george wimpey improving performance peter johnson group chief executive 11 december 2000

George Wimpey Improving performance

Peter Johnson

Group Chief Executive

11 December 2000

Agenda

• background

• objectives and strategy

• what we plan to do

• benefits

• current trading

• summary

Background

• market

– outlook stable with low price inflation

– changed planning environment

– continued demand for detached houses

Background

• Wimpey - strengths

– recognised in industry for build quality

– leading results in customer satisfaction survey

– improving product mix and land bank

Background

• Wimpey - issues to be addressed

– lack of benefits from Wimpey/McLean merger

– wasteful duplication of effort

– too many regions below critical mass

– large Head Office

– high cost culture

Objectives and Strategy

• objective - to create shareholder value

– reduce costs and bureaucracy

– speed up decision-making

– gain benefits from scale

– grow added value products and services

– change internal culture

Objectives and Strategy

• strategy

– make our business efficient

– move mix towards growing markets

– gain benefits from internal benchmarking etc

– invest more in new construction techniques

– develop new products and services

Initial targets

• eliminate high cost culture

• gain advantages from our scale

• show shareholders we can use capital well

What we plan to do

• create single UK housing business

• Keith Cushen appointed Managing Director of UK housing

• Keith Cushen and Stu Cline join Board with immediate effect

What we plan to do

• use McLean decentralised structure

• new, lean headquarters outside London

• slim corporate centre in central London

Benefits

• reducing our costs– up to £15mn pa– full benefits coming through by end 2001– some benefits in H2 2001– one-off exceptional costs of ~ £15mn

• exploiting the benefits of scale

• creating the potential for growth

Current trading

• 2000 to finish strongly - results on track

• stable market conditions set to continue in 2001

• lengthening planning process will result in H1 performance below same period in 2000

Summary

• historic high cost culture to go

• benefits of asset swap now to be realised

• management will be decentralised

• slim head office structure

• first steps to new structure already taken

• line management very supportive of plan

• led by experienced Managing Director: Keith Cushen