TIDM15HG
RNS Number : 2099V
Great Places Housing Group Limited
05 August 2020
QUARTERLY PERFORMANCE UPDATE
This update covers performance for the period ending 30 June
2020.
Our Performance Updates are aimed at ensuring our investors and
other stakeholders receive regular, timely information regarding
the performance of the Group. We will publish these reports on a
quarterly basis and will produce them within six weeks of the
relevant quarter end.
The information included is based on unaudited management
accounts and other internal performance measures.
KEY HEADLINES
PANDEMIC RESPONSE AND RECOVERY PLANNING
The COVID-19 pandemic continues to impact our customers,
communities and colleagues. Some of the ways that we have helped
our communities are explained below in the Corporate 'Social' News
stories.
Operationally, Great Places responded effectively to maintain
essential services whilst following Government and HSE guidelines
and having moved out of lockdown and recommenced virtually all
services, the Group is now very much planning for the next stages
of recovery. Our business continuity team continues to meet
regularly to manage the operational impacts and challenges of this
pandemic and lead the organisation in workplace recovery.
2019/20 FINANCIAL RESULTS
The statutory accounts of the Great Places Housing Group for
2019/20, along with those of its subsidiaries, have been approved
by their Boards, following a clean audit which was conducted
entirely virtually during the lockdown period. The results were in
line with our expectations for the year and the financial
statements will be published on our website after our AGM in
mid-September.
BUDGETS AND BUSINESS PLAN 2020/21
Given the unparalleled nature of the COVID-19 pandemic, Great
Places will be reviewing the current year budget and long term
business plan. The process of working with leaders across the
organisation to fully understand the wide ranging impacts of
COVID-19 and to revise our expectations for 2020/21 is well
underway; for example to reflect the changing landscape of the
property market and the affect on our development programme during
the period of lockdown during quarter one. Early indications of the
revised budget show that whilst surplus will reduce by up to 20%,
primarily as market and shared ownership sales slip into 2021/22,
there will be an increased operating margin and an improvement in
EBITDA MRI in the current year. The same applies for repairs and
investment works that were temporarily put on hold or reduced in
quarter one 2020/21.
INTEGRATION OF THE FORMER EQUITY HOUSING GROUP INTO GREAT
PLACES
The Transfer of Engagements on 1(st) April 2020 brought together
Great Places and Equity Housing Group into one organisation.
Integration is going well, with a dedicated Programme Management
Office engaging with customers and colleagues to plan and implement
change.
FINANCIAL PERFORMANCE: QUARTER ONE RESULTS
The management accounts of the Group show year to date surplus
of GBP5.1m, GBP0.3m better than budget. The most significant
effects of the COVID-19 pandemic were reduced property sales and
reduced repairs and investment works, all of which were delayed and
are picking up again as the lockdown restrictions ease.
Investment programme spend was GBP1.1 m against a budget of
GBP5.9m, of which only GBP0.2m was capitalised. Overall impact to
surplus was GBP1.0m better than budget. Repairs and Maintenance
essential work continued, although non essential jobs were
initially postponed. Total net property sales surplus was GBP1.0m,
GBP1.5m worse than budget. Net interest costs were GBP0.3m better
than budget due to low interest rates. Turnover in the period was
GBP31.5m and operating surplus GBP12.3m.
Drawn debt (excluding bond premium and including finance leases)
as at 30 June 2020 was GBP592.7m (March 2020: GBP531.7m). The
movement is mainly due to loans that were transferred from Equity
Housing Group to Great Places Housing Association on 1(st) April
2020.
Mark to Market exposure on the Group's free standing derivatives
was GBP54.1m, up from GBP51.8m at 31 March 2020, due mainly to
reductions in 15-25 year swap rates. There was GBP31.1m cash
collateral posted to meet counterparties' security requirements, up
from GBP28.5m at 31 March 2020.
Liquidity is strong with closing cash balances (excluding cash
held on behalf of leaseholders) of GBP44.5m. Undrawn facilities
immediately available are GBP145.7m of which GBP112.0m is fully
secured. This does not include our GBP70m retained bond, which we
can sell at any time. Our internal financial "Golden Rules" around
interest cover, gearing and operating surplus were all met at the
end of the period.
OPERATIONAL PERFORMANCE
Our performance management centres around our Critical Success
Factors ("CSFs") which are designed to focus us on the delivery of
our Corporate Plan, and particularly our vision of "Great Homes,
Great Communities, Great People". We have ten CSFs for 2020/21, as
well as three-year targets and ten-year ambitions within our
Corporate Plan. The CSFs give immediate oversight on progress
against our vision and key objectives. The CSF targets for 2020/21
were set in early March prior to knowing the extent of COVID-19 and
before lockdown occurred and we plan to review them and reset any
where required.
Despite the impact of COVID-19 and lockdown, performance over
quarter one has been largely positive. However, there are certain
areas such as development completions, colleague sickness and
re-lets where performance has been clearly impacted as a direct
consequence.
There have been 37 Development Completions over quarter one,
below the expected completion target of 164. This is due to the
vast majority of our sites being closed towards the end of March
and remaining closed throughout April and much of May. At the end
of June, all of these sites are open having been made COVID-19
secure. Sites are operating with reduced labour due to social
distancing practices and supply of some materials is proving
problematic. Our early indications suggests an average of 10%-15%
productivity loss on sites compared with before March, based on a
wide range of sites at different build stages and various levels of
productivity.
At the end of June, the average days sickness per employee was
10.2 days, an improvement of 0.2 compared to the end of April, but
still higher than the phased monthly target for this stage of the
year which was set before the impact of the pandemic was known. The
increase in sickness seen during the first quarter was
predominantly linked to coronavirus, however sickness levels are
now decreasing, with days lost in May being 33% lower than
March.
Our average re-let time has increased over the quarter, with an
average re-let time of 34.3 days against a target of 23 days. While
some re-lets did occur over lockdown, there were a number of
properties unable to be re-let due to lockdown restrictions. This
situation has contributed significantly to a dip in performance,
introducing new rules on who was eligible to move and challenges to
how we undertook re-let repairs safely. Following the easing of
restrictions, with the majority of these properties now re-let, we
expect to see next quarter's performance to return much closer to
the norm with early signs being positive.
While the above CSFs have been impacted by COVID-19, the other
seven CSFs are all above or on target highlighting our positive
performance over quarter one despite the external circumstances.
Trusted Stock Conditions surveys is at 90.6% with a review being
undertaken for properties within our Equity region following the
transfer of engagements. Currently, there are no concerns for
meeting the year-end target of 96%.
Despite lockdown, we have helped 211 households into work,
training and volunteering so far this year which is on track to
surpass the year-end target of 750. Colleague engagement is
currently at 78%, above the year-end target of 70% and Group
surplus is also on track.
The % of digitally active tenants was 39.2% at the end of June,
above the year-end target of 35%. This is a new CSF, replacing the
% of digital contacts reported last year. Whilst that only looked
at overall contacts in a month, the new CSF looks more closely at
the contact behaviour of individual tenancy over the last 12
months. A digitally active tenant is defined as a tenant whose
contacts over the last 12 months are 50% or more through our
digital channels.
At the end of quarter one current tenant arrears was 4.7%,
representing a cash value of GBP3.55m. This is better than the
monthly target of 5.2%. Current tenant arrears increased during the
quarter, however not to the extent originally expected from
COVID-19. The government's furlough scheme has largely protected us
from the effects of lockdown on rental income and we expect to see
the true impact of that on our arrears figures once the furlough
scheme has ended in October 2020.
Over the course of quarter one we have continued to receive
customer feedback in the form of our customer satisfaction surveys.
While in previous years, the satisfaction CSF has focused on our
General Needs customers, it was agreed for this year that it would
be expanded to include all customer groups, and thus presenting a
far more holistic view of our customer satisfaction. The majority
of responses so far this year have been extremely positive with an
overall satisfaction of 7.5/10, above our year-end target of
7.3/10. For just General Needs customers, overall satisfaction was
at 7.95/10 compared to 7.53/10 at the end of March 2020.
CORPORATE NEWS
These stories illustrate some of our recent activities,
particularly in terms of Environmental, Social and Governance.
GOVERNANCE
Successful Innovation Chain North framework bidders
announced
Over 100 firms recently celebrated being successfully appointed
to Great Places Housing Group's GBP750m Innovation Chain North
(ICN) framework of contractors and consultants. ICN has been
designed to support delivery of new homes across the north of
England, not only to support Great Places' very ambitious
development programme but also those of other housing associations
operating across the north of England. The framework renewal saw a
56% increase in bidders seeking to deliver works and services, with
183 companies applying to supply the framework. The majority of
bidders applied for multiple lots, and in total 726 bids were
evaluated across the 23 lots. In total 113 suppliers - 30
contractors and 83 consultants - were successful. The new framework
will run until June 2024.
Forge New Homes submits planning on first site
Forge New Homes, the recently formed Sheffield-based partnership
between five housing providers including Great Places, has
exchanged contracts on its first site, a 98-home development in
Pilsley, North East Derbyshire. It has submitted plans for the new
homes on the seven-acre site, close to Clay Cross and Chesterfield.
This will be a mixture of bungalows, two, three and four bedroom
homes for sale and two and three bedroom homes for shared ownership
and affordable rent. Subject to planning, work is due to start on
the new site in Autumn 2020. The Pilsley site is a key milestone
for the joint venture that is aiming to address the shortfall in
housing in the Sheffield City Region.
ENVIRONMENTAL
Environmental Team launches online training offer
The Environmental team has used the current pandemic to develop
an online version of its award winning Carbon literacy training.
The virtual offer consists of a series of interactive sessions that
look to increase participants' awareness of how organisations and
individuals can change behaviours to reduce their carbon footprints
and tackle climate change. Sessions are set to launch in early July
with the first client being the North Housing Consortium. The
training will also form part of Great Places internal induction
programme for new colleagues who joined from Equity Housing in
April.
SOCIAL
Great Places launches Community Resilience Fund to support
COVID-19 recovery
Great Places has launched a Community Resilience Fund to support
customers in our neighbourhoods that have been affected by the
recent pandemic. It will provide financial support to charities,
community groups and social enterprises to implement their COVID-19
recovery strategies and will enable them to become more resilient
to future economic setbacks. The aim is to direct our funding and
resources into our neighbourhoods, where there will be a positive
impact to help our customers and communities.
Great Places donates GBP10,000 towards #KeepStockportCaring
The Equity Foundation, on behalf of Great Places, has donated
GBP10,000 to #KeepStockportCaring - a campaign set up by Sector3 to
fund voluntary, charity and social enterprise (VCSE) organisations
working on the frontline during and after the COVID-19 outbreak.
All money raised by #KeepStockportCaring will be invested back into
the local voluntary sector to build their resilience and help them
recover and continue their vital work in the borough.
Countryside donate GBP25,000 to help support Great Places
customers
Countryside has donated GBP25,000 to help Great Places support
customers and communities who need it most during the pandemic.
Great Places shortlisted for two Housing Heroes Awards
Great Places has been shortlisted for two prestigious Chartered
Institute of Housing (CIH) Housing Heroes Awards. Our Repairs Team
is in the running for the Development or maintenance team of the
year accolade, while Great Places customer, Stuart Hutton has been
shortlisted for the coveted Tenant Innovator award. Stuart's
shortlisting is in recognition for his tireless dedication and
service to his Blackpool community through 'Counselling in the
Community', a service he set up in 2018 which offers counselling
support to people who may otherwise be unable to access such
services in the town. The winners will be announced at the virtual
awards ceremony in September.
Great Places help STAR & Bevan Brittan form Social Value
Partnership
Blackpool based mental health support service, Stand Together
and Recover (STAR), is receiving expert advice from legal
specialists Bevan Brittan, thanks to social value support offered
as part of its involvement with Great Places' Legal Services
Procurement Framework. Bevan Brittan responded to STAR's request
for help in securing new premises as part of its plans to provide
additional support services for Blackpool residents. The OJEU
compliant Legal Services Framework was procured to meet Great
Places legal needs and that of other Housing Associations. All
applicants to the framework are also expected to offer social value
commitments as part of the rigorous tendering process.
FEEDBACK
We welcome feedback on our performance update. Please contact
Kal Kay, Director of Finance, on 0161 447 5029 or at
kal.kay@greatplaces.org.uk
The information included within this report is for information
purposes only. The Financial results quoted are unaudited. The
report may contain forward looking statements and actual outcomes
may differ materially. No statement in the report is intended to be
a profit estimate or forecast. We do not undertake to revise such
statements if our expectations change in response to events. This
report does not constitute legal, tax, accounting or investment
advice.
This information is provided by RNS, the news service of the
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END
UPDUVOWRRRUWRRR
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