. I showed an interest
and aptitude, so I was asked if wanted to
join the safety team. I’d always wanted a
career rather than a job so I jumped at the
chance. I was offered the opportunity to do
a 13-week training course with the National
Irish Safety Organisation (‘NISO’) for which I
was delighted to get a distinction. This was
followed a few months later with a course at
University College Dublin.
Glenveagh has given me so much mentoring
and support – they really encourage and
reward initiative. I’m now a qualified EHS
advisor. I’ve worked on a few sites and will
shortly start a site myself, with full support
from management every step of the way.
OUR STRATEGY
CONTINUED
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ISO 45001:2018
& SAFETY
NSAI
Certified
HEALTH
Accreditations, certifications, external commitments and partnerships
ISO 45001
Investors in Diversity Mark (Silver)
Elevate Pledge (BITCI)
Great Place to Work Certification
Health and Safety Award
How we measure progress
>
Turnover rate.
>
Training hours per monthly salaried employee.
>
Great Place To Work Survey Score.
>
Total Recordable Incident Rate (‘TRIR’).
See
page 45
to find out more
Relevant principal risks
and uncertainties
08
09
10
See
page 59
to find out more
Relevant material issues
15
17
22
24
25
26
30
See
page 25
to find out more
Contribution to UN SDGs
See
pages 43 to 46
to find out more
Relevant values
See
page 2
to find out more
OUR STRATEGY
CONTINUED
WE LAUNCHED OUR FIRST EQUITY, DIVERSITY AND
INCLUSION (‘EDI’) STRATEGY IN DECEMBER 2022,
SETTING OUT THREE OBJECTIVES, UNDERPINNED
BY EIGHT WORKSTREAMS.
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ISO 14001:2015
ENVIRONMENT
NSAI
Certified
Driving
operational
excellence
STRATEGIC PRIORITY
We will plan, design and
assemble high-quality
products using best-in-class
processes across the
end-to-end build lifecycle.
Clear accountability
will enable us to make
operational choices rapidly
and decisively, and to
allocate resources as
efficiently as possible.
Pillars
Efficiency
Establish an end-to-end, time-bound
process for the build cycle, with clear
accountability at each element, supported
by appropriate oversight. Enhance efficiency
and use fewer resources (time, money,
materials, energy, natural resources) to
create a high-quality product.
Highlights from 2022
>
We completed a record number of new
Suburban units and improved Suburban gross
margins. We also continued to deliver for
institutional customers with five active operational
sites in the Urban business segment.
>
In a highly inflationary environment, we worked
in close collaboration with our supply-chain
partners to secure sustainable, competitive
pricing while maintaining security of supply.
>
Developing our off-site manufacturing
capabilities allowed us to mitigate the impact
of rising input costs and also provides a
platform from which to develop our model
of standardised and own-door, high-density
housing solutions. This will add resilience to
delivery schedules, while aligning with our
sustainability targets.
>
We are also delivering operational efficiency
in a sustainable way: 55% of suburban homes
delivered in FY 2022 had the top A1 rating,
with the remainder having a BER rating
of at least A2.
>
We were delighted to achieve ISO 9001:2015
certification for implementing and maintaining
a Quality Management System (‘QMS’).
>
We strengthened our quality culture among
subcontractors and professional teams,
supported by the integration of major
subcontractors into our QMS.
Focus for FY 2023 and beyond
>
Increase the standardised proportion of our units.
>
Develop and integrate the timber frame and
LGS capabilities we have in our own facilities.
>
Design a data framework to support the
end-to-end process and to enable timely
and informed decision-making.
>
Promote a lean capability and culture within
the business to ensure efficiency is embedded
throughout Glenveagh. Appoint an expert to
identify and execute continuous improvement
projects across the business.
>
Improve the accurate measurement and
reporting of variances so that corrective actions
can be implemented in a timely manner.
>
Ensure a holistic assessment of the operating
model to allow rapid sharing of best practice.
This will involve a focus on value engineering
to minimise use of resources.
>
Continue to enhance the efficiency of our land
investment, supported by our National Land
campaign launched in October 2022.
>
Publish a circular economy plan, including
targets, to ensure more efficient use of
materials.
>
Assess sites to understand where efficiencies
can be made with respect to fuel use.
How we measure progress
>
Operating margin.
>
Greenhouse gas emissions.
>
Operational energy intensity (mWh/100sqm).
See
pages
43 and 44
to find out more
Relevant principal risks
and uncertainties
02
03
06
07
10
11
See
page 59
to find out more
Relevant material issues
01
05
06
08
12
14
18
23
27
See
page 25
to find out more
OUR STRATEGY
CONTINUED
Contribution to UN SDGs
See
pages 43 to 46
to find out more
Relevant values
See
page 2
to find out more
Accreditations, certifications, external
commitments and partnerships
Quality ISO (ISO 9001)
Environment ISO (ISO 14001)
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Embracing
innovation
STRATEGIC PRIORITY
We will be at the cutting
edge of innovation in
the homebuilding sector
allowing us to transition
to a low carbon economy
with the best-value,
circular construction.
Pillars
Efficient, low-carbon,
circular construction
Develop innovative solutions throughout the
project lifecycle to reduce costs and whole-life
carbon from our buildings, and incorporate
circularity to support our net zero ambition.
Research and Development hub
Foster a culture of research, innovation and
entrepreneurship within the organisation and
be recognised for this in the industry.
Highlights from 2022
>
We established an innovation department
to develop solutions that are viable, require
less embodied carbon and fewer people.
The department has already begun
researching how best to incorporate high-
density and standardised house types into
our manufacturing and delivery process. We
have begun a research project to assess the
embodied carbon implications for a variety of
options for all aspects of our homes.
>
We made significant additions to our
manufacturing and supply-chain capabilities,
which will benefit the long-term ambitions of the
business, including our pathway towards net
zero. A highlight was the acquisition of timber
frame manufacturer, Harmony Timber Solutions,
in September 2022. Combined with our existing
Suburban North facility (Dundalk) and the
Carlow facility (operational in FY 2023), this will
provide the capability to produce in excess of
2,000 timber frames per annum from FY 2024.
>
We signed a supply agreement with a Light
Gauge Steel (‘LGS’) manufacturer to help build
Glenveagh’s own LGS capability at our Carlow
site. This will facilitate the organic growth of
this aspect of the business.
>
We committed to set science-based targets
and signed up to Business in the Community,
Ireland’s low carbon pledge. This commits us
to setting science-based carbon emissions
reduction targets by 2024, which must include
Scopes 1, 2 and 3 and be in line with the Paris
Agreement and the latest IPCC findings.
Focus for FY 2023 and beyond
>
Set science-based targets and publish our
Net Zero Transition Plan setting out our actions
to align with a 1.5°C trajectory.
>
Develop alternatives for each stage of the
project lifecycle that maximise efficiencies and
streamlines effort, input and resources required
to produce our business’s product.
How we measure progress
>
Greenhouse gas emissions.
>
Pre-manufactured value.
>
€ invested in R&D.
See
pages 43 and 44
to find out more
Relevant principal risks
and uncertainties
01
02
03
11
See
page 59
to find out more
Relevant material issues
04
06
09
10
11
12
13
14
18
22
23
See
page 25
to find out more
Contribution to UN SDGs
See
pages 43 to 46
to find out more
Relevant values
See
page 2
to find out more
Accreditations, certifications,
external commitments and partnerships
Low Carbon Pledge
Build Digital Industry Advocate
Construct Innovate Member
IGBC Gold Member
>
Publish a circular economy plan, including
targets, which sets out how circularity can
be incorporated into various stages of the
value chain.
>
Create an Research and Development (‘R&D’)
hub to assess ideas to improve methods,
products, and approaches.
OUR STRATEGY
CONTINUED
36
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36
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STRATEGIC PRIORITY
We will be known
for developing great
places for people to live,
where communities and
nature can flourish for
the longterm.
Pillars
Social impact
Create places where people love to live,
ensuring connectivity to the things that
matter to them.
Land use and biodiversity
Use land in the most efficient way while
protecting and ultimately contributing
positively to biodiversity.
Highlights from 2022
>
Activities for our ‘Building Lasting Communities’
engagement programme spanned 23
communities and included establishing hubs to
update on activities, engaging with Tidy Towns
and community groups, sponsorship for local
sports clubs, community events and supporting
schools and local businesses. We published our
first community report in May 2022, and our
‘Build Communities not just Homes’ brand-
score increased from 9% to 19% (B&A research
December 22).
>
In partnership with the education organisation
Biodiversity in Schools, we launched the Nature
Hero Awards, a national campaign to support
schools with biodiversity initiatives (see case study).
>
Our EHS team delivered talks on construction-
site safety to 11 primary schools in close
proximity to our developments, framed around
a children’s storybook that we developed.
>
We participated in two maintenance days
with charity partner ALONE and provided
mentoring and career guidance to an Early
Learning Initiative programme, contributing
to an overall total of 322 volunteering hours.
We fundraised for charities including the Jack
& Jill Foundation, ALONE, St. Vincent de Paul,
the Dublin Simon Community as well as the
Irish Red Cross to support victims of the war
in Ukraine.
>
We commenced the development of our
Biodiversity Transition Plan in line with the
Post-2020 Global Biodiversity Framework
targets of no net loss by 2030, net gain
from 2030 and full recovery by 2050. The
publication of this was postponed to 2023 to
allow incorporation of the requirements of the
European Sustainability Reporting Standards.
>
We continued to incorporate biodiversity
into developments including detailed
ecological studies, retaining wildlife corridors,
incorporating Sustainable Drainage Systems
(‘SuDS’) and encouraging pollinators.
CASE STUDY
Nature Hero Awards
We worked with Biodiversity in Schools,
who delivered free Nature Hero workshops
for schools in areas where we build – a total
of 89 workshops for 2,210 primary and
secondary school children.
Together we launched the Nature Hero Award
to support schools with their biodiversity goals
and provide a mark of excellence to schools
that create an educational space that nurtures
a love of nature, develops a knowledge of
biodiversity, and encourages action to
support this.
The Nature Hero Award currently has 200
primary schools registered. Schools are
encouraged to undertake practical tasks such
as hanging bird-nest boxes and pollinator
planting, and ensuring outdoor teaching time
each week. The winning school will receive a
school garden makeover to a value of €10,000,
courtesy of the Glenveagh Greencare team.
OUR STRATEGY
CONTINUED
Creating
sustainable
and thriving
places
Focus for FY 2023 and beyond
>
Publish our Biodiversity Transition Plan setting
out our targets and actions to get there.
>
Further stakeholder research to inform
the development of a best practice tool
to measure the social value of the projects
we deliver.
>
Continue to engage with the communities
where we build to understand their needs and
build relationships with key stakeholders, and
deliver programmes aligned with our ‘Building
Lasting Communities’ strategy.
>
Support our national charity partnerships
through fundraising, in-kind donations where
appropriate and staff volunteering.
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Financial Statements
Governance
Accreditations, certifications, external commitments and partnerships
All Ireland pollinator plan
Nature heroes partnership
How we measure progress
>
‘Build Communities not just Homes’ brand score.
>
Donations to charities/local communities.
>
Social value metric (to be developed).
>
Biodiversity metric (to be developed).
See
page 45
to find out more
Relevant principal risks
and uncertainties
02
See
page 59
to find out more
Relevant material issues
01
03
07
09
20
See
page 25
to find out more
Contribution to UN SDGs
See
pages 43 to 46
to find out more
Relevant values
See
page 2
to find out more
OUR STRATEGY
CONTINUED
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OUR IMPACT
Our drivers of success
Our strategic priorities
Our positive
stakeholder
impact
Glenveagh is focused on delivering high-quality
homes in flourishing communities whilst also
prioritising the impact on our stakeholders.
Our stakeholders are a crucial part of our success,
and our strategic priorities and drivers for success
reflect our commitment to these stakeholders. We
aim to demonstrate this commitment by delivering
value to our stakeholders. Through considering
their needs, we believe that we can continue to
grow and succeed while also making
a positive impact.
Ensuring
operational
excellence
Placing the
customer first
Valuing and
developing our
colleagues
Driving
innovation
Growing
sustainable and
thriving places
Talented and
dedicated
individuals
A trusted brand
Our Building Better
strategy
A
s
t
r
o
n
g
S
t
r
o
n
g
r
e
l
a
t
i
o
n
s
h
i
p
s
A
s
t
r
a
t
e
g
i
c
l
a
n
d
b
a
n
k
f
i
n
a
n
c
i
a
l
p
o
s
i
t
i
o
n
OUR CULTURE
OUR VALUES
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OUR IMPACT
CONTINUED
Our stakeholders in 2022
>
Provided affordability to our customers with an average sale price (‘ASP’) of €330k,
well below the national average of €359k, with 85% of customers availing themselves
of the Help to Buy scheme.
>
Achieved a customer satisfaction survey score of 91%.
>
Delivered sustainable homes with 100% of units A1/A2 rated.
>
Provided emergency accommodation for 40 Ukrainian families.
>
Completed 126 activities in 23 communities nationally across six community pillars –
education, sports and fitness, health and wellbeing, local economy, sustainability
and charity.
>
Launched Nature Hero Awards, a national accolade sponsored by Glenveagh to
encourage biodiversity awareness amongst school children.
>
Delivered community days in five locations with average attendance of 120 residents.
>
Issued first Community Report in May 2022 and launched our Community Brand.
>
Achieved ISO 9001:2015 Quality Management Systems.
>
Achieved Site Safety Audit score average of 88% in the year.
>
Supported a network of approximately 400 subcontractors and 600 materials suppliers.
>
Established supplier engagement programme as part of net zero plan.
>
Worked to embed equity, diversity and inclusion, (‘ED&I’) throughout Glenveagh
through publication of our ED&I Strategy.
>
Published our inaugural Gender Pay Gap report.
>
Created Glenveagh’s Employer Value Proposition (‘EVP’) pillars.
>
Achieved Great Places to Work certification with a score of 78%.
>
Attended four capital market conferences and conducted 111 institutional one-on-one or
group meetings.
>
Returned €146 million to shareholders in two separate share buy-back programmes.
>
Generated EPS growth of 69% in the year to 7.6 cents.
>
Increased ROE by 540bps to 7.1% in 2022.
>
Participated in Residential Zoned Land Tax and National Development Plan statutory
provisions processes.
>
Active members of the Irish Home Builders Association, Construction Industry Federation
and Irish Institutional Property industry groups.
>
Joined the Irish Green Building Council.
>
Signed the Low Carbon Pledge to set science based targets.
€330k
Average selling price
83%
of employees felt ‘I can be myself in
Glenveagh’
126
Community involvement events
€146m
Returned to shareholders in 2022
135
Site safety audits completed
46%
Absolute reduction in Scopes 1 & 2
by 2031
91%
Customer satisfaction rating
28%
of women in senior management
by 2025
322
Total staff volunteering hours
69%
EPS growth in 2022
Over 100
Weekly site-level meetings
with subcontractors
55%
Reduction in Scope 3 emission
intensity by 2031
Our impact
Government and regulators
Suppliers and subcontractors
Shareholders
Communities
Customers
Employees
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01
11
21
02
12
22
03
13
23
04
14
24
05
15
25
06
16
26
07
17
27
08
18
28
09
19
29
30
31
32
33
34
35
36
37
38
10
20
OUR LAND BANK
Our active
portfolio
The Group continues to create
a more active land portfolio to
support continued growth and
remains focused on managing to
a four to five-year land portfolio
at scale.
SITE SCHEDULE
LAND BANK HIGHLIGHTS
15,100
Total units
70%
Dublin and GDA
focused by units
72%
Suburban
by units
98%
Starter-homes
by units
Active Suburban
01
Baker Hall
02
Barn Oaks – Private Residential
03
Belin Woods
04
Bellingsmore
05
Blackrock Villas
06
Castleland Park
07
Citywest Village
08
Cluain Adain
09
Cois Glaisin
10
Drumaconn
11
Donabate South
12
Cluain Glasan
13
Grey Abbey View
14
Hearse Road, Donabate
15
Hollystown
16
Maple Woods
17
Mount Woods
18
Greville Wood
19
Oldbridge Manor
20
Raven’s Mill
21
Riversend
22
Ruxton Oaks
23
Semple Woods
24
Silver Banks
25
Taylor Hill
26
The Hawthorns
27
Ushers Glen
28
Walkers Gate
Active Urban
29
Barn Oaks – Apartments
30
Carpenterstown
31
Castleforbes
32
Cluain Mhuire
33
Marina Village
34
The Collection
Future Partnerships
35
Ballymastone
36
Oscar Traynor Road
Completed Sites in 2022
37
Barnhall Meadows
38
Ledwill Park
41
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Our partnerships are built on trust.
If you’re a landowner with zoned land ready for development,
talk to us about a Development Partnership.
Find out more at
Glenveagh.ie/Land
CASE STUDY
National Land campaign
In 2022, we launched our National Land
campaign, driving awareness of our
unique partnership with landowners
across Ireland.
According to the Department of Housing,
approximately 10,000 hectares of land will fall
within the scope of a new 3% zoned land tax.
Some 90% of this land is understood to be
currently in agricultural use.
Glenveagh launched a new portal and national
media campaign to help landowners navigate
development partnership opportunities.
OUR LAND BANK
CONTINUED
We mapped out a simple five step process for
people interested in a development partnership,
from initial review through to due diligence,
planning, zoning, and implementation, and
provide support, expertise and experience
throughout the process. Our cross-functional
team brings expertise in sustainability, planning
and design, manufacturing, procurement, and
construction management.
The campaign launched in October 2022 on
radio, press and digital platforms, delivering
more than one million online views and a
national awareness of more than 10%, helping
to build our land pipeline in key communities.
42
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Sustainability Governance
To ensure that sustainability is embedded
throughout the organisation, and receives the
appropriate oversight and direction, we have
put in place a robust governance structure at
Board and management-level which we will
review and evolve as required.
Glenveagh’s Board is responsible for setting
the strategic direction for the organisation.
This includes addressing relevant sustainability
matters. It therefore has ultimate responsibility
and oversight of sustainability. It receives regular
reports throughout the year on this agenda
including progress against targets. The Board also
participated in a number of education sessions
during the year to increase their understanding of
this evolving area. The Board is supported by two
Board committees on this agenda.
The Environmental and Social Responsibility
Committee (‘ESR’) was established in 2021 and
is responsible for developing and monitoring
the business’ approach to sustainability. The
committee meets four times per year and
provides reports to the main Board after every
meeting (see page 104 for a full report of the
ESR Committee).
The Audit and Risk Committee (‘ARC’) has
responsibility with respect to sustainability risks
and opportunities as part of its wider responsibility
for the risk management of the business, ensuring
that our controls and mitigants are adequate and
effective.
The Executive Committee, led by the CEO,
has overall executive responsibility for
sustainability. This is a regular agenda item with
the committee discussing sustainability issues,
reviewing performance and progress against
targets. The Chief Strategy Officer has specific
executive responsibility for sustainability.
The sustainability team is led by the Head of
Sustainability. The team is responsible for day-to-
day management of sustainability, providing
a framework within which all parts of the
business can work. The team reports to the
Chief Strategy Officer.
Department leads are accountable for the
implementation of sustainability through
operations, activities and projects.
In 2023, a new Environmental Sustainability
Working Group will be set up. This will provide
a forum for the coordinated implementation of
environmental sustainability actions across the
company, in particular those to support our net
zero, biodiversity and circular economy ambitions.
Board
Has ultimate responsibility for sustainability.
Executive Management Team
Overall executive responsibility for sustainability.
Sustainability Team
Responsible for the day-to-day management of sustainability.
ESR Committee
Develops and monitors
Glenveagh’s approach
to sustainability.
Audit & Risk Committee
Reviews sustainability risks
and opportunities.
Department Leads
Responsible for the implementation of sustainability commitments
through operations, activities and projects.
Environmental Sustainability Working Group
A forum to coordinate the implementation of environmental sustainability
actions across the Group.
ENVIRONMENT, SOCIAL AND GOVERNANCE PERFORMANCE
43
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Environmental
Indicator
Link to
strategy
Link to
material issues
UN SDGs
Measure
Unit
2022
2021
2
2020
2
Climate – carbon
emissions
1
100sqm of units completed
100sqm
1,563
1,255
875
04
06
08
11
12
13
14
18
23
Scope 1 – combustion of fuel
tCO
2
e
3,567
3,048
2,700
Scope 2 – location based
tCO
2
e
813
518
519
Scope 2 – market-based
tCO
2
e
227
189
247
Total Scopes 1 and 2 – location based
tCO
2
e
4,380
3,566
3,219
Total Scopes 1 and 2 – market-based
tCO
2
e
3,794
3,237
2,947
Scopes 1 and 2 per 100sqm of completed units – location based
tCO
2
e/100sqm
2.8
2.8
3.7
Scopes 1 and 2 per 100sqm of completed units – market-based
tCO
2
e/100sqm
2.4
2.6
3.4
Total Scope 3 GHG emissions
tCO
2
e
223,332
188,618
128,645
Total Scopes 1, 2 and 3 – location based
tCO
2
e
227,712
192,184
131,864
Total Scopes 1, 2 and 3 – market-based
tCO
2
e
227,126
191,854
131,592
Emissions per 100sqm completed homes – Scopes 1, 2 and 3 – location based
tCO
2
e/100sqm
145.7
153.1
150.7
Emissions per 100sqm completed homes – Scopes 1, 2 and 3 – market-based
tCO
2
e/100sqm
145.3
152.8
150.4
Scope 3 emissions categories
Waste
tCO
2
e
195
120
78
Business travel
tCO
2
e
44
18
17
Other fuel and energy
tCO
2
e
1,119
894
1,077
Upstream transportation and distribution
tCO
2
e
7,143
6,442
4,715
Employee commute
tCO
2
e
1,093
908
879
Capital goods – construction materials
tCO
2
e
102,083
80,526
52,309
Capital goods – assets
tCO
2
e
678
769
176
Purchased goods and services
tCO
2
e
55,642
42,372
25,880
Occupant energy use (over 50 years) – regulated
tCO
2
e
17,637
24,855
22,539
Occupant energy use (over 50 years) – unregulated
tCO
2
e
30,888
26,770
17,639
Occupant emissions – refrigerants
tCO
2
e
1,388
1,085
508
End-of-life treatment of product
tCO
2
e
5,423
3,857
2,828
We monitor a range of ESG indicators
across our business activities, and many
of these align to our strategic priorities.
ENVIRONMENT, SOCIAL AND GOVERNANCE PERFORMANCE
CONTINUED
44
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
ENVIRONMENT, SOCIAL AND GOVERNANCE PERFORMANCE
CONTINUED
Indicator
Link to
strategy
Link to
material issues
UN SDGs
Measure
Unit
2022
2021
2
2020
2
Climate – energy
efficiency
04
06
08
11
12
13
14
18
23
Fuel and electricity consumption from sites and offices
mWh
16,707
13,779
13,580
Operation energy intensity
mWh/100sqm
11
11
16
Climate – low
carbon homes
04
06
08
11
12
13
14
18
23
Proportion of total homes with Building Energy Rating (BER) of A1
%
55%
–
–
Proportion of total homes with Building Energy Rating (BER) of A2
%
44%
82%
72%
Proportion of total homes with Building Energy Rating (BER) of A3
%
0.2%
18%
28%
Average kilowatt hours per sqm per year across all homes delivered
kwh/m2/yr
30
45
46
Homes incorporating renewable energy
%
99.7%
94%
71%
04
06
08
11
12
13
14
18
23
Proportion of off-site manufactured houses as a share of all houses sold
%
71%
77%
85%
Off-site manufactured timberframe houses
%
70%
76%
85%
Other house types
%
30%
24%
15%
Resource use and
circular economy
04
06
08
11
12
13
14
18
23
Construction waste
Tonnes
10,381
6,191
3,661
Construction waste per 100sqm build
Tonnes/100sqm
6.6
4.9
4.2
Construction waste recycled
%
8.9%
10.2%
6.1%
Construction waste recovered
%
91.1%
89.8%
93.9%
Biodiversity
03
07
09
20
Biodiversity risks assessed at % of sites
%
100%
100%
100%
Environmental
continued
45
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
ENVIRONMENT, SOCIAL AND GOVERNANCE PERFORMANCE
CONTINUED
Social
Indicator
Link to
strategy
Link to
material issues
UN SDGs
Measure
Unit
2022
2021
2020
Consumers
and end-users
13
15
22
25
29
Core ASP
€’k
330
308
311
Proportion of core homes priced below the new market median
%
73%
69%
72%
First-time buyers (% of private sales)
%
88%
87%
82%
Proportion of customers who would recommend us to a friend
%
91%
89%
83%
Own workforce
15
17
22
24
25
Average number of employees
3
Headcount
411
329
318
Average number of salaried employees
Headcount
316
247
206
Great Place to Work Survey Score
%
78%
72%
–
Annual employee turnover
%
14%
10%
11%
Glenveagh’s graduate programme participants
Headcount
 33
24
12
Total training hours (ex. Health and Safety training)
Hours
6,522
3,919
2,266
Training hours per monthly salaried employee (ex. Health and Safety training)
Hours
19
16
11
Women in workforce – all employees
%
30%
27%
24%
Women amongst new graduates
%
 33%
30%
18%
Total Recordable Incident Rate
TRIR
3.54
2.38
2.43
Health and Safety total training hours
Hours
5,205
3,644
1,932
Health and Safety training hours per all employees
Hours/Employee
11
11
6
Average monthly Health and Safety audit compliance score across all sites
%
88%
89%
88%
Proportion of independent audits
%
20%
30%
20%
Affected
communities
20
Donations to charities/local communities
€’k
394
129
n/a
Employee fundraising
€’k
18
19
n/a
46
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Governance
Indicator
Link to
strategy
Link to
material issues
UN SDGs
Measure
Unit
2022
2021
2020
Ratings
04
06
08
10
12
13
14
18
23
CDP Climate Change
B
A-
B
MSCI
AA
AA
BBB
Sustainalytics
19.3
Low Risk
19.3
Low Risk
23.9
Medium
Risk
ENVIRONMENT, SOCIAL AND GOVERNANCE PERFORMANCE
CONTINUED
1.
The assessment of Glenveagh’s GHG emissions footprint has been carried out in line with the principles and guidelines provided by the two relevant GHG protocol standards: GHG Protocol Corporate Accounting and Reporting Standard (2004), and its supplement GHG
Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The assessment methodology also considers the following sector specific guidance: RICS professional standards and guidance, UK – Whole life carbon assessment for the built environment 1st edition,
November 2017. The organisational boundary for Glenveagh’s GHG assessment has been determined on an operational-control basis. The assessment considers the six greenhouse gases covered by the Kyoto and Montreal Protocols: carbon dioxide (CO
2
), methane (CH4), nitrous
oxide (N2O), sulphur hexafluoride (SF6), perfluorocarbons (PFCs) and hydrofluorocarbons (HFCs). The total footprint is expressed as carbon dioxide equivalent (CO
2
e) applying the Global Warming Potential values provided by IPCC (2007). A third-party verification (ISO 14064-3)
was completed for reported emissions. This was carried out by Clearstream Solutions Ltd. A copy of their GHG verification statement and more details on our methodology is available at https://glenveagh.ie/corporate/sustainability.
2.
2021 and 2020 emissions data has been restated to improve the accuracy of reporting and to reflect both improved methodology and data availability in calculation of all categories of emissions reported. This data was not subject to verification.
3.
Average number of employees displayed in this table excludes Non-executive Directors. The headcount on the last day of each month is used to calculate the average.
47
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Non-financial information statement
Our annual report contains a range of non-financial information. A summary of this can be found in the table below.
Reporting requirement
Relevant policies
More information on our impact and risks
Environmental matters
>
Sustainability policy.
>
Waste and resources policy.
>
Climate change policy.
>
Environmental policy.
>
Sustainable procurement policy.
>
Embracing innovation (page 35).
>
Driving operational excellence (page 34).
>
Environmental performance (pages 43 and 44).
>
Action and disclosure on climate change (pages 51 to 56).
>
Risk management report (pages 57 to 66).
Social and employee matters
>
Community engagement policy.
>
Health and safety policy.
>
Diversity and inclusion policy.
>
Charitable giving policy.
>
Customer service policy.
>
Placing the customer first (page 31).
>
Valuing and developing our colleagues (pages 32 and 33).
>
Creating sustainable and thriving places (pages 36 and 37).
>
Social performance (page 45).
>
Risk management report (pages 57 to 66).
Respect for human rights
>
Human rights, anti-slavery, and human trafficking policy.
>
Whistleblowing policy.
>
Diversity and inclusion policy.
>
Vendor code of conduct.
>
Valuing and developing our colleagues (pages 32 and 33).
>
Corporate governance (pages 70 to 108).
>
Our stakeholders (pages 26 to 29).
>
Risk management report (pages 57 to 66).
Anti-corruption and bribery matters
>
Whistleblowing policy.
>
Anti-bribery policy.
>
Audit and risk committee report (pages 86 to 89).
Business model
Information on our business model can be found on pages 20 to 23.
Non-financial KPIs
Our non-financial KPIs can be found on page 106.
Glenveagh also monitors and reports performance through additional data which can be found on pages 43 to 46.
Principal risks
Our principal risks and uncertainties can be found on pages 59 to 66.
ENVIRONMENT, SOCIAL AND GOVERNANCE PERFORMANCE
CONTINUED
48
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Activity metric
Code
Category
2022
2021
2020
Number of controlled lots
IF-HB-000.A
Quantitative
15,198
17,014
14,147
Number of homes delivered
IF-HB-000.B
Quantitative
1,358
1,150
700
Number of active selling communities
1
IF-HB-000.C
Quantitative
12
15
16
Topic
Code
Accounting metric
2022
2021
2020
Land use and
ecological impacts
IF-HB-160a.1
Number of (1) lots and (2) homes delivered
on redevelopment sites.
(1) 2,103
(2) 186
(1) 3,611
(2) 248
(1) 4,005
(2) 25
IF-HB-160a.2
Number of (1) lots and (2) homes delivered in
regions with High or Extremely High Baseline
Water Stress.
(1) 0
(2) 0
(1) 0
(2) 0
(1) 0
(2) 0
IF-HB-160a.3
Total amount of monetary losses as a result of
legal proceedings associated with environmental
regulations.
€nil
€nil
€nil
IF-HB-160a.4
Discussion of process to integrate environmental
considerations into site selection, site design,
and site development and construction.
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 competent environmental
experts using the appropriate recognised Irish and European Union (‘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 and minimise 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.
SUSTAINABILITY ACCOUNTING STANDARDS BOARD DISCLOSURES
We have chosen to disclose sustainability topics and accounting methods in line with the Home Builders Sustainability Accounting Standard issued by the Sustainability Accounting Standards Board (‘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.
1.
The scope of active selling communities includes those communities or developments open for sales with at least five homes or lots
remaining to sell as of the last day of the reporting period.
49
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Topic
Code
Accounting metric
2022
2021
2020
Workforce health
and safety
IF-HB-320a.1
(1) Total recordable incident rate (‘TRIR’) and
(2) fatality rate for (a) direct employees and (b)
contract employees.
2,3
Accident data includes Glenveagh employees,
contractors, suppliers, and public. Our data
collection process does not segregate employees
from contractors.
(1) 3.54
(2) 0
(1) 2.38
(2) 0
(1) 2.43
(2) 0
Design for
resource efficiency
IF-HB-410a.1
(1) Number of homes that obtained a certified
HERS® Index Score and (2) average score.
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.
(1) 1,358
(2)
(1) 1,150
(2)
(1) 700
(2)
55% of homes were A1 rated
44% of homes were A2 rated
82% of homes were A2 rated
72% of homes were A2 rated
0.2% of homes were A3 rated
18% of homes were A3 rated
28% of homes were A3 rated
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.
All units in our developments include fixtures that have flow restrictors and aerators or are sized to reduce the
water usage of our homes.
Design for
resource efficiency
IF-HB-410a.4
Description of risks and opportunities related
to incorporating resource efficiency into home
design, and how benefits are communicated
to customers.
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 Group-wide risks.
There are climate-related risks associated with unexpected market outcomes that are included into the Sustainability
Risk and Opportunity Register, as they could have an impact on Glenveagh’s financial and operational performance.
One such risk is the shift in 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 since November 2020 nearly all our homes have been 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, higher quality materials used, and the use of renewable technologies in our homes, such as heat pumps.
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.
SUSTAINABILITY ACCOUNTING STANDARDS BOARD DISCLOSURES
CONTINUED
2.
Reportable Incidents in Ireland are where a person is absent for more than 3 days not including the day of injury.
3.
In our 2020 sustainability report, we incorrectly disclosed ‘0’ for (a) and (b) for 2019. This should have been ‘1’.
50
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Topic
Code
Accounting metric
2022
2021
2020
Community
impacts of new
developments
IF-HB-410b.1
Description of how proximity and access to
infrastructure, services, and economic centres
affect site selection and development decisions.
At Glenveagh, we consider where the house is located 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 amenities. 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 authorities to ensure we
consider all aspects of infrastructure provision, current and future.
IF-HB-410b.2
Number of (1) lots and (2) homes delivered on
infill sites
4
.
(1) 1,668
(2) 83
(1) 4,196
(2) 248
(1) 3,662
(2) 25
IF-HB-410b.3
(1) Number of homes delivered in compact
developments and (2) average density
5
.
(1) 1,186
(2) 14
(1) 672
(2) 15.8
(1) 313
(2) 16.1
Climate change
adaptation
IF-HB-420a.1
Number of lots located in 100-year flood zones.
0
0
0
IF-HB-420a.2
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 adopted through the CDP reporting benchmarks.
See
pages 51 to 56
for more detail on climate risks
4.
Infill sites defined as those sites that are surrounded by other developments from both sides.
5.
Compact developments are defined as those sites with 13 or more units per acre.
SUSTAINABILITY ACCOUNTING STANDARDS BOARD DISCLOSURES
CONTINUED
51
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Action and
disclosure on
climate change.
At Glenveagh, we understand the immediate
need for action on climate.
The Intergovernmental Panel on Climate
Change (‘IPCC’) has delivered its strongest
warnings yet, and legislation and action
plans at European and national levels are
clear about what needs to happen. With
construction and the built environment
sectors accounting for 37% of Ireland’s carbon
emissions, we acknowledge the role we need
to play as a leading Irish homebuilder.
Our stakeholders also told us how important
action on climate change is to them, and
we are committed to providing clear and
transparent disclosures to them.
Glenveagh is required to report against the Task
Force on Climate-related Financial Disclosures
(‘TCFD’) recommendations and recommended
disclosures in its Annual Report covering
financial year ended 31 December 2022
according to the Financial Conduct Authority
(FCA) listing rule LR 9.8.6 R(8). Glenveagh is
compliant with the TCFD recommendations and
recommended disclosures, with the exception
of Strategy 2.b (impact on business strategy
and financial planning) and c (resilience to
scenarios). We will complete work throughout
the year with a view to full compliance in
2023. We will also explore how we can further
improve all of the TCFD disclosures as we
become increasingly mature in our approach.
ACTION AND DISCLOSURE ON CLIMATE CHANGE
Our climate action journey
2023
>
Net Zero Transition Plan published.
>
Successfully completed our first sustainability-linked financing facility.
2020
>
First sustainability report published.
>
Reported Scope 1 and 2 emissions with
external assurance.
>
First CDP disclosure – B rating achieved.
2019
>
Sustainability approach
agreed by Board.
2017
>
Company founded.
2021
>
Sustainability governance structures set up.
>
First climate target set.
>
CDP rating A-.
>
Electric vehicles (‘EVs’) introduced to fleet.
>
Published full Scope 3 emissions.
2022
>
Joined Irish Green Building Council (‘IGBC’).
>
Signed Low Carbon Pledge committing to setting science-based targets (‘SBTs’).
>
Commenced Hydrotreated Vegetable Oil (‘HVO’) trials.
>
CDP rating B.
52
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
ACTION AND DISCLOSURE ON CLIMATE CHANGE
CONTINUED
GOVERNANCE
Board oversight of climate-related
risks and opportunities
The Board sets the strategic direction for Glenveagh
taking consideration of a wide array of relevant
issues including climate change. In approving the
evolved business strategy ‘Building Better’ during
2022, the Board took account of the materiality of
climate change risks and opportunities as defined
through the materiality assessment. Action on
climate-change has therefore been integrated
throughout the business strategy.
The Board’s approach to climate is informed by
dedicated training sessions with external specialists,
presentations from internal experts and the
outputs from the Group’s materiality assessment
and stakeholder engagement. The Board receives
regular updates on sustainability, and in particular
climate change, throughout the year.
The Board’s appraisal of climate risk is indicated
through its strategic decision making. In 2022, it
made two significant decisions with respect to
climate change:
1.
It identified climate change as a principal risk
for the Group.
2. It approved the Group’s commitment to setting
science-based targets.
The Board is supported on climate change by two
Board committees.
>
The Environmental and Social Responsibility
(‘ESR’) Committee is responsible for developing
and monitoring our approach to sustainability
(including climate change). Throughout
2022, the committee discussed in detail with
management the development of the Group’s
net zero approach and the commitment to
setting science-based targets. This committee
also reviewed and considered the climate-
related risks and opportunities in advance
of their consideration by the Audit and Risk
Committee (‘ARC’). The ESR Committee’s report
can be found on page 104.
>
The ARC is responsible for reviewing our
climate risks and opportunities and ensuring
that our controls and mitigants are adequate
and effective. Climate risks are included in
our risk register which is a standing item at
committee meetings. In addition, climate risks
and opportunities were reviewed specifically
during 2022 and the ARC recommended that
climate change be identified as a principal risk
for the Group. The ARC’s report can be found
on page 86.
Management’s role in assessing and managing
climate-related risks and opportunities
The Executive Committee has overall responsibility
for implementing the business strategy as agreed by
the Board, which includes our approach to climate
change. Climate change, as part of sustainability,
is a regular agenda item for this committee. As the
most senior executive, the CEO has responsibility for
the management of climate-related initiatives under
our agreed business strategy. The CEO also agrees
the annual objectives for the Chief Strategy Officer
who has specific executive responsibility for climate.
Management is supported by the sustainability
team, led by the Head of Sustainability. The team
is responsible for day-to-day management of
sustainability, providing a framework within which
all parts of the business can work.
Additional information with regard to governance of
sustainability in Glenveagh can be found on
page 42
.
STRATEGY
In reviewing our business strategy during 2022,
action on climate played a significant part in
formulating our strategic priorities ensuring
we adequately manage the risks and take
advantage of the opportunities where possible.
Action on climate is embedded throughout our
strategic priorities.
The following pages set out the climate-related
risks and opportunities that we have identified
over the short, medium, and long term as well
as their potential impacts and what we are
currently doing in response. In 2023, we will test
the resilience of our business strategy through
climate-related scenario analysis.
IN APPROVING THE
EVOLVED BUSINESS
STRATEGY ‘BUILDING
BETTER’ DURING
2022, THE BOARD
TOOK ACCOUNT OF
THE MATERIALITY
OF CLIMATE
CHANGE RISKS AND
OPPORTUNITIES AS
DEFINED THROUGH
THE MATERIALITY
ASSESSMENT.
PLACING THE CUSTOMER FIRST
>
High-quality, energy-efficient homes.
>
Educating customers on reducing their
carbon footprint.
VALUING AND DEVELOPING
OUR COLLEAGUES
>
Developing sustainability skills across
the business.
GROWING SUSTAINABLE
AND THRIVING PLACES
>
Building communities that support
sustainability.
>
Nature-based solutions to climate
impacts/potential impacts.
ENSURING OPERATIONAL
EXCELLENCE
>
Driving efficiency in resource use to
reduce GHG emissions.
>
Using renewable fuels where possible.
DRIVING INNOVATION
>
Driving innovation in design, materials
used, offsite manufacturing etc. to reduce
embodied carbon in our homes.
How climate action
is embedded in our
strategic priorities
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Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
OUR RISKS AND OPPORTUNITIES
Risk/Opportunity
Risk description
Potential impact
Our response
HIGHEST RATED TRANSITION RISKS
SUPPLIERS’ PACE OF
CHANGE AND NET ZERO
ALIGNMENT
Time frame:
Medium-long-term
Materiality:
High
Risk type: 
Reputational,
Technology, Market
There is a risk that key suppliers of high carbon impact
materials and works on-site don’t address climate change
challenges fast enough for us to align with our planned
net zero journey, with little or no alternative available.
Increased costs resulting from preferred suppliers’
inability to scale or transition to meet our sustainability
needs cost effectively.
Through the development of our Net Zero Transition Plan, we have begun
identifying and assessing future trends and options to implement in the Group’s
operations. This has necessitated supplier engagement and collaboration
to ensure suppliers are aware of such movements and understand what is
expected of them. We have also begun vertical integration of our supply-chain
with the acquisition of Harmony Timber Solutions and the development of key
manufacturing capabilities.
CARBON PRICING
Time frame:
Medium-term
Materiality:
High
Risk type: 
Policy and Legal,
Technology, Market, Reputation
Failure to move away from carbon intensive products/
services at a fast enough pace while carbon taxes
continue to rise.
Increased costs due to carbon taxes.
Impairment in carrying value of carbon-intensive assets
(e.g. plant and machinery).
The development of our Net Zero Transition Plan and commitment to science-
based targets puts us on a trajectory towards decarbonisation across our value
chain. This will see a reduction in carbon emissions and a decrease in exposure
to carbon-pricing risks. Increased supplier engagement keeps us informed
on the cutting-edge trends in the low carbon economy and solidifies good
business relationships. This assists us to quickly transition away from carbon
intensive products/services.
OFF-SITE MANUFACTURING
AND MODERN METHODS
OF CONSTRUCTION (‘MMC’)
Time frame:
Medium-term
Materiality:
High
Risk type: 
Technology
Failure to fully/quickly take advantage of off-site
manufacturing and MMC to address net zero challenges.
Increased construction costs resulting from the continued
reliance on skilled labour, time spent on-site and the
absence of efficiency benefits from standardisation in
build methodology.
The Group set up its Innovation Department which works closely with the
sustainability team to ensure the benefits from MMC are maximised and that net
zero targets are achieved. Furthermore, off-site manufacturing and MMC have
been addressed in the development of the business strategy and sustainability
has been interwoven throughout this. Additionally, the Group has begun the
vertical integration of the supply-chain with the acquisition of Harmony Timber
Solutions and the development of key manufacturing capabilities.
DEVELOPMENT OF LOW
CARBON TECHNOLOGY
Time frame:
Medium-long-term
Materiality:
High
Risk type: 
Technology,
Market, Reputation
Lack of pace in the market developing adequate/
appropriate low carbon technology combined with
a faster shift to low carbon technology or products,
leads to lack of supply, price rises and ultimately an
inability for the Group to meet certain commitments
and obligations.
Increased construction costs due to the lack of
appropriate low carbon materials.
Through the development of the Group’s Net Zero Transition Plan we have
acknowledged the need to act quickly and engage with supply-chains to
solidify strong relationships, ensuring we remain at the forefront of developments.
Concurrently, the sustainability team and external consultants are also monitoring
any developments in the area to assist in achieving this goal. Additionally, our
commitment to low carbon technology will create increased demand in the
market encouraging development to be undertaken at a faster pace within our
value chain.
ACTION AND DISCLOSURE ON CLIMATE CHANGE
CONTINUED
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Annual Report and Accounts 2022
Strategic Report
ACTION AND DISCLOSURE ON CLIMATE CHANGE
CONTINUED
Risk/Opportunity
Risk description
Potential impact
Our response
HIGHEST-RATED PHYSICAL RISKS
IMPACTS ON
SUPPLY-CHAINS
Time frame:
Medium-term
Materiality:
High
Risk type: 
Acute physical, market
Supply-chain is impacted by disruption due to frequent
severe weather events causing delays to deliveries and
subsequent delays to our schedules. Suppliers themselves
are restricted or impacted by transition risks affecting
availability and the cost of goods and services to us.
Increased construction costs resulting from disrupted
construction programmes and availability of goods and
services.
The Group has begun supply-chain integration as demonstrated through our
investment in our manufacturing facilities. Increased supplier engagement will
also raise awareness of the various climate risks that our suppliers may face.
SEVERE WEATHER EVENTS
Time frame:
Short-term
Materiality:
Low
Risk type: 
Acute physical
More frequent storms, extreme rainfall, flooding and
other severe weather events result in sites being closed
for longer periods of time at greater frequency, as well as
potentially unsafe conditions to people on construction
sites during extreme weather events e.g. storms and
heatwave conditions.
Increased construction costs due to prolonged
construction programmes resulting from severe
weather related delays.
Greater reliance on off-site construction will reduce the exposure to this risk.
Health and Safety systems and procedures are in place with weather warnings
being issued and safety procedures activated according to severity of weather.
HIGHEST RATES OPPORTUNITIES
A STANDARD SETTER
IN THE INDUSTRY
Time frame:
Medium-term
Materiality:
Medium
Opportunity type: 
Product
Become a standard setter in the industry driving suppliers
and partners to come on the journey with us as their
partner of choice.
Decreased construction costs resulting from better
bargaining positions.
Our Net Zero Transition Plan sets out our ambition to our stakeholders, including
our suppliers and partners, with respect to climate change. Increased supplier
engagement, which is a key action under the plan will facilitate increased
opportunities to partner and collaborate with suppliers to take advantage
of opportunities.
Vertical integration of supply-chain and development of key manufacturing
capabilities has already begun.
ALIGNMENT WITH
GREEN MORTGAGES
Time frame:
Short-term
Materiality:
Medium
Opportunity type: 
Product
Align our product with consumer green finance
opportunities making Glenveagh houses the product
of choice in the market.
Increased revenue due to alignment with customer
financing options.
Decrease in the cost or increase in the availability
of capital.
Our homes are already highly energy efficient with 55% of Glenveagh
homes having an A1 rating making all of our homes aligned with green
financing opportunities.
We will also educate our customers regarding the support available including
green finance opportunities.
SUSTAINABILITY
FINANCING
Time frame:
Short-term
Materiality:
Medium
Opportunity type: 
Markets
Avail of green financing options due to performance
against targets.
Decrease in the cost or increase in the availability
of capital.
Successfully completed our first sustainability-linked financing facility in 2023.
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Financial Statements
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Annual Report and Accounts 2022
Strategic Report
ACTION AND DISCLOSURE ON CLIMATE CHANGE
CONTINUED
RISK MANAGEMENT
Identifying and assessing climate-related
risks and opportunities
Glenveagh’s risk management framework is
supplemented by a specific process to identify
and assess climate-related risks and opportunities.
This includes viewing risk over a longer timeframe
than normal. Desk-based research including
reviews of relevant climate-change literature on
impacts and risks, peer reviews and review of the
forthcoming regulatory requirements was carried
out. From this a long list of potential climate risks
and opportunities were developed, reviewed and
consolidated further.
Timeframes were defined as follows:
>
Short-term
0–3 years
>
Medium-term
3–5 years
>
Long-term
+ 5 years
An external consultant reviewed the list and it
was also tested with stakeholders as part of
our materiality assessment. The risks were then
individually scored using our standard risk scoring
approach i.e. assessing impact and likelihood and
the effectiveness of controls in place, to come up
with a residual score. The risks and opportunities
presented on the previous pages are the output of
this exercise and represent the highest-ranked for
transition and physical risks as well as opportunities.
Managing climate-related risks
and opportunities
Glenveagh has developed a number of actions
which support the realisation of the opportunities
identified and the mitigation of the risks. These
actions are outlined on the previous pages
alongside each of the risks and opportunities.
Additional information can be found in our Net
Zero Transition Plan, the strategic section of this
report and in our CDP response.
Integrating climate-related risks into the
organisation’s overall risk management
Our risk management framework provides a
common risk management process to identify,
assess, mitigate, monitor and report risks which
impact the business, including climate. Climate
risks are included in our risk register along with
all other relevant risks for the business and are
managed in accordance with the framework. For
the first time, climate change has been identified
as a principal risk for the Group indicating its
priority within our overall strategy. In addition,
other principal risks are reviewed to ensure that
climate-related elements are integrated where
appropriate, e.g. availability and increased cost
of materials and labour.
METRICS
Glenveagh monitors a number of metrics in the
area of climate. Our detailed Scope 1, 2 and 3
emissions information can be found on page
43. Our assurance certificate and methodology
document can be found at https://glenveagh.
ie/corporate/sustainability. We also monitor the
following metrics to assess our climate related
risks and opportunities:
>
Proportion of total homes with Building Energy
Rating (BER) of A1 and A2.
>
Average kilowatt hours per sqm per year
(kwh/m
2
/yr) across all homes delivered.
>
CDP score.
In 2021, we set a target to achieve a 25% reduction
in our direct emissions (Scopes 1 and 2) intensity by
2025 against a 2020 baseline (tonnes of CO
2
e per
100 sqm of completed homes). Our 2022 emissions
represent an 24% reduction compared to the 2020
baseline. As part of the development of our Net
Zero Transition Plan, we have developed both near-
term GHG emissions reduction targets and long-
term net zero GHG emissions targets for Scopes
1, 2 and 3. These targets have been developed in
line with guidance from the Science Based Targets
initiative (‘SBTi’) and have been submitted to the
SBTi for validation.
NEAR-TERM TARGET
46%
absolute reduction in Scopes 1 and 2 by 2031*
55%
reduction in Scope 3 emissions intensity
(tCO
2
e/100sqm) by 2031*
LONG-TERM TARGET
Net Zero
in Scopes 1 and 2 by 2050*
Net Zero
in Scope 3 by 2050*
FOR THE FIRST TIME, CLIMATE CHANGE HAS
BEEN IDENTIFIED AS A PRINCIPAL RISK FOR
THE GROUP INDICATING ITS PRIORITY WITHIN
OUR OVERALL STRATEGY.
* Subject to validation.
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Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
* Subject to validation.
Transition
fleet to EV
Transition sites
to renewable fuel
Renewable
electricity
Electrification
Increased
efficiency
Subcontractor
engagement
Innovation
Raising
awareness
Data quality
Supplier
engagement
Scopes 1 and 2
Robust
governance
Transparent
reporting
Stakeholder
engagement
Risk
management
Now
2050
Actions
Targets
Supported by:
Scope 3
46%
absolute reduction in
Scopes 1 and 2 by 2031*
Net Zero
for Scopes 1 and 2 by 2050*
55%
reduction in Scope 3 emissions
intensity (tCO
2
e/100sqm) by
2031*
Net Zero
for Scope 3 by 2050*
Aligned to a 1.5°C trajectory
ACTION AND DISCLOSURE ON CLIMATE CHANGE
CONTINUED
OUR NET ZERO TRANSITION PLAN
Throughout 2022, we focused on developing our Net Zero Transition Plan, which sets out the actions that we will take to put us on a 1.5°C pathway and achieve the ambitious targets that we set. Our Net Zero
Transition Plan can be found here: https://glenveagh.ie/corporate/sustainability
57
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Annual Report and Accounts 2022
Strategic Report
Risk management
report
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 Glenveagh
maintains the appropriate level of risk to achieve
its strategic objectives, while also ensuring
good corporate governance and prudent risk
management is implemented. The Board has
approved our risk management framework which
provides a common risk management process to
identify, assess, mitigate, monitor and report risks
which impact the business. Our risk management
process is an integrated approach with input
across all levels of the Group that aims to ensure
that all risks to which Glenveagh is exposed are
identified, and understood, and appropriate
mitigating controls are implemented to manage
the risks effectively and protect the business.
As part of its oversight responsibilities,
the audit and risk committee (‘ARC’) is
responsible for reviewing the adequacy
and effectiveness of Glenveagh’s internal
controls and risk management process
(page 55). Our 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
risks, controls and their approved ratings
based on likelihood and impact from both
an inherent and residual risk 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.
RISK MANAGEMENT REPORT
Our 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.
Our risk management framework
KEY TO RISK MANAGEMENT
Identify
Assess
Mitigate
Monitor
Report
TOP-DOWN
RISK
BOTTOM-UP
RISK
Underpinned by
Department Heads
Senior Leadership
Team
Site
Leadership
Audit & Risk
Committee
Environmental
& Social
Responsibility
Committee
Executive
Committee
Internal Audit
Function
LEVEL 2
Site
Non-Corporate
Departments
Corporate
Departments
LEVEL 1
Board of Directors
LEVEL 3
LEVEL 4
Our Vision
Our Culture
Our Mission
Drivers of Success
Strategic Priorities
Our Stakeholders
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Financial Statements
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Annual Report and Accounts 2022
Strategic Report
Climate Risk and Opportunities
In line with the recommendations of the Task Force
on Climate Related Financial Disclosures (‘TCFD’)
reporting requirements, the Group has considered
climate-related impacts within the organisation
under the pillars of Governance, Strategy, Risk
Management and Metrics and Targets, as
outlined on pages 51 to 56. The Group undertook
a specific process to identify and assess climate-
related risks and opportunities informed by
relevant climate-change literature, peer reviews
and forthcoming regulatory requirements. A long
list of potential climate risks and opportunities was
developed, reviewed and consolidated. These risks
were then individually scored in line with our risk
management framework
Risks include both transition risks, i.e. those
associated with the transition to a decarbonised
economy, and physical risks i.e. impacts from
changes in weather and climate.
In 2022, climate change moved from an emerging
risk to a principal risk for the first time.
Risk management in action
Risk 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 Glenveagh 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.
At Board level, the Environmental and
Social Responsibility Committee maintains
responsibility for compliance with the evolving
regulatory disclosure landscape and our key
targets in respect of sustainability.
The environmental health and safety
(‘EHS’) department is a dedicated resource
whose activities are mainly focused on risk
management throughout the business.
The certification to ISO 14001 environmental
management and ISO 45001 occupational
health and safety, led by the EHS department,
demonstrates our commitment to managing
our environmental impact and continued
improvement of health and safety standards
in the workplace.
The services and utilities department is a
dedicated resource whose activities are
mainly focused on the risk management
of product quality and building regulations
throughout the business. The certification to
ISO 9001 quality management, demonstrates
our commitment to monitoring the quality
of our products and drive for continuous
improvement.
There are a number of corporate office
departments whose activities support EHS
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.
Glenveagh 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. We purchased our third
manufacturing facility in Co. Wicklow. This,
coupled with the standardisation of house
typologies and construction methodologies,
further derisks our medium, and long-term
housing delivery targets.
RISK MANAGEMENT REPORT
CONTINUED
Glenveagh has implemented a line of defence model
Line of defence
Function
Responsibilities
Level 1
Board of Directors
Overall responsibility for determining the nature and extent of
the significant risks it is willing to take in achieving the Group’s
strategic objectives and for setting the Group’s risk appetite.
Level 2
Executive, Audit & Risk
Committee, Environmental &
Social Responsibility Committee
and internal audit
Committees have responsibility for risk monitoring and,
ensuring policies are implemented throughout the business.
Internal audit provides risk 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.
Level 3
Department Heads &
senior leadership team
Risk 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.
Level 4
Department teams
Identify risks within the business with responsibility for
implementing mitigation plans. Take a proactive approach
to identifying, assessing and mitigating risk.
88%
H&S score in 2022
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Annual Report and Accounts 2022
Strategic Report
RISK 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.
Principal risks
01
Adverse changes to government policy & regulations (operational risk)
02
Climate change (external risk)
03
Availability and increased cost of materials and labour (operational risk)
04
Adverse macroeconomic conditions (external risk)
05
Mortgage availability and affordability (external risk)
06
Failure to obtain expected planning permission (operational risk)
07
Inadequate project management (operational risk)
08
Attracting, retaining and developing people (operational risk)
09
Data protection and cyber security (operational risk)
10
Insufficient health and safety procedures (operational risk)
11
Decline in product quality (reputational risk)
RISK MANAGEMENT REPORT
CONTINUED
Principal risks and uncertainties
The 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 business in achieving our strategic objectives. The Board and ARC have
reviewed the principal risks and have considered the new risks introduced for 2022.
Likelihood
Impact
5
2
7
6
1
4
8
9
10
11
3
Key: 
Very high risk
High risk
5
5
3
3
1
1
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Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Risk category
Risk or uncertainty
and potential impact
Management’s view
Key mitigating considerations
Risk rating
change
Operational
risk
1. Adverse changes to government
policy and regulations
A change in the domestic
political environment and/or
government policy (including
tax legislation, support of the
housebuilding sector, Part V
allowance and first-time buyer
assistance) could adversely affect
Glenveagh’s financial performance.
The provision of social and affordable housing will remain a significant political issue
into the future until a sustained response to the supply/demand gap occurs. The current
government has implemented or committed to policies which provide significant tailwinds
to the construction industry such as:
>
Help to Buy (due to expire at the end of 2024).
>
New rental tenure scheme (cost-rental) and First Home scheme (shared equity
scheme) in the Affordable Housing Act 2021.
>
Introduction of a €450 million subvention fund to assist in the delivery of urban
apartments and five-year increase in social housing stock of at least 50,000.
>
Introduction of the Land Development Agency Act 2021 and Large-scale Residential
Developments (LRDs).
However, uncertainty exists regarding the formation of any future government and the
potential policy headwinds that this might bring for the construction industry. Political
influence has and can result in the government quickly enacting changes to legislation
and policy. Further potential changes to legislation such as the zoned land tax or
concrete levy could adversely impact Glenveagh.
Glenveagh’s management and Board monitor government policy
and political developments on an ongoing basis.
Our site forecasts are conservative by nature and allow for expected
negative changes in government policy and regulation.
We have the capability to redesign developments as appropriate
should this be required.
Glenveagh will consider alternative strategies where required to align
to any changes in the domestic political environment.
Our land bank assembly is focused on affordability, first-time buyers,
attractive locations and within the parameters of government
support schemes.
We will continue to develop partnerships with local authorities.
We will continue to engage constructively with trade associations
and the government.
Changes to zoning rules as a result
of the National Planning Framework
(‘NPF’) could result in sites being
dezoned, rezoned or phased which
would adversely impact the carrying
value of land, units available within
our land portfolio and ultimately
diminish Glenveagh’s ability to
achieve financial targets.
Our view is that the NPF’s population growth assumption is inadequate, and the
allocation of zoned units is disproportionately weighted in favour of cities in Ireland.
The resulting impact is that local authorities will have reduced unit allocations for zoning
and therefore will have to decrease the quantum of zoned land in their jurisdiction.
Glenveagh is therefore at risk of having sites within such jurisdictions:
>
Dezoned: the site is no longer zoned residential,
>
Rezoned: the site’s zoning is changed to a category other than residential, or
>
Phased: the site retains its zoned residential status however the land would not be
available for release in the short-term.
Glenveagh’s management is prioritising planning lodgements
for sites within our land bank that are in jurisdictions at risk of
zoning reductions.
Glenveagh’s planning department engages in the statutory plan-
making process to seek to protect the assets of the business.
As part of the site-purchase due diligence, the land acquisition team is
in communication with the planning department to assess the planning
and zoning risk under the NPF for potential new site acquisitions.
Glenveagh’s planning department is adopting innovative approaches
to achieving minimum density requirements and is seeking to influence
forthcoming policy around density.
The Government has made a commitment to review the NPF.
External risk
2. Climate change
Changes in climate could impact
Glenveagh either through the
physical impacts of climate change
or the risks and opportunities
associated with the transition to a
net zero economy. Failure to meet
evolving stakeholder and legislative
requirements could adversely affect
our ability to raise capital, financial
performance, reputation and lead
to litigation and fines.
Action on climate change has become a major focus for countries, corporates and citizens
alike in particular in the last few years. The adoption of the Paris Climate Agreement at
international level, the European Green Deal and the Climate Action and Low Carbon
Development (Amendment) Act 2021 in Ireland all signal the direction of travel. The
reporting framework is further set for us through the widespread adoption of TCFD and
the forthcoming disclosure requirements under both the Corporate Sustainability Reporting
Directive (‘CSRD’) and International Sustainability Standards Board (‘ISSB’).
Against the background of these developments, our stakeholders, including investors and
customers, have set out their expectations regarding this agenda and expect action in
line with a 1.5⁰C world. It is management’s view that in order to future-proof the business
and ensure continued access to capital, now is the right time to take positive action for the
changes that need to be made. Additionally, the business needs to respond to consumer
preferences and provide the energy efficient and sustainable product customers want. It is
also our view that there are opportunities in this space to innovate to address not only this
challenge but to continue to be a leader in the area of sustainable housebuilding.
We have robust governance in place with an Environmental & Social
Responsibility Committee at Board-level, executive responsibility and
we have established a Sustainability department.
Our innovation department has been established in line with our
mission and specifically to provide sustainable high-quality homes.
Climate change is a key focus area for the overarching Group strategy
and action is integrated throughout each of the strategic priorities.
We are launching our Net Zero Transition Plan in March 2023 to align
our strategy with a 1.5⁰C world and we will submit our science-based
targets to the Science Based Targets Initiative (‘SBTi’) for verification.
We provide sector-leading A1-rated homes.
Table legend:
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New risk
RISK MANAGEMENT REPORT
CONTINUED
61
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Risk category
Risk or uncertainty
and potential impact
Management’s view
Key mitigating considerations
Risk rating
change
Operational
risk
3. Availability and increased
cost of materials and labour
Shortages, increased costs of
materials and labour and the low
availability/higher cost of more
sustainable materials could lead
to an increase in construction
costs and delays in the completion
of units.
If the Group is unable to control
its costs or pass on any increase
in costs to the purchasers of the
Group’s product, appropriately
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.
In addition, if ethical or responsible
procurement procedures are not
being implemented and followed
this could lead to reputational
damage and/or litigation.
The construction sector has seen significant increased material costs over the past
12 months due to a range of issues including continuing supply-chain constraints,
commodity-price increases, the impacts of escalating energy costs and fuel-cost inflation
in relation to transportation. The business continues to leverage its purchasing power and
scale to negotiate strong terms with both domestic and international suppliers allowing
us to purchase more competitively than the wider market. In addition, the supply-chain
investment in our timber-frame factory and soil recovery facility allow the business to
shield itself from the full effect of the increases that the wider market experienced. As
we progress our net zero strategy, we will need to engage with our suppliers to ensure
that they come on the journey with us and can provide the materials necessary at an
affordable cost to drive down our embodied carbon emissions.
From a labour perspective, the end of all COVID-19 unemployment schemes and the slowdown
in the one-off housing and renovation markets due to the significant cost inflation has resulted
in encouraging labour availability as we open new construction sites. The Group has also seen
the benefits of several recruitment and training initiatives which ensure we continue to attract
and retain a high-performing workforce.
In the short term, our continued investment in supply-chain initiatives and standardisation
will be a significant contributor to managing both materials and labour-cost increases.
Over the medium to long term, modular build and off-site construction are further
mitigants that the business is exploring. A significant benefit from a modular build/
off-site construction approach is a reduction in the reliance on skilled trade labour on
site, therefore shielding the business from any skilled labour shortages or cost increases
over the medium to long term. Additionally, a reduction in housing typologies through
increased standardisation of the Glenveagh product and construction methodology will
further de-risk the business from shortages or increased costs of materials and labour.
This reduced variation in packages procured and construction programmes, enhances
our purchasing power and increases Glenveagh’s attractiveness as the partner of choice
for subcontractors and suppliers.
We have fixed cost contracts in place with subcontractors and
suppliers where possible.
We have the potential to expand our purchasing network should
it be required and are not over-reliant on any one supplier.
Glenveagh engages in financial planning and continuously monitors
and reviews budgeted versus actual costings.
We continuously evaluate partnerships at a site-level with outsourced
labour providers to ensure agreements are in line with the market rates.
We engage in continuous communications with our subcontractor
network and supply-chain, to ensure they are aware of our plans and
to reduce the impact of current trading conditions.
We have strong relationships across the construction industry in Ireland
and with our existing and wider subcontractor network.
Our size and reputation in the market remain highly attractive to
subcontractors and suppliers.
Through acquisition and investment we continue to develop in-house
manufacturing capabilities in timber-frame and light gauge steel.
External risk
4. Adverse macroeconomic
conditions
Glenveagh operates in a property
market that is cyclical by nature,
which can lead to volatility of
property values and market
conditions.
Geopolitical uncertainty can lead
to a potential adverse impact on
Glenveagh’s asset valuations and
financial performance factors such
as a slowdown in economic growth,
increased interest rates and a
decline in consumer confidence.
Market sentiment and transaction levels can change quickly, requiring us to adopt a
flexible approach to our investment decisions. Glenveagh’s capital allocation policy
allows the flexibility to reconfigure capital allocations that best fits a particular
economic cycle.
Notwithstanding the more challenging economic environment, the Irish economy has
remained resilient in FY2022 with continued growth expected in FY2023. Consumer
confidence remains strong and is underpinned by government support intitaives (e.g.
Help to Buy, First Home scheme), low unemployment levels, population growth and
strong corporate and household balance sheets.
From a supply perspective, the Irish housing market remains materially undersupplied.
The fragmented nature of the market, the inability of smaller builders to access capital
and a defunct planning system are all contributory factors to supply remaining below
the levels required, in the short to medium term.
We aim to maintain a reasonable but limited stock of land (c. four to
five years).
We avoid any long-term exposure through strict land acquisition
policies which are reviewed and updated on a regular basis to meet
market sentiment and demand.
We have a robust acquisition policy and approval process in place to
ensure the best value is achieved on assets and that they are aligned
to our strategic objectives.
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 geopolitical risks and
seek expert industry advice where required.
RISK MANAGEMENT REPORT
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62
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Risk category
Risk or uncertainty
and potential impact
Management’s view
Key mitigating considerations
Risk rating
change
External risk
5. Mortgage availability
and affordability
Glenveagh 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 may
have a negative impact on sales of
Glenveagh’s products and ultimately
our profitability, due to a potential
decline in customer demand.
Two mortgage providers have
withdrawn from the Irish market
creating the potential for reduced
competition and delays in the
application process.
Mortgage demand remains strong; in 2022 the level of mortgage approvals in the
Republic of Ireland increased by 9.3% in comparison to 2021 to 58,276 approvals. 2022
mortgage volumes increased by 21% to 52,634 drawdowns
(1)
. We are seeing a slight
shift in the market where the growth was previously being driven primarily by first-time
buyers (54.4% volume in 2021 to 46.8% in 2022) to remortgages and top-ups which have
increased by a combined 70% in 2022 when compared to 2021
(1)
.
Mortgage affordability remains a significant issue, with house prices continuing to rise
nationwide. The average first-time buyer’s mortgage drawdown rose by 9.15% year-on-
year to €270,508
(1)
. In addition, the potential for further interest-rate increases creates
additional challenges for first-time buyers. The affordability hurdle remains the biggest
challenge for prospective buyers, despite the government offering First Home scheme
where the state and participating banks pay up to 30% of the cost of a new home in
return for a percentage share.
Management and the Board continuously monitor government policy
around mortgage availability.
We regularly engage with mortgage advisors to gain valuable insights
into the market and the impact of regulatory changes impacting
mortgage lending.
We have increased the frequency of cashflow and sales reporting
to facilitate accurate business continuity planning.
Our strategy can speed up delivery if required.
New home buyers can continue to avail of Green Mortgage which
offer lower interest rates for purchasing an energy efficient home.
The Central Bank have adjusted their macro-prudential framework to
allow first-time buyers to borrow up to four times their gross income,
increasing affordability for prospective buyers.
Operational
risk
6. Failure to obtain expected
planning permission
Failure to obtain planning
permission on sites in our one to
three year sales pipeline or renew
existing planning permission
without significant changes could
result in failure to meet unit delivery
and return on investment targets.
Obtaining the necessary planning permission on sites, to materially de-risk our unit delivery
targets and build flexibility into our land bank, is a key strategic objective. Management’s
progress in obtaining planning permission has been affected by the legal challenges
and lengthy delays that can arise through the planning process. The planning process is
currently in a transitionary phase with the Strategic Housing Development (‘SHD’) planning
process now replaced by the LRDs operates similar to the SHD process in dealing with
larger applications. The government is intending to publish a new planning bill in the coming
months, which the Group has contributed to through various industry forums and submissions.
The delays experienced in the planning process have limited the rate at which units have
progressed through planning, with a significant number of units awaiting decision from
An Bord Pleanala (‘ABP’). Management do not have any immediate concerns as the Group
has planning permission for over 80% of the Group’s expected deliveries in 2023. Overall,
the Group has over 5,000 units with full planning permission in place. To de-risk 2024
and 2025 delivery targets, management have focused the Company’s land acquisition
strategy to ensure, at a minimum, 50% of the sites purchased are acquired with or subject
to planning permission. Currently, over 30% of our land portfolio is planned and more than
3,500 planning lodgments were completed in 2022 which will further increase the planned
units in our land bank.
It is worth noting, from an Urban perspective, the business has limited exposure as most
Urban sites are through the planning process. Furthermore, management have been
prudent and realistic with unit delivery dates within the Group delivery matrix which
forms the starting point of forecasting, financial and strategy planning.
Finally, the Company has put in place the appropriate organisational structure within
the Planning department to achieve our strategic goals. The Planning department is
focused on the short-term needs of the business (i.e. progressing a large volume of units
through planning within the existing processes), but also focuses on mapping out the
long-term strategy for sites and the planning route these will take, based on the planning
processes available.
We ensure there is strong alignment between the planning and
acquisitions departments to ensure planning-related issues are
avoided, or identified and rectified on a timely basis.
We have ongoing monitoring, liaising, engaging and networking
processes with both local and national government agencies.
We have a set strategy for Suburban planning applications, which is
reported monthly and reviewed periodically, for any required changes.
We have a strategy in place for planning applications currently
lodged through the SHD planning process.
We have put in place the appropriate organisational structure within
the planning department to achieve our strategic goals.
We envisage that the new LRD planning process will provide more
timely decisions on planning applications.
We envisage the new Planning Act will be enacted in 2023. The act
will bring greater clarity, consistency and certainty to how planning
decisions are made. The draft bill is currently at the pre-legislative
scrutiny stage.
RISK MANAGEMENT REPORT
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(1)
Source: Banking and Payments Federation Ireland (‘BFPI’).
63
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Risk category
Risk or uncertainty
and potential impact
Management’s view
Key mitigating considerations
Risk rating
change
Operational
risk
7. Inadequate project management
Inadequate oversight of the cost
and delivery of development
projects adversely affects expected
return on investment.
As the business continues to scale, project management will play a key role in managing
timelines to meet unit delivery targets and control costs to deliver gross margin and
return on equity targets. Timely and accurate reporting against financial metrics and the
construction programme facilitates decision-making on a site-by-site or overall portfolio
basis. The Group has in place a commercial department that has oversight of all project
costs and timelines. The Commercial Director works with an experienced quantity
surveying and estimating teams that are responsible for:
>
pre-acquisition, planning and pre-construction stage budget preparation;
>
preparing build of quantities (‘BoQ’) to secure sub-contractors based on a
detailed scope;
>
robust financial planning and forecasting for each site; and
>
continuously monitoring and reviewing budget versus actual costings.
The Group also has in place a dedicated services and utilities department with
responsibility for working with Irish Water and ESB to ensure timely connection to
the water and electric grids, to deliver units in line with site openings and practical
completion dates.
The procurement department forecasts material packages 12 months in advance to
lock in prices and guarantee supply, in advance of commencing construction on site.
In addition, the procurement department works with suppliers to de-risk the supply of
scarce or at-risk materials through consignment stock agreements.
Management has implemented a new project management office to centralise
processes, reporting and communication across departments. This has been facilitated
by an external Company that has been engaged to review and improve our end-to-
end processes and advise on how best to automate these. Through this process a
construction committee has now been established, which is responsible for reviewing
reporting, decision-making at site-by-site or overall portfolio-level and communicating
actions across departments.
Our suite of IT systems provides real time reporting/information for more accurate
decision-making relevant to projects at a financial, programme and management level.
The Group has fixed-cost contracts in place with sub-contractors and
suppliers where possible.
The Group has an appointed Commercial Director who is responsible
for:
>
reviewing pre-acquisitions budgets prior to engaging in the site
acquisition process;
>
engaging in continuous monitoring and reforecasting of costs at
the pre-construction stage as sites move through planning; and
>
completing a cost plan/bill of quantities at the pre-construction
start/post-planning stage, which acts as the budget for the
site build.
The commercial department organisational structure ensures oversight
of all costs as the business matures in line with the business plan.
Glenveagh’s integrated ERP system provides commercial reporting,
automated payment and subcontractor accrual functions which
facilitates real-time reporting for more accurate decision-making
relevant to projects at a cost-object, element and subproject level.
Frequent Executive Committee and Board meetings.
Glenveagh continuously reviews the site delivery matrix and updates
this as necessary.
We engage in continuous communications with our subcontractor
network and supply chain to ensure they are aware of our plans.
We employ highly experienced and qualified project managers and
quantity surveyors 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.
We have a formal budget sign-off procedure in place for each site.
The commercial department has a dedicated estimating team to assist
with reviews at pre-acquisition-stage budget preparation, planning-
stage budget preparation, and pre-construction-stage budget
preparation, with a focus on site development and value engineering.
The estimating team is also responsible for the preparation of site
development, curtilage & sub-structure BoQs to secure subcontractors
based on a detailed scope, which facilitates thorough cost management
and forecasting.
The commercial team uses our reporting software which is linked
directly with the Glenveagh ERP system. This ensures that budgets and
cost data are managed and verified automatically, with forecasting
and variances being tracked and reviewed.
RISK MANAGEMENT REPORT
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64
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Risk category
Risk or uncertainty
and potential impact
Management’s view
Key mitigating considerations
Risk rating
change
Operational
risk
8. Attracting, retaining
and developing people
The success of the Group is
dependent on recruiting, retaining
and developing highly skilled,
diverse and competent people.
The Group is aware that we need
to have an inclusive and equitable
working environment and ensure
that we engage and challenge
our employees so that they can
positively impact the business.
The loss of key personnel and/
or the inability to attract/retain
adequately skilled and qualified
people could adversely impact
business performance.
As the business continues to grow in line with our targets, management is aware there
will be a greater need to recruit high quality skilled staff to ensure site employee and
head office headcount keeps pace with growth. The growth of the business also brings
with it opportunities for increased responsibility and advancement for current staff and
there needs to be a continued focus by management on the development of existing
staff and succession planning. We are also conscious of the need to continue to develop
our employer-value proposition and build our employer brand. Areas such as Equity,
Diversity and Inclusion, employee engagement and flexible working conditions will be
of greater importance as we compete in a market with full employment.
Glenveagh offers competitive and attractive remuneration packages
and where appropriate long-term interest alignment.
We offer the opportunity for advancement through creating a positive
working environment.
We have a graduate programme across all departments to develop
and ensure progression within the business.
We have in place a performance management and appraisal process,
which includes open channels of communication and feedback, and
development plans for employees.
We are developing a succession plan to ensure continuity of high
quality service and knowledge retention.
We have a dedicated learning and development team with a focus on
developing and deploying continuous professional development and
upskilling of staff.
We have implemented flexible working arrangements for staff as well
as offering support to ensure employees have suitable working-from-
home arrangements.
We ensure that all staff have access to relevant internal and external
training.
We are committed to the Great Place to Work credentials to further
improve our internal and external culture and reputation.
We have a corporate affairs team that is responsible for enhancing
internal and external communications.
We have put in place various initiatives at senior and middle
management levels to address the greater need to recruit and
maintain existing skilled staff, to ensure the site and head office
employee headcount keeps pace with the continued growth of
the business.
We have invested in new HR software to support the organisation as
it grows, providing more timely management information and freeing
up resources to focus on core employee-related activities.
RISK MANAGEMENT REPORT
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65
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Risk category
Risk or uncertainty
and potential impact
Management’s view
Key mitigating considerations
Risk rating
change
Operational
and
reputational
risk
9. Data protection and
cyber security
Glenveagh 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 our systems and
operations, which in turn could
lead to damage to our reputation
and potential loss of customers
and revenue.
Any security or privacy breach of the
information technology systems may
also expose Glenveagh to liability
and regulatory scrutiny.
As businesses move to a hybrid working model, the threat from cyber attacks remains
high. Enhanced controls, penetration-testing and security awareness training have
been implemented which allow for better detection and prevention from cyber attacks.
However methods of attack continue to evolve and are becoming more sophisticated,
requiring additional technical controls and awareness training. Email-based attacks
remain a significant risk.
An email security platform is in place and is constantly reviewed and improved to
address new threats.
Glenveagh’s IT director leads our initiatives in mitigating the risk
of cyber and data security breaches further.
We have a personal data retention policy in place to manage the
information held appropriately.
We use 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.
We have in place sensitive data and password protection and all such
information is stored in secure locations and fully encrypted systems.
Glenveagh is proactively managing the cyber threat, is continuously
monitoring and evolving systems internally and has engaged a third
party to assist and ensure that best practices are implemented to
identify and remediate any potential weaknesses or control gaps.
We have put in place a schedule of specific cyber security training-
related training programmes.
We have enabled multi-factor authentication for all users.
A new VPN connection has been established increasing the resilience
and security of the connection to facilitate remote working.
Glenveagh’s IT Director completes security assessments and
implements suggested changes on a periodic basis.
We have a cyber incident response service in place.
We have a Chief Information Security Officer service in place
to continuously review and improve all security related policies
and procedures.
RISK MANAGEMENT REPORT
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66
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Risk category
Risk or uncertainty
and potential impact
Management’s view
Key mitigating considerations
Risk rating
change
Operational
risk
10. Insufficient health and
safety procedures
Glenveagh is focused on the
wellbeing of its employees,
contractors, subcontractors and
the general public.
We understand that failure to
implement and adhere to the
highest standard of health and
safety practices could 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 and safety
regulations may result in financial
and/or other penalties.
The wellbeing of our people remains of paramount importance to management and
the Board. We strive to ensure the highest standards of health and safety across our
workforce and sites, with health and safety KPIs forming part of remuneration metrics.
We continue to implement all the necessary steps to maintain the health and welfare
of our employees, subcontractors and customers. Management has increased the
proportion of sites having independent audits to 20% and we have continued to
maintain our health and safety audit scoring at 88% (2021: 89%). Glenveagh has
achieved ISO 45001 health and safety management systems certification, maintained
our grade A Safe-T certificate, and increased training hours per employee.
Glenveagh has an experienced health and safety team in place
with a specific health and safety plan for each site.
We have a wealth of experience, adopt best practice and regulations
and have developed and implemented formal best-practice policies
and procedures to support and promote a robust health and
safety environment.
Glenveagh has developed an accredited health and safety
management system and is certified to ISO 45001 by the National
Standards Authority of Ireland.
Glenveagh ensures all staff are appropriately and adequately trained.
We hold a Grade A Safe-T certificate which is the industry health and
safety auditing standard.
We undertake monthly health and safety audits through both internal
and external parties.
We circulate a weekly incident monitoring report to construction
management.
There is adequate insurance cover in place to deal with any claims
that may arise due to injury.
Reputational
risk
11. Decline in product quality
Glenveagh’s brand and customer
satisfaction are crucial to our
performance and any negative
incidents including construction
defects, material environmental
liabilities (including hazardous
or toxic substances), quality
deficiencies or perceptions thereof
could adversely impact sales, and
possibly result in litigation cases
against the business.
Our continued focus on improving the quality of design and product is an essential
component of our homes. We continue to evolve the design of our end-product to meet
the demands of changing lifestyles, as well as the rapidly changing levels of expectations
from our customers.
Continued investment and expansion in our manufacturing facilities, the development of
modular build and offsite manufacturing and the standardisation and reduction in our
house typologies are some of the measures we have undertaken to ensure we deliver
high quality homes.
Glenveagh 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.
We have a dedicated quality manager to manage and report on
site quality.
We have a dedicated environmental officer to advise on the business
challenges, from an environmental perspective, on a daily basis.
Glenveagh has an experienced and professional support team in place.
We have a dedicated customer care team in place.
We have an ISO 9001 certified quality management system to monitor
product quality and drive continuous improvement.
RISK MANAGEMENT REPORT
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67
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
FINANCIAL REVIEW
Glenveagh continued
its strong growth
momentum in 2022
across all segments
of the business
.
Michael Rice
Chief Financial Officer
68
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
Glenveagh continued its strong growth
momentum in 2022 across all segments of
the business, with our highest Suburban
unit deliveries, significant progress in
the monetisation of our Urban portfolio,
and planning lodged for both of our
Partnership projects.
This significant growth has not come at the
expense of further progress on our capital
efficiency strategy, with the business returning
approximately €150 million to shareholders in the
year, bringing the overall returns over a two-year
period to over €250 million. The business has also
reduced its total equity to below €700 million for
the first time since 2017, Glenveagh’s first year
in operation.
Group performance
Total Group revenue was €645 million (2021:
€477 million) from two main income streams:
>
€455 million in our Suburban business, which
predominantly relates to our 1,354 Suburban
units closed in the year;
>
€190 million from our Urban business, which
includes our land disposal in East Road and
the revenue generated from a number of
forward-funds, which are the Premier Inn
hotel in Castleforbes and our apartment
developments in Citywest and Castleknock.
Glenveagh’s Suburban revenue of €455 million
represents significant growth for the primary
segment of the business and equates to a 64%
increase in revenue versus 2021. The Group
delivered 1,354 core units in the year at an
average selling price of approximately €330k
(FY 2021: €308k) reflecting the Group’s strong
operational performance in a challenging
environment. ASP increased by 7% as a result
of a change in portfolio mix and house-price
inflation in the period.
Glenveagh finished the year with 408 Suburban
units contracted or reserved for FY 2023 (FY 2021:
605). Though forward sales rates were lower than
prior year levels, this is being actively managed
to benefit from strong underlying market demand,
that is further supported by updated Housing for
All initiatives and the change to the Central Bank
of Ireland’s macroprudential rules, both of which
became effective in January 2023.
We continued to actively manage suburban unit
reservations in the first two months of the year
and these now stand at 803 units. This progress
demonstrates the strong underlying demand for
suburban housing, supported by the updated
government and Central Bank initiatives.
The Group’s gross profit for the year amounted
to €108.1 million (2021: €83.1 million) with an overall
gross margin of 16.8% (2021: 17.4%).
Suburban gross margins improved as the business
benefitted from a full year not impacted by
COVID-19 related restrictions. FY 2022 margin
was 18.4% and with suburban margin in the
second half of the year higher still, we anticipate
further improvement in the FY 2023 margin to
approximately 19%.
Urban gross margin was 12.9% in FY 2022,
modestly below guidance, reflecting the
transaction mix in the period, in particular the
impact of the forward sale of our development
in Cluain Mhuire, Blackrock, where revenue and
profits will now be fully recognised at completion.
Our operating profit was €70.1 million (2021: €50.6
million). The Group’s central costs for the year
were €36.1 million (2021: €30.1 million), which along
with €1.9 million (2021: €2.4 million) of depreciation
and amortisation, gives total administrative
expenses of €38.0 million (2021: €32.5 million).
Net finance costs for the year increased
significantly to €7.1 million (2021: €4.8 million),
predominantly impacted by increased interest
rates which have impacted the overall market.
Overall, the Group delivered an earnings per share
of 7.6 cents (2021: 4.5 cents), an increase of 69%.
Balance sheet
In line with our continuing commitment to drive
capital efficiency, we have reduced the Group’s
net assets to €693.1 million at 31 December 2022
(2021: €784.1 million). This has been achieved
through a considered and strategic reduction in
the land portfolio to €458.5 million (2021: €562.7
million). We believe that further reductions can be
made in our land portfolio, while still supporting
the significant growth the business has projected
in the coming years.
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 €227.2
million (2021: €204.5 million). The increase year-on-
year predominantly relates to the Urban business,
where we have ongoing construction for the office
development in Castleforbes and the apartment
development at Cluain Mhuire, Dublin, both of
which are due for completion in 2024.
The business has increased its non-current assets
during the year, with increases in both goodwill
and property, plant and equipment, resulting
from our continued investment in innovation and
our supply-chain initiatives. The acquisition of
Harmony Timber Solutions Limited, along with
our investment in additional timber frame and
soil recovery facilities, will enhance our off-site
manufacturing capabilities considerably. The
focus for the business is to now integrate these
capabilities effectively and maximise the value
of these investments.
FINANCIAL REVIEW
CONTINUED
€645m
Total Group revenue
€108.1m
Gross profit for 2022
69
Governance
Financial Statements
Glenveagh Properties plc
Annual Report and Accounts 2022
Strategic Report
FINANCIAL REVIEW
CONTINUED
THE GROUP’S UNWAVERING FOCUS ON
CAPITAL EFFICIENCY AND CASH-GENERATION
PLACES THE BUSINESS IN AN EXCELLENT
POSITION FOR CONTINUED LONG-TERM
OPERATIONAL GROWTH.
At 31 December 2022, the reduced equity figure
reflected the three share buyback programmes
completed by the Group to date, which total
over €250 million. In 2022, a total of 135.7 million
shares had been repurchased and subsequently
cancelled.
Albeit from a relatively low base, the Group made
considerable progress in increasing Return on
Equity (ROE) to 7.1% from 4.6% in 2021, an increase
of 250bps.
Cash flow
In line with our continued focus on capital efficiency
and reducing inventory, the business generated
significant cash, with €140.9 million generated from
operating activities (2021: €104.3 million). The main
drivers of this cash-generation are €72.4 million
from the Group’s profitability, and €83.4 million
from the reduction in inventory.
This cash-generation allowed the business to
invest in line with our capital allocation priorities,
predominantly focused on acquisitions and capital
expenditure of €27.2 million and the two separate
share buyback programmes totalling €146.3
million in the year.
Outlook
The Group continues to see a very positive
long-term outlook in the Irish residential housing
market, and we believe we are very well-
positioned to take advantage of that opportunity.
Notwithstanding the Group’s forecasted 2023
performance, which has been shaped specifically
by planning momentum, the business has a busy
development schedule across our sites, including
opening new sites for first deliveries in 2024.
The Group has forward-sales of 803 Suburban
units which reflects significant progress from
our announcement on 5 January 2023 and also
demonstrates the strength of the underlying
demand for Suburban homes.
We currently anticipate earnings per share for
FY 2023 to be 7.5 – 8.0 cents.
The Group’s unwavering focus on capital
efficiency and cash-generation, along with
our new €350 million debt facility, places the
business in an excellent position for continued
long-term operational growth and maximising
returns for shareholders, with our Return on Equity
target of 15% in 2024 continuing to be our key
capital metric.
Michael Rice
Chief Financial Officer
The business vigorously managed its cash flow
requirements and ended the year in a net debt
position of only €13.8 million, demonstrating the
strength and resilience of our balance sheet. This
provides a very strong platform for further capital-
allocation initiatives in 2023.
Group financing
In February 2023, the Group finalised a new five-
year sustainability linked finance facility of €350
million, consisting of €100 million term component,
and a revolving credit facility of €250 million,
which is a direct replacement of our previous
€250 million debt facility. This new facility is with
our existing banking syndicate, at interest rates
consistent with those of the previous facility and
includes financial and sustainability covenants
that better reflect the current strategy and growth
ambitions of the business.
This facility will ensure that the business has the
appropriate financial structure to support the
operational growth of the business over the next
five years, while also ensuring the business can
maximise its return on equity for shareholders.
Investor relations and share price
Glenveagh 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. During
the year, the executive management and investor
relations team presented at four capital market
conferences and conducted 111 institutional one-
on-one and group meetings.
The Group has had a strong share-price
performance throughout FY 2022 relative to its
peer group, aided by the strong profitability and
the initiatives introduced to improve the capital
efficiency of the business. The Group’s shares
traded between €0.84 and €1.27 during the
year (2021: €0.82 to €1.24). The share price at
31 December 2022 was €0.85 (31 December 2021:
€1.23) giving a market capitalisation of €539.9
million (2021: €950.8 million).
Governance
Financial Statements
Strategic Report
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Glenveagh Properties plc
Annual Report and Accounts 2022
INTRODUCTION FROM THE CHAIRMAN
Dear shareholders,
On behalf of the Board, I am pleased to
present the Corporate Governance Report
for the year ended 31 December 2022.
Corporate Governance Code
The Board is committed to the highest standards of corporate governance and for
the year ended 31 December 2022, the Corporate Governance Report, in conjunction
with the Audit and Risk Committee report, the Remuneration Committee report,
the Nomination Committee report and the Environmental and Social Responsibility
Committee report, describes how the Company has applied the principles and
followed the provisions of the 2018 UK Corporate Governance Code (the ‘Code’)
and the Irish Corporate Governance Annex (the ‘Annex’) and details any departures
from the specific provisions.
During 2022, we complied with the Code and the Annex with the following exceptions:
>
Provision 9, in relation to the appointment of an Executive Chairman at IPO; and
>
Provision 41, workforce engagement on executive pay.
Further details in relation to these matters are provided on pages 81 and 92,
respectively, and the Board will keep them under review during 2023.
>
The Code can be found at www.frc.org.uk
>
The Annex can be found at www.euronext.com
Governance
Financial Statements
Strategic Report
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Glenveagh Properties plc
Annual Report and Accounts 2022
INTRODUCTION FROM THE CHAIRMAN
CONTINUED
AS A BOARD, WE ARE COMMITTED
TO ACHIEVING THE TARGETS SET
BY BALANCE FOR BETTER BUSINESS
FOR ISEQ 20 COMPANIES.
Sustainability, including climate change
Glenveagh acknowledges the role that it needs
to play as one of Ireland’s leading homebuilders
and has integrated sustainability throughout
its business strategy. Performance against our
environmental, social, and governance (‘ESG’)
indicators can be found on page 43. The Board
are particularly conscious of the Group’s impact on
climate change, and have set ambitious targets in
this area. Details of these and the work to comply
with the requirements of the Task Force on Climate-
related Financial Disclosures (‘TCFD’) are set out
on page 51. Building sustainable homes has been
part of Glenveagh’s strategy for many years, and
as a Board, we continue to give a considerable
amount of time and focus to the oversight of
sustainability matters.
Board composition and succession
The Nomination Committee continues to lead the
process for Board appointments and ensuring that
plans are in place for systematic Board and senior
management succession. Richard Cherry chose
not to seek re-election at the Annual General
Meeting (‘AGM’) in April 2022 and, on behalf
of the Board, I would like to thank Richard for
his contribution to Glenveagh since joining the
Board in 2017.
During 2022, the Nomination Committee
conducted a request for proposal (‘RFP’) to
select an executive search provider to advise
it as it began the process of identifying a
new Non-executive Director for proposal
to the Board. Further details in relation to the
nomination process are provided in the report
of the Nomination Committee on page 83.
As a Board, we are committed to achieving
the targets set by Balance for Better Business
for ISEQ 20 companies. The Nomination
Committee remains cognisant of the diversity
targets directed by forthcoming EU legislation,
as well as by investor and stakeholder
expectations, as it progresses through
the nomination process in early 2023.
Board evaluation
The Board and each of its committees evaluate
their performance on an annual basis in order to
assess if any improvements can be made. In 2022,
we conducted an internal Board performance
evaluation, overseen by our Company Secretary,
and I am happy to report that the evaluation
found that the Board and its committees continue
to operate effectively, while providing some insight
into opportunities for further development.
You can read more about our evaluation process
on page 85.
Priorities for the year ahead
As a Board we have a demanding year
ahead with a number of environmental and
social priorities; these include overseeing the
implementation of our net zero transition plan,
approving strategies in the important areas of
biodiversity and circular economy, along with
continued progress on our overall strategy,
including the development of our senior leaders,
and maintaining a robust internal control
environment and risk management framework.
Conclusion
I believe that the Board is well-positioned to
provide the strategic oversight and leadership
required for Glenveagh to continue to deliver
long-term sustainable success and continued
returns for shareholders.
The 2023 AGM will be held on 8 June 2023 and
the Board looks forward to the opportunity to
engage with our shareholders in person.
Further details will be published in the Notice
of Annual General Meeting, which will be sent
or made available to shareholders, and is
also available on the Company’s website,
www.glenveagh.ie
John Mulcahy
Chairman
Glenveagh corporate website
The Glenveagh website www.glenveagh.ie
contains additional information about our
corporate governance:
>
Composition of principal Board
and Board committees;
>
Terms of reference for the Board
committees; and
>
Details of AGM, proxy voting by
shareholders, including votes withheld
CORPORATE GOVERNANCE REPORTING
Board leadership
72 and 73
Board leadership and
company purpose
4 to 77
Division of responsibilities
78 to 81
Composition, succession
and evaluation
82 to 85
Audit, risk and internal control
86 to 89
Remuneration
90 to 103
Environmental and
social responsibility
104 and 105
Directors’ report
106 to 108
Governance
Financial Statements
Strategic Report
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Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: BOARD LEADERSHIP
KEY
Audit and Risk Committee
Environmental and Social Responsibility Committee
Remuneration Committee
Nomination Committee
Chair of Committee
Name
John Mulcahy (74)
Stephen Garvey (43)
Michael Rice (40)
Job title
Chairman
Chief Executive Officer
Chief Financial Officer
Nationality
Irish
Irish
Irish
Date of appointment
Appointed to the Board on 11 August
2017 and as Chair of the Nomination
Committee on 28 April 2022.
Appointed to the Board on 9 August 2017.
Appointed to the Board on
1 November 2019.
Skills and experience
John is a chartered surveyor with over 40
years’ experience in the Irish real estate
sector. 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.
Stephen Garvey was appointed Chief
Executive Officer in August 2019.
Stephen is responsible for delivering
on Glenveagh’s vision that everyone
should have the opportunity to access
great-value, high-quality homes in
flourishing communities across Ireland.
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,
Stephen has led the growth and
development of Glenveagh since IPO.
Michael Rice is Glenveagh’s Chief
Financial Officer. Michael joined
Glenveagh in September 2017 having
previously worked as the group financial
controller of Kingspan Group plc.
Michael oversees a wide range of
functions including finance, treasury,
corporate governance, IT, corporate
affairs and investor relations. He is
a qualified chartered accountant
with significant experience of finance
management in both domestic and
international environments.
Other appointments
John is the chairman of IPUT plc and a
board member of TIO ICAV, and Quinta
do Lago S.A., a Portuguese resort
developer.
Committee memberships
Board of Directors
Governance
Financial Statements
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Glenveagh Properties plc
Annual Report and Accounts 2022
Robert Dix (70)
Cara Ryan (50)
Pat McCann (71)
Camilla Hughes (53)
Chloe McCarthy (38)
Senior Independent Director
Independent Non-executive Director
Independent Non-executive Director
Independent Non-executive Director
Company Secretary
Irish
Irish
Irish
British
Irish
Appointed to the Board on
26 September 2017.
Appointed to the Board on 1 September
2019 and as Chair of the Audit and
Risk Committee on 3 September 2020.
Cara is also the Glenveagh Workforce
Engagement Director.
Appointed to the Board on 1 September
2019 and as Chair of the Remuneration
Committee on 28 April 2022.
Appointed to the Board and as Chair
of the Environmental and Social
Responsibility Committee on 1 July 2021.
Robert 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.
Cara is a Non-executive Director, with
over 20 years’ experience at board level in
publicly listed and private companies, in
both regulated and non-regulated entities.
Cara was the director of finance of Manor
Park Homebuilders, an Irish housebuilding
company and she was formerly a non-
executive director of IFG Group plc, a
listed financial services group in Dublin &
London and was the managing director
of IFG Investment Managers until 2006.
Cara holds a BA in Economics from
University College Dublin and a MSc
in Investment & Treasury from Dublin
City University.
Pat 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. Pat founded Dalata Hotel
Group plc in 2007 and acted as CEO
until 31 October 2021.
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.
Camilla is a highly experienced ESG and
capital markets adviser, having spent over
twenty-five years in financial services, and
investment banking. She currently provides
independent ESG advisory services to
corporates and banking teams in M&A,
capital raisings, shareholder engagement
and ESG reporting at Rothschild & Co
in the Global Advisory business,
based in London. Her work focuses
on helping publicly listed and privately
owned companies around climate
and sustainability strategies, including
governance issues, and connecting them
to ESG capital at all stages of corporate life
cycle. Previous to expanding her executive
career, Camilla has worked at Credit Suisse,
UBS and Market Pipe, an early-stage
Fintech SaaS business included in the
Techtrak 100.
She holds a Bachelor of Arts degree
and MA (Hons) in Philosophy, Politics and
Economics from Oxford University and is
an alumna of the Cambridge University
Institute for Sustainability Leadership and
Sustainable Finance.
Chloe is an ICSA qualified Company
Secretary and a barrister-at-law in Ireland.
Chloe was called to the Bar of Ireland
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.
Robert is the CEO of Sopal Limited and
a non-executive director and chairman
of Quinn Property Group.
Cara is the chair of Mercer Ireland Limited
and a member of its board risk committee
and remuneration committee, a non-
executive director of Stonebond Properties
and a non-executive director and chair
of the audit committee of BNP Fund
Administration Services in Ireland.
Pat is the deputy chairman at The
National Maternity Hospital and a
non-executive director of Ibec and
Quinn Property Group.
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Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: BOARD LEADERSHIP AND COMPANY PURPOSE
Details of the activities of the Board during the year can be found
on the next page.
Board meetings
The Board convenes with sufficient frequency to ensure the effective
discharge of its duties during the year and holds additional meetings
when required. In line with the easing of COVID-19 restrictions, the
Board met in person for all nine meetings held during the year.
In addition to formal Board meetings, the Board also convened
for a number of strategy and training sessions in 2022.
MEETINGS DURING THE YEAR
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 discharge their duties
effectively and confirm this as part of the annual Board evaluation.
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.
Attendance at Board and committee meetings
Board
Nomination
Committee
Remuneration
Committee
Audit and Risk
Committee
ESR
Committee
Current Directors
John Mulcahy
9/9
3/3
n/a
n/a
n/a
Stephen Garvey
9/9
n/a
n/a
n/a
4/4
Michael Rice
9/9
n/a
n/a
n/a
n/a
Robert Dix
9/9
3/3
n/a
5/5
4/4
Cara Ryan
9/9
n/a
6/6
5/5
n/a
Pat McCann
9/9
3/3
6/6
5/5
4/4
Camilla Hughes
9/9
3/3
6/6
n/a
4/4
Past Directors
Richard Cherry
3/3
0/1
2/2
0/1
n/a
January
Board training
Remuneration Committee meeting
March
Board meetings
Audit & Risk, and Nomination
Committee meetings
May
Board meeting
Audit & Risk, Nomination
and ESR Committee meetings
September
Board meeting
Audit & Risk, Remuneration
and ESR Committee meetings
November
Audit & Risk and
ESR Committee meetings
February
ESR Committee Meeting
April
Board meeting
Annual General Meeting
July
Board meeting
October
Board training day
(including strategy session)
Board meeting
Audit & Risk and Remuneration
Committee meetings
December
Board meeting
Nomination and Remuneration
Committee meetings
AGM
Board meeting
Committee meeting
Training days
Role of the Board
The Board is responsible for setting the Company’s purpose,
strategy and values, promoting the long-term sustainable success
of the Group while generating shareholder-value and contributing
to the society in which it operates. The Board provides effective
leadership by developing and guiding the strategic direction
of the Group, understanding the key risks faced by the Group
and determining the risk appetite of the Group and ensuring
that a robust internal control environment and risk management
framework are in place.
The Board has overall responsibility for the management of the
Group’s activities and has put in place a framework of controls and
delegated authorities, which enables the Group to appraise and
manage risk effectively. To assist in discharging its responsibilities,
the Board has established an Audit and Risk Committee, a
Remuneration Committee, a Nomination Committee and an
Environmental and Social Responsibility (‘ESR’) Committee.
A high-level overview of the delegated authority flow from
the Board is shown in the diagram on page 77.
The composition of each of the Board committees is fully aligned
with the provisions of the Code and is detailed in the reports of
the relevant committees on pages 82 to 105.
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,
www.glenveagh.ie.
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CODE PRINCIPLE: BOARD LEADERSHIP AND COMPANY PURPOSE
CONTINUED
The Board’s key activities during the year were:
Strategy & Management
Environmental & Social
Financial Reporting
Governance
Investments/Acquisitions
What did the Board do this year?
Activity
Description
Strategy &
Management
>
Engaged with senior management in detailed strategic planning sessions and received reporting on strategy implementation
throughout the year, as part of the annual strategic planning cycle.
>
Reviewed and challenged operational and financial reporting from the Chief Executive Officer and the Chief Financial Officer.
Monthly management reporting includes an analysis of the Group’s performance against KPIs and updates in relation to health
and safety, planning, construction, sales, customer satisfaction, investment, operations, finance, HR and investor relations.
>
Reviewed and approved the Group’s updated manufacturing strategy.
>
Continued to assess the capital allocation priorities of the Group and identified excess capital for return to shareholders through
the initiation of a third buyback programme.
Environmental
& Social
>
Reviewed quarterly management reporting in relation to the Group’s environmental and social responsibilities.
>
Received training in the form of presentations from external advisors on recent developments including; EU Sustainable Finance Action
Plan and Taxonomy, Corporate Sustainability Reporting Directive and ESG trends.
>
Supported management in partnering with Clúid Housing to provide emergency accommodation for up to 40 Ukrainian families,
in addition to matching voluntary donations by staff to a minimum commitment of €250,000.
Financial Reporting
>
Reviewed and approved Budget 2023.
>
Reviewed and approved the 2022 Annual Report and Audited Financial Statements, on the recommendation of the
Audit & Risk Committee.
>
Reviewed and approved the 2022 Interim Financial Statements, on the recommendation of the Audit & Risk Committee.
>
Reviewed and approved the Group’s full-year and half-year financial results announcements.
Governance
>
Reviewed the findings from the internally facilitated Board performance evaluation in 2022 and agreed areas of focus for the Board
in 2023.
>
Considered Board members’ potential conflicts of interests.
>
Received updates from the Chairs of the Board committees at each scheduled Board meeting.
>
Reviewed and approved the 2022 Notice of Annual General Meeting for circulation to shareholders.
>
Reviewed and approved the schedule of matters reserved for the Board and the terms of reference for each of the Board committees.
>
Reviewed and approved the terms of reference for the expanded executive committee (‘ExCo’), following the Chairman’s transition to
a non-executive role.
Investments/
Acquisitions
>
Reviewed all site acquisitions approved by the ExCo under its delegated authority from the Board.
>
Considered and approved the disposal of the East Road site.
>
Considered and approved the acquisition of Harmony Timber Solutions Limited.
>
Reviewed management updates in relation to pipeline sites and the progression of existing land bank assets.
>
Reviewed and challenged post-acquisition investment performance against management models.
>
Reviewed and approved capital expenditure associated with the Group’s updated manufacturing strategy.
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CODE PRINCIPLE: BOARD LEADERSHIP AND COMPANY PURPOSE
CONTINUED
Examples of ways that the Board and its committees monitor and assess culture
Who
What
The Board
>
The operational and financial reporting presented at every scheduled Board meeting contains detailed people updates
covering health and safety, recruitment and retention, and learning and development.
>
The Board reviews customer satisfaction survey scores on a monthly basis.
Board Members
>
The Workforce Engagement Director meets with employee representatives every six months in order to facilitate direct
feedback to the Board on culture and the working environment.
>
Board training days and site visits provide opportunities for the Non-executive Directors to engage with employees of all levels
across the Group’s operations.
ESR Committee
>
The committee receives regular updates on diversity and inclusion, health and safety and culture within the Group, with
progress in these areas measured and assessed through employee survey results.
>
The committee considered and approved the introduction of a Group Equity, Diversity and Inclusion (‘EDI’) Strategy, including
the adoption of targets and goals for each level of the organisation.
>
The committee reviewed and approved the Group’s first report under the Gender Pay Gap Information Act 2021
Audit and Risk Committee
>
The committee receives and considers regular internal audit reports, covering a wide range of the Group’s operations and
providing insight into the operational culture of the business.
>
The committee reviews and approves the Group Whistleblowing Policy and reporting mechanisms.
Remuneration Committee
>
The committee evaluates the Group’s non-financial performance against defined safety and customer satisfaction measures, assessed
through externally managed customer surveys and site audits. These non-financial KPIs account for 30% of the annual bonus.
>
In addition to setting the pay for the Executive Directors and members of the ExCo (including the 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.
Nomination Committee
>
The committee recognises that succession planning is key to maintaining the Group’s culture and it focuses on developing
people internally and having a promising pipeline of talent to fill key senior management positions.
>
The Board is committed to achieving diversity and inclusion across the Group and, through the committee, continues to
progress towards meeting the targets and goals set both internally and externally.
OUR VALUES
Our values encompass the culture and conduct we expect from all our employees in the day-to-day operations of our business.
Safety-first
Collaborative
Innovative
Customer-centred
Can-do
Culture and Values
Glenveagh’s vision is that everyone should have the opportunity to
access great-value, high-quality homes in flourishing communities
across Ireland. The Board believes that building homes and
communities is a worthy cause and will positively impact Irish society.
The Board continues to support management in forging a new path,
innovating at every stage of the homebuilding process. To do this,
the Board fosters a culture of fresh thinking, teamwork and trust
to challenge the status quo. The Board is committed to ensuring
the continued alignment of Glenveagh’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 assesses and monitors Glenveagh’s culture through a
number of employee engagement measures including the workforce
engagement forum, which is attended by Cara Ryan as the Board’s
Workforce Engagement Director, regular employee engagement
surveys and the Group’s whistleblowing reporting mechanisms.
Further details in relation to the role of the Workforce Engagement
Director can be found on page 81.
The Board recognises the significant role the people of Glenveagh
have played in delivering our success to date and strives to continue
to be a great place to work for every single employee.
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CODE PRINCIPLE: BOARD LEADERSHIP AND COMPANY PURPOSE
CONTINUED
ESR Committee
See report on
page 104
Audit & Risk Committee
See report on
page 86
Nomination Committee
See report on
page 82
Remuneration Committee
See report on
page 90
GOVERNANCE FRAMEWORK
DELEGATED AUTHORITY FLOW
ExCo
On 1 January 2022, the Executive Directors Stephen Garvey and Michael
Rice were joined on the ExCo by Wesley Rothwell (Chief Commercial
Officer), Conor Murtagh (Chief Strategy Officer), Barney O’Reilly (Head of
Construction) and Tony McLoughlin (Managing Director – Planning, Design,
Manufacturing and Operations). The Company Secretary Chloe McCarthy
also attends ExCo meetings. The ExCo has responsibility for day-to-day
running of the Group’s operations, as delegated by the Board in the ExCo’s
terms of reference.
General Data Protection Regulation (‘GDPR’) Committee
The GDPR Committee was established in July 2022 and is responsible
for providing oversight and high-level support for data privacy and
implementation of GDPR within the Group. The committee is comprised
of the CFO, the Chief Commercial Officer, the Chief Strategy Officer
and the Company Secretary.
Construction Committee
The Construction Committee is comprised of senior members of the
business with specific responsibility for areas of construction operations.
The Construction Committee meetings are held monthly to review all
construction projects.
Senior Leadership Team (‘SLT’)
The SLT is comprised of over 30 senior members of management and
is aimed at keeping the senior leaders in the business informed of the
day-to-day business and performance of the Company. Members of
the SLT present at the meetings, providing insight into various parts of
the business. The SLT is also used to update senior leaders on strategy,
people, performance and culture.
Board
See Board of Directors on
page 72 and 73
Executive Management Team
Operating Business
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CODE PRINCIPLE: DIVISION OF RESPONSIBILITIES
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 ExCo, with the Board reserving to itself a formal schedule of matters over which it retains control.
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 table below summarises how there is a clear division of responsibilities between the leadership of the Board and the executive leadership
of the business.
Position
Description
Chair
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.
Chief Executive Officer (‘CEO’)
The CEO, 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 CEO is ultimately
responsible for all day-to-day management decisions, acting as a direct liaison between the Board and management and communicating to the Board on behalf
of the Group’s external stakeholders. The CEO also chairs the ExCo.
Chief Financial Officer (‘CFO’)
The CFO, Michael Rice, is responsible for managing the financial affairs of the Group. His areas of responsibilty include finance, treasury, corporate governance, IT,
corporate affairs and investor relations and he works closely with the CEO to manage the Group’s operations. The CFO is a member of the ExCo and GDPR committee.
Senior Independent Director
The Senior Independent Director, Robert Dix, is available to shareholders who have concerns that cannot be addressed through the Chairman or CEO and will attend
meetings with major shareholders as necessary. 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 Company’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 obligations.
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CODE PRINCIPLE: DIVISION OF RESPONSIBILITIES
CONTINUED
Shareholder and stakeholder engagement
The Code provides that the Board should ensure effective
engagement with, and encourage participation from shareholders and
stakeholders. Further details regarding the Board’s engagement with
key stakeholders can be found on page 80.
Shareholders
The Board recognises the importance of engaging with shareholders
and values regular dialogue. The Group prioritises effective dialogue
with shareholders to ensure that we capture and embrace feedback
relating to areas of interest and areas of concern. This commitment
is formalised through the Group’s comprehensive investor relations
programme. 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, all of which assists the Board in
understanding and taking account of the view of shareholders. In
addition, 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
IR channels, and up-to-date contact details are available on the
Group’s website, www.glenveagh.ie.
TIMELINE OF STAKEHOLDER ENGAGEMENT
January
5 January 2022
March
8-14 March 2022
29 March 2022
May
26 May 2022
September
14-15 September 2022
21 September 2022
November
25 November 2022
April
7 April 2022
28 April 2022 (Dublin)
June
28 June 2022
Investors and analysts
In addition to the detailed presentations and roadshows
conducted after the announcement of interim and full-year results,
the Group runs an active investor relations programme that includes
all financial announcements, presentations and regular ongoing
dialogue with the investment community, apart from when the
Group is in a close period. The CEO, CFO and Head of Investor
Relations regularly meet with institutional investors and analysts
throughout the year and participate in a number of industry
conferences. This year, executive management attended in-person
conferences, roadshows and investor meetings as outlined on the
next page.
Further details in relation to the Group’s investor engagement
during 2022 is provided in the stakeholder engagement section
on page 28.
Annual General Meeting
The AGM gives shareholders an opportunity to receive 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 the Board
encourages all shareholders to attend the meeting each year and
to put forward any questions they may have to the Directors at the
conclusion of the formal business of the meeting.
In line with the easing of COVID-19 restrictions, the Board was
delighted to once again meet with shareholders in person at the
2022 AGM. Shareholders who were unable to attend the AGM
in person were invited to remotely access the AGM via a virtual
meeting platform which included a mechanism for lodging questions
in advance of and during the meeting.
The 2023 AGM will be held on 8 June 2023 at The Westbury Hotel,
Balfe Street, Dublin 2.
Private shareholders
The Company Secretary, Chloe McCarthy, oversees communication
with private shareholders, and ensures direct responses as
appropriate in respect of any matters raised by shareholders.
Website
Glenveagh’s website is an important channel for interacting with all
stakeholders, including shareholders, and it provides a library of all
relevant shareholder communications, financial results and updates,
and a history of our share price performance.
All material information reported to the Regulatory News Service is
published at www.glenveagh.ie/corporate/investor-centre.
Roadshow
Conference
AGM
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CODE PRINCIPLE: DIVISION OF RESPONSIBILITIES
CONTINUED
OTHER STAKEHOLDERS
It is critical for the success of the Group that it engages with all of its key stakeholders, seeks their views and takes into consideration their interests as part of its decision-making
process. Board engagement with other key stakeholders during 2022 is summarised in the table below.
Further detail in relation to the wider Group’s engagement with key stakeholders is provided on pages 26 to 29.
Stakeholder
How the Board engages
Activity during 2022
Employees
>
Monthly in-house and externally facilitated
health and safety audits of all Group sites.
>
Board visits to sites, manufacturing facilities
and head office.
>
Employee engagement surveys.
>
Designated Non-executive Director with
responsibility for workforce engagement.
>
Monthly reporting of health and safety audit results.
>
Continued recognition of the importance of health and safety, maintaining it as one of the Group’s two non-financial
annual bonus metrics.
>
Approved the Group’s EDI strategy and set clear targets across all levels of the business.
>
Approved the movement of head office to modernise and improve the work environment for staff.
>
Received and considered feedback from the 2022 Great Place to Work employee engagement survey.
>
Visits by Cara Ryan, in her capacity as Workforce Engagement Director, to meet with employee representatives on-site every
six months.
>
Ongoing review of leading employee satisfaction indicators, including turnover rates, training and development levels, and
benefits available to staff.
Customers
>
Externally facilitated customer satisfaction surveys.
>
Customer Care department reporting and metrics.
>
Monthly reporting of customer satisfaction survey results.
>
Regular review of customer care data and issue tracking.
>
Continued recognition of the importance of customer satisfaction, maintaining it as one of the Group’s two non-financial
annual bonus metrics.
Communities
>
Consultation with communities throughout the site
planning process.
>
Support of local community initiatives and Group
charity partners.
>
Regular review of housing need in the communities in which the Group operates.
>
Supported the development and publication of the Group’s Compact Growth Strategy, demonstrating Glenveagh’s role
as a thought leader in this area.
>
Supported management in responding to the humanitarian crisis in Ukraine through an initiative with Clúid Housing to
provide emergency accommodation in Ireland for up to 40 displaced Ukrainian families.
Government &
regulators
>
Regular communication with industry bodies, planning
authorities and Government representatives.
>
Communication with regulators including the LSE,
Euronext Dublin, the FCA and the Central Bank
of Ireland.
>
Direct engagement through the Executive Directors with housebuilding bodies and local and national planning authorities
and government representatives.
>
Engagement with regulatory authorities through the Company Secretary.
Suppliers & partners
>
Board visits to manufacturing facilities and
development sites.
>
Surveys of contractors and supply-chain partners.
>
Monthly reporting from construction operations and procurement departments.
>
Approved the expansion of the Group’s manufacturing operations and increased supply-chain integration and partnerships
across different building methodologies.
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CODE PRINCIPLE: DIVISION OF RESPONSIBILITIES
CONTINUED
Workforce engagement
The Board is committed to meeting its responsibilities to all
stakeholders in the business, and places significant value on the
maintenance of successful relationships with the Group’s workforce,
suppliers, customers and the communities in which it operates.
Cara Ryan is designated as the Non-executive Director with
responsibility for employee engagement on behalf of the Board.
In her position as the Workforce Engagement Director, Cara
continued to work with the Company Secretary and the Head
of Human Resources to develop meaningful two-way dialogue
between employees across the Groups’ operations and the wider
Board. During the year, Cara held two meetings with representatives
from each department in the business and provided an opportunity
for them to ask questions directly of the Board.
Feedback from these meetings has continued to be very positive,
with employees welcoming the opportunity to meet with a Non-
executive member of the Board. Equally 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 remains committed to continuing
to enhance its engagement activities and strengthen its relationship
with the workforce.
Board information
Each month, the Directors receive financial and operational
information to help them discharge their duties. In order to allow
sufficient time to review, Board papers are circulated digitally at
least one week before each Board meeting. Directors have access
to independent professional advice at the Company’s expense,
if they consider it appropriate.
Independence
As required by the Code, Provision 9 prescribes that the Chairman
should be independent on appointment. The Board is of the
collective belief that John Mulcahy’s role as a Non-independent
Chairman during the period from IPO to 31 December 2022 enabled
him to bring his extensive knowledge and experience of the Irish
residential housing market to his leadership of the Board.
As announced at the Company’s 2021 AGM, John transitioned to a Non-
executive Chairman role on 1 January 2022. While John has stepped
down from his executive duties, the Board unanimously considers
that his commitment and contribution as Chairman is essential to the
continued effective leadership of the Board and the Group.
Given John’s prior executive role within the Company, the Senior
Independent Director remains willing and available to assume any
additional responsibilities, as required. There is also a clear division
of responsibilities between the Chairman and the CEO. As such,
the Board remains satisfied that no one individual or group has
dominated its decision-making and that there has been sufficient
challenge of executive management in meetings of the Board.
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 particular consideration to the continued
independence of Robert Dix and Pat McCann, noting that both
currently act as non-executive directors at Quinn Property Group.
The Board was aware of this relationship on appointing Pat to the
Board in 2019, and remains satisfied that Robert and Pat continue
to demonstrate objectivity and autonomy in both character and
judgement, irrespective of their relationship outside the Company,
and will continue to act objectively and in the best interests of
the Company.
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 Company 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.
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CODE PRINCIPLE: COMPOSITION, SUCCESSION AND EVALUATION
NOMINATION COMMITTEE REPORT
Nomination
Committee Report
Chair, Nomination Committee
John Mulcahy
On behalf of the committee, I am pleased to present the Nomination
Committee report for the financial year ended 31 December 2022.
2022 was a year of transition for the Board, its committees and
for the senior executive team. As announced at the 2021 AGM,
I transitioned to the role of Non-executive Chairman with effect
from 1 January 2022 and, as part of the succession planning for
the smooth transition of my executive functions, the composition
of the Group’s executive committee was expanded with Tony
McLoughlin (Managing Director – Planning, Design, Manufacturing
and Operations), Wesley Rothwell (Chief Commercial Officer), Conor
Murtagh (Chief Strategy Officer) and Barney O’Reilly (Head of
Construction) joining the Executive Directors. Throughout 2022, the
committee continued its engagement with management in relation
to succession planning for these key Executives within the business.
Following Richard Cherry’s decision not to seek re-election at the
2022 AGM, the committee reviewed all Board committee structures
and Directors’ responsibilities, and the following changes were
recommended to the Board and approved with effect from the
conclusion of the AGM:
>
Pat McCann assumed the chair of the Remuneration Committee;
>
I succeeded Pat as the chair of this committee, though he
remains a member of the committee; and
>
Pat also joined the Audit & Risk Committee.
Arising from the review of Board and committee composition during
the year, the committee conducted an RFP in Q4 2022 to select an
executive search provider to advise us, as we begin the process
of identifying and appointing a new Independent Non-executive
Director. Further details in relation to the appointment process are
provided on page 83 of this report.
The Board is committed to achieving the targets set by Balance for
Better Business for ISEQ 20 companies and by the FCA for UK-listed
companies, though we acknowledge that the Board composition
as at 31 December 2022 did not meet these targets. A detailed
breakdown of Board diversity is provided on page 84 of this report.
This committee will remain cognisant of these diversity and inclusion
targets, as well as investor and stakeholder expectations in this
regard, as we proceed through the nominations process in early 2023.
Committee members and attendance
Name
Position
Attendance
John Mulcahy
Chair
Pat McCann
Member
Robert Dix
Member
Camilla Hughes
Member
Richard Cherry
Member
Quick facts
>
John Mulcahy has chaired the Nomination Committee since
April 2022.
>
A majority of committee members are Independent
Non-executive Directors, in line with the Code.
>
The committee met three times during the year ended
31 December 2022.
Link to terms of reference
nomination-committee-terms-of-reference (glenveagh.ie)
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CODE PRINCIPLE: COMPOSITION, SUCCESSION AND EVALUATION
CONTINUED
NOMINATION COMMITTEE REPORT
CONTINUED
PROCESS FOR BOARD APPOINTMENTS
The process for Board appointments involves the committee first appointing a search agent for the assignment, following which it reviews and approves an outline of the role specification for the new
appointee. The committee meets the search agent to discuss the specification and the search, following which the agent prepares an initial longlist of candidates. The committee defines a shortlist and holds
interviews and ultimately, the committee makes a recommendation to the Board for its consideration. Following Board approval, and in line with the requirements of the FCA and Euronext Dublin listing rules,
the appointment is announced to the market.
Following a detailed RFP process in Q4 2022, Odgers Berndtson (an executive search firm with no other connections to the Company or its Directors) was selected by the committee to advise on the
appointment of a new Independent Non-executive Director in early 2023.
Step 01
The committee appoints a
search agent and reviews
and approves an outline
brief and role specification.
Step 02
The agent prepares an initial
longlist of candidates.
Step 03
The committee then selects a
shortlist and hold interviews.
Step 04
The committee makes a
recommendation to the
Board for its consideration.
Step 05
Following Board approval, the
appointment is announced in line
with the requirements of the FCA
and Euronext Dublin listing rules.
Committee activities in 2022
March 2022
May 2022
December 2022
>
Discussed and considered the results
of the 2021 Board evaluation in relation
to Board and committee composition
and Directors’ responsibilities and time
commitments.
>
Reviewed and discussed the Board skills
matrix as a basis for preparing a draft
candidate specification for a potential
new Independent Non-executive Director.
>
Considered RFP responses received from
three potential third-party executive
search advisors.
>
Reviewed Board and committee structure,
size and composition.
>
Continued discussions in relation to Board
succession and the potential initiation of
an RFP to appoint a third-party executive
search adviser.
>
Considered and approved an initial draft
candidate specification for the proposed
new Non-executive Director appointment.
Committee’s key roles and responsibilities
As a committee our responsibilities include:
>
Regularly reviewing the structure, size and composition (including
skills, experience and knowledge) of the Board and other senior
management positions and making recommendations to the
Board with regard to any proposed changes;
>
Leading the process for appointments and ensuring that a
formal, rigorous and transparent procedure is undertaken for
effective and orderly succession to both Board and senior
management positions;
>
Promoting the development of greater diversity at Board-level
and reviewing the Board diversity policy on an annual basis; and
>
Reviewing the results of the annual Board performance
evaluation process that relate to the composition of the Board
and the time commitment required from Non-executive Directors.
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57%
29%
14%
29%
71%
14%
43%
43%
Independent
non-Executive
Executive
Chair
1 to <2
2 to <4
4 to <6
Male
Female
candidates to the Board. There were no new appointments to the
Board during 2022, but during the year the committee commenced
the process of identifying a new Independent Non-executive Director
following Richard Cherry’s decision to step down from the Board.
Re-election
All Directors submit themselves for re-election at the Company’s AGM.
Board diversity
The Board has adopted a Board diversity policy, intended to
assist it, through the Nomination Committee, in achieving optimum
Board and committee composition. The Board recognises the clear
benefits of a diverse Board including diversity of experience, skills,
background and gender and agrees that these differences should
be considered in determining the optimum board composition.
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 Company’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.
Through the ESR committee, the Board has approved targets for
diversity and aims to reach 40% female representation and at
least one Director from a minority ethnic group. Currently, female
Directors account for 29% of the Board; there are no Directors
who self-disclose as being from minority ethnic groups. Below
Board level, female employees accounted for 14% of the senior
management as at 31 December 2022, as defined by the Code,
and 27% of senior management direct reports.
Directors’ induction, training and development
The Board 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. 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
CODE PRINCIPLE: COMPOSITION, SUCCESSION AND EVALUATION
CONTINUED
NOMINATION COMMITTEE REPORT
CONTINUED
Board composition
The Board is currently comprised of seven Directors: the
Non-executive Chairman, two Executive Directors and four
Independent Non-executive Directors. 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 Company 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.
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
Balance of Executive
and Non-executive Directors
Balance of male
and female Directors
Length of tenure
of Directors
BOARD COMPOSITION
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Focus areas highlighted in the 2021 review
Progress during 2022
Focus areas arising from 2022 review
The Board will continue to enhance its engagement with
key stakeholders in the business, building on the work of
the newly established ESR Committee.
During 2022, the Board engaged with key
stakeholders across the Group. Details in relation
to the Board’s engagement with stakeholders are
provided on page 80.
The Board will work to expand its meaningful
engagement with all principal stakeholders
and enhance its understanding of their interests
and concerns.
The Board will prioritise in-person engagement between
the Directors, both formally and informally, as COVID-19
restrictions are lifted.
In line with the easing of COVID-19 restrictions,
the Board met in-person for all nine meetings
held during 2022. In addition to formal Board
meetings, the Board also convened for strategy
and training sessions.
The Board will continue the development of
Non-executive Directors through training on
areas of operational focus for the business.
The Board will review and assess the structure and
composition of the Board committees during the year,
while also encouraging cross-committee interaction
where appropriate.
The Nomination Committee reviewed all Board
committee structures and Directors’ responsibilities
following Richard Cherry’s decision not to seek
re-election at the 2022 AGM and changes were
recommended to the Board and approved with
effect from the conclusion of the AGM.
Following Richard Cherry’s departure in 2022, the
Nomination Committee will focus on identifying a
suitable new Independent Non-executive Director
for recommendation to the Board in early 2023.
The Board will continue its work in relation to medium,
and long-term succession planning for the Board and ExCo.
As part of the succession planning for the smooth
transition of John Mulcahy’s executive functions
in 2022, the composition of the Group’s ExCo
was expanded.
Following the expansion of the ExCo in 2022,
the Board will focus on succession planning for
the Executive Directors.
lines and site tours of live construction projects. Newly appointed
Directors have access to the Company Secretary’s assistance
and guidance around the workings of the Board, in addition to
the experience gained with attendance at regular meetings. The
Board is committed to continued training and development 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 matters.
Annual Board evaluation
The Code specifies that the Board should undertake a formal and
rigorous annual evaluation of its own performance and that of its
committees and individual Directors, and that the Board should also
have an externally facilitated evaluation at least once, every three years.
2020 was the first year of the Board’s three-year review cycle.
An external evaluation was conducted by the Institute of
Directors in Ireland, to provide the Board with greater insights
into its performance and to identify opportunities to improve its
effectiveness. In 2021, the Board undertook an internally facilitated
review by way of a comprehensive questionnaire to assess its
performance and effectiveness. Some areas highlighted by the
2021 evaluation for potential improvement, and the agreed action
items for implementation during 2022, are summarised in the
adjacent table. The 2022 evaluation, being the third year of our
cycle, was comprised of a questionnaire-based internal evaluation.
As part of the annual evaluation process, the Chairman
also conducted one-on-one meetings with each individual
Director, and the Senior Independent Director met with the
Non-executive Directors to evaluate the performance of the
Chairman during the year.
Having carefully considered the results of the 2022 Board
evaluation in their totality, the Directors are satisfied with the
effectiveness of the Board and its committees, and with the
performance of the Chairman and the individual Directors.
John Mulcahy
Chair, Nomination Committee
CODE PRINCIPLE: COMPOSITION, SUCCESSION AND EVALUATION
CONTINUED
NOMINATION COMMITTEE REPORT
CONTINUED
Year 1 – 2020
Evaluation by external facilitator.
Year 2 – 2021
Internal review against detailed
Year 1 evaluation.
Year 3– 2022
Questionnaire-based internal
evaluation.
BOARD EVALUATION
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CODE PRINCIPLE: AUDIT, RISK AND INTERNAL CONTROL
AUDIT AND RISK COMMITTEE REPORT
Audit and Risk
Committee Report
Chair, Audit and Risk Committee
Cara Ryan
Committee members and attendance
Name
Position
Attendance
Cara Ryan
Chair
Robert Dix
Member
Pat McCann
Member
Richard Cherry
Member
Quick facts
>
Cara Ryan has chaired the Audit and Risk Committee since
September 2020.
>
All committee members are Independent Non-executive
Directors in line with the Code, and the Board considers
them to have an appropriate level of experience.
>
The committee met five times during the year ended
31 December 2022.
>
Regular attendees at committee meetings include the Chair,
the Executive Directors, the Group Financial Controller and
representatives from KPMG LLP (the ‘External Auditor’) and
Deloitte (the ‘Internal Auditor’).
>
The committee meets with the Internal and External Auditors
without management being present, on an annual basis in
order to discuss any issues which may have arisen during the
financial year.
Link to terms of reference
audit-and-risk-committee-terms-of-reference (glenveagh.ie)
On behalf of the committee, I am pleased to present the Audit
and Risk Committee (‘ARC’) report for the financial year ended
31 December 2022. The composition of the committee is outlined
in the table to the left; all committee members are Independent
Non-executive Directors in line with the Code.
The committee continues to focus its efforts on assisting the
Board by proactively managing its core areas of responsibility:
the integrity of the Group’s financial reporting, risk management
and internal control and assurance processes. The principal duties
and responsibilities of the committee together with an overview of
its activities for the year have been outlined in detail on pages 88
and 89 and summarised in the table on page 87.
Committee’s key roles and responsibilities
The Board believes the ARC to be a central pillar for effective
corporate governance by providing independent and impartial
oversight of the Company’s relevant functions. As a committee,
our responsibilities include:
>
Monitoring the integrity of the Group’s financial statements
including reviewing significant financial reporting issues,
judgements and other supplementary financial information
contained in formal announcements and communications;
>
Providing advice on whether the Annual Report and
financial statements, taken as a whole, is fair, balanced and
understandable and provides the necessary information for
shareholders to assess the Group’s position and performance,
business model and strategy;
>
Reviewing internal financial controls and the Group’s internal
control and risk management systems;
>
Reviewing the effectiveness of the audit process and the
independence and objectivity of the external auditor;
>
Monitoring and reviewing the effectiveness of the Group’s
Internal and External Auditors;
>
Developing and implementing policy on engaging the
External Auditor to supply non-audit services, taking into
account relevant guidance;
>
Approving the External Auditor’s remuneration and terms
of engagement, and making recommendations about
its re- appointment;
>
Receiving updates on the work undertaken to improve the
Group IT and cyber security capabilities; and
>
Reporting to the Board on how the committee has discharged
its responsibilities.
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CODE PRINCIPLE: AUDIT, RISK AND INTERNAL CONTROL
CONTINUED
AUDIT AND RISK COMMITTEE REPORT
CONTINUED
Committee activities in 2022
March 2022
May 2022
September 2022
October 2022
November 2022
>
Reviewed the Annual Report to ensure it
was fair, balanced and understandable and
provided information enabling an assessment
of Glenveagh’s position and performance,
business model and strategy.
>
Received and considered the internal
audit update.
>
Reviewed and considered the internal
audit update.
>
Received and considered a review of
the risk management process.
>
Reviewed and considered the internal
audit update.
>
Reviewed the External Auditor’s year-
end report, including independence
considerations.
>
Received updates on the Company’s deep-
dive on climate risk presentation and on
climate risk and opportunities.
>
Reviewed structure, organisation
and resources.
>
Received and considered the principal risks
to the business which included external and
operational risks.
>
Received and considered KPMG’s audit
plan and strategy 2022.
>
Considered the net realisable value of
inventories.
>
Considered next steps on 2022
sustainability workplan update.
>
Reviewed and considered the PLC
obligations register.
>
Reviewed the full-year financial report
announcement, the Annual Report; and
papers in relation to:
>
year-end accounting matters.
>
the preparation of the financial
statements on the going-concern
basis (see also Note 7 to the Group
financial statements).
>
the making of a going concern and
viability statement recommendation
to the Board.
>
the making of the Director’s compliance
statement recommendation to the Board.
>
the making of management
representations.
>
Discussed in detail the 2022 interim
financial results.
>
Received and considered the KPMG
interim review findings report.
>
Considered and approved the 2022
interim financial statements and letter
of representation.
>
Undertook the annual review of
Company policies.
>
Undertook the annual review of the
committee’s terms of reference.
Each scheduled meeting considered Directors’ interests and reviewed risk register updates.
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CODE PRINCIPLE: AUDIT, RISK AND INTERNAL CONTROL
CONTINUED
AUDIT AND RISK COMMITTEE REPORT
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Financial reporting and compliance
The committee reviewed, prior to their publication, the Group’s
Annual Report and financial statements and half-year and year-
end results announcements issued during the year. 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. The committee also
considered the view expressed by the External Auditor, KPMG,
in making these assessments.
The primary issue considered by the committee in relation to the
financial statements for the financial year ended 31 December 2022
was the Group’s assessment of the carrying value of inventory at
the reporting date, and profit recognised on completed units during
the year.
The committee assessed the Group’s ability to continue as a going
concern and its viability statement prior to recommending both for
approval by the Board. The committee considered the actual and
potential implications on the Group’s financial performance and
position against the macro-economic environment and because of
environmental or sustainability risks. These considerations included
but were not limited to the impact on selling prices and strategies,
development costs and construction programmes and put a focus
on the adequacy of liquidity when reaching its conclusion.
During the financial year, the committee reviewed and
recommended the Group’s 2021 Annual Report and the condensed
financial statements for the half-year ended 30 June 2022 to the
Board for approval. The committee’s review of the Annual Report
and financial statements considered whether, taken as a whole,
it was fair, balanced and understandable and provided the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy. Having
considered this, the committee confirmed to the Board its approval
of the Annual Report and financial statements.
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.
Risk management and internal controls
The committee acknowledges its role to oversee the Group’s risk
management framework and internal-controls processes. This
framework has been in place from the start of the financial year
to the approval date of the 2022 Annual Report and financial
statements and is set out on pages 57 to 66 of the strategic report.
The Group’s internal controls manage risk and provide reasonable
assurance against events or conditions that may result in material
misstatement or loss to the Group. Internal control processes are
regularly reviewed by the committee including an annual review by
the Board of Directors through the Directors’ Compliance Statement
Significant issue considered
Committee activity
Carrying value of inventory
The carrying value of the Group’s inventory was €685.8 million at 31 December 2022 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 and 31 December 2022, 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 the exercises determined that no net
adjustment to the carrying value was required at 30 June 2022 and 31 December 2022.
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 2022 and 31 December 2022, to seek to assess the impact of the macro-economic environment and
sustainability and environmental issues on the profitability of the Group’s development sites and to understand the different
scenario analysis completed.
The committee considered the six-month interim approach and financial year-end approach to the net realisable carrying value
of the inventory balance. It also considered the External Auditor’s conclusion regarding management’s assessment that no net
impairment charge or reversal was required at 30 June 2022 and 31 December 2022.
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 2022.
process. Throughout the year, the committee continued to engage
with Group management to ensure that robust internal controls and
risk management systems continue to apply.
The committee undertook an annual review of the Group’s risk
management and internal controls framework in October. The
review focused on the strategic risks and internal controls to address
these risks. This included:
>
Assessment of the principal and emerging strategic risks faced
by the Group;
>
The key internal controls in place and their effectiveness to
mitigate and manage these risks; and
>
Determining scoring thresholds and risk ratings.
The risk register and the principal risks and uncertainties faced by
the Group are outlined on pages 59 to 66 of this report. 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 environmental
and sustainability risks on the prospects of the Group.
The committee’s key priorities for the year ahead will include
a continued focus on assisting the Group with cyber security,
emerging environmental and sustainability considerations and
ensuring recommendations from Group internal audit reviews are
implemented on time, and giving effect to the actions from the
reviews of the Group internal audit function.
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CODE PRINCIPLE: AUDIT, RISK AND INTERNAL CONTROL
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Assurance oversight
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 which is informed by the strategic
risk areas for the business and considers any identified ineffective
controls and findings. The committee places a particular focus on
control weaknesses identified by internal audit and the remediation
plans put in place by management. A bi-annual update is provided
to the committee by internal audit on the remediation plan progress
made by management.
The committee met representatives from the Internal Auditor on four
occasions during the financial year and considered the findings from
their reviews of planning, procurement, internal financial controls,
project management, cyber security and human resources. During
the year, the committee considered the frequency of internal audit
reviews in the context of the current and future scale of the business.
To ensure the scope, extent and effectiveness of the internal audit
function is appropriate the committee approved six internal audit
reviews in the 2023 financial year.
External auditor
Audit effectiveness
KPMG were appointed as the Group’s External Auditors in 2017.
During 2021, the committee reviewed KPMG’s reports on its 2021
audit and interim review for the six months ended 30 June 2022.
It also reviewed and approved KPMG’s audit plan in respect of
the audit for the year ended 31 December 2022.
The effectiveness of the external audit process is assessed by the
committee, which meets regularly throughout the financial year with
the audit partner, with and without management. In conducting
this review, the 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.
The 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 four committee meetings in 2022.
In assessing the independence and objectivity of the External
Auditor, the committee considered the internal processes which the
External Auditor has in place to ensure their independence and
objectivity is monitored and reviewed sufficiently. The committee
considered senior management’s satisfaction with KPMG.
Auditor independence and non-audit services
KPMG has formally confirmed its independence to the 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 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:
€’000
Audit fees
255
Non-audit fees
Interim review fees
20
Tax services fees
73
Other non-audit services
20
Total
368
At the end of the financial year, non-audit fees paid to KPMG
represented 44% of total audit fees.
It is the Group’s practice to engage KPMG on assignments in
addition to its statutory audit duties where its expertise and
experience with the Group is 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 three 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.
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.
I am pleased to conclude that the ARC has met its obligations
for 2022 and is looking forward to further adapting the Group’s
risk management framework to respond to the opportunities and
challenges that 2023 will bring as the Group continues to deliver
on its strategic objectives.
Cara Ryan
Chair, Audit and Risk Committee
Governance
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CODE PRINCIPLE: REMUNERATION
REMUNERATION COMMITTEE
Remuneration
Committee Report
Chair, Remuneration Committee
Pat McCann
Committee members and attendance
Name
Position
Attendance
Pat McCann
Chair
Cara Ryan
Member
Camilla Hughes
Member
Richard Cherry
Member
Quick facts
>
Pat McCann has chaired the Remuneration Committee
since April 2022.
>
All committee members are Independent Non-executive
Directors, in line with the Code.
>
The committee met six times during the year ended
31 December 2022.
Link to terms of reference
remuneration-committee-terms-of-reference (glenveagh.ie)
On behalf of the committee, I am pleased to present our
Remuneration Committee report for the financial year ended
31 December 2022, which contains:
>
The current Directors’ remuneration policy, which was approved
at the AGM on 28 April 2022; and
>
The annual remuneration report, describing how the policy has
been put into practice in 2022 and how it will be implemented
in 2023.
Committee’s key roles and responsibilities
The principal responsibilities and duties of the Remuneration
Committee include:
>
Setting the remuneration policy for the 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.
Performance during 2022
As explained throughout this Annual Report, Glenveagh performed
strongly in 2022 across all segments of the business, with our highest
suburban unit deliveries to date and significant progress achieved in
the monetisation of our urban land portfolio.
This performance did not happen by accident as it relies on
good leadership and strong operational teams to deliver a highly
consistent quality product. The Remuneration Committee pays close
attention to the retention and rewards for the entire workforce.
While the committee’s remit is to focus on senior management, we
feel it is important to look at the rewards for the wider workforce in
making our decisions on senior management total remuneration.
We recognise that there needs to be alignment across the entire
workforce and we set out to be fair and reasonable in all our
deliberations. I am delighted to report that there is a wide range
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CODE PRINCIPLE: REMUNERATION
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of benefits available to all the workforce. Glenveagh pays
competitive basic salaries with bonus structures for performance,
in addition to providing pension schemes, private health insurance,
employee assistance programs, access to the Laya wellbeing studio
and a host of other benefits including further education to help our
people grow. The committee has been unable to roll out a Save As
You Earn (‘SAYE’) share scheme to employees for a number of years
due to the absence of a savings carrier in the Irish market, however
we are committed to reviving the SAYE as soon as a new savings
carrier is in place. The SAYE scheme has proven to be extremely
popular in previous years and the committee looks forward to
rolling it out to employees again in the future. The committee’s
deliberations in 2022 focused on the retention of the truly fantastic
team in place within Glenveagh. The market for talent is very
competitive and the committee is very aware of what is happening
in the sector. Glenveagh is not just competing for talent with Irish
companies, as many international companies are also recruiting in
Ireland. The committee is firmly of the belief that the Group has a
great team of people in place to deliver the future growth strategies
for Glenveagh, and that it is therefore essential that the Group
continues to grow and nurture all its people.
Remuneration outcomes for 2022
2022 annual bonus outcome
Given the level of business performance during the year, the
Executive Directors were successful in achieving the maximum
annual bonus for 2022. The committee was very pleased with
management’s execution and delivery during the year to ensure
that Glenveagh finished 2022 with a strong set of results.
Bonuses for 2022 were payable to the Executive Directors at 100%
of maximum as a result, which the committee believes was wholly
appropriate in light of the performance throughout the year. Full
details of the specific bonus targets, the outcomes achieved and the
resulting level of bonus payments are provided on page 99 of this
report. In line with the new remuneration policy, the 2022 annual
bonus payments to the Executive Directors were subject to one-third
deferral into shares, which must be held for a minimum of two years.
2019 LTIP outcome
The performance period for the 2019 long-term incentive plan
(‘LTIP’), in which Michael Rice, the CFO, was a participant, ended in
April 2022. Following assessment of performance against the 2019
LTIP targets, the vesting outcome for the awards was 100%
of maximum for all participants, including the CFO.
Conclusion of the founder share scheme
The final testing period for the legacy founder share scheme, in which
the Chairman and the CEO participated, ended in June 2022. The
final performance condition related to the Company’s share price
was not satisfied and therefore no founder shares were converted to
ordinary shares during 2022. Further details in relation to the winding
up of the expired founder share scheme can be found on page 103.
2020 LTIP outcome
The performance period for the 2020 LTIP, in which the CFO was a
participant, ended on 31 December 2022. The 2020 LTIP award was
granted in February 2020 and had a three-year vesting period. The
award was subject to two equally weighted performance conditions:
50% absolute total shareholder return (‘TSR’) and 50% earnings per
share (‘EPS’).
As allowed under the Code, the committee reviewed the vesting
outcome in early 2023, to ensure that it was fair and appropriate
in the context of the overall performance of the business and the
experience of our stakeholders. The committee did not consider
the formulaic vesting out-turn to be a fair reflection of the strong
performance of the business and management team over the
performance period. For this reason, the committee exercised
discretion in respect of one of the performance metrics for senior
management LTIP participants.
Committee activities in 2022
January 2022
March 2022
April 2022
September 2022
October 2022
December 2022
>
Concluded shareholder consultation
on the proposed new remuneration
policy for 2022.
>
Finalised 2021 bonus pay-out level.
>
Approved 2022 Bonus Metrics.
>
Approved targets for the 2022
LTIP award.
>
Reviewed remuneration for the new
ExCo members and the Company
Secretary.
>
Authorised the issue and allotment
of shares to satisfy the exercise of
vested LTIP option awards.
>
Authorised the application to
Euronext Dublin and the London
Stock Exchange for a block listing of
shares to satisfy LTIP options
at exercise.
>
Approved the establishment of a
restricted share trust for the purpose
of holding shares that are subject to
restrictions on disposal.
>
Approved and adopted the
amended LTIP Rules, following
shareholder approval at the AGM.
>
Approved the 2022 LTIP award
grants.
>
Initiated a formal RFP process
for the committee’s external
remuneration adviser.
>
Received an update on the work of
employee share plan providers in
Ireland to try and find an alternative
savings carrier for the Revenue-
approved SAYE Scheme following
Ulster Bank’s decision to leave the
Irish market.
>
Considered the external
remuneration adviser RFP
presentations.
>
Approved the appointment of
Ellason as external remuneration
adviser to the committee.
>
Authorised the issue and allotment
of shares to satisfy the exercise of
SAYE options.
>
Authorised the application to
Euronext Dublin and the London
Stock Exchange for a block listing
of shares to satisfy SAYE options
at exercise.
>
Considered the projected vesting
outcome of the 2020 LTIP based
on the performance period ending
31 December 2022. Received advice
from Ellason in relation to the
potential adjustment of the 2020
LTIP vesting outcome.
>
Reviewed current progress of 2022
bonus metrics versus target.
>
Annual review of committee terms
of reference.
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CODE PRINCIPLE: REMUNERATION
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The committee engaged with major shareholders in early 2023
in relation to this decision, and sought shareholder support to
exercise the same level of discretion in respect of the CFO, as the
committee felt strongly that it was important to treat all participants
consistently. The CEO was not a participant in the 2020 LTIP. We are
committed to open and transparent engagement with shareholders
in relation to remuneration, and we were greatly encouraged by
the level of responsiveness and support received from our major
shareholders for our proposed exercise of discretion in respect of
the 2020 LTIP.
As a committee, we are aware that the use of discretion in
relation to the CFO’s 2020 LTIP award will be scrutinised carefully
by investors and other interested parties. We strongly believe that
the use of discretion was fair and appropriate to ensure that the
vesting outcome for the CFO was aligned with the performance of
the company and the experience of stakeholders, and is necessary
for his continued retention and incentivisation.
Full details in relation to the performance outcome, formulaic level
of vesting, and the subsequent level of discretion exercised by the
committee are set out on page 101.
Remuneration in 2023
Base salaries
The base salary of the CEO increased to €600,000 in 2022
under the new remuneration policy, and, for the CFO to €400,000.
In light of the recent step-up in base salary for the Executive
Directors, which was disclosed in last year’s report and approved
by shareholders at the end of April 2022, the salary levels for the
Executive Directors remain unchanged for 2023.
Annual bonus
The CEO and CFO will continue to participate in the annual bonus
scheme. For 2023 the financial measures remain unchanged from
2022, consisting of profit before tax (‘PBT’) (50%) and operating
margin (20%). Non-financial performance will continue to be assessed
based on health and safety (15%) and customer satisfaction (15%)
measures and assessed in a similar way as in previous years by input
from externally managed surveys and audits.
All the measures selected 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 2023
remuneration report. For 2023 the annual bonus opportunity will
remain unchanged from 2022, at 150% and 125% of base salary
for the CEO and the CFO respectively, in line with the new policy.
Two-thirds of the annual bonus will continue to be paid in cash, the
remainder will be deferred into shares for a minimum of two years.
LTIP
The CEO and CFO will continue to participate in the LTIP, with
awards levels for 2023 unchanged from 2022 at 200% and 175%
of salary for the CEO and CFO respectively.
Further detail in relation to target-setting for the 2023 LTIP awards
is set out on page 100.
Pension contributions
Over the last number of years, the committee has worked towards
achieving pension alignment between the Executive Directors and
the average workforce. In line with our new remuneration policy,
pension contributions for the Executive Directors reduced from 15%
to 5% of salary with effect from 1 January 2023. As a result, pension
contributions for the Executive Directors are now aligned to the
wider workforce.
Wider workforce
The Board remains cognisant of the importance of retaining key
staff across all levels of the wider organisation as we progress our
ambitious growth plans for the business. The Board recognises the
importance of rewarding our workforce fairly and competitively to
ensure the incentivisation of the people we need to attract and
to retain across our business segments. In 2022 the committee
considered matters relating to workforce remuneration, particularly
the cost of living pressures experienced in Ireland. As a result,
average workforce salaries were increased by 3% with effect from
1 January 2023. Further detail in relation to the committee’s wider
employee remuneration considerations are provided on page 96.
During 2022, the Board, through the ESR Committee, received
and considered the Group’s first reporting under the Gender Pay
Gap Information Act 2021. In conjunction with the work of the ESR
Committee, this committee will maintain an ongoing focus on the
Group’s gender pay gap in 2023.
UK Corporate Governance Code
Glenveagh continues to support the principles and provisions of
the Code, though the committee and the Board acknowledge
Glenveagh’s departure from provision 41 of the Code concerning
engagement with the workforce in relation to executive remuneration.
As recommended by the Code, Glenveagh’s remuneration policy
and its implementation are designed to support the strategy of
the business and promote long-term sustainable success. This
Remuneration Committee report explains the policy in a transparent
and straightforward manner, with sufficient detail provided to give
shareholders a clear understanding of how the policy operates
and the potential reward opportunities available to the Executive
Directors. There is a clear link between the performance of the
Group and the rewards available to individual Directors. The policy
has a relatively conventional structure and unnecessary complexity
has been avoided. There is consistency with Glenveagh’s broader
culture of rewarding excellent performance across the organisation,
and strong alignment with the interests of shareholders and
wider stakeholders.
External advisers
During 2022, the committee undertook a formal tender process
for the appointment of its remuneration adviser. Following the
conclusion of this process, the committee selected Ellason as its
independent remuneration consultants and they succeeded Korn
Ferry with effect from October 2022.
Ellason 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 has satisfied itself
that the advice provided by Ellason is robust and independent.
Annual General Meeting
As noted above, the committee consulted with major shareholders
at the outset of 2023 on its proposal to exercise discretion in
relation the CFO’s 2020 LTIP. We remain grateful for the time taken
by shareholders to consider our proposal and to provide their
feedback, which was supportive of our intentions as a committee.
Shareholder approval will be sought at the AGM for the usual
advisory vote on this Remuneration Committee report. I hope you
will support this resolution and, ahead of the AGM, I welcome any
comments or feedback you may have on the committee’s activities
in 2022, our plans for 2023, or any other relevant matters.
Pat McCann
Chair
Remuneration Committee
Governance
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CODE PRINCIPLE: REMUNERATION
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DIRECTORS’ REMUNERATION POLICY
The following table outlines the key elements of Glenveagh’s remuneration policy, as approved by shareholders at the 2022 AGM.
Fixed remuneration
Base salary
Element/purpose
Operation
Maximum opportunity
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
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.
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 relate to each individual’s
circumstances.
Retirement benefits
To attract and retain high calibre individuals
as part of competitive package.
The Group operates a defined contribution pension scheme for Executive
Directors. Pension contributions are calculated on base salary only.
Maximum contribution rate is set in line with the rate attributable to a majority
of the wider workforce (currently 5%).
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Variable remuneration
Annual bonus
Element/purpose
Operation
Maximum opportunity
To reward the achievement of
annual performance targets.
Individuals 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 financial KPIs 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.
The maximum award for Executive Directors as a percentage of base salary
is 150%.
For 2023, the committee intends to apply the following maximum opportunities
as a percentage of base salary:
CEO
150%
CFO
125%
The amount payable for target performance is limited to 50% of the relevant
maximum award opportunity.
Two-thirds of the annual bonus will be paid in cash, while one-third will be
delivered in shares deferred for at least two years. No further performance
targets apply to the deferred shares but malus and clawback will apply to the
shares during the deferral period.
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 LTIP involves the grant of nil-cost options over ordinary shares to
participants based on a percentage of their gross base salary.
LTIP awards vest subject to the satisfaction of performance conditions over a
three-year period. The committee selects the performance conditions 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 2023 are set out on page 100.
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.
LTIP awards 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.
The LTIP rules permit awards to be granted up to 200% of base salary.
The committee intends to make grants at the following levels in 2023
(as a percentage of base salary):
CEO
200%
CFO
175%
Governance
Financial Statements
Strategic Report
95
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
Relative proportion of fixed and variable remuneration
As 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.
CEO
Max variable pay
Target variable pay
No variable pay
Salary
Pension
Bonus
LTIP
0
10
20
30
40
50
60
70
80
90
100
CFO
Max variable pay
Target variable pay
No variable pay
Salary
Pension
Bonus
LTIP
0
10
20
30
40
50
60
70
80
90
100
NOTES:
(1)
Max variable pay assumes a full annual bonus pay-out and 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.
Performance conditions
For both the annual bonus scheme and the LTIP, the committee sets
performance conditions based on business circumstances and the
key strategic priorities of the business at the time the targets are set.
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 that everyone should have the
opportunity to access great-value, high-quality homes in
flourishing communities across Ireland.
The performance conditions which apply to the annual bonus
scheme to operate in 2023 are based on a mix of financial and
non-financial criteria as set out below:
>
Profit before tax:
This is considered to be the best profit
measure to use for the bonus scheme as it takes into account
depreciation, amortisation and interest on debt, and overall
financing;
>
Operating margin:
This ensures that management is focused
on operating profit in the context of 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. Safety audits are
completed on a monthly basis by an external consultant and
by internal safety specialists; and
>
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.
The performance conditions for the LTIP awards to be granted in
2023 will be announced at the time of granting awards. Further
details in relation to the LTIP awards to be granted in 2023 are
provided on page 100.
The 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 this
involves reviewing Glenveagh’s financial performance as determined
by its audited results and comparing the specific targets against
the performance achieved. 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 clawback
For 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;
>
If the participant has engaged in any wilful misconduct,
recklessness, fraud and/or criminal activity which reflects
negatively on Glenveagh or otherwise impairs or impedes
its operations and/or which has caused serious injury to the
financial condition and/or business reputation of Glenveagh;
>
If a participant behaves in a manner which fails to reflect
Glenveagh’s governance and business values and/or which has
the effect of causing, or is likely to result in, serious reputational
damage to Glenveagh;
>
If there is an incidence of corporate failure (including but not
limited to Glenveagh being placed into administration); and
>
If the participant commits an act which constitutes a material
breach of his/her contract, restrictive covenants and/or any
confidentiality obligations.
Shareholding guidelines
The CEO is required to build a shareholding equivalent in value to
300% of his base salary, while all other Executive Directors must
build a shareholding equivalent in value to 200% of base 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).
In line with the new remuneration policy, there is a requirement
for shares to be held by Executive Directors for a period of time
following termination of employment. For a minimum period of
two years after the cessation of their employment, the Executive
Directors are required to hold shares at a level of the lower of (i)
the in-employment shareholding requirement in place at the time
and (ii) their actual shareholding at the time of departure. These
requirements apply to any shares which vest from incentive awards
granted from 2022 onwards. Shares which have been purchased by
an Executive Director from their own resources will not be covered
by this arrangement.
Governance
Financial Statements
Strategic Report
96
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
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.
>
Base 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. This is currently 5% of base salary.
>
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 150% of base 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 a
maximum of 200% of base salary.
>
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 have service agreements with
Glenveagh of no fixed term. The agreements are terminable on
nine 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
committee has responsibility for setting the pay of members of
senior management immediately below Board level (including
the 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
has a similar structure to that of 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.
Full details in relation to the Board’s engagement with, and
consideration of, its employees is set out on page 80 of the
Corporate Governance Report.
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. The committee has engaged extensively with major
shareholders on remuneration matters in recent years, most recently
in late 2021 and early 2022 to discuss the new remuneration policy
and its implementation for 2022, and, as detailed earlier in this
report, in early 2023 in relation to its proposed exercise of discretion
in respect of the 2020 LTIP.
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.
Governance
Financial Statements
Strategic Report
97
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
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
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 Board on advice
from the independent professional advisers. The NEDs are paid
a fee of €65,000 per annum with additional fees payable to the
Senior Independent Non-executive Director of €30,000 per annum
and to the Workforce Engagement Director of €15,000 per annum.
NEDs receive an additional €15,000 for chairing the Audit and Risk,
Remuneration, Nomination and ESR Committees. The Non-executive
Chairman receives a fee of €200,000.
Accordingly, the NED letters of appointment detail the following
annual fees:
Role
€
John Mulcahy
Company Chairman, and Chair of the
Nomination Committee
200,000
Robert Dix
Senior Independent Non-executive
Director
95,000
Cara Ryan
Workforce Engagement Director
and Chair of the Audit and Risk
Committee
95,000
Pat McCann
Chair of the Remuneration Committee
80,000
Camilla Hughes
Chair of the ESR Committee
80,000
NEDs are not eligible to participate in any Group pension plan. The
Non-executive Directors 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.
Governance
Financial Statements
Strategic Report
98
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
ANNUAL 
REMUNERATION REPORT FOR 2022
The following table illustrates remuneration awarded to Directors 
for the financial year ended 31 December 2022:
Name
Salary/fees (€)
(1)
Benefits (€)
(2)
Employer pension
contribution (€)
(3)
Total fixed (€)
Annual bonuses (€)
LTIP
Total variable (€)
Total (€)
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
(7)
2021
2022
2021
2022
2021
Executive Directors
Stephen Garvey
600,000
450,000
24,801
25,213
90,000
67,500
714,801
542,713
900,000
445,500
–
–
900,000
445,500
1,614,801
988,213
Michael Rice
400,000
315,000
16,121
16,270
60,000
47,250
476,121
378,520
500,00
311,850
545,643
–
1,045,643
311,850
1,521,764
690,370
Non-executive Directors
John Mulcahy
(4)
200,000
300,000
–
18,500
–
200,000
318,500
–
222,750
–
–
–
222,750
200,000
541,250
Robert Dix
95,000
90,000
–
–
95,000
90,000
–
–
–
95,000
90,000
Richard
Cherry
(6)
26,667
75,000
–
–
–
–
26,667
75,000
–
–
–
–
–
–
26,667
75,000
Pat McCann
80,000
75,000
–
–
–
–
80,000
75,000
–
–
–
–
–
–
80,000
75,000
Cara Ryan
95,000
78,750
–
–
–
–
95,000
78,750
–
–
–
–
–
–
95,000
78,750
Camilla Hughes
(5)
80,000
37,500
–
–
–
–
80,000
37,500
–
–
–
–
–
–
80,000
37,500
Total
1,576,667
1,421,250
40,922
59,983
150,000
114,750
1,767,589
1,595,983
1,400,000
980,100
545,643
–
1,945,643
980,100
3,713,232
2,576,083
(1)
Amounts reflect salaries in respect of Executive Directors and Directors’ fees in respect of Chairman and other Non-executive Directors.
(2)
Benefits largely relate to car allowances and healthcare provided to Executive Directors in accordance with their employment contracts.
(3)
Only Executive Directors are eligible to receive pension contributions. Non-executive Directors do not receive pension contributions.
(4)
John Mulcahy was an Executive director in 2021.
(5) Camilla Hughes was appointed to the Board on 1 July 2021.
(6)
Richard Cherry resigned from the Board in 2022.
(7) Amount reflects the combined total of 2019 and 2020 LTIP awards. The performance periods for the 2019 and 2020 LTIP awards ended on 16 April 2022 and 31 December 2022, respectively.
Governance
Financial Statements
Strategic Report
99
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
The Remuneration Committee report for 2021 and the Directors’
remuneration policy were the subject of advisory shareholder votes
at the AGM in 2022. The resolutions were passed with the support
of 89% and 95% of those voting, respectively. 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 2022. The committee concluded that the vote
results 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 2022 are set out in the table on page 98.
The base salaries for the CEO and CFO will remain unchanged for
the 2023 financial year.
Total remuneration received for 2022
All elements of the remuneration received by the Directors for 2022
were consistent with the Directors’ remuneration policy as approved
by shareholders at the AGM in 2022. The salaries received by the
Executive Directors and the fees received by the Non-executive
Directors were as disclosed in the 2021 Remuneration Committee
report. The bonus payments received by the Executive Directors
in respect of 2022 reflected the achievement of the performance
targets, as explained further below.
During the financial year ended 31 December 2022:
>
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.
Annual bonus
2022 bonus outcome
The Executive Directors participated in an annual bonus scheme for
2022 with performance measured against a mix of financial (70%)
and non-financial (30%) performance conditions.
The specific targets that were set for the bonus scheme in 2022 are
set out in the table below:
Metric
Weight
% Payable
Target
Performance achieved
Profit before tax
50%
Threshold 25%
€46,260,000
€63.0m
Target 50%
51,400,000
Max 100%
€62,828,000
Operating margin
20%
Threshold 25%
9.00%
10.9%
Target 50%
9.60%
Max 100%
10.50%
Health and safety
15%
Threshold 25%
70% audit score
88%
Target 50%
75% audit score
Max 100%
85%+ audit score
Customer satisfaction
15%
Threshold 25%
75% survey score
91%
Target 50%
80% survey score
Max 100%
90%+ survey score
The Remuneration Committee reviewed the outcome of the formulaic bonus calculations and was satisfied that they were a fair reflection of the overall performance of the business. As a result, the Executive
Directors received €1,400,000, being 150% of base salary for the CEO and 125% of base salary for the CFO.
Governance
Financial Statements
Strategic Report
100
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
2023 bonus arrangements
For 2023, the annual bonus scheme will continue to operate in the
same manner as in 2022, with a 70%/30% split between financial
and non-financial metrics. The performance metrics and associated
weightings will remain as follows:
Financial metrics
Weighting
Profit before tax
50%
Operating margin
20%
Non-Financial metrics
Weighting
Health and safety
15%
Customer satisfaction
15%
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 2023 will be 150%
of base salary for the CEO and 125% for the CFO. The amount
payable for target performance will continue to be 50% of the
maximum opportunity.
In line with the Directors’ remuneration policy, two-thirds of the
annual bonus will be paid in cash while one-third will be delivered
in shares deferred for at least two years.
The performance conditions for this award are set out below:
EPS performance
(applies to 50% of the award) – adjusted
EPS to be achieved in FY2024
Level of
vesting
20.0c
100%
12.0c
25%
Less than 12.0c
Nil
Awards vest on a straight-line basis for performance between 12.0c
and 20.0c
Return on equity performance
(applies to 50% of the award) –
ROE to be achieved in FY2024
Level of
vesting
16.2%
100%
11%
25%
Less than 11%
Nil
Awards vest on a straight-line basis for performance between 11%
and 16.2%
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.
Awards to be granted in 2023
The CEO and CFO will continue to participate in the LTIP, with
awards levels for 2023 unchanged from 2022 at 200% and 175%
of salary for the CEO and CFO respectively.
At the time of finalising this report, the committee had not made a
final decision on the metrics and targets to apply to the 2023 LTIP
award. Details in relation to the metrics and targets will be included
in the necessary regulatory announcement of the award at the
time it is granted. The committee confirms that the chosen metrics
and 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.
The committee will have the flexibility to make adjustments to
the targets and/or the determination of performance against
the targets and vesting outcome to reflect the impact of material
events during the performance period. Any such adjustment will
be explained in the relevant Directors’ remuneration report.
Long-term incentive plan (LTIP)
Awards granted in 2022
The table below provides details of the LTIP awards made during the year to the Executive Directors.
Director
Award date
% of salary
award
Grant date
share price
Face value
of award
Number of
shares
Performance
period
Date of
vesting
Stephen Garvey
29 Apr 2022
200%
€1.16
€1,200,000
1,034,483
1 Jan 2022 to
31 Dec 2024
28 Apr 2025
Michael Rice
29 Apr 2022
175%
€1.16
€700,000
603,448
1 Jan 2022 to
31 Dec 2024
28 Apr 2025
Governance
Financial Statements
Strategic Report
101
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
LTIP awards held by Directors
Details of all LTIP awards held by Directors are set out in the table below:
Director
Award date*
Share price used
Share
awards held
at 1 Jan 2022
Awarded during the
year
Vested during the year
Lapsed during the
year
Share
awards held
at 31 Dec 2022
Vesting
date
Stephen Garvey
29 Apr 2022
€1.16
–
1,034,483
–
–
1,034,483
28 Apr 2025
Michael Rice
17 Apr 2019
€0.84
200,893
–
200,893
–
–
16 Apr 2022
28 Feb 2020
€0.75
420,000
–
–
–
420,000
27 Feb 2023
1 Apr 2021
€0.91
399,493
–
–
–
399,493
31 Mar 2024
29 Apr 2022
€1.16
–
603,448
–
–
603,448
28 Apr 2025
* The awards are granted as options with an exercise price of nil.
The vesting of the award granted in April 2019 was subject to the TSR performance condition set out in the table below:
LTIP award
Performance condition
Performance Period
Threshold
(25% vesting)
Maximum
(100% vesting)
Actual
% Vesting
April 2019
TSR
17 Apr 2019 – 16 Apr 2022
6.25%
12.5%
12.5%
100%
The vesting of the award granted in February 2020 was subject to performance conditions based on absolute TSR and EPS performance (equally weighted on a 50/50 basis) detailed in the table below:
LTIP award
Performance condition
Performance Period
Threshold
(25% vesting)
Maximum
(100% vesting)
Actual
% Vesting
February 2020
TSR
1 Jan 2020 – 31 Dec 2022
6.25%
12.5%
10.4%
74%
EPS
1 Jan 2020 – 31 Dec 2022
9.5c
12.5c
7.6c
0%*
* Details in relation to the discretion exercised by the committee, and the resulting effective vesting percentage, are provided below.
The 2020 LTIP award was granted in February 2020 and has a
three-year vesting period. The award was subject to two equally
weighted performance conditions: 50% of the award was based
on absolute total shareholder return (TSR) and the other 50% of
the award was based on earnings per share. The absolute TSR
condition required growth of 6.25% to 12.5% per annum. Our TSR
performance over the period was 10.4% per annum, resulting
in 74% of this element of the award becoming due to vest. No
adjustment is being made to the absolute TSR vesting outcome. The
EPS performance condition required EPS of 9.5 to 12.5 cents for FY
2022. Whilst EPS has grown strongly over the performance period,
delivering a total growth over the period of 192%, performance
against this target was significantly impacted by the COVID-19
pandemic and, as a result, the EPS target for the 2020 LTIP was not
met. The committee does not consider this formulaic vesting out-turn
to be a fair reflection of the strong underlying performance of the
business and management team over the period. For this reason,
the committee exercised its discretion in respect of the senior
management LTIP participants, determining that an equivalent
percentage vesting as that achieved in the TSR metric be applied
to the EPS element of the award, thereby giving an overall vesting
percentage of 74% across both metrics. Following engagement with
shareholders, and on receipt of their support for the proposal, the
committee also exercised discretion in the same manner in respect
of Michael Rice, CFO, as the committee believes it is important to
treat all participants consistently. Stephen Garvey, CEO, was not
a participant in the 2020 LTIP award, therefore the exercise of
discretion for Executive Directors is limited to Michael Rice.
The vesting of the award granted in April 2021 is subject to
performance conditions based on absolute TSR and EPS
performance (equally weighted on a 50/50 basis) over the
three years to the end of December 2023. The specific targets
were disclosed in the 2021 Remuneration Committee report. The
performance outcome and subsequent level of vesting will be
disclosed in next year’s Remuneration Committee report.
In addition to performance conditions set out above, the vesting
of any LTIP award 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 page 93), 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.
Governance
Financial Statements
Strategic Report
102
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
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.
2022
2021
2020
2019
2018
% Change
2022 v 2021
Executive Directors
Stephen Garvey
€1,614,801
€988,213
€541,821
€750,439
€564,401
63.4%
Michael Rice
€1,521,764
€690,370
€378,176
€99,918
–
120.4%
Non-executive Directors
John Mulcahy
(1)
€200,000
€541,250
€318,500
€480,596
€419,000
-63.0%
Robert Dix
€95,000
€90,000
€79,875
€75,000
€75,000
5.6%
Richard Cherry
(3)
€26,667
€75,000
€75,000
€75,000
€75,000
-64.4%
Pat McCann
€80,000
€75,000
€63,427
€20,000
–
6.67%
Cara Ryan
€95,000
€78,750
€64,875
€20,000
–
20.6%
Camilla Hughes
(2)
€80,000
€37,500
–
–
–
113.3%
Company performance
Adjusted EBITDA
€72.2m
€48.8m
€9.6m
€31.9m
€(2.0)m
48.0.%
Health and safety
88%
89%
88.0%
75.0%
N/A
-1.1%
Customer satisfaction
91%
89%
83.0%
82.0%
N/A
2.2%
(1)
John Mulcahy was an Executive Director in 2021.
(2)
Camilla Hughes was appointed to the Board on 1 July 2021.
(3) Richard Cherry resigned from the Board in 2022.
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
2022
2021
2020
2019
2018
% Change
2022 vs 2021
Average remuneration for employees of the Group
€92,745
€98,350
€73,610
€84,286
€90,110
-5.7%
Governance
Financial Statements
Strategic Report
103
Glenveagh Properties plc
Annual Report and Accounts 2022
CODE PRINCIPLE: REMUNERATION
CONTINUED
REMUNERATION COMMITTEE
CONTINUED
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 72 and 73
of the Corporate Governance Report. The table below sets out the
interests of the Directors and Company Secretary in ordinary shares
of the Company as at 31 December 2022. Under the remuneration
policy, the CEO is required to build a shareholding equivalent
in value to 300% of his base salary. Other Executive Directors
are required to build a holding of 200% of base 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).
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 entitled 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 fifth and final test period (which
ran from 1 March 2022 until 30 June 2022), 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. Under
the Company’s constitution, any Founder Shares which remained
in existence, and which had not been previously converted were,
following the final test period, to be converted on a 1:1 basis into
deferred shares (the ‘Termination Conversion’). On 26 October 2022,
the Board approved the Termination Conversion. In respect of
the deferred shares held by the Founders, John Mulcahy and
Stephen Garvey surrendered their respective deferred shares in
November 2022.
Ordinary shares
Founder shares
Deferred shares
Ordinary shares under option**
Name
2022
2021
2022
2021
2022
2021
2022
2021
Stephen Garvey
9,411,319
9,411,329
–
81,453,077
–
–
1,034,483*
–
Michael Rice
169,333
23,333
–
–
–
–
1,452,941*
1,050,386*
Richard Cherry
1,370,905
1,371,069
–
–
–
–
–
–
John Mulcahy
2,882,766
2,682,766
–
18,100,684
–
–
–
–
Robert Dix
350,000
350,000
–
–
–
–
–
–
Cara Ryan
28,000
28,000
–
–
–
–
–
–
Pat McCann
70,000
70.000
–
–
–
–
–
–
Camilla Hughes
–
–
–
–
–
–
–
–
Chloe McCarthy
–
–
–
–
–
–
420,606*
368,677*
*
The exercise price of the ordinary shares under options detailed above is €nil. The expiry date for the options granted during 2021 and 2022 are 7 years from 31 March 2024 and 28 April 2025 respectively.
**
Shares under option include options from both LTIP and SAYE schemes.
Governance
Financial Statements
Strategic Report
104
Glenveagh Properties plc
Annual Report and Accounts 2022
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY COMMITTEE REPORT
Environmental and
Social Responsibility
Committee Report
Chair, Environmental and
Social Responsibility Committee
Camilla Hughes
On behalf of the committee I am pleased to present the ESR
Committee report for the financial year ended 31 December 2022.
The committee focuses its efforts on assisting the Board by
proactively managing its core areas of responsibility: developing
and monitoring the Group’s approach to sustainability.
The principal duties and responsibilities of the committee together
with an overview of its activities for the year have been outlined
below and on the following page.
Committee’s key roles and responsibilities
The Board strongly believes that sustainability is an inherent
part of our business. As a Group, we are committed to playing
a leading role in achieving a sustainable future. As a committee,
our responsibilities include:
>
Reviewing the environmental and social responsibility targets
and areas of focus as set out in the Group’s strategy;
>
Ensuring compliance with the evolving regulatory disclosure
landscape in respect of sustainability;
>
Investigating any statutory prosecutions or notices in
relation to environmental and community issues and make
recommendations to the Board regarding any action to be
taken; and
>
Considering budgetary and financial implications of the
environmental and social responsibilities strategy.
Areas of focus for the committee in 2022.
The committee reviewed the Group’s approach to sustainability,
its environmental and social responsibility targets and the progress
being made against these. The main areas of focus in 2022 are
outlined below.
>
Development of the Group’s Net Zero Transition Plan.
>
Materiality assessment.
>
Preparation for the Corporate Sustainability Reporting Directive
(‘CSRD’).
>
Equity, Diversity and Inclusion (‘ED&I’).
>
Ongoing sustainability workplan.
Committee members and attendance
Name
Position
Attendance
Camilla Hughes
Chair
Stephen Garvey
Member
Robert Dix
Member
Pat McCann
Member
Quick facts
>
The Environmental and Social Responsibility (‘ESR’) Committee
was established in July 2021.
>
Camilla Hughes has chaired the Committee since
it was established.
>
All committee members but one are Independent Non-executive
Directors.
>
The committee met four times during the year ended
31 December 2022.
>
The Chief Strategy Officer and Head of Sustainability were
invited to all meetings.
Link to terms of reference
environmental-and-social-responsibility-committee-terms-of-
reference (glenveagh.ie)
Governance
Financial Statements
Strategic Report
105
Glenveagh Properties plc
Annual Report and Accounts 2022
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY COMMITTEE REPORT
CONTINUED
Committee activities in 2022
February 2022
May 2022
September 2022
November 2022
>
Discussed in detail the results of the Great Place To Work
(‘GPTW’) Survey.
>
Received an update on external developments such as
sustainability-related policy, legislation and important
reports in Ireland and worldwide.
>
Received an update on external developments such as
sustainability-related policy, legislation and important
reports in Ireland and worldwide.
>
Received an update on external developments such as
sustainability-related policy, legislation and important
reports in Ireland and worldwide.
>
Received an update on the Group’s progress on its
ED&I strategy.
>
Received an update on the evolution of CDP.
>
Received and considered the outputs of the Group’s
materiality assessment carried out by an external provider.
>
Received an update on the Net Zero Transition Plan and
proposed next steps to the Board for approval.
>
Discussed the proposed Health and Safety Culture
approach.
>
Received an overview of the Group’s approach to
materiality and stakeholder engagement.
>
Received an update on the Net Zero Transition Plan.
>
Received and considered the ED&I strategy and Gender
Pay Gap report.
>
Received an update on the 2022 sustainability workplan.
>
Received an update on the Net Zero Transition Plan.
>
Received an overview of the proposed approach
to biodiversity.
>
Received an update on CSRD preparation.
>
Received and considered climate and ESG risks.
>
Received an update on CSRD preparation.
>
Discussed the 2023 sustainability workplan and budget.
>
Reviewed structure, organisation and resources with
respect to sustainability.
>
Discussed the 2022/23 sustainability workplan.
>
Reviewed and approved the Terms of Reference for
the Committee.
>
Considered next steps on 2022 sustainability workplan.
The main focus throughout the year was the development of the
Group’s Net Zero Transition Plan. The committee received ongoing
updates from management as work on this progressed in order to
understand the options emerging and the commitments to be made.
As key stakeholders, the committee participated in the Group’s
materiality assessment which was carried out, by an external
provider, to determine the most important sustainability issues.
We also received and discussed the outputs of this assessment
which allowed us to better understand the key priorities for a
range of stakeholders, both internal and external.
Social aspects of sustainability also formed a key part of our
agenda in 2022. This included understanding staff priorities through
our GPTW survey results, our evolving approach to Health and
Safety culture as well as an ongoing focus on ED&I including our
first Gender Pay Gap report.
The committee also reviewed and approved the sustainability
workplan presented by management.
As a standing item, the committee reviewed future obligations
and recent external developments with respect to standards and
legislation and assessed the Group’s preparedness for these. These
included the CSRD, the Gender Pay Gap Information Act 2021,
the Climate Action Plan, the net zero standard from SBTi and the
establishment of the International Sustainability Standards board.
I am pleased to conclude that the ESR Committee has made
continued progress in its second year. With sustainability now
fully embedded into our business strategy and at the core of
future strategic decision making, I am looking forward to further
evolving the Group’s sustainability approach to respond to the
needs of our stakeholders.
Camilla Hughes
Chair, Environmental and Social Responsibility Committee
Governance
Financial Statements
Strategic Report
106
Glenveagh Properties plc
Annual Report and Accounts 2022
DIRECTORS’ REPORT
The 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 2022.
Principal activities and business review
Glenveagh is a leading Irish homebuilder listed on Euronext Dublin
and the London Stock Exchange. Supported by innovation and
supply chain integration, Glenveagh is committed to opening up
access to sustainable high-quality homes to as many people as
possible in flourishing communities across Ireland.
Glenveagh is focused on three core markets – suburban housing,
urban apartments and partnerships with local authorities and state
agencies. The land bank that Glenveagh has assembled can deliver
housing that is both in demand and affordable.
Shareholders are referred to the Chair’s letter, the CEO’s review
and the CFO’s review on pages 10, 14 and 67, respectively, which set
out management’s review of the Group’s operations and financial
performance in 2022 and the outlook for 2023.
These are deemed to be incorporated into the Directors’ Report.
Results and dividends
Group revenue for the year ended 31 December 2022 was
€644.7 million (2021: €476.8 million), gross profit was €108.1 million
(2021: €83.1 million), profit after tax was €52.6 million (2021: €37.7
million) and basic earnings per share was 7.6 cents (2021: 4.5 cents).
The Company did not pay a dividend during the financial year
ended 31 December 2022 (2021: €nil).
Key performance indicators
Group performance against 2022 key performance indicators is
outlined in the table below. The key performance indicators upon
which particular emphasis is placed are as follows:
2022
2021
% change
KPIs financial
Profit before tax
€63,001
€45,722
+37.8%
Operating margin
10.9%
9.7%
+12.4%
KPIs non-financial
Customer satisfaction
91%
89%
+2%
Health and safety
88%
89%
-1%%
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 (the
‘Act’), the Company 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 to mitigate them, are detailed on
pages 59 to 66 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 72 to 73.
In accordance with the provisions contained in the Code, all
Directors will voluntarily retire and be subject to election by
shareholders at the 2023 AGM.
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 103.
Share capital
The issued share capital of the Company as at 28 February 2023
consists of 607,638,221 ordinary shares and 81,453,077 deferred 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 Company, while no voting rights are conferred on holders of
deferred shares. The Company’s deferred shares have nominal and
no economic value and are, simply, a means of winding up the historic
founder share scheme.
Further information on the Company’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 has a Long-term incentive plan in place, the details
of which are set out at page 94 of the Remuneration Committee
Report and in Note 14 to the consolidated financial statements.
Significant shareholdings
As at 31 December 2022 and 28 February 2023, the Company has
been notified of the following interests of 3% or more in its ordinary
share capital:
31 December 2022
28 February 2023
Shareholder
Ordinary
shares held
%
Ordinary
shares held
%
1
Teleios Capital Partners
107,151,843
16.79
114,384,243
18.67
2
FIL Investment International
81,430,276
12.76
80,740,545
13.18
3
GIC
61,649,008
9.66
35,949,008
5.87
4
Pelham Capital Mgt
35,169,985
5.51
32,087,423
5.24
5
Man GLG
30,333,123
4.75
29,919,533
4.88
6
Notz, Stucki Europe
27,025,000
4.24
27,615,000
4.51
7
Lansdowne Partners
30,812,648
4.83
23,994,934
3.92
8
Paradice Investment Mgt
21,389,642
3.35
21,369,706
3.49
9
PM Capital
20,433,755
3.20
20,433,755
3.34
10
Schooner Investment Group
19,088,095
2.99
19,382,095
3.16
11
Helikon Investment
18,879,353
2.96
18,879,353
3.08
12
SAS Rue la Boétie
19,247,848
3.02
17,729,528
2.89
Governance
Financial Statements
Strategic Report
107
Glenveagh Properties plc
Annual Report and Accounts 2022
DIRECTORS’ REPORT
CONTINUED
Accounting records
The Directors believe that they have complied with the requirements
of Sections 281 to 285 of the Act with regard to maintaining adequate
accounting records 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 Company 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
to Directors’ remuneration and interests in the Remuneration
Committee report on pages 101 to 103 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 long-term incentive plan is set out below.
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 Chair’s letter on
pages 10 to 12, the CEO’s review on pages 14 to 17, the CFO’s review
on pages 67 to 69 and the principal risks and uncertainties detailed
on pages 59 to 66 are deemed to be incorporated in this part of the
Directors’ Report.
Corporate governance
The Directors are committed to achieving the highest standards of
corporate governance. The Directors have prepared a Corporate
Governance Report, which is set out on pages 70 to 81 and, for the
purposes of s1373 of the Act, is deemed to be incorporated into the
Directors’ Report.
The Corporate Governance Report includes a detailed description
of the way in which the Company has applied the principles of good
governance set out in the Code and the Annex.
Directors’ compliance statement
The Directors acknowledge their responsibility for securing the
Company’s compliance with its relevant obligations under Section
225(2)(a) of 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
Company’s policies (that are, in the opinion of the Directors,
appropriate to the Company) in respect of compliance with
the 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 Company’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. A number of
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 Company and the Group
have adequate resources to continue in operational existence for
twelve 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.
Viability statement
In accordance with the provisions of the Code, the Directors are
required to assess the prospects of the Company, explain the
period over which they have done so and state whether they
have a reasonable expectation that the Company 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 2026. 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 three-
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 2023 and is based on forecasts undertaken by
management of the relevant business functions. The plan reflects
construction cost and house price inflationary assumptions which
were reviewed at Board and management level. The underlying
assumptions of the Group’s strategic plan are subject to sensitivity
analysis for scenarios that could reasonably materialise. The risk
factors outlined in the risk management report on pages 57 to 66
were also considered in the strategic plan process.
Based on the above assessment the Directors have a reasonable
expectation that the Company and the Group will be able to
continue in operation and meet liabilities as they fall due over the
three-year period.
Political donations
No political donations were made 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 24 to the financial statements. The Group does not have
any branches outside of Ireland.
Subsequent events
Information in respect of events since the year end is contained
in Note 31 to the consolidated financial statements.
Governance
Financial Statements
Strategic Report
108
Glenveagh Properties plc
Annual Report and Accounts 2022
DIRECTORS’ REPORT
CONTINUED
Audit and Risk Committee
The Company 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 86 and 87.
Auditor
KPMG, 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 AGM.
Relevant audit information
The Directors confirm that so far as they are each aware, there is
no relevant audit information of which the Company’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 Company’s
auditors are aware of that information.
Approval of financial statements
The financial statements were approved by the Board on
28 February 2023.
On behalf of the Board
Michael Rice
Stephen Garvey
Director
Director
Governance
Financial Statements
Strategic Report
109
Glenveagh Properties plc
Annual Report and Accounts 2022
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS
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 Group financial statements in
accordance with IFRS as adopted by the European Union and applicable law including the Commission
Delegated Regulation 2018/815 regarding the single electronic reporting format (ESEF) and 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 that year. 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 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 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 72 to 73 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 2022 and of the profit or loss of the Group for the 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 risks 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
Stephen Garvey
Director
Director
28 February 2023
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF GLENVEAGH PROPERTIES PLC
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Glenveagh Properties plc (‘the Company’) and its
consolidated undertakings (‘the Group’) for the year ended December 31, 2022, contained within the
reporting package 635400QUQ2YYGMOAK834-2021-12-31-en.zip, 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 Statement of
Cash Flows and related notes, including the summary of significant accounting policies set out in Note 1.
The financial reporting framework that has been applied in their preparation is Irish Law, including the
Commission Delegated Regulation 2019/815 regarding the single electronic reporting format (ESEF) and
International Financial Reporting Standards (IFRS) as adopted by the European Union and, as regards the
Company financial statements, as applied in accordance with the provisions of the Companies Act 2014.
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 December 31, 2022 and of the Group’s profit 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 IFRS as adopted
by the European Union, as applied in accordance with the provisions of the Companies Act 2014; 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 Committee.
We were appointed as auditor by the Directors on August 21, 2017. The period of total uninterrupted
engagement is the 6 years ended December 31, 2022. 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.
Conclusions relating to going concern
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 risk that we considered most likely to adversely affect the Group’s and Company’s available financial
resources over this period was the impact of construction cost inflation and/or a reduction in the volume of
units sold.
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.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in
the relevant sections of this report.
In relation to the Group and the Company’s reporting on how they have applied the UK Corporate
Governance Code and the Irish Corporate Governance Annex, 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.
Detecting irregularities including fraud
We identified the areas of laws and regulations that could reasonably be expected to have a material
effect on the financial statements and risks of material misstatement due to fraud, using our understanding
of the entity’s industry, regulatory environment and other external factors and inquiry with the Directors.
In addition, our risk assessment procedures included:
–
Inquiring with the Directors as to the Group’s policies and procedures regarding compliance with laws
and regulations, identifying, evaluating and accounting for litigation and claims, as well as whether
they have knowledge of non-compliance or instances of litigation or claims.
–
Inquiring of Directors, the Audit Committee and internal audit as to the Group’s policies and procedures
to prevent and detect fraud, as well as whether they have knowledge of any actual, suspected or
alleged fraud.
–
Inquiring of Directors, the Audit Committee and internal audit regarding their assessment of the risk
that the financial statements may be materially misstated due to irregularities, including fraud.
–
Inspecting the Group’s regulatory and legal correspondence.
–
Reading Board minutes.
–
Considering remuneration incentive schemes and performance targets including the EPS target for
management remuneration.
–
Performing planning analytical procedures to identify any usual or unexpected relationships.
We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the
audit team.
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Firstly, the Group is subject to laws and regulations that directly affect the financial statements including
companies and financial reporting legislation. We assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statement items, including assessing the
financial statement disclosures and agreeing them to supporting documentation when necessary.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-
compliance could have a material effect on amounts or disclosures in the financial statements, for instance
through the imposition of fines or litigation. We identified the following areas as those most likely to have
such an effect: health and safety, anti-bribery, employment law, environmental law, regulatory capital and
liquidity and certain aspects of company legislation recognising the financial and regulated nature of the
Group’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these non-direct
laws and regulations to inquiry of the Directors and inspection of regulatory and legal correspondence,
if any. These limited procedures did not identify actual or suspected non-compliance.
We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide
an opportunity to commit fraud. As required by auditing standards, we performed procedures to address
the risk of management override of controls and the risk of fraudulent revenue recognition. We identified
a fraud risk in relation to the Group revenue. We did not identify any additional fraud risks.
In response to the fraud risks, we also performed procedures including:
–
Identifying journal entries and other adjustments to test based on risk criteria and comparing the
identified entries to supporting documentation.
–
Assessing significant accounting estimates for bias
–
Assessing the disclosures in the financial statements
INDEPENDENT AUDITOR’S REPORT
(continued)
TO THE MEMBERS OF GLENVEAGH PROPERTIES PLC
As the Group is regulated, our assessment of risks involved obtaining an understanding of the legal and
regulatory framework that the Group operates and gaining an understanding of the control environment
including the entity’s procedures for complying with regulatory requirements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected
some material misstatements in the financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example, the further removed non-
compliance with laws and regulations (irregularities) is from the events and transactions reflected in the
financial statements, the less likely the inherently limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as these may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We
are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with
all laws and regulations.
Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, 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 identified, was as follows (unchanged
from 2021):
Carrying value of inventory €685.8 million (2021: €767.2 million) and profit recognition
Refer to, page 124 (accounting policy for inventories) page 123 (accounting policy for expenditure) and page
136 (financial disclosures – inventories).
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INDEPENDENT AUDITOR’S REPORT
(continued)
TO THE MEMBERS OF GLENVEAGH PROPERTIES PLC
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:
–
We agreed a sample of forecast costs to purchase contracts, supplier agreements or tenders and other relevant documentation.
–
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.
–
We enquired as to whether there were any site-specific factors which may indicate that an individual site could be impaired.
–
We evaluated the sensitivity of the certain forecast development margin 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 accurately 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 2022, and the related disclosures in respect of work-in-progress to be appropriate.
Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at €3.3 million determined with reference
to total revenue for the Group of which it represents 0.5%, which we consider to be one of the principal
considerations for members of the Group in assessing its financial performance for the year. We have
used the revenue benchmark in the current year because the group is entering into a mature stage and
the importance placed on this metric by the users of the financial statements. In 2021, materiality for the
Group financial statements was set at €4.8 million with reference to total assets of which it represented
0.5%. Performance materiality for the Group financial statements as a whole was set at €2.5 million (2021:
€3.6 million). We use performance materiality to reduce to an appropriately low level the probability that
the aggregate of uncorrected and undetected misstatements exceeds overall materiality. In applying our
judgement in determining performance materiality, we considered a number of factors including; the low
number and value of misstatements detected and the low number and severity of deficiencies in control
activities identified in the prior year financial statement audit.
We reported to the Audit and Risk Committee any corrected or uncorrected identified misstatements
exceeding €0.2 million (2021: €0.2 million) in addition to other identified misstatements that warranted
reporting on qualitative grounds.
Materiality for the Company financial statements as a whole was set at €3.0 million (2021: €3.7 million).
This was determined with reference to a 0.5% benchmark of total assets (2021: 0.5% of total assets).
Performance materiality for the Company financial statements as a whole was set at €2.3 (2021:
€2.8 million). We reported to the Audit and Risk Committee any corrected or uncorrected identified
misstatements exceeding €0.1 million (2021 €0.1 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.
We used materiality to assist us to determine what risks were significant risks and to determine the audit
procedures to be performed including those discussed above.
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INDEPENDENT AUDITOR’S REPORT
(continued)
TO THE MEMBERS OF GLENVEAGH PROPERTIES PLC
Other information
The Directors are responsible for the other information presented in the Annual Report together with the
financial statements. The other information comprises the information included in the Directors’ Report,
Chairman’s Letter, CEO’s Review, CFO’s Review, Strategic Report, Risk Management Report, Sustainability
Accounting Standards Board disclosures, Corporate Governance Statement, Audit and Risk Committee
Report, Remuneration Committee Report, Nomination Committee Report and Environmental and Social
Responsibility 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 Director’s 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;
–
in our opinion, the Directors’ report has been prepared in accordance with the Companies Act 2014.
Corporate governance statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability, that part of
the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK
Corporate Governance Code and the Irish Corporate Governance Annex.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial statements
and our knowledge obtained during the audit:
–
Directors’ statement with regards the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified;
–
Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment
covers and why the period is appropriate;
–
Director’s statement on whether it has a reasonable expectation that the Group will be able to
continue in operation and meets its liabilities;
–
Directors’ statement on fair, balanced and understandable and the information necessary for
shareholders to assess the Group’s position and performance, business model and strategy;
–
Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks
and the disclosures in the annual report that describe the principal risks and the procedures in place
to identify emerging risks and explain how they are being managed or mitigated;
–
Section of the annual report that describes the review of effectiveness of risk management and internal
control systems; and;
–
Section describing the work of the Audit Committee.
The Listing Rules of Euronext Dublin also requires us to review certain elements of disclosures in the report
to shareholders by the Board of Directors’ Renumeration Committee.
We have nothing to report in this regard.
In addition as required by the Companies Act 2014, we report, in relation to information given in the
Corporate Governance Statement on pages 70 to 81, 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, the information required by the Act is
contained in the Corporate Governance Statement.
Our opinions on other matters prescribed by the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we consider necessary for the purposes
of our audit.
In our opinion the accounting records of the Company were sufficient to permit the financial statements
to be readily and properly audited and the financial statements are in agreement with the accounting
records.
We have nothing to report on other matters on which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our opinion:
–
the disclosures of Directors’ remuneration and transactions required by Sections 305 to 312 of the Act
are not made;
–
the Company has not provided the information required by Section 1110N in relation to its remuneration
report for the financial year December 31, 2021.
–
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 2021 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.
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INDEPENDENT AUDITOR’S REPORT
(continued)
TO THE MEMBERS OF GLENVEAGH PROPERTIES PLC
Respective responsibilities and restrictions on use
Responsibilities of Directors for the financial statements
As explained more fully in the Directors’ responsibilities statement set out on page 109, 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 for the audit of the financial statements
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 an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
A fuller description of our responsibilities is provided on IAASA’s website at https://iaasa.ie/publications/
description-of-the-auditors-responsibilities-for-the-audit-of-the-financial-statements/.
The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of
the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions
we have formed.
Michael Gibbons
28 February 2023
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2
D02 DE03
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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Note
2022
€’000
2021
€’000
Revenue
10
644,706
476,807
Cost of sales
(536,655)
(397,969)
Impairment reversal
19
–
4,219
Gross profit
108,051
83,057
Administrative expenses
(37,956)
(32,490)
Operating profit
70,095
50,567
Finance expense
11
(7,094)
(4,845)
Profit before tax
12
63,001
45,722
Income tax
16
(10,434)
(8,020)
Profit after tax attributable to the owners of the Company
52,567
37,702
Other comprehensive income
–
–
Total comprehensive profit for the year attributable of the owners of the Company
52,567
37,702
Basic earnings per share (cents)
15
7.6
4.5
Diluted earnings per share (cents)
15
7.6
4.5
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CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2022
Note
2022
€’000
As restated
1
2021
€’000
Assets
Non-current assets
Goodwill
18
5,697
–
Property, plant and equipment
17
51,750
27,230
Intangible assets
18
1,770
1,214
Deferred tax asset
16
619
403
59,836
28,847
Current assets
Inventory
19
685,751
767,194
Trade and other receivables
20
58,671
32,380
Restricted cash
23
458
458
Cash and cash equivalents
27
71,085
141,176
815,965
941,208
Total assets
875,801
970,055
Equity
Share capital
26
719
952
Share premium
26
179,416
179,310
Undenominated capital
26
335
100
Retained earnings
465,680
558,468
Share–based payment reserve
46,968
45,251
Total equity
693,118
784,081
Liabilities
Non-current liabilities
Loans and borrowings
22
71,221
80,622
Lease liabilities
28
4,216
81
Trade and other payables
21
3,500
–
78,937
80,703
Current liabilities
Trade and other payables
21
93,234
57,488
Income tax payable
565
7,692
Loans and borrowings
22
9,419
39,625
Lease liabilities
28
528
466
103,746
105,271
Total liabilities
182,683
185,974
Total liabilities and equity
875,801
970,055
Michael Rice
Stephen Garvey
Director
Director
28 February 2023
1.
See Note 6(i)(a) for more information on the restatement.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Share Capital
Note
Ordinary
shares
€’000
Founder
shares
€’000
Deferred
shares
€’000
Undenominated
capital
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
Balance as at 1 January 2022
771
181
–
100
179,310
45,251
558,468
784,081
Total comprehensive profit for the year
Income for the year
–
–
–
–
–
–
52,567
52,567
Other comprehensive income
–
–
–
–
–
–
–
–
771
181
–
100
179,310
45,251
611,035
836,648
Transactions with owners of the
Company
Equity-settled share-based payments
–
–
–
–
–
1,717
–
1,717
Lapsed share options
14
–
–
–
–
–
–
–
–
Conversion of founder shares to
deferred shares
26
–
(181)
181
–
–
–
–
–
Cancellation of deferred shares
26
–
–
(100)
100
–
–
–
–
Exercise of options
2
–
–
–
106
–
–
108
Purchase of own shares
26
(135)
–
–
135
–
–
(145,355)
(145,355)
(133)
(181)
81
235
106
1,717
(145,355)
(143,530)
Balance as at 31 December 2022
638
–
81
335
179,416
46,968
465,680
693,118
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Annual Report and Accounts 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
Share Capital
Note
Ordinary
shares
€’000
Founder
shares
€’000
Undenominated
capital
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
Earnings
€’000
Total
Equity
€’000
Balance as at 1 January 2021
871
181
–
179,281
44,129
629,044
853,506
Total comprehensive profit for the year
Income for the year
–
–
–
–
–
37,702
37,702
Other comprehensive income
–
–
–
–
–
–
–
871
181
–
179,281
44,129
666,746
891,208
Transactions with owners of the Company
Equity-settled share-based payments
–
–
–
–
1,219
–
1,219
Lapsed share options
14
–
–
–
–
(97)
97
–
Exercise of options
–
–
–
29
–
–
29
Purchase of own shares
26
(100)
–
100
–
–
(108,375)
(108,375)
(100)
–
100
29
1,122
(108,278)
(107,127)
Balance as at 31 December 2021
771
181
100
179,310
45,251
558,468
784,081
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Note
2022
€’000
As restated
1
2021
€’000
Cash flows from operating activities
Profit for the financial year
52,567
37,702
Adjustments for:
Depreciation and amortisation
2,081
2,406
Impairment of inventories reversal
19
–
(4,219)
Finance costs
11
7,094
4,845
Equity-settled share-based payment expense
14
1,717
1,219
Tax expense
16
10,434
8,020
(Profit)/loss on disposal of property, plant and equipment
12
(1,501)
1,707
72,392
51,680
Changes in:
Inventories
83,360
59,418
Trade and other receivables
(26,290)
(17,796)
Trade and other payables
35,662
14,306
Cash from operating activities
165,124
107,608
Interest paid
(6,490)
(4,009)
Tax (paid)/refund
(17,778)
705
Net cash from operating activities
140,856
104,304
Cash flows from investing activities
Acquisition of property, plant and equipment
17
(19,278)
(15,701)
Acquisition of intangible assets
18
(1,055)
(1,012)
Acquisition of subsidiary undertakings
25
(6,875)
–
Cash acquired on acquisition
25
847
–
Transfer from restricted cash
23
–
250
Proceeds from the sale of property, plant and equipment
2,036
5,099
Net cash used in investing activities
(24,325)
(11,364)
Cash flows from financing activities
Proceeds from loans and borrowings
22
110,000
130,000
Repayment of loans and borrowings
22
(150,000)
(107,500)
Transaction costs related to loans and borrowings
22
–
(2,993)
Purchase of own shares
26
(146,260)
(107,466)
Proceeds from exercise of share options
26
108
29
Payment of lease liabilities
28
(470)
(1,110)
Net cash used in financing activities
(186,622)
(89,040)
Net (decrease)/increase in cash and cash equivalents
(70,091)
3,900
Cash and cash equivalents at the beginning of the year
141,176
137,276
Cash and cash equivalents at the end of the year
71,085
141,176
1.
See Note 6(i)(a) for more information on the restatement.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
1 Reporting entity
Glenveagh Properties PLC (‘the Company’) is domiciled in the Republic of Ireland. The Company’s
registered office is Block B, Maynooth Business Campus, Maynooth Co. Kildare. These consolidated
financial statements comprise the Company and its subsidiaries (together referred to as ‘the Group’)
and cover the financial year ended 31 December 2022. The Group’s principal activities are the construction
and sale of houses and apartments for the private buyer, local authorities and the private rental sector.
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union which comprise standards and
interpretations approved by the International Accounting Standards Board (IASB), and those parts
of the Companies Act 2014, including the Commission Delegated Regulation 2018/815 regarding the
single electronic reporting format (ESEF), applicable to companies reporting under IFRS and Article 4
of the IAS regulation.
2 Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union which comprise standards and
interpretations approved by the International Accounting Standards Board (IASB), and those parts of the
Companies Act 2014 applicable to companies reporting under IFRS and Article 4 of the IAS regulation.
3 Functional and presentation currency
These consolidated financial statements are presented in Euro which is the Company’s functional currency.
All amounts have been rounded to the nearest thousand unless otherwise indicated.
4 Use of judgements and estimates
The preparation of the Group’s financial statements under International Financial Reporting Standards
(‘IFRS’), as adopted by the European Union, requires the Directors to make judgments and estimates that
affect the application of policies and the reported amounts of assets, liabilities, income, expenses and
related disclosures. Actual results may differ from these estimates.
Critical accounting judgements
Management applies the Group’s accounting policies as described in Note 8 when making critical
accounting judgements, of which no individual judgement is deemed to have a significant impact
upon the financial statements.
Key sources of estimation uncertainty
The key source of significant estimation uncertainty impacting these financial statements involves
assessing the carrying value of inventories as detailed below.
(a) Carrying value of work-in-progress, estimation of costs to complete and impact on profit
recognition
The Group holds inventories stated at the lower of cost and net realisable value. Such inventories include
land and development rights, work-in-progress and completed units. As residential development is largely
speculative by nature, not all inventories are covered by forward sales contracts. Furthermore, due to
the nature of the Group’s activity and, in particular the scale of its developments and the length of the
development cycle, the Group has to allocate site-wide development costs between units being built and/
or completed in the current year and those for future years. It also has to forecast the costs to complete on
such developments.
These estimates impact management’s assessment of the net realisable value of the Group’s inventory
balance and also determine the extent of profit or loss that should be recognised in respect of each
development in each reporting period.
In making such assessments and allocations, there is a degree of inherent estimation uncertainty.
The Group has established internal controls designed to effectively assess and centrally review inventory
carrying values and ensure the appropriateness of the estimates made. These assessments and allocations
evolve over the life of the development in line with the risk profile, and accordingly, the margin recognised
reflects these evolving assessments, particularly in relation to the Group’s long-term developments.
The impact of sustainability and other macroeconomic factors have been considered in the Group’s
assessment of the carrying value of its inventories at 31 December 2022, particularly with regard to the
potential implications for future selling prices, development expenditure and construction programming.
Management has considered a number of scenarios on each of its active developments and the
consequential impact on future profitability based on current facts and circumstances together with
any implications for future projects in undertaking its net realisable value calculations.
As part of the assessment, the Group has re-evaluated its most likely exit strategies on all developments
in the context of the current market environment and reflected these in revenue assumptions within the
forecast models. The results of this exercise determined that the net impairment charge or reversal required
for the period was €Nil (2021: reversal of €4.2 million). Further detail is included in Note 19.
Management have performed a sensitivity analysis to assess the impact of a change in estimated costs for
developments on which sales were recognised in the year. A 1%-4% increase in estimated costs recognised
in the year, which is considered to be reasonably possible, would reduce the Group’s gross margin by
approximately 58-174bps (2021: 65bps).
5 Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values,
both for financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values.
This includes a valuation team that has overall responsibility for overseeing all significant fair value
measurements, including Level 3 fair values and reports directly to the Chief Financial Officer.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
5 Measurement of fair values
(continued)
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third
party information, such as broker quotes or pricing services, is used to measure fair values, then the
valuation team assess the evidence obtained from the third parties to support the conclusion that these
valuations meet the requirements of the Standards, including the level in the fair value hierarchy in which
the valuations should be classified.
Significant valuation issues are reported to the Group’s Audit and Risk Committee.
Fair value is defined in IFRS 13,
Fair Value Measurement
, as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. When measuring the fair value of an asset or liability, the Group uses market
observable data as far as possible. Fair values are categorised into different levels in a fair value
hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
Further information about the assumptions made in measuring fair values is included in the following
notes:
–
Note 14 Share-based payments arrangements; and
–
Note 27 Financial instruments and financial risk management.
6 Changes in significant accounting policies
Amendments to standard IAS 37 Onerous Contracts – Cost of Fulfilling a Contract are effective from
1 January 2022 but they do not have a material effect on the Group’s financial statements.
(i) New significant accounting policies
(a) Cash and cash equivalents
In April 2022, the IFRS Interpretations Committee issued an agenda decision clarifying the definition of
cash and cash equivalents in the statement of cash flows stating that cash amounts that are only restricted
by an obligation to a third party meet the definition of cash under IAS 7 Statement of Cash Flows. The title
of the agenda decision is Demand Deposits with Restrictions on Use arising from a Contract with a Third
Party (IAS 7 Statement of Cash Flow).
Prior to this clarification, the Group had not treated cash in demand deposit accounts that were
contractually restricted as cash and cash equivalents in the statement of cash flows and had instead
classified these balances as non-current assets – restricted cash. The Group considered these cash
balances to not be available to the Group and disaggregated these cash balances from the cash
balances that are available to the Group.
In accordance with this clarification, the Group has made an accounting policy change as a result of the
IFRIC decision and has presented cash and cash equivalents for the purpose of its cash flow including
these restricted balances and has restated the prior period accordingly.
The change in accounting policy has resulted in a change to prior year numbers in 2021 in the statement
of financial position and the statement of cash flows. The change in classification for the purpose of
statement of cash flows did not impact the overall statement of financial position other than the transfer
of €25.0 million restricted cash from non-current assets to cash and cash equivalents in current assets.
(b) Contingent consideration
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.
(c) Classification of liabilities as current or non-current (amendments to IAS 1)
The amendments, as issued in 2020, aim to clarify the requirements on determining whether a liability
is current or non-current and apply for annual reporting periods beginning on or after 1
January 2023. However, the IASB has subsequently proposed further amendments to IAS 1 and the deferral
of the effective date of the 2020 amendments to no earlier than 1 January 2024. Due to these ongoing
developments, the Group is unable to determine the impact of these amendments on the consolidated
financial statements in the period of initial application. The Group is closely monitoring the developments.
There have been no other changes to significant accounting policies during the financial year ended to
31 December 2022.
(ii) Other standards
The Group has not adopted the following new and amended standards early, and instead intends to
apply them from their effective date as determined by the date of EU endorsement. The potential impact
of these amendments to standards on the Group is under review:
–
IAS 8 Accounting policies, changes in accounting estimates and errors: Definition of accounting
estimates and errors (amendment) (not yet effective)
–
IAS 1 Presentation of financial statements: Amendments to IAS 1 presentation of financial statements
and IFRS practice statement 2 making materiality judgements (amendment) (not yet effective)
–
IFRS 16 Leases – COVID-19 related rent concessions beyond 30 June 2021 (amendment)
–
Annual improvements to IFRS standards 2018-2020
–
IAS 16 Property plant and equipment: Proceeds before intended use (amendment)
–
IFRS 3 Business combinations: Reference to the Conceptual Framework (amendment)
–
IFRS 17 Insurance contracts – amendments to IFRS 17 insurance contracts (amendment) (not yet effective)
–
IAS 12 Income taxes – Deferred tax related to assets and liabilities arising from a single transaction
(amendment) (not yet effective)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
7 Going concern
The Group has recorded a profit before tax of €63.0 million (2021: €45.7 million which included a non-
cash impairment reversal of €4.2 million relating to the Group’s inventory balance). The Group has an
unrestricted cash balance of €46.1 million (31 December 2021: €116.2 million) exclusive of the minimum
cash balance of €25.0 million which the Group is required to maintain under the terms of its debt facilities.
The Group has committed undrawn funds available of €150.0 million (31 December 2021: €120.0 million).
Management has prepared a detailed cash flow forecast to assess the Group’s ability to continue as
a going concern for at least a period of twelve months from the signing of these financial statements.
The preparation of this forecast considered the principal risks facing the Group, including those risks that
could threaten the Group’s business model, future performance, solvency or liquidity over the forecast
period. These principal risks and uncertainties and the steps taken by the Group to mitigate them are
detailed on page 60 to 66 of the Risk Management Report. The Group’s business activities, together with
the factors likely to affect its future development are outlined in our Strategic Report. Further disclosures
regarding the Group’s loans and borrowings are provided in Note 22.
The Group is forecasting compliance with all covenant requirements throughout the period of assessment
under the current facilities including the interest cover covenant which is based on earnings before interest,
tax, depreciation and amortisation (EBITDA) excluding any non-cash impairment charge or reversal. Other
assumptions within the forecast include the Group’s expected selling prices and sales strategies as well as
its investment in work in progress which reflect updated development programmes.
Based on the forecasts modelled, the Directors have assessed the Group’s going concern status for the
foreseeable future. Having considered the Group’s cash flow forecasts, the Directors are satisfied that the
Group has the appropriate working capital management strategy, operational flexibility, and resources
in place to continue in operational existence for the foreseeable future. Accordingly, these consolidated
financial statements have been prepared on a going concern basis.
8 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.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date on which control ceases.
(iii) Joint operations
Joint operations arise where the Group has joint control of an operation with other parties, in which the
parties have direct rights to the assets and obligations of the operation. The Group accounts for its share
of the jointly controlled assets and liabilities and income and expenditure on a line by line basis in the
consolidated financial statements.
(iv) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated.
8.2 Revenue
The Group develops and sells residential properties and non-core land in addition to developing land
under development agreements with third parties.
(i) Housing and land sales
Revenue is recognised at the point in time when control over the property has been transferred to the
customer, which occurs at legal completion.
(ii) Development revenue
Revenue arising on contracts under a development agreement which give the customer control over
properties as they are constructed, and for which the Group has a right to payments for work performed,
is recognised over time. Revenue and costs are recognised over time with reference to the stage of
completion of the contract activity at the balance sheet date where the outcome of a contract can be
estimated reliably. This is measured by surveys of work performed to date. Variations in contract work,
claims and incentive payments are included to the extent that it is probable that they will result in revenue,
and they are capable of being reliably measured. When land is transferred at the start of a contract,
revenue is not recognised until control has been transferred to the customer which includes legal title
being passed to them. Where the outcome of a contract cannot be estimated reliably, contract revenue
where recoverability is probable is recognised to the extent of contract costs incurred. The costs associated
with fulfilling a contract are recognised as expenses in the period in which they are incurred. When it is
probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an
expense immediately.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
8 Significant accounting policies
(continued)
8.3 Expenditure
Expenditure recorded in inventory is expensed through cost of sales at the time of the related property
sale. The amount of cost related to each property includes its share of the overall site costs. Expenditure
related to revenue recognised over time is expensed through cost of sales on an inputs basis.
Administration expense is recognised in respect of goods and services received when supplied
in accordance with contractual terms.
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.
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.
Temporary differences in relation to a right of use asset and a lease liability for a specific lease are
regarded as a net package (the lease) for the purposes of recognising deferred tax.
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.
8.5 Share-based payment arrangements
The grant date fair value of equity-settled share-based payment arrangements granted to employees is
generally recognised as an expense, with a corresponding increase in equity, over the vesting period of
the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which
the related service and non-market performance conditions are expected to be met, such that the amount
ultimately recognised is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date. For share-based payment awards with non-vesting conditions
or market conditions, the grant date fair value of the share-based payment is measured to reflect such
conditions and there is no true-up for differences between expected and actual outcomes.
8.6 Exceptional items
Exceptional items are those that are separately disclosed by virtue of their nature or amount in order
to highlight such items within the consolidated statement of profit or loss for the financial year. Group
management exercises judgement in assessing each particular item which, by virtue of its scale or nature,
should be highlighted as an exceptional item. Exceptional items are included within the profit or loss
caption to which they relate.
During the financial year, there were no costs considered exceptional items.
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8 Significant accounting policies
(continued)
8.7 Property, plant and equipment
Property, plant and equipment is carried at historic purchase cost less accumulated depreciation. Cost
includes the original purchase price of the asset and the costs attributable to bringing the asset to its
working condition for its intended use. Depreciation is provided to write off the cost of the assets on a
straight-line basis to their residual value over their estimated useful lives at the following annual rates:
–
Buildings
2.5%
–
Plant and machinery
14-20%
–
Fixtures and fittings
20%
–
Computer Equipment
33%
The assets’ residual values, carrying values and useful lives are reviewed on an annual basis and adjusted
if appropriate at each reporting date.
Where an impairment is identified, the recoverable amount of the asset is identified and an impairment
loss, where appropriate, is recognised in the statement of profit or loss and other comprehensive income.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and
are recognised within administration expenses in the statement of profit or loss and other comprehensive
income.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated
with the expenditure will flow to the Group.
8.8 Intangible assets
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.
Computer software is capitalised as intangible assets as acquired and amortised on a straight-line basis
over its estimated useful life of 3 years, in line with the period over which economic benefit from the
software is expected to be derived.
Licence costs are capitalised as intangible assets as acquired and amortised on a straight-line basis over
their estimated useful life in line with the period over which economic benefit from the software is expected
to be derived.
The assets’ useful lives and residual values are reviewed and adjusted, if appropriate, at each reporting
date.
8.9 Inventory
Inventory comprises property in the course of development, completed units, land and land development
rights. Inventories are valued at the lower of cost and net realisable value. Direct cost comprises the
cost of land, raw materials and development costs but excludes indirect overheads. Land purchased for
development, including land in the course of development, is initially recorded at cost. Where such land
is purchased on deferred settlement terms, and the cost differs from the amount that will subsequently
be paid in settling the liability, this difference is charged as a finance cost in the statement of profit or loss
and other comprehensive income over the period to settlement. A provision is made, where appropriate, to
reduce the value of inventories and work-in-progress to their net realisable value.
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
IFRS 9
Classification
Financial assets
Cash and cash equivalents
Amortised cost
Trade receivables
Amortised cost
Other receivables
Amortised cost
Amounts recoverable on construction contracts
Amortised cost
Restricted cash
Amortised cost
Deposits for sites
Amortised cost
Construction bonds
Amortised cost
Financial liabilities
Lease liabilities
Amortised cost
Trade payables
Amortised cost
Inventory accruals
Amortised cost
Other accruals
Amortised cost
Loans and borrowings
Amortised cost
Contingent consideration
Fair value through profit or loss
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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8 Significant accounting policies
(continued)
8.10 Financial instruments
(continued)
Classification of financial instruments
(continued)
Cash and cash equivalents
Cash and cash equivalents include cash, short-term investments with an original maturity of three months
or less and minimum cash balances required under the terms of the debt facilities. Interest earned or
accrued on these financial assets is included in finance income.
Trade and other receivables
Such receivables are included in current assets, except for those with maturities more than 12 months
after the reporting date, which are classified as non-current assets. Loans and other receivables are
included in trade and other receivables on the statement of financial position and are accounted for at
amortised cost. These assets are subsequently measured at amortised cost. The amortised cost is reduced
by impairment losses. The Group recognises impairment losses on an ‘expected credit loss’ model (ECL
model) basis in line with the requirements of IFRS 9. Interest income and impairment are recognised in
profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Amounts recoverable on construction contracts
Amounts recoverable on construction contracts includes recoverable revenue recognised over time with
reference to the stage of completion arising on contracts under a development agreement which are
receivable within 12 months of the reporting date.
Deposits for sites
Deposits for sites includes a percentage amount paid of the total purchase price for the acquisition of land
intended for development.
Restricted cash
Restricted cash includes cash amounts which are classified as current assets and held in escrow until the
completion of certain criteria.
Construction bonds
Construction bonds includes amounts receivable in relation to the completion of construction activities on
sites. These assets are included in trade and other receivables on the consolidated balance sheets and are
accounted for at amortised cost.
Financial liabilities
Such financial liabilities are recorded at amortised cost and include all liabilities.
Loans and borrowings
Loans and borrowings include debt facilities, interest accrued and borrowing costs classified as current and
non-current liabilities.
Contingent consideration
Contingent consideration includes amounts payable if conditions pertaining to the business combination
are satisfied.
8.11 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of
past events and it is probable that an outflow of resources will be required to settle that obligation, and
the amount has been reliably estimated.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability, where the
effect of discounting is considered significant. The unwinding of the discount is recognised as a finance
cost.
8.12 Pensions
The Group operates a defined contribution scheme. The assets of the scheme are held separately from
those of the Group in a separate fund. Obligations for contributions to defined contribution plans are
expensed as the related service is provided.
8.13 Leases
At the inception of a contract, the Group assess whether a contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period
of time in exchange for consideration.
(i) As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates
the consideration in the contract to each lease component and non-lease component on the basis of its
relative stand-alone prices. However, for the leases of property the Group has elected not to separate non-
lease components and account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-
of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date, plus any initial direct costs incurred
and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset
or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the
Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will
exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of
the underlying asset, which is determined on the same basis as those of property and motor vehicles. In
addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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8 Significant accounting policies
(continued)
8.13 Leases
(continued)
(i) As a lessee
(continued)
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.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured
when there is a change in the future lease payments arising from a change in an index or rate, if there is
a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee,
if the Group changes its assessment of whether it will exercise a purchase, extension or termination option
or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property,
plant and equipment’ and lease liabilities in ‘lease liability’ in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value
assets and short-term lease. The Group recognises the lease payments associated with these leases as
an expense on a straight-line basis over the lease term.
(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 Share capital
(i) Ordinary shares
Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from
equity (retained earnings).
(ii) Founder Shares
Founder Shares were initially issued as ordinary shares and subsequently re-designated as Founder Shares.
Following re-designation, the instruments are accounted for as equity-settled share-based payments as set
out at Note 8.5 above.
8.15 Finance income and costs
The Group’s finance income and finance costs include:
–
Interest income
–
Interest expense
Interest income and expense is recognised using the effective interest method.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
9 Segmental information
The Group has considered the requirements of IFRS 8 Operating Segments in the context of how the
business is managed and resources are allocated.
The Group is organised into three key reportable segments, being Suburban, Urban and Partnerships.
Internal reporting to the Chief Operating Decision Maker (‘CODM’) is provided on this basis. The CODM
has been identified as the Executive Committee.
The Group currently operates solely in the Republic of Ireland and therefore no geographically segmented
financial information is provided.
Suburban
The Suburban segment is focussed primarily on high quality housing (with some low rise apartments) with
demand coming from private buyers and institutions. Our core Suburban product is affordable and located
in well serviced communities predominantly in the Greater Dublin Area and Cork.
Urban
Urban’s strategic focus is developing apartments to deliver to institutional investors. The apartments are
located primarily in Dublin and Cork, but also on sites adjacent to significant rail transportation hubs.
Urban’s strategy is to deliver the product to institutional investors through a forward sale, or forward fund
transaction providing longer term earnings visibility.
Partnerships
A Partnership will typically involve the Government, local authorities, or state agencies contributing their
land on a reduced cost, or phased basis into a development agreement with Glenveagh. Approximately
50% of the product is delivered back to the government or local authority via social and affordable homes.
This provides longer term access to both land and deliveries for the business and provides financial
incentive by reducing risk from a sales perspective.
Segmental financial results
2022
€’000
2021
€’000
Revenue
Suburban
454,540
276,848
Urban
190,166
199,959
Partnerships
–
–
Revenue for reportable segments
644,706
476,807
Operating profit/(loss)
Suburban
70,353
36,153
Urban
21,532
33,426
Partnerships
(1,565)
(1,050)
Operating profit for reportable segments
90,320
68,529
Reconciliation to results for the financial year
Segment results – operating profit
90,320
68,529
Finance expense
(7,094)
(4,845)
Directors’ remuneration
(3,402)
(2,576)
Corporate function payroll costs
(6,081)
(4,350)
Depreciation and amortisation
(2,081)
(2,406)
Professional fees
(4,992)
(3,451)
Share-based payment expense
(1,717)
(1,219)
Profit/(loss) on sale of property, plant and equipment
1,501
(1,707)
Other corporate costs
(3,453)
(2,253)
Profit before tax
63,001
45,722
There are no individual costs included within other corporate costs that is greater than the amounts listed
in the above table.
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9 Segmental information
(continued)
Segment assets and liabilities
31 December 2022
31 December 2021
1
Suburban
€’000
Urban
€’000
Partnerships
€’000
Total
€’000
Suburban
€’000
Urban
€’000
Partnerships
€’000
Total
€’000
Segment assets
590,321
153,018
6,452
749,791
613,168
183,848
2,519
799,535
Reconciliation to Consolidated Balance Sheet
Deferred tax asset
620
403
Trade and other receivables
785
497
Cash and cash equivalents
71,085
141,176
Property, plant and equipment
51,750
27,230
Intangible assets
1,770
1,214
875,801
970,055
Segment liabilities
69,138
9,876
159
79,173
–
–
–
–
Reconciliation to Consolidated Balance Sheet
Trade and other payables
17,561
57,488
Loans and Borrowings
80,640
120,247
Lease liabilities
4,744
547
Income tax payable
565
7,692
182,683
185,974
1.
See Note 6(i)(a) for more information on the restatement. As a result of a change in reporting to the CODM in FY2022, liabilities are now split between reportable segments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
10 Revenue
2022
€’000
2021
€’000
Suburban
Core
451,930
276,848
Non-core
2,610
–
454,540
276,848
Urban
Core
176,570
126,217
Non-core
13,596
73,742
190,166
199,959
Total Revenue
644,706
476,807
The Group has presented revenue as a split between core and non-core by business segment. This split
is consistent with internal reporting to the Chief Operating Decision Maker (‘CODM’).
Core suburban product relates to affordable starter homes for first time buyers. Core urban product
relates primarily to apartments suitable for institutional investors. Non-core suburban and urban product
relates to high-end, private developments and sites. Non-core suburban and urban cost of sales is mostly
attributable to land and development expenditure costs for high end, private developments and sites.
Urban core revenue includes income from the sale of land and development revenue from construction
contracts that are recognised over time by reference to the stage of completion of the contract with the
customer. Development revenue recognised in the financial year related to the development of the sites
at Barn Oaks Apartments, Castleforbes and Carpenterstown and amounted to €82.1 million
(2021: €8.2
million)
with €32.1 million
(2021: €3.8 million)
outstanding in contract receivables (Note 20) at the year end.
The payment terms for these contracts are between 30 and 90 days.
All revenue is earned in the Republic of Ireland.
11 Finance Expense
2022
€’000
2021
€’000
Interest on secured bank loans
7,049
4,820
Finance cost on lease liabilities
45
25
7,094
4,845
12 Statutory and other information
2022
€’000
2021
€’000
Amortisation of intangible assets (Note 18)
487
487
Depreciation of property, plant and equipment (Note 17)*
3,509
3,144
Employment costs (Note 13)
40,337
33,481
(Profit)/Loss on disposal of property, plant and equipment
(1,501)
1,707
Audit of Group, Company and subsidiary financial statements**
255
235
Other assurance services
20
15
Tax advisory services
30
23
Tax compliance services
43
33
Other non-audit services
20
6
368
312
Directors’ remuneration
Salaries, fees and other emoluments
3,252
2,461
Pension contributions
150
115
3,402
2,576
*
Includes €2.1 million (2021: €1.2 million) capitalised in inventory during the year ended 31 December 2022.
**
Included in the auditor’s remuneration for the Group is an amount of €0.020 million (2021: €0.015 million) that relates to the Company’s
financial statements.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
13 Employment costs
The average number of persons employed by the Group (including Executive Directors) during the financial
year was 423
(Executive Committee: 6; Non-executive Directors: 5; Construction: 227; and Other: 185).
(2021:336 (Executive Committee: 3; Non-executive Directors: 5; Construction: 176; and Other: 152))
.
The aggregate payroll costs of these employees for the financial year were:
2022
Total
€’000
2021
Total
€’000
Wages and salaries
33,734
28,262
Social welfare costs
3,540
2,744
Pension costs – defined contribution
1,346
1,256
Share-based payment expense (Note 14)
1,717
1,219
40,337
33,481
€15.4 million
(2021: €12.3 million)
of employment costs were capitalised in inventory during the financial
year.
14 Share-based payment arrangements
The Group operates three equity-settled share-based payment arrangements being the Founder Share
scheme, the Long-Term Incentive Plan (‘LTIP’) and the Savings Related Share Option Scheme (known as
the Save As You Earn or ‘SAYE’ scheme). 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 fifth test period (which ran from 1 March 2022 until 30 June 2022), 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. Accordingly, no Founder Shares
were converted to ordinary shares during the financial year. Following completion of the fifth test period,
the scheme is now completed.
(b) LTIP
On 1 April 2022, the Remuneration Committee approved the grant of 4,568,698 options to certain
members of the management team in accordance with the terms of the Company’s LTIP. These options
will vest on completion of a three-year service period from grant date subject to the achievement of certain
performance condition hurdles based on the Company’s Return on Equity (ROE) and Earnings per Share
(EPS) across the vesting period. 50% of the awards will vest based on the Group’s ROE for the financial
year ended 31 December 2024. The EPS based options will vest based on the Group’s EPS
*
for the financial
year ended 31 December 2024. 25% of ROE based options vest should the Group achieve ROE of 11.0%
with the remaining options vesting on a pro rata basis up to 100% if ROE of 16.2% is achieved. 25% of EPS
based options will vest should the Group achieve EPS
*
of 12.0 cents per share with the remaining options
vesting on a pro rata basis up to 100% if EPS
*
of 20.0 cents per share is achieved. In line with the Group’s
remuneration policy, LTIP awards granted to Executive Directors from 2020 onwards include a holding
period of at least two years post exercise.
Number of
Options
2022
Number of
Options
2021
LTIP options in issue at 1 January
10,583,497
7,675,456
Granted during the financial year
4,568,698
3,998,475
Forfeited during the financial year
(264,729)
(590,329)
Lapsed during the financial year
–
(381,595)
Exercised during the financial year
(1,864,636)
(118,510)
LTIP options in issue at 31 December
13,022,830
10,583,497
Exercisable at 31 December
461,395
58,057
LTIP options were exercised during the financial year with the average share price being €1.00
(2021:
€0.99)
. The options outstanding at 31 December 2022 had an exercise price €0.001
(2021: €0.001)
and a
weighted-average contractual life of 7 years
(2021: 7 years)
.
* Group EPS is defined as Basic Earnings Per Share as calculated in accordance with IAS 33 Earnings Per Share subject to adjustment by the
Remuneration Committee at its discretion, for items deemed not reflective of the Group’s underlying performance for the financial year.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
14 Share-based payment arrangements
(continued)
(b) LTIP
(continued)
The EPS and ROE related performance conditions are non-market conditions and do not impact the fair
value of the EPS or ROE based awards at grant date which is equivalent to the share price at grant date.
The fair value of LTIP options granted in the prior periods was measured using a Monte Carlo simulation.
There is no Total Shareholder Return (TSR) linked performance condition for options granted in the period
and therefore no fair value exercise was performed related to this performance condition. Service and non-
market conditions attached to the arrangements were not taken into account when measuring fair value.
The inputs used in measuring fair value at grant date were as follows:
2022
2021
Fair value at grant date
€1.16
€0.49
Share price at grant date
€1.16
€0.91
Valuation methodology
N/A
Monte Carlo
Exercise price
€0.001
€0.001
Expected volatility
N/A
36.1%
Expected life
N/A
3 years
Expected dividend yield
N/A
0%
Risk free rate
N/A
-0.7%
The exercise price of all options granted under the LTIP to date is €0.001 and all options have a 7- year
contractual life. The expected share price and TSR volatility was based on the historical volatility of the
Group over the expected life of the equity instruments granted.
The Group recognised an expense of €1.7 million
(2021: €1.2 million)
in the consolidated statement of profit
or loss in respect of options granted under the LTIP.
(c) SAYE Scheme
Under the terms of the scheme, employees may save up to €500 per month from their net salaries for a
fixed term of three or five years and at the end of the savings period they have the option to buy shares
in the Company at a fixed exercise price. No options were granted in the current year or prior period and
therefore no fair value exercise was performed.
Details of options outstanding and grant date fair value assumptions
2022
2021
Number of
Options
3 Year
Number of
Options
5 Year
Number of
Options
3 Year
Number of
Options
5 Year
SAYE options in issue at 1 January
799,740
165,000
959,040
255,000
Granted during the financial year
–
–
–
–
Cancelled during the financial year
(32,520)
–
(130,500)
(90,000)
Exercised during the financial year
(177,000)
–
(28,800)
–
SAYE options in issue at 31 December
590,220
165,000
799,740
165,000
The weighted average exercise price of all options granted under the SAYE to date is €0.97
(2021: €0.71)
.
The expected share price and TSR volatility was based on the historical volatility of a comparator group of
peer companies over the expected life of the equity instruments granted together with consideration of the
Group’s actual trading volatility to date.
The Group recognised an expense of €0.06 million
(2021: €0.06 million)
in the consolidated statement of
profit or loss in respect of options granted under the SAYE scheme.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
15 Earnings per share
(a) Basic earnings per share
The calculation of basic earnings per share has been based on the profit attributable to ordinary
shareholders and the weighted average numbers of shares outstanding for the financial year. There
were 638,131,722 ordinary shares in issue at 31 December 2022
(2021: 771,770,694)
.
2022
2021
Profit for the financial year attributable to ordinary shareholders (€’000)
52,567
37,702
Weighted average number of shares for the financial year
693,872,004
840,694,786
Basic earnings per share (cents)
7.6
4.5
2022*
No. of shares
2021
No. of shares
Reconciliation of weighted average number of shares
Number of ordinary shares at beginning of financial year
771,770,694
871,333,550
Effect of share buyback
(78,865,173)
(30,664,903)
Effect of SAYE maturity
29,487
4,359
Effect of LTIP maturity
936,996
21,780
693,872,004
840,694,786
(b) Dilutive earnings/(loss) per share
Diluted earnings per share
2022
2021
Profit for the financial year attributable to ordinary shareholders (€’000)
52,567
37,702
Weighted average number of shares for the financial year
695,970,940
845,809,433
Diluted earnings per share (cents)
7.6
4.5
2022*
No. of shares
2021
No. of shares
Reconciliation of weighted average number of shares (diluted)
Weighted average number of ordinary shares (basic)
693,872,004
840,694,786
Effect of potentially dilutive shares
2,098,936
5,114,647
695,970,940
845,809,433
*
The number of potentially issuable shares in the Group held under option or Founder Share arrangements at 31 December 2022 is 13,022,830
(2021: 191,590,335).
**
Under IAS 33, Founders Shares and LTIP arrangements have an assumed test period ending on 31 December 2022. Based on this assumed
test period no ordinary shares would be issued through the conversion of Founder Shares. Based on the assumed test period only the TSR
performance condition was met related to LTIP options and therefore only ordinary shares related to this condition would be issued through
the conversion of LTIP options.
At 31 December 2022 Nil options (2021: Nil options) were excluded from the diluted weighted average
number of ordinary shares because their effect would have been anti-dilutive.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
16 Income tax
2022
€’000
2021
€’000
Current tax charge for the financial year
10,650
7,008
Deferred tax (credit)/charge for the financial year
(216)
1,012
Total income tax charge
10,434
8,020
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.
2022
€’000
2021
€’000
Profit before tax for the financial year
63,001
45,722
Tax charge at standard Irish income tax rate of 12.5%
7,875
5,715
Tax effect of:
Income taxed at the higher rate of corporation tax
2,424
2,141
Non-deductible expenses – other
97
298
Adjustment in respect of prior year (over)/under accrual
38
44
Losses forward previously not recognised as deferred tax
–
(178)
Total income tax charge
10,434
8,020
Movement in deferred tax balances
Balance at
1 January
2022
€’000
Recognised in
profit or loss
€’000
Balance at
31 December
2022
€’000
Expenses deductible in future periods
403
216
619
403
216
619
The expenses deductible in future periods arise in Ireland and have no expiry date. Based on profitability
achieved in the period, the continued forecast profitability in the Group’s strategic plan and the sensitivities
that have been applied therein, management has considered it probable that future profits will be
available against which the above losses can be recovered and, therefore, the related deferred tax
asset can be realised.
Global minimum tax
To address concerns about uneven profit distribution and tax contributions of large multinational
corporations, various agreements have been reached at the global level, including an agreement by
over 135 jurisdictions to introduce a global minimum tax rate of 15%. In December 2021, the Organisation
for Economic Co-operation and Development (‘OCED’) released a draft legislative framework, followed
by detailed guidance released in March 2022, that is expected to be used by individual jurisdictions that
signed the agreement to amend their local tax laws. Once changes to the tax laws in any jurisdiction in
which the Group operates are enacted or substantively enacted, the Group may be subject to the top-
up tax. At the date when the financial statements were authorised for issue, the jurisdiction in which the
Group operates had not enacted or substantively enacted the tax legislation related to the top-up tax.
The Group may be potentially subject to the top up tax. Management is closely monitoring the progress
of the legislative process in the Republic of Ireland. At 31 December 2022, the Group did not have sufficient
information to determine the potential quantitative impact.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
17 Property, plant and equipment
2022
2021
Land &
buildings
€’000
Fixtures
& fittings
€’000
Plant &
machinery
€’000
Computer
equipment
€’000
Total
€’000
Land &
buildings
€’000
Fixtures
& fittings
€’000
Plant &
machinery
€’000
Computer
equipment
€’000
Total
€’000
Cost
At 1 January
18,239
945
14,699
717
34,600
15,263
1,162
9,045
694
26,164
Acquisitions through business combinations (Note 25)
3,313
56
714
–
4,083
–
–
–
–
–
Additions
15,315
1,095
7,874
308
24,592
10,000
62
5,958
32
16,052
Disposals
(545)
–
(792)
(75)
(1,412)
(7,024)
(279)
(304)
(9)
(7,616)
At 31 December
36,322
2,096
22,495
950
61,863
18,239
945
14,699
717
34,600
Accumulated depreciation
At 1 January
(2,216)
(438)
(4,121)
(595)
(7,370)
(1,693)
(389)
(2,551)
(444)
(5,077)
Charge for the financial year
(748)
(216)
(2,447)
(98)
(3,509)
(922)
(197)
(1,866)
(159)
(3,144)
Disposals
–
–
700
66
766
399
148
296
8
851
At 31 December
(2,964)
(654)
(5,868)
(627)
(10,113)
(2,216)
(438)
(4,121)
(595)
(7,370)
Net book value
At 31 December
33,358
1,442
16,627
323
51,750
16,023
507
10,578
122
27,230
The depreciation charge for the year includes €2.1 million (2021: €1.2 million) which was capitalised in inventory at 31 December 2022.
Property plant and equipment includes right of use assets of €4.7 million (2021: €0.5 million) related to leased properties and motor vehicles.
During the year, the Group entered into new lease agreements for the use of land and buildings as its head office facility in Maynooth, Co. Kildare. The land and buildings lease
commenced in September 2022 for a duration of seven years. On lease commencement, the Group recognised €4.7 million of right-of-use assets and lease liabilities.
In the prior year, The Group entered new lease arrangements for the use of motor vehicles (€0.3 million).
135
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Financial Statements
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Glenveagh Properties plc
Annual Report and Accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
18 Intangible assets
2022
2021
Goodwill
€’000
Licence
€’000
Computer
Software
€’000
Total
€’000
Licence
€’000
Computer
Software
€’000
Total
€’000
Cost
At 1 January
–
–
2,390
2,390
149
1,359
1,508
Additions
5,697
300
743
6,740
–
1,038
1,038
Disposals
–
–
–
–
(149)
(7)
(156)
At 31 December
5,697
300
3,133
9,130
–
2,390
2,390
Accumulated amortisation
At 1 January
–
–
(1,176)
(1,176)
(100)
(696)
(796)
Charge for the year
–
–
(487)
(487)
–
(487)
(487)
Disposals
–
–
–
–
100
7
107
At 31 December
–
–
(1,663)
(1,663)
–
(1,176)
(1,176)
Net book value
At 31 December
5,697
300
1,470
7,467
–
1,214
1,214
136
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Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
19 Inventory
2022
€’000
2021
€’000
Land
455,280
548,728
Development expenditure work in progress
227,240
204,458
Development rights
3,231
14,008
685,751
767,194
€530.4 million
(2021: €387.5 million)
of inventory was recognised in ‘cost of sales’ during the year ended
31 December 2022. Sustainable materials such as heat pumps, PV panels, timber frames and building
expenditure necessary to deliver A1/A2 Building Energy Rating (‘BER’) homes are included within
development expenditure work in progress.
(i) Impairment of inventories
During the financial year the Group carried out a net realisable value assessment of its inventories at the
reporting date. This assessment determined that the net impairment charge or reversal required for the
period was €Nil.
In the prior financial year, the Group’s net realisable value assessment resulted in an impairment reversal
of €4.2 million for the year at our previously impaired non-core active sites. The impairment reversal was
reflective of management’s reassessment of sales prices on remaining units at higher ASP sites due to
better pricing being achieved on unit closings in the year. This was recognised in cost of sales with €1.4
million allocated to land and the remainder (€2.8 million) allocated to work in progress.
(ii) Employment cost capitalised
€15.4 million of employment costs incurred in the financial year have been capitalised in inventory
(2021:
€12.3 million)
.
(iii) Development right
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 the site at Gateway
Retail Park, Knocknacarra, Co. Galway for consideration of approximately €13.2 million (including stamp
duty and acquisition costs). The development rights will (subject to planning) entitle the Group to develop
at least 250 residential units under a joint business plan to be undertaken with Sigma Retail Partners (on
behalf of TIO) which will also entitle TIO to control and benefit from any retail development at the site. The
Directors have determined that joint control of the site exists and the arrangement has been accounted for
as a joint operation in accordance with IFRS 11 Joint Arrangements. For further information regarding the
APSA, see Note 29 of these financial statements.
In July 2022, the Group agreed a repayment of consideration (€10.0 million) and release of obligations
under the Acquisition and Profit Share Agreement in relation to the site at The Square Shopping Centre,
Tallaght, Dublin 24.
20 Trade and other receivables
2022
€’000
2021
€’000
Trade receivables
9,224
6,549
Contract receivables
32,113
3,825
Other receivables
2,283
2,172
Prepayments
862
698
Construction bonds
12,140
10,012
Deposits for sites
2,049
9,124
58,671
32,380
The carrying value of all financial assets and trade and other receivables is approximate to their fair value
and are short term in nature with the exception of construction bonds.
137
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Financial Statements
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Glenveagh Properties plc
Annual Report and Accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
21 Trade and other payables
2022
€’000
2021
€’000
Current
Trade payables
7,132
6,202
Payroll and other taxes
4,897
3,524
Inventory accruals
33,600
20,069
Contingent consideration
1,500
–
Other accruals
16,372
13,238
VAT payable
29,733
14,455
93,234
57,488
The carrying value of all financial liabilities and trade and other payables is approximate to their fair value
and are repayable under the normal credit cycle.
2022
€’000
2021
€’000
Non-current
Contingent consideration (Note 25)
3,500
–
Non-current
3,500
–
Current
93,234
57,488
96,734
57,488
22 Loans and borrowings
(a) Loans and borrowings
The Group is party to a long-term debt facility for a total of €250.0 million with a syndicate of domestic
and international banks for a term of 5 years at an interest rate of one-month EURIBOR (subject to a floor
of 0 per cent) plus a margin of 2.6%. €82.5 million had been drawn on the new debt facilities (31 December
2021: €122.5 million). Pursuant to the debt facility agreement, there is a fixed and floating charge in place
over the net assets of the subsidiary entities of the Group as continuing security for the discharge of
any amounts drawn down. The carrying value of these net assets at 31 December 2022 is €685.2 million
(31 December 2021: €783.2 million).
2022
€’000
2021
€’000
Debt facilities
82,500
122,500
Unamortised borrowing costs
(1,877)
(2,476)
Interest accrued
17
223
Total loans and borrowings
80,640
120,247
Loans and borrowings are payable as follows:
2022
€’000
2021
€’000
Less than one year
9,419
39,625
Between one and two years
9,401
9,401
More than two years
61,820
71,221
Total loans and borrowings
80,640
120,247
The Group’s debt facilities were entered into with AIB, Bank of Ireland, Barclays and Ulster Bank and are
subject to primary financial covenants calculated on a quarterly basis:
–
A maximum net debt to net assets ratio of 25%;
–
Loans to eligible assets value does not exceed 65%;
–
The Group is required to maintain a minimum cash balance of €25.0 million throughout the term of the
debt facility, from 31 March 2024 this will increase to €50.0 million; and
–
EBITDA must exceed net interest costs by a minimum of 3 times and is calculated on a trailing twelve-
month basis.
All covenants have been complied with in 2022 and 2021.
Debt facilities are secured by a debenture incorporating fixed and floating charges and assignments over
all the assets of the Group. The carrying value of inventories as at 31 December 2022 pledged as security is
€685.2 million.
138
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Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
22 Loans and borrowings
(continued)
(b) Reconciliation of movements of liabilities to cash flows arising from financing activities
Cash flows
Non-cash changes
2022
Opening
2022
€’000
Credit
facility
drawdown
€’000
Credit
facility
repayment
€’000
Transaction
costs related
to loans and
borrowings
€’000
Share
buyback
payments
€’000
Proceeds
from share
option
exercise
€’000
Payment
of lease
liability
€’000
Interest
Paid
€’000
Amortisation
of
transaction
costs
€’000
Interest
on debt
facilities
€’000
Interest
on lease
liability
€’000
New
leases
€’000
Closing
2022
€’000
Liabilities:
Loans and borrowings
122,500
110,000
(150,000)
–
–
–
–
–
–
–
–
–
82,500
Unamortised transaction costs
(2,476)
–
–
–
–
–
–
–
599
–
–
–
(1,877)
Lease liability
547
–
–
–
–
–
(470)
–
–
–
45
4,622
4,744
Interest accrual
223
–
–
–
–
–
–
(6,490)
–
6,284
–
–
17
Equity:
Share Buyback
(107,466)
–
–
–
(146,260)
–
–
–
–
–
–
–
(253,726)
Share option exercise
29
–
–
–
–
108
–
–
–
–
–
–
137
13,357
110,000
(150,000)
–
(146,260)
108
(470)
(6,490)
599
6,284
45
4,622
(168,205)
Cash flows
Non-cash changes
2021
Opening
2021
€’000
Credit
facility
drawdown
€’000
Credit
facility
repayment
€’000
Transaction
costs related
to loans and
borrowings
€’000
Share
buyback
payments
€’000
Proceeds
from share
option
exercise
€’000
Payment
of lease
liability
€’000
Interest
Paid
€’000
Amortisation
of
transaction
costs
€’000
Interest
on debt
facilities
€’000
Interest
on lease
liability
€’000
New
leases
€’000
Closing
2021
€’000
Liabilities:
Loans and borrowings
100,000
130,000
(107,500)
–
–
–
–
–
–
–
–
–
122,500
Unamortised transaction costs
(104)
–
–
(2,993)
–
–
–
–
621
–
–
–
(2,476)
Lease liability
1,316
–
–
–
–
–
(1,110)
–
–
–
22
319
547
Interest accrual
38
–
–
–
–
–
–
(4,009)
–
4,194
–
–
223
Equity:
Share Buyback
–
–
–
–
(107,466)
–
–
–
–
–
–
–
(107,466)
Share option exercise
–
–
–
–
–
29
–
–
–
–
–
–
29
101,250
130,000
(107,500)
(2,993)
(107,466)
29
(1,110)
(4,009)
621
4,194
22
319
13,357
139
Governance
Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
22 Loans and borrowings
(continued)
(c) Net (debt)/funds reconciliation
2022
€’000
As restated
2021
€’000
Restricted Cash
458
458
Cash and cash equivalents
71,085
141,176
Loans and borrowings
(80,640)
(120,247)
Lease liabilities
(4,744)
(547)
Total net (debt)/funds
(13,841)
20,840
(d) Lease Liabilities
Lease liabilities are payable as follows:
31 December 2022
Present value
of minimum
lease
payments
€’000
Interest
€’000
Future value
of minimum
lease
payments
€’000
Less than one year
84
–
84
Between one and two years
16
–
16
More than two years
4,644
313
4,957
4,744
313
5,057
23 Restricted cash
2022
€’000
As restated
2021
€’000
Current
458
458
458
458
The restricted cash balance relates to €0.5 million held in escrow until the completion of certain
infrastructural works relating to the Group’s residential development at Balbriggan, Co. Dublin.
24 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 2022 are
as follows:
Company
Principal activity
%
Reg. office
Glenveagh Properties (Holdings) Limited
Holding company
100%
1
Glenveagh Treasury DAC
Financing activities
100%
1
Glenveagh Contracting Limited
Property development
100%
1
Glenveagh Homes Limited
Property development
100%
1
Greystones Devco Limited
Property development
100%
1
Marina Quarter Limited
Property development
100%
1
GLV Bay Lane Limited
Property development
100%
1
Glenveagh Living Limited
Property development
100%
1
GL Partnership Opportunities DAC
Property development
100%
1
Castleforbes Development Company DAC
Property development
100%
1
Hollystown Golf & Leisure Limited
Golf Club operations
100%
1
Harmony Timber Solutions Limited
Manufacturing operations
100%
1
GMP Developments Limited
Holding company
100%
1
1 Block B, Maynooth Business Campus, Maynooth, Co. Kildare, W23W5X7.
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.
25 Acquisition of subsidiary
On 31 August 2022, the Group acquired 100% of the share capital of Harmony Timber Solutions Limited
(‘Harmony’) and GMP Developments Limited (‘GMP’) for a total consideration of €11.9 million. Taking control
of Harmony and GMP enables the Group to enhance its timber frame manufacturing capabilities and
de-risks our supply chain with access to high quality timber frames. The business is highly complementary
to the Group’s housing development platform and existing manufacturing capabilities. The investment
increases the Group’s market share in the timber frame sector and is expected to have a positive impact
from a construction costs perspective.
In the post-acquisition period to 31 December 2022, the business acquired during the current year
contributed revenue of €1.1 million and profit of €0.3 million respectively to the Group’s results.
The full year revenue and trading profit had the acquisition taken place at the start of the year, would
have been €6.9 million and €1.3 million respectively.
140
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Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
25 Acquisition of subsidiary
(continued)
(i) Goodwill
Goodwill arising from the acquisition has been recognised as follows.
Harmony
€’000
GMP
€’000
Total
€’000
Cash paid
6,875
–
6,875
Contingent consideration
5,000
–
5,000
Total consideration
11,875
11,875
Less: fair value of net (assets)/liabilities acquired
(6,181)
3
(6,178)
Goodwill
5,694
3
5,697
Impairment Test
The goodwill carrying amount is allocated to the suburban segment with the recoverable amount of this
cash generating unit (CGU) being based on value in use. The value in use was determined by the cash
flows to be generated from the continuing use of the CGU over a three year period.
The Group has established internal controls designed to effectively assess and centrally review future cash
flows generated from CGUs. The key assumptions on which management has based its cash flows are
revenue and construction costs. Revenue assumptions relate to unit sales prices for sites delivering over
the period based on prices achieved to date, current market prices, historic prices, and sales agent reports.
Construction cost assumptions are based on contracted/procured package pricing or where packages are
not procured, historic pricing achieved, or pricing achieved on similar packages in reference to other sites.
The impact of sustainability and other macroeconomic factors have been considered in the Group’s
assessment of these cash flows, particularly with regard to the potential implications for future selling
prices, development expenditure and construction programming. Management has considered scenarios
on each of its active developments and the consequential impact on future profitability based on current
facts and circumstances together with any implications for future projects in undertaking its impairment
analysis.
As part of the assessment, the Group has re-evaluated its most likely exit strategies on all developments
in the context of the current market environment and reflected these in revenue assumptions within the
forecast models. The results of this exercise determined that the no impairment was required at the
reporting date.
(ii) Contingent consideration
The Group has agreed to pay the selling shareholders additional consideration over a three year
between €nil and €5.0 million dependent on the selling shareholders successfully achieving certain
agreed metrics. These metrics are fully aligned with the business strategy. At the reporting date, there
is a reasonable expectation that these metrics will be met with €5.0 million being recognised as the fair
value of contingent consideration at the date of acquisition. The fair value of contingent consideration will
be reassessed at each reporting date.
The valuation technique used to measure contingent consideration was the enterprise value of the entity
acquired with the enterprise value being determined with reference to EBITDA and Net Asset multiples.
Contingent consideration is categorised as a Level 3 fair value instrument.
(iii) Acquisition related costs
The Group incurred acquisition related costs of €0.5 million on legal fees and due diligence costs. These
costs have been included in administrative expenses in the Consolidated statement of profit or loss and
other comprehensive income.
(iv) The fair value of assets and liabilities arising from the acquisition
The following table summarises the recognised amounts of assets and liabilities assumed at the date of
acquisition.
Harmony
€’000
GMP
€’000
Total
€’000
Non-current assets
Land and buildings
2,932
381
3,313
Plant and machinery
714
–
714
Fixtures and Fittings
56
–
56
Current assets
Trade and other receivables
2,555
–
2,555
Inventories
1,009
–
1,009
Cash and cash equivalents
847
–
847
Current Liabilities
Trade and other payables
(1,932)
(384)
(2,316)
Fair value of net assets/(liabilities) acquired
6,181
(3)
6,178
141
Governance
Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
25 Acquisition of subsidiary
(continued)
(v) Measurement of fair values
The valuation techniques used for measuring the fair value of material assets acquired were as follows:
(a) Land and buildings and plant and machinery
The valuation model considers market prices for similar items when they are available and depreciated
cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as
well as functional and economic obsolescence.
(b) Inventories
The fair value of raw materials is determined based on the cost based on market rates in the ordinary
course of business. The fair value for finished goods is determined based on the estimated cost of inputs
to complete units.
(c) Trade receivables and other receivables
The gross contractual value of trade and other receivables as at the date of acquisition amounts to €2.8
million. The fair value of these receivables is €2.5 million, all of which is expected to be collectable at the
date of acquisition.
If new information obtained within one year of the date of acquisition about facts and circumstances that
existed as the date of acquisition identifies adjustments to the above amounts, then the accounting for the
acquisition will be revised.
26 Capital and reserves
(a) Authorised share capital
2022
2021
Number of
shares
€’000
Number of
shares
€’000
Ordinary Shares of €0.001 each
1,000,000,000
1,000
1,000,000,000
1,000
Founder Shares of €0.001 each
–
–
200,000,000
200
Deferred Shares of €0.001 each
200,000,000
200
200,000,000
200
1,200,000,000
1,200
1,400,000,000
1,400
(b) Issued and fully paid share capital and share premium
At 31 December 2022
Number of
shares
Share
capital
€‘000
Share
premium
€’000
Ordinary Shares of €0.001 each
638,131,722
638
179,416
Founder shares of €0.001 each
–
–
–
Deferred Shares of €0.001 each
81,453,077
81
–
719,584,799
719
179,416
At 31 December 2021
Number of
shares
Share
capital
€‘000
Share
premium
€’000
Ordinary Shares of €0.001 each
771,770,694
771
179,310
Founder Shares of €0.001 each
181,006,838
181
–
952,777,532
952
179,310
(c) Reconciliation of shares in issue
In respect of current year
Ordinary
shares
‘000
Founder
shares
‘000
Deferred
shares
‘000
Un-
denominated
capital
€’000
Share
capital
€‘000
Share
premium
€’000
In issue at 1 January 2022
771,771
181,007
–
100
952
179,310
Purchase of own shares
(135,680)
–
–
135
(135)
–
Conversion of founder shares
to deferred shares
–
(181,007)
181,007
–
–
–
Cancellation of deferred shares
–
–
(99,554)
100
(100)
–
Exercise of options
2,041
–
–
–
2
106
638,132
–
81,453
335
719
179,416
In respect of prior year
Ordinary
shares
‘000
Founder
shares
‘000
Undenominated
capital
€’000
Share
capital
€‘000
Share
premium
€’000
In issue at 1 January 2021
871,333
181,007
–
1,052
179,281
Purchase of own shares
(99,710)
–
100
(100)
–
Exercise of options
148
–
–
–
29
771,771
181,007
100
952
179,310
142
Governance
Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
26 Capital and reserves
(continued)
(d) Rights of shares in issue
Ordinary Shares
The holders of Ordinary Shares are entitled to one vote per Ordinary Share at general meetings of the
Company and are entitled to receive dividends as declared by the Company.
Founder Shares
Founder Shares do not confer on any holder thereof the right to receive notice of, attend, speak or vote
at general meetings of the Company except in relation to resolutions regarding the voluntary winding up
of the Company or the granting of further Founder Shares. Founder Shares do not entitle their holder to
receive dividends.
Founder Shares entitle the Founders of the Company namely, Justin Bickle (through Durrow Ventures),
Stephen Garvey and John Mulcahy to share 20% of the Company’s TSR (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 fifth test period (which ran from 1 March 2022 until 30 June 2022), 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.
Under the Company’s constitution any Founder Shares which remained in existence, and which had not
been previously converted were, following the final test period, to be converted on a one-to-one basis into
deferred shares, (the ‘Termination Conversion’). On 26 October 2022, the Board approved the Termination
Conversion. In respect of deferred shares held by the Founders, John Mulcahy and Stephen Garvey
surrendered their respective deferred shares in November 2022.
Following completion of the fifth test period, the scheme is now completed.
(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 14.
(f) Share buyback programme
Further to the authority granted at the Annual General Meeting on 27 May 2021. The Group commenced
a €75.0 million share buyback programme on 28 May 2021, the programme completed on 13 October
2021. The total number of shares purchased was 71,689,205 at a total cost of €75.0 million. All repurchased
shares were cancelled in accordance with the share buyback programme.
On 16 November 2021, the Group announced a second share buyback programme, which completed on
28 April 2022. The total number of shares purchased was 92,950,510 at a total cost of €111.0 million. The
total number of shares purchased in the period 1 January to 28 April 2022 was 64,929,549 at a total cost of
€77.9 million. All repurchased shares were cancelled in accordance with the share buyback programme in
the year ended 31 December 2022.
On 1 June 2022, a third share buyback programme commenced up to a further €75.0 million, which
completed on 1 November 2022. As at 31 December 2022 the total number of shares purchased under
the third buyback programme was 70,750,810 at a total cost of €67.5 million. All repurchased shares were
cancelled in the year ended 31 December 2022.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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).
Financial instruments: financial assets
The consolidated financial assets can be summarised as follows:
2022
€’000
As restated
1
2021
€’000
Trade receivables
9,224
6,549
Amounts recoverable on construction contracts
32,113
3,825
Other receivables
2,282
2,172
Construction bonds
12,140
10,012
Deposits for sites
2,049
9,124
Cash and cash equivalents
71,085
141,176
Restricted cash (current)
458
458
Total financial assets
129,351
173,316
1
See Note 6(i)(a) for more information on the restatement.
Cash and cash equivalents are short-term deposits held at variable rates.
Financial instruments: financial liabilities
2022
€’000
2021
€’000
Trade payables
7,132
6,202
Lease liabilities
4,744
547
Inventory accruals
33,600
20,069
Other accruals
16,372
13,238
Contingent consideration
5,000
–
Loans & borrowings
80,640
120,247
Total financial liabilities
147,488
160,303
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.
Management monitors the adequacy of the Group’s liquidity reserves against rolling cash flow forecasts.
In addition, the Group’s liquidity risk management policy involves monitoring short-term and long-term
cash flow forecasts. Set out below are details of the Group’s contractual cash flows arising from its financial
liabilities and funds available to meet these liabilities.
31 December 2022
Carrying
amount
€’000
Contractual
cash flows
€’000
Less than
1 year
€’000
1 year
to 2 years
€’000
More than
2 years
€’000
Lease liabilities
4,744
5,057
84
16
4,957
Trade payables
7,132
7,132
7,132
–
–
Inventory accruals
33,600
33,600
33,600
–
–
Other accruals
16,372
16,372
16,372
–
–
Contingent consideration
5,000
5,000
1,500
1,750
1,750
Loans and borrowings
80,640
89,488
11,563
11,546
66,379
147,488
156,649
70,251
13,312
73,086
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
27 Financial instruments and financial risk management
(continued)
Liquidity risk
(continued)
31 December 2021
Carrying
amount
€’000
Contractual
cash flows
€’000
Less than
1 year
€’000
1 year
to 2 years
€’000
More than
2 years
€’000
Lease liabilities
547
568
487
80
1
Trade payables
6,202
6,202
6,202
–
–
Inventory accruals
20,069
20,069
20,069
–
–
Other accruals
13,238
13,238
13,238
–
–
Loans and borrowings
120,247
130,596
43,954
11,253
75,389
160,303
170,673
83,950
11,333
75,390
Funds available
2022
€’000
2021
€’000
Debt facilities* (undrawn committed)
150,000
120,000
Cash and cash equivalents
71,543
141,634
221,543
261,634
* The Group’s debt facilities contains a mechanism through which the committed amount can be increased by a further €50.0 million.
The Group’s RCF is subject to primary financial covenants calculated on a quarterly basis:
–
A maximum net debt to net assets ratio of 25%;
–
Loans to eligible assets value does not exceed 65%;
–
The Group is required to maintain a minimum cash balance of €25.0 million throughout the term of the
debt facility, from 31 March 2024 this will increase to €50.0 million; and
–
EBITDA must exceed net interest costs by a minimum of 3 times and is calculated on a trailing twelve-
month basis.
Credit risk
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. The Group is party to a debt facility agreement for a total of €250.0 million, the
agreement 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 for a term of 5 years at an
interest rate of EURIBOR (subject to a floor of 0 per cent) plus 2.6%. €82.5 million
(2021: €122.5 million)
had been drawn on the facility at 31 December 2022. 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 debt facilities with variable interest rates based upon
EURIBOR. At the year ended 31 December 2022 it is estimated that an increase of 100 basis points to
EURIBOR would have decreased the Group’s profit before tax by €2.5 million assuming all other variables
remain constant and the rate change is only applied to the loans that are exposed to movements in
EURIBOR.
The Group is also exposed to interest rate risk on its cash and cash equivalents. These balances attract low
interest rates and therefore a relative increase or decrease in their interest rates would not have a material
effect on the Group’s profit.
A fundamental review and reform of major interest rate benchmarks is being undertaken globally, including
the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred
to as ‘IBOR reform’). The Group has no exposure to these changes as it only has exposure to EURIBOR
interest rates which is outside the scope of the current reform.
Capital management
The Group finances its operations through 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. The Group’s capital allocation
policy is to invest in supply chain, land, and work-in-progress. Once the business has invested sufficiently in
each of these priorities, excess capital is returned to shareholders.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
28 Leases
(a) Leases as lessee (IFRS 16)
The Group leases a property and motor vehicles. Motor vehicle leases typically run for a period of
1-3 years, with an option to renew the lease after that date. Lease payments are renegotiated every
1-3 years to reflect market rentals. The property lease is for 15 years with a break clause after 7 years.
The Group leases certain motor vehicles with contract terms of one year. These leases are short term and
leases of low-value items. The Group has elected not to recognise right-of-use assets and lease liabilities
for these leases.
Information about leases for which the Group is a lessee is presented below.
(i) Right-of-use assets
Right-of-use assets related to leased properties (that do not meet the definition of investment property)
and motor vehicles are presented as property, plant and equipment (see Note 17).
2022
Property
€’000
Motor
Vehicles
€’000
Total
€’000
Balance at 1 January
286
261
547
Additions to right-of-use assets
4,605
–
4,605
Depreciation charge for the year
(506)
(175)
(681)
Balance at 31 December
4,385
86
4,471
2021
Property
€’000
Motor
Vehicles
€’000
Total
€’000
Balance at 1 January
1,024
292
1,316
Additions to right-of-use assets
–
319
319
Depreciation charge for the year
(738)
(350)
(1,088)
Balance at 31 December
286
261
547
(ii) Amounts recognised in profit or loss
2022
€’000
2021
€’000
2022 – Leases under IFRS 16
Interest on lease liabilities
45
25
Expenses relating to short-term leases
97
46
(iii) Amounts recognised in statement of cash flows
2022
€’000
2021
€’000
Total cash outflow on leases
470
1,110
(b) Leases as lessor
In certain instances, the Group acts as a lessor in relation to certain property assets. These arrangements
are not material to the Group’s consolidated financial statements.
29 Related party transactions
(i) Key Management Personnel remuneration
Key management personnel comprise the Non-executive Directors and the Executive Committee. The
aggregate compensation paid or payable to key management personnel in respect of the financial year
was the following:
2022
€’000
2021
€’000
Short-term employee benefits
4,864
2,461
Post-employment benefits
294
115
LTIP and SAYE share-based payment expense
670
116
5,828
2,692
Compensation of the Group’s key management personnel includes salaries, non-cash benefits and
contributions to a post-employment defined contribution plan.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
29 Related party transactions
(continued)
(ii) Other related party transactions
Acquisition of development rights
The Group entered into the Acquisition and Profit Share Agreement (APSA) with Targeted Investment
Opportunities ICAV (TIO), a wholly owned subsidiary of OCM Luxembourg EPF III S.a.r.l. (OCM) (and
an entity in which John Mulcahy is a Director) on 12 March 2018.
Under the terms of the APSA, the Group acquired certain development rights in respect 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.
In July 2022, the Group agreed a repayment of consideration (€10.0 million) and release of obligations
under the APSA in relation to the site at The Square Shopping Centre, Tallaght, Dublin 24.
The Directors have determined that joint control over the remaining site exists, and the arrangements
have been accounted for as joint operations in accordance with IFRS 11 Joint Arrangements. This accounting
treatment was re-assessed at the end of the reporting period and the Directors concluded that it remains
appropriate.
The APSA also stipulates that TIO would be entitled to share, on a 50/50 basis, any residual profit
remaining after the Group’s purchase consideration plus interest and residential development cost plus
20% has been deducted from sales revenue in relation to the residential development opportunity at
Gateway Retail Park, Knocknacarra, Co. Galway and Bray Retail Park, Bray, Co. Wicklow.
The agreement defines certain default events including TIO not possessing good and marketable title
over the development sites and TIO not transferring good and marketable title over the development
sites. On the occurrence of a default event, the Group shall be entitled to recover the aggregate purchase
consideration in respect of the development rights. OCM has agreed to guarantee this obligation of TIO.
30 Commitments and contingent liabilities
(a) Commitments arising from development land acquisitions
The Group had no contingent liabilities at 31 December 2022. The Group had the following commitments
at 31 December 2022 relating to Development Land Acquisitions.
Hollystown Golf and Leisure Limited (‘HGL’)
During 2018, the Group acquired 100 per cent of the share capital of HGL. Under the terms of an overage
covenant signed in connection with the acquisition, the Group has committed to paying the vendor an
amount equal to an agreed percentage of the uplift in market value of the property should any lands
owned by HGL, that are not currently zoned for residential development be awarded a residential zoning.
This commitment has been treated as contingent consideration and the fair value of the contingent
consideration at the acquisition date was initially recognised at €nil. At the reporting date, the fair
value of this contingent consideration was considered insignificant.
Contracted acquisitions
At 31 December 2022, the Group had contracted to acquire a site; in County Kildare for approximately
€14.0 million (excluding stamp duty and legal fees). Deposits totalling €1.4 million were paid pre-year end
and are included within trade and other receivables at 31 December 2022.
31 Subsequent events
In February 2023, the Group finalised a new five-year sustainability linked finance facility of €350.0
million, consisting of €100.0 million term component and a revolving credit facility of €250.0 million, which
is a direct replacement of our previous €250.0 million debt facility. This new facility is with our existing
banking syndicate, at interest rates consistent with those of the previous facility and includes financial and
sustainability covenants that better reflect the current strategy and growth ambitions of the business.
On 6 January 2023, the Group announced a fourth share buyback programme to repurchase up to 10%
of the Group’s issued share capital such that the maximum number of shares which can be repurchased
under the buyback is 63,813,172. On 20 February 2023, the number of shares repurchased in respect of this
buyback programme had reached 29,678,501 shares for a cost of €28.1 million. All repurchased shares were
cancelled.
32 Profit of the Parent Company
The parent company is Glenveagh Properties plc. In accordance with section 304 of the Companies Act
2014, the Company is availing of the exemption from presenting its individual statement of profit or loss
and other comprehensive income to the Annual General Meeting and from filing it at the Companies
Registration Office. The Company’s profit after tax for the financial year was €7.7 million (for the year
ended 31 December 2021: profit of €0.031 million).
33 Approved financial statements
The Board of Directors approved the financial statements on 28 February 2023.
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COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
Note
2022
€’000
2021
€’000
Assets
Non-current assets
Investments in subsidiaries
3
8,860
7,143
8,860
7,143
Current assets
Trade and other receivables
4
171
190
Amounts owed by subsidiaries
5
599,854
736,398
Cash and cash equivalents
191
1,983
600,216
738,571
Total assets
609,076
745,714
Equity
Share capital
7
719
952
Share premium
179,416
179,310
Retained earnings
379,855
517,528
Share-based payment reserve
46,968
45,251
Undenominated capital
335
100
607,293
743,141
Liabilities
Current liabilities
Trade and other payables
6
1,783
2,573
Total liabilities
1,783
2,573
Total liabilities and equity
609,076
745,714
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Share Capital
Ordinary
shares
€’000
Founder
Shares
€’000
Deferred
Shares
€’000
Undenominated
capital
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
Balance as at 1 January 2022
771
181
–
100
179,310
45,251
517,528
743,141
Total comprehensive income for the
financial year
Profit for the financial year
–
–
–
–
–
–
7,682
7,682
Other comprehensive income
–
–
–
–
–
–
–
–
771
181
–
100
179,310
45,251
525,210
750,823
Transactions with owners of the Company
Equity-settled share-based payments
–
–
–
–
–
1,717
–
1,717
Lapsed share options (Note 14
*
)
–
–
–
–
–
–
–
–
Conversion of founder shares to deferred shares
(Note 26)
–
(181)
181
–
–
–
–
–
Cancellation of deferred shares (Note 26)
–
–
(100)
100
–
–
–
–
Exercise of options
2
–
–
–
106
–
–
108
Purchase of own shares (Note 26
*
)
(135)
–
–
135
–
–
(145,355)
(145,355)
(133)
(181)
81
235
106
1,717
(145,355)
(143,530)
Balance as at 31 December 2022
638
–
81
335
179,416
46,968
379,855
607,293
* The note reference is to the Consolidated financial statements as the information is not disclosed in the notes to the Company financial statements.
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COMPANY STATEMENT OF CHANGES IN EQUITY
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021
Share Capital
Ordinary
shares
€’000
Founder
shares
€’000
Undenominated
capital
€’000
Share
premium
€’000
Share-based
payment
reserve
€’000
Retained
earnings
€’000
Total
equity
€’000
Balance as at 1 January 2021
871
181
–
179,281
44,129
625,775
850,237
Total comprehensive income for the financial year
Profit for the financial year
–
–
–
–
–
31
31
Other comprehensive income
–
–
–
–
–
–
–
871
181
–
179,281
44,129
625,806
850,268
Transactions with owners of the Company
Equity-settled share-based payments
–
–
–
–
1,219
–
1,219
Lapsed share options (Note 14
*
)
–
–
–
–
(97)
97
–
Exercise of options
–
–
–
29
–
–
29
Purchase of own shares (Note 26
*
)
(100)
–
100
–
–
(108,375)
(108,375)
(100)
–
100
29
1,122
(108,278)
(107,127)
Balance as at 31 December 2021
771
181
100
179,310
45,251
517,528
743,141
* The note reference is to the Consolidated financial statements as the information is not disclosed in the notes to the Company financial statements.
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NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
1 Basis of preparation
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
–
Disclosures required by IFRS 2 Share-based Payments
–
Disclosures required by IAS 24 Related Party Disclosures
–
The effects of new but not yet effective IFRSs; and
–
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 €7.7 million.
(2021: Profit of €0.03 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.
3 Investment in subsidiaries
2022
€’000
2021
€’000
Investment in subsidiaries
4,025
4,025
Accumulated cost of share-based payments in respect of subsidiaries
4,835
3,118
8,860
7,143
Details of subsidiary undertakings are given in Note 24 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
2022
€’000
2021
€’000
VAT receivable
48
56
Prepayments and other receivables
123
134
171
190
5 Amounts due from subsidiaries
2022
€’000
2021
€’000
Amounts due from subsidiaries
599,854
736,398
599,854
736,398
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.
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NOTES TO THE COMPANY FINANCIAL STATEMENTS
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
6 Trade and other payables
2022
€’000
2021
€’000
Trade payables
75
128
Accruals
1,649
2,385
Payroll and other taxes
59
60
1,783
2,573
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 14
of the consolidated financial statements.
10 Related party disclosures
See Note 29 of the consolidated financial statements for information in relation to related party
transactions.
Remuneration of key management
Key management of the Company is defined as the Directors of the Company. The compensation of key
management personnel is set out in Note 29 of the consolidated financial statements.
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SUPPLEMENTARY INFORMATION
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
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.
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
Financial statements reference
2022
€’000
2021
€’000
Gross profit
Statement of profit or loss
108,051
83,057
Revenue
Note 10
644,706
476,807
Gross margin percentage
16.8%
17.4%
Prior year gross margin percentage is calculated after an impairment reversal of €4.2 million.
2 Core gross margin percentage
2022
€’000
2021
€’000
Suburban
Core revenue
451,930
276,848
Non-core revenue
2,610
–
Total revenue
Note 10
454,540
276,848
2 Core gross margin percentage
(continued)
2022
€’000
2021
€’000
Urban
Core revenue
176,570
126,217
Non-core revenue
13,596
73,742
Total revenue
Note 10
190,166
199,959
2022
€’000
2021
€’000
Core cost of sales
(521,292)
(324,254)
Non-core cost of sales
(15,363)
(73,715)
Total cost of sales
Statement of profit or loss
(536,655)
(397,969)
2022
€’000
2021
€’000
Core gross profit
107,208
78,811
Core revenue
628,500
403,065
Core gross margin percentage
17.1%
19.6%
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.
Non-core cost of sales is mostly attributable to land and development expenditure costs for high end,
private developments and sites.
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.
153
Governance
Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
SUPPLEMENTARY INFORMATION
(continued)
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
Alternative Performance Measures (APMs)
(continued)
3 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) pre-exceptional
items, pre-impairment and related margin
(continued)
Financial statements reference
2022
€’000
2021
€’000
Depreciation – capitalised
1,978
1,224
Depreciation – expensed
1,616
1,920
Total depreciation
Note 17
3,594
3,144
2022
€’000
2021
€’000
Adjusted operating profit
Statement of profit or loss
70,095
50,567
Impairment
Note 19
–
(4,219)
Depreciation – expensed
As above
1,616
1,920
Amortisation
Note 18
487
487
Adjusted EBITDA pre-exceptional items
72,198
48,755
Adjusted EBITDA margin pre-exceptional items
11.2%
10.2%
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 Return on equity (ROE)
An APM representing return on equity that Group management apply to measure of the Group’s
efficiency of returns generated from shareholder equity after taxation and is calculated as profit after
tax attributable to shareholders divided by the average of opening and closing shareholders’ funds.
Financial statements reference
2022
€’000
2021
€’000
Profit after tax
Statement of profit or loss
52,567
37,702
Total equity
Balance sheet
693,118
784,081
Average total equity
738,600
818,793
ROE
7.1%
4.6%
6 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.
7 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 Committee at its discretion, for items deemed not reflective
of the Group’s underlying performance for the period.
8 Adjusted operating profit
An APM representing a metric the Group uses to measure financial performance in a given financial
period. It is defined as operating profit before exceptional items and impairment reversals/charges.
Financial statements reference
2022
€’000
2021
€’000
Operating profit
Statement of profit or loss
70,095
50,567
Impairment reversal
Statement of profit or loss
–
(4,219)
Adjusted operating profit
70,095
46,348
Revenue
Statement of profit or loss
644,706
476,807
Adjusted operating margin
10.9%
9.7%
154
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Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
COMPANY INFORMATION
Directors
Executive Directors
Stephen Garvey
Michael Rice
Non-executive Directors
John Mulcahy
Robert Dix
Pat McCann
Cara Ryan
Camilla Hughes
Company Secretary
Chloe McCarthy
Registered Office
Glenveagh Properties plc
Block B, Maynooth Business Campus
Maynooth
Co. Kildare
W23 W5X7
Ireland
Registrars
Computershare Investor Services (Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
D24 AK82
Auditor
KPMG
Chartered Accountants
1 Stokes Place
St. Stephen’s Green
Dublin 2
D02 DE03
Solicitor
A&L Goodbody
3 Dublin Landings
North Wall Quay
Dublin 1
D01 C4E0
DLA Piper Ireland LLP
40 Molesworth Street
Dublin 2
D02 YV57
Kane Tuohy
Hambleden House
19-26 Pembroke Street Lower
Dublin 2
D02 WV96
Mason Hayes and Curran
South Bank House
Barrow St
Dublin 4
D04 TR29
Bankers
Allied Irish Banks, p.l.c
10 Molesworth Street
Dublin2
Bank of Ireland Group plc
40 Mespil Road
Dublin 4
D04C2N4
Barclays Bank Ireland plc
One Molesworth Street
Dublin 2
D02RF29
Website
www.glenveagh.ie
Stockbrokers
Davy Group
Davy House
49 Dawson Street
Dublin 2
D02 PY05
155
Governance
Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
156
Governance
Financial Statements
Strategic Report
Glenveagh Properties plc
Annual Report and Accounts 2022
The outer cover of this report has been laminated
with a biodegradable film. Around 20 months
after composting, an additive within the film will
initiate the process of oxidation.
Printed on material from well-managed, FSC
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certified forests and other controlled sources. This
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Glenveagh Properties plc
Block B, Maynooth Business Campus
Maynooth
Co. Kildare
W23 W5X7
Ireland
T: +353 (0)1 903 7100
glenveagh.ie
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