TIDM20SY
RNS Number : 0289Z
Optivo Finance PLC
14 May 2019
OPTIVO TRADING UPDATE
FULL YEAR 2018-19
This is Optivo's unaudited trading update for the twelve months
ended 31 March 2019.
Highlights
Financial KPIs* 2018-19 (unaudited) 2017-18
Turnover GBP314m GBP317m
-------------------- --------
Operating surplus GBP102m GBP117m
-------------------- --------
Surplus before tax GBP89m GBP90m
-------------------- --------
Net interest costs GBP41m GBP42m
-------------------- --------
Operating margin (excluding
sales) 28.3% 30.5%
-------------------- --------
* excluding pensions adjustments
Strategic KPIs 2018-19 result 2018-19 target
Residents' net promoter score 62 56
--------------- ---------------
Residents using our services
online 53% 45%
--------------- ---------------
Staff feel proud to work for
Optivo 81% 75%
--------------- ---------------
Staff say Optivo is a great
employer 77% 75%
--------------- ---------------
Helping people into jobs and
training 1,122 870
--------------- ---------------
New homes started 1,003 1,000
--------------- ---------------
-- 2018-19 was Optivo's first full year of operation.
-- We met and exceeded our strategic KPIs.
-- The decrease in turnover was in large part a result of no
open market sales during 2018-19 as there were no completions of
properties for the open market sales tenure (2017-18:
GBP12.5m).
-- 2018-19 was the third of four years in which social housing
rents decrease by 1% before returning to CPI+1% growth in 2021.
-- The decrease in operating surplus was due to a lower surplus
on asset disposals (GBP13m vs GBP20m) and zero surplus on open
market outright sales (2017-18: GBP4m).
-- Higher revaluation movements this year (GBP28m vs GBP11m)
compensated for the operating surplus fall, keeping our surplus
before tax broadly level with last year.
Core operations
For our core business of General Needs, Supported Housing and
Housing for Older People operational income KPIs for Optivo for the
year to date were as follows:
Voids 2018-19 2017-18
Void rental losses as a %
of annual rent debit 0.92% 0.59%
---------- ----------
Average vacant properties 39.3 days 26.5 days
re-let time, excluding voids
for major works
---------- ----------
We carried a higher level of voids this year while readying
properties for asset disposals. The rise in re-let times was
concentrated in 23 sheltered housing schemes in our Midlands
region, and our review of these is underway.
Rent arrears at year-end March 2019 March 2018
0 to 4 weeks GBP3.4m, 1.62% GBP3.5m, 1.68%
--------------- ---------------
5 to 6 weeks GBP0.7m, 0.32% GBP0.7m, 0.32%
--------------- ---------------
7 to 12 weeks GBP1.5m, 0.73% GBP1.5m, 0.71%
--------------- ---------------
13 weeks or more GBP3.6m, 1.74% GBP2.6m, 1.25%
--------------- ---------------
Total rent arrears of annual GBP9.3m, 4.41% GBP8.2m, 3.96%
rent debit
--------------- ---------------
Out-turn rent arrears for the year were in line with our
expectations and financial plan.
Property development
At 31 March we were in contract to deliver 2,020 homes (March
2018: 2,054) across 39 sites, with remaining capital commitments on
these sites of GBP361m (March 2018: GBP363m). In December 2018 we
entered into a 50/50 Joint Venture with Linden Homes to develop a
site in Kent. This will deliver a further 76 homes for Optivo with
remaining capital commitments of GBP19m.
We had 262 Shared Ownership 1st tranche properties that were
practically complete and available for sale, of which 158 were
ready for occupation (March 2018: 65), and no open market sale
unsold units (March 2018: 0).
The increase in unsold homes in part reflects a relatively large
number of shared ownership completions (223) during Q4. At year end
we had 27 homes unsold for more than six months (March 2018: 7
homes).
Liquidity
At the end of the financial year we had available undrawn
facilities of GBP380m (March 2018: GBP606m) and GBP61m (March 2018:
GBP82m) unencumbered cash and deposits available. We sold GBP25m
retained bonds after the financial year end in April 2019.
Our outstanding debt balance was GBP1,281m (March 2018:
GBP1,089m).
Optivo and Optivo Finance plc are rated A2 by Moody's.
Unaudited Financial Results
Statement of Consolidated Income 2018-19 2017-18
GBPm GBPm
----------------------------------- -------- --------
Turnover 314 317
Cost of Sales (19) (21)
Operating Expenditure (206) (199)
Surplus on disposal of fixed
assets 13 20
----------------------------------- -------- --------
Operating Surplus 102 117
----------------------------------- -------- --------
Surplus on commercial property
disposals - 4
Interest receivable 1 1
Interest and financing costs (42) (43)
Fair value movements 28 11
----------------------------------- -------- --------
Surplus before taxation 89 90
----------------------------------- -------- --------
Hedge reserve movement - (141)
----------------------------------- -------- --------
Surplus/(deficit) before taxation 89 (51)
----------------------------------- -------- --------
-- The figures exclude pension adjustments which we are
reviewing as part of year-end accounting processes.
-- Fair value movements represent the movement on Optivo's
investment property and interest rate derivatives. Optivo has opted
not to apply hedge-accounting.
Next Update
We will publish a half-year financial update after 30 September
2019.
Notes
Optivo is a charitable Housing Association owning and/or
managing 44,000 homes across London, the South East and the
Midlands.
Contact for more information
https://www.optivo.org.uk/about-us/investors.aspx
Tariq Kazi
Head of Treasury
tariq.kazi@optivo.org.uk
020 8036 2293
DISCLAIMER
This update contains certain 'forward-looking' statements
reflecting, among other matters, our current views on markets,
activities and prospects. Actual outcomes may differ materially.
Such statements are a correct reflection of our views only on the
publication date and no representation or warranty is given in
relation to them, including as to their completeness or accuracy or
the basis on which they were prepared. Financial results quoted are
unaudited. No reliance should be placed on the information
contained within this update. We do not undertake to update or
revise such public statements as and when our expectations change
in response to events. This update is neither recommendation nor
advice. This is not an offer or solicitation to buy or sell any
securities.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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