Managerial Finance for the Built Environment

Purpose
The coursework is intended to provide you with the opportunity to demonstrate understanding and integration of the various aspects of the programme and this module.The aim should be to obtain, analyse
and interpret financial information; assess the financial viability of a project and integrate them into a balanced decision-making framework.

Project Brief:
MF4BE, a leading local housing developer of the South West is considering a new housing development to be built under a quasi-social housing agreement with a national house-building firm. Several sites were identified in the initial feasibility studies, however, many of these required substantial demolitions of existing dwelling houses and relocation during construction and have thus been rejected.

The proposed development will take place on a site in a new neighborhood called East of Harry Stoke (EoHS) situated on the urban edge of north Bristol near the University of the West of England and close to the M32 and M4 motorways. This site is mostly owned by Crest Nicholson and South Gloucestershire Council who intend to deliver about 2000 houses; while some parts are owned by other private landowners. MF4BE has purchased 4.5 hectares of the EoHS land from the private landowners for £3.5 million per hectare to enable it to carry out this development. MF4BE plans to develop the site to provide a mix of housing (including family housing, flats and sheltered accommodation), together with commercial uses in future and also provide some open spaces. In keeping with this, the average dwelling per hectare (density) for this development should NOT exceed 30.
To achieve this undertaking, MF4BE is considering engaging a reputable construction company or house builder from a list of firms that have expressed interest. MF4BE is also considering taking a stake in a construction company or house builder as part of its long-term expansion goals of accessing other income.
You are required to provide a report that will contain the following:

Part 1: 60 Marks
Assessment of suitability of the construction or house builder firm (1800 words)
You are required to select one (1) company from the table below which is a UK PLC that is quoted on the UK Stock Exchange. You must then obtain the most recently published “FULL ANNUAL REPORT” for the selected company. The annual report must be in the English language.
NOTE: YOU WILL NOT RECEIVE ANY MARKS IF YOU USE A COMPANY THAT IS NOT IN THIS TABLE

You are required to assess the suitability of the chosen company, both as a building contractor and a potential investment, by preparing a report on the financial “health” of this company. This should be done by making use of financial ratios as revealed or implied by the most recent FULL annual report and its financial statements. Your report should be clear and succinct as if prepared for your boss (with no accounting knowledge) who is a very busy person with limited time to read it before an important meeting. All relevant information in the annual report should be used as necessary.
The detailed calculations of all ratios must be shown in FULL and must be attached separately as part of the Appendices either in Microsoft Word or Microsoft Excel (Note: Please only restrict yourself to the ratios covered in class). A complete copy of the FULL ANNUAL REPORT must be attached as a separate file in the submission. Please DO NOT use the interim (half-year) annual report.
The full annual report can be obtained online from the respective company’s website or by carrying out a
search using your preferred internet “search engine". You can use FAME (a database accessible through the UWE Library webpage) to check that the company is a PLC.
Note that FAME should only be used to compare the ratios but all the ratios should be calculated manually.

Part 2: 40 Marks
Development decision making (1200 words)
You are required to propose a choice of two (2) housing schemes on the site for MF4BE to pick from. Decide on the total number of residential dwellings proposed for this site and the housing mix and types (e.g. 1 bedroom, 2 bedrooms etc). Note: a minimum of FOUR (4) house types is required for both proposed schemes.
a. Undertake breakeven analyses (charts included) based on only the development of houses in both of the proposed schemes. Based on the breakeven analyses, advise MF4BE on which of the two schemes is the best.
Market information can be gleaned from a variety of databases, e.g. “Rightmove” that will provide reasonable comparables. Cost information can be obtained from sources such as the Building Cost Information Service (BCIS) or Spon’s. (18 marks)
b. With the use of the information from (a) above, advise MF4BE on the viability of the two proposed schemes by carrying out capital budgeting using the Return of Capital Employed (ROCE), Payback Period
(PP), Net Present Value (NPV) and Internal Rate of Return (IRR). Discuss which of these appraisal methods
IS the most suitable for this task and advise which of the two proposed schemes is the best. Make appropriate assumptions regarding the timing of the construction and sale of the units. (22 marks)

The full report should include, among other things:
ï‚· One-page executive summary of both Part 1 and Part 2-containing the key features and results of the report.This should be on a separate page placed at the beginning of the report
ï‚· A brief introductory section
ï‚· Numerical investigation
ï‚· Findings-analysis and interpretation of results
ï‚· Solutions, conclusions and recommendations
ï‚· References (ensure that you use the Harvard System check the UWE library website for guidance)
 Appendices – these should be used appropriately to show the workings (Calculations for Part 2 should be done in MS Excel) and should be limited to information supporting the report. Definitions of ratios should be
within the report while ensuring that important information is not relegated to the appendices
Style
The typed report should be complete, coherent, clear and concise (maximum 3,000 words with a 10% allowance – see the University s policy on word count) making good use of headings, tables, graphs, diagrams, page numbers etc., and presented professionally with balanced use of appendices, contents listings, proper referencing, bibliography, word count,etc. material in the appendices. The report should be
predominately analytical rather than descriptive.
Course work hand-in
The coursework should be handed ONLINE (electronically) following normal Faculty practice BEFORE 14.00 hrs on Monday, July 11th 2022. Note that you will be penalised if your work is submitted even one(1) second after the 14.00 hrs.
The most significant point to stress at this time is that your submission must consist of three electronic files:-
1. The report containing both parts 1 and 2 and any appendices MUST be submitted as a single MS
WORD document.
2. A single spreadsheet file (MS Excel or similar) containing (at least) two (2) separate worksheets (labelled appropriately) for the appendices of all the calculations.

3. The pdf file of the FULL ANNUAL REPORT
Note: Please DO NOT just paste pictures of extracts of the Excel file since we will need to see your calculations. Ensure that this Excel file is uploaded as a separate file and DO NOT EMBED it in the MS WORD file –embedded files that cannot open will be deemed as missing and therefore making your work in complete.
Electronic Submission
Full instructions will be provided about 4 weeks before submission. Ensure that you read the submission instructions carefully.
Hard copy submissions are NOT accepted under any circumstances.
Please do not leave submission to the last day. Computer and internet connection problems are not acceptable grounds for Personal Circumstances. Anticipate that very close to the deadline black board usage will surge and may cause upload speed issues.
The electronic format provides the ability for word counts to be completed. Anything more than 10% over the limit (not including any covering note)will not be marked. This will leave your submission incomplete and disjointed; this will be a major penalty.
The electronic submission also provides the marker with the ability to process the whole batch of assignments through a piece of software called‘safe assign’. This will compare the text in every assignment against available electronic resources AND compare it to all the other submissions in the batch.
Best wishes

Guideline assessment criteria for post graduate work