Presentation title / Audience / Location / Date / © George Wimpey 2002

Credit Suisse First Boston UK Housing Conference Wednesday 21 April 2004 Andrew Carr-Locke Finance Director, George Wimpey Plc

Agenda  Overview of George Wimpey  The UK Housing Market  The Barker Review - Key Recommendations  The Barker Review - Impact on the Industry and George Wimpey  Summary and Conclusions 3

Overview of George Wimpey

Background to GW  George Wimpey established in 1880  Became a focused housebuilder in 1996 Since a changed company:  Jan merger of McLean Homes and Wimpey Homes  Oct acquisition of McAlpine Homes  Nov acquisition of Laing Homes  Combined cost savings in excess of £70m in the UK  Have also increased investment in US arm - Morrison Homes 5

Turnover £m EBITE £m TurnoverOp profit Five-year review  CAGR of 17% in turnover and 39% in PBT in past 5 years  Core UK margins have risen from 8.4% to 17.1%  US margins have risen from 8.1% to 11.9%  16,570 completions globally in

George Wimpey today  Operating through 27 regional business in the UK under two brands  core ‘George Wimpey’ brand nationally  ‘Laing Homes’ brand in SE and Midlands  Diverse product mix  George Wimpey value positioning  Laing Homes premium positioning Bristol Manchester Liverpool Newcastle Edinburgh Glasgow Birmingham Leeds London George Wimpey regional business Laing Homes regional business 7

George Wimpey today  Morrison Homes have 12 regional offices located across six states  Building a range of single family homes  Morrison now represents 21% of Group turnover Sacramento Denver Atlanta Sarasota Tampa Orlando Jacksonville Austin Dallas Phoenix Central Valley Houston 8

Relative share price performance re-based from Jan George WimpeyConst & Building MaterialsFTSE 100 9

The UK Housing Market

Supply / demand imbalance Increasing demand  Net immigration  Birth rate  Increase in longevity  Reduction in average household size  Demand is ever increasing Constrained supply  Restrictive planning regime  Ageing housing stock - c.15,000 removed / demolished p.a*.  Annual shortfall of c.40,000 units* *Source: Barker Review 11

Price inflation / affordability  This has lead to high levels of house price inflation in recent years House price / Earnings ratio Source: HBOS 12

Price inflation / affordability  However - affordability remains good  historically low interest rates  record levels of employment Mortgage repayments as % of ave earnings Source: Barker Review 13

First time buyers  UK owner occupancy rates are amongst the highest in the world  Proportion of first time buyers has decreased  Evidence that FTB’s are buying later  Potential for rental sector to further develop  Requirement for increase in provision in affordable housing Source: ODPM % owner occupiers in England 14

The Barker Review Key recommendations

Barker recommendations Output  Housing output needs to increase significantly to meet demand  Affordability should be a key criterion when setting housing targets Planning  Prime responsibility for housing decisions should be at the regional level  Additional planning routes should be available to housebuilders  Regions should be able to diverge from PPG3 where appropriate Government funding  Local government should receive greater financial gain from new housing developments, so the benefits better match the costs  Government should finance “pump-priming” infrastructure  Government needs to increase funding of “sub-market” housing 16

Barker recommendations Taxation  A planning-gain supplement is the best way to tax land “rent” profits  Alternatives, such as VAT, could have perverse effects on land supply  This new tax should partially replace S 106 agreements Requirements on industry  The industry must improve customer satisfaction significantly  The industry should work to increase off-site prefabrication  And increase the number of apprentices and training generally  And work with CABE on a code of best practice for external design  Local Authorities should set conditions to increase build rates on new sites 17

The Barker Review Impact on the Industry and GW

Impact on housebuilders Output  If fully implemented, today’s constraints on growing volumes will be lifted  Steady growth in volumes will underpin earnings growth for largest companies Product  Flexibility from PPG3 will potentially increase attractiveness to consumer and responsive value engineering Prices  If supply responds to demand, prices should become more stable  Even a limited supply response would stop price increases being a one way bet Profits  Margins are likely to stabilise or converge to “normal” levels over time  However volume growth will enable profits of the efficient producer to grow Land market  As prices moderate and land supply improves, land prices will rise more slowly Cash  More stable land prices will lead to significantly higher cash generation  This should increase economic value added and hence earnings multiples: valuations should become earnings-driven rather than assets-driven 19

Housebuilder P/E ratios 20

Impact on housebuilders Competition  Barker’s vision is that competition will be based on delivery of superior value to customers at lowest cost: a normal competitive industry model Operating strategies  Successful operational strategies will become  delivering superior customer satisfaction  at lowest total cost  on developments that meet modern “standards” of design Industry consolidation  Benefits of scale will increase whilst limits to scale will reduce  Acquisition remains an alternative to organic growth to deliver profit growth Land banks  Today, competitive advantage comes from holding long land banks  With more responsive supply, holding gain much reduced - < cost of capital  Land banks will be held for operational need, not for financial returns 21

ROCE comparison Year to Dec Operating margin % Asset turn 25% ROCE 15% ROCE 20% ROCE GW 2003 GW 2002 Laing 22 Competitors Source: GW estimates from company information

Challenges for the industry Increasing volume growth rates  Need to create organisation structure and processes which support growth  GW: flexible organisation plus two brands will support volume growth Lower house price inflation  Lower house price price inflation will increase exposure to rising costs  GW: scale and focus on “best practice” processes ensures tight control of costs Pressure to increase build-out rates  There will be pressure to increase selling and build rates (from ave c0.7 a week)  GW: already builds at 1 a week (highest in industry) - efficient build processes Meeting customer needs  Industry must raise average “would you refer?” from 46% to 75%  GW: achieved 85%, Laing Homes 70% in 2003; all management bonused on “willingness to refer”; rigorous benchmarking between GW, Laing Homes and Morrison 23

Customer satisfaction 2003 MORI poll for Housing Forum 0 Below industry average Industry average Above industry average Sample size George Wimpey Greater market share Smaller market share 24

Challenges for the industry Innovation  Industry must demonstrate embrace of prefabrication: many examples in place, but to date these lack benefits of scale  GW: uses prefabricated components wherever possible and timber- frame where appropriate; in discussion with Universities on approach to innovation Attracting skilled workers  Industry must increase investment in training and employ more apprentices  GW: employs > 300 apprentices; structured programme of personal development and training at all levels up to international graduate programme Design  Industry must continue to develop innovative design whilst controlling costs  Industry must demonstrate its design standards have improved  GW: no national house-types; inter-regional bench-marking enables standardisation of best footprints with flexibility of external design 25

Summary and Conclusions

Summary and Conclusions: excellent news for the industry The Barker Review establishes a favourable political climate for housing  It puts housing high up the political agenda  It confirms the obstacle to meeting housing need is the planning system  Whilst implementation will be slow, the volume “risk” is now on the upside  The industry is absolved from land hoarding It creates a tax framework favourable to the industry  A planning gain supplement will fall on land owners rather than the industry  The problems associated with VAT are underlined  The need to “simplify” S106 agreements is confirmed The economics of the industry will be much improved  Lower house price inflation will lead to lower land inflation  Whilst “stock gains” will be reduced, cash generation should greatly improve  This should lead to higher EVA and hence higher multiples 27

Summary and Conclusions: and excellent news for George Wimpey The Barker Review also requires changes in the industry  Its objective is that competition should be based on delivering superior customer satisfaction at lowest cost: most business models need to change  This will enhance the benefits of scale, whilst reducing the limits to scale  There will be winners and losers based on speed of adaptation to a new world Different operating models and efficiencies will be affect relative valuations  Relative values will reflect ability to win under the new model rather than just length of land banks  Long land banks will not produce a return above the cost of capital George Wimpey is well placed to benefit from these changes  We already achieves customer scores well ahead of the Barker target  Our fast build rate and organisational model gives us low production costs  We have established a good reputation with CABE and others for innovative design and forward-looking vision 28

Implementation and reality Obstacles to implementation  Limited regional government infrastructure  Size and complexity of the South East Region  Need for a political consensus on  roles of regional, county and district planning bodies  introduction and rate of a planning-gain supplement Approach to implementation  Extensive industry consultation planned  Conservative Party conducting policy review Realistic timeframe  Implementation unlikely until after the next election  Important for industry meanwhile to address those issues within its control  Will still change industry mindset, and hence strategies for volume growth 29

Short term objectives  Barker Review is far reaching and will take time to implement  In the short term we are focused on delivering growth without dramatic increases in UK volumes or further UK price inflation through:  further investment in and growth of Morrison Homes  customer options sales & related services  Laing Homes - volume and margin growth  modest growth in core George Wimpey UK business  George Wimpey will continue to be active in ongoing discussions and we fully support recommendations of the Review made to date. 30

Presentation title / Audience / Location / Date / © George Wimpey 2002