TIDM46QW
RNS Number : 4788V
Peabody Capital PLC
04 December 2023
Peabody Group (incorporating Peabody Trust, Peabody Capital PLC,
Peabody Capital No.2 PLC and TCHG Capital PLC).
This is an unaudited consolidated trading update for Peabody
Group for the six months ending 30 September 2023.
Highlights for Peabody Group
Six months to September Six months to September
2023 2022
Homes in management 108,289 104,540
------------------------ ------------------------
Homes completed in
the period 654 1,004
------------------------ ------------------------
Investment in existing
homes 100 65
------------------------ ------------------------
Turnover (GBPm) 489 515
------------------------ ------------------------
Operating surplus
(GBPm) 131 137
------------------------ ------------------------
Operating margin 27% 27%
------------------------ ------------------------
Surplus for the period
(GBPm) 41 79
------------------------ ------------------------
Drawn debt (GBPm) 4,680 4,445
------------------------ ------------------------
Available Facilities
(GBPm) 1,313 1,722
------------------------ ------------------------
Accessible Cash (GBPm) 71 113
------------------------ ------------------------
Despite the economic challenges, we've increased capital
investment in residents' homes by over 50%, spending GBP39m more
than in the same period last year. In total we spent GBP184m in the
six-month period, including on building safety, improving
insulation and proactively managing damp, mould and condensation,
repairs and maintenance as well as surveys of the condition of
6,560 residents' homes.
Commenting on the results, Peabody's Chief Financial Officer,
Eamonn Hughes said: "We continue to invest in getting closer to
residents through a renewed local focus, with more neighbourhood
teams, proactive condition surveys and a plan for a more effective
and efficient repairs service. We continue to make progress with
our substantial change programme and this trading update
demonstrates that we are prioritising investment."
Financial performance
Peabody's operating surplus held up in the first six months of
the year compared to 2022. Net surplus has reduced principally due
to a) higher interest rates which had yet to fully feed through in
the 2022-23 half year, and b) fewer completions and reduced surplus
on joint ventures in the half-year. This is a function of
transactions and completions happening outside of the reporting
period. Our financing costs, including GBP6m incurred in break
fees, remain within budget, with 77% of our borrowing at fixed-rate
levels.
Turnover on Peabody's core operations has increased and our
year-to-date collection rate has held at 98%, but overall revenues
have reduced due to a planned lower level of sales in the current
year. To the end of September our Financial Inclusion team had
received over 1,100 referrals and helped residents to increase
their household income by over GBP1m. Joint Venture surpluses and
further sales are expected to generate substantial income for
reinvestment later in the year. The number of unsold homes is
substantially lower than in previous years with many of these
either reserved or exchanged already:
Unsold new homes
- Peabody Group Reserved
at 30 September /
exchanged Available Total
3 - 6 months 3 6 9
Over 6 months 73 90 163
Investment in sustainable homes
We now have around 108,000 homes under management within the
Peabody Group. In the six months to 30 September 2023, we invested
GBP100m in our existing homes compared to GBP65m in the same period
last year, including GBP43m on our building safety programme. A
further GBP84m was spent on repairs and maintenance, compared to
GBP80m in the same period last year. In total therefore GBP184m was
spent on residents' homes in the last 6 months, which is consistent
with our overall aim to spend GBP2bn over the next 5 years.
78% of our homes are currently rated EPC C or above. In
September 2023 we published our updated Environmental
Sustainability Strategy
https://www.peabodygroup.org.uk/media/3v4p0yhh/peabody-sustainability-strategy-23-26.pdf
. This sets out our detailed plans for the next three years,
providing the foundations for our journey to net zero. In October
we published our latest ESG report under the Sustainable Reporting
Standard for Social Housing:
https://www.peabodygroup.org.uk/media/a3vdsywd/peabody-esg-report-22-2023.pdf
We aim to have 82% achieving at least EPC C or above by 2026. To
do this we're installing insulation, improving ventilation and
replacing inefficient boilers and windows in thousands of our
existing homes. All our new homes are being built to at least EPC
B.
New homes, Development and Sales
We invested GBP268m in our new homes programme over the last six
months, completing 654 new homes and with 470 starts on site in the
period. The sales programme depends on the timing of practical
completion and whilst currently behind schedule we have a strong
level of exchanges and reservations in addition to completed sales.
Due to the build programme, there is no expectation that sales will
achieve 2022-23 levels but by 30 September we had completed GBP75m
in sales, with improved margins at 17%. We're continuing to
carefully manage our development programme and maintaining
appropriate flexibility on the level of future spend and
commitments.
Liquidity
We retain very strong access to liquidity, with GBP1.4 billion
of cash and undrawn facilities to ensure that we can continue to
operate and deliver for the benefit of our residents in challenging
times. Our gearing remains low and 77% of our borrowing is on fixed
rates. We retain over 42,000 unallocated or unencumbered properties
across the Group with a security value of around GBP4bn.
Ratings and certification
We are rated G1, V2 by the Regulator of Social Housing, which
was reaffirmed in September this year following an In-Depth
Assessment. We were pleased to see our A3 rating from Moody's
return to a stable outlook in October, reflecting Peabody's
financial resilience and management's response to the current
economic environment, and we continue to hold an A- negative
outlook rating from S&P Global following a recent review.
Transfer of engagements
The transfer of engagements of Catalyst Housing Limited into
Peabody Trust completed on 3 April 2023 followed by a similar
exercise for Rosebery Housing Association Limited into Town &
Country Housing on 4 April. This consolidation of our structure has
allowed us to move into the next phase of transformation, getting
closer to residents through a focused approach to service delivery,
with more locally based teams alongside better use of data and
technology across our operations.
Statement of Comprehensive Income - Peabody Group
GBP million Six months to September Six months to September
2023 2022
Turnover - from core operations 414 383
------------------------ ------------------------
Turnover - from sales 75 132
------------------------ ------------------------
Total turnover 489 515
------------------------ ------------------------
Operating Costs 332 299
------------------------ ------------------------
Cost of Sales 62 121
------------------------ ------------------------
Surplus staircasing/disposal
of fixed assets 36 42
------------------------ ------------------------
Operating Surplus 131 137
------------------------ ------------------------
Net Interest Costs - inc
loan break costs 90 72
------------------------ ------------------------
JV Surplus - 14
------------------------ ------------------------
Surplus for the period 41 79
------------------------ ------------------------
Operating margin 27% 27%
------------------------ ------------------------
Sales margin 17% 8%
------------------------ ------------------------
Note: Figures quoted in the update are based on unaudited
management accounts, which are subject to review and further
adjustments.
Loan break costs GBP6 million (corresponding period in 2022:
GBP6m)
Contact: Anthony Marriott, Director of Treasury & Corporate
Finance or Ben Blades, Assistant Director Corporate Affairs .
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END
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