Kaufman & Broad (KOF) H1 2024 earnings summary

Executive summary

• Housing land portfolio exceeds 32,000 lots at end-May 2024, covering over 6 years of activity, with 89% in high-demand areas.

• Housing orders rose 11.5% in value to €561.2M and 7.2% in volume to 2,400 units, outperforming a declining market.

• Take-up rate for housing programs improved to 4.1 months, well below the market average of 26 months.

• Financial structure remains robust with positive net cash of €224.9M and financial capacity of €578.9M.

• Business model validated by managed residence operations, with an IRR of 14.6% on equity for projects like Amiens and Gagny.

Financial highlights

• H1 2024 revenue: €452.5M, down from €848.8M in H1 2023, mainly due to a strong base effect from the Austerlitz deal.

• Gross margin: €97.5M (21.6% of sales, up from 16.7%); EBIT: €34.5M (7.6% margin); net income: €21.1M.

• Commercial property revenue dropped to €54.4M from €381.0M year-over-year.

• Net cash: €224.9M at end-May 2024, up from €101.7M in May 2023.

• Working capital requirement at €(138.9)M, or -13.7% of sales.

Outlook and guidance

• 2024 full-year revenue expected around €1.1B, with operating profit margin between 7% and 7.5%.

• Group expected to maintain a positive net cash position, excluding IFRS 16 and Put Neoresid.

• Recurring operating income ratio forecasted between 7% and 7.5%.