TIDM60OT
RNS Number : 1039H
Yorkshire Housing Finance plc
29 July 2019
Yorkshire Housing Group trading update for the year ending 31
March 2019
-- Yorkshire Housing Group (YH) is today issuing its
consolidated trading update for the year ended 31 March 2019.
-- These figures are unaudited and for information purposes only.
Highlights for the year ended 31 March 2019
-- YH owns and manages 16,697 homes (2018: 16,606 homes)
-- Turnover for the period was GBP113m (2018: GBP101m)
-- Social housing lettings contributed 75% of total turnover (2018: 86%)
-- Operating surplus was GBP35m (2018: GBP33m)
-- Overall operating margin (including asset sales) was 31% (2018: 33%)
-- Net margin on sales programme was 25% (2018:21%)
-- Social housing lettings interest cover was 1.3x (2018: 1.7x)
-- Gearing was 47% (2018: 45%)
-- 283 new homes were delivered during the year and a further 917 on site
-- And we are on track towards our strategic priority to deliver 3,120 new homes by 2021
-- YH also successfully secured GBP62m of government grant
during the year to provide an additional 1,300 homes for social and
affordable rent and shared ownership after 2021
-- Moody's rating maintained at A3
Commenting on the results, Guy Millichamp, Director of Finance,
said:
We are pleased to present another year of strong financial
performance with our operating surplus increasing 6% per cent and
turnover and profits rising by 12% despite a third year of rent
cuts. All our surpluses are reinvested in our business of providing
homes and support for our customers.
We have built and completed 283 new homes in the year, and have
a further 917 new homes on site to be completed in the next year or
two. Of these, 23% are for outright sale, with the rest to be let
at social or affordable rents, or for shared ownership. Outright
and shared ownership sales have been strong, with 29 outright sales
and 124 shared ownership first tranche sales during the year.
While our underlying social housing letting margin has again
been impacted by the rent cut (29% vs 32% in 2018), the business
continues to deliver a margin of 31% overall.
We continue to improve our efficiency which means that our
headline social housing cost per unit has reduced by 4%. Further
investment in new technology will deliver greater efficiency and
improved metrics in the medium term though will incur short term
cost
Our balance sheet remains strong, with increases of GBP50m in
fixed assets and stock available for shared ownership or sale
funded from cash reserves and operating surpluses.
Just after the year end we were pleased to welcome our new chief
executive Nick Atkin who brings a wealth of experience and track
record of driving performance in the housing sector.
Yorkshire Housing is committed to improving the sustainability
of our portfolio and the wellbeing of our customers. Through our
community based tenancy support teams we have met our plan targets
early, specifically generating GBP10m of social value and helping
over a thousand people into work or training.
We continue to offer opportunities to apprentices directly (101
since the programme started) on top of partner programmes, and we
were highly commended in the national employer of the year awards
for our work on this scheme.
Since the year end, we have announced the development of 46 new
homes on a brownfield site in Halifax which will be developed by
energy and regeneration specialist, ENGIE. We have diversified our
form of delivery, using timber frames on two new sites (345 homes
in total). On average this non-traditional approach reduces build
times by a third and saves 0.8 tonnes of CO(2) for every cubic
metre of wood used.
Unaudited Financial Metrics
31 Mar 31 Mar
2019 2018
Statement of comprehensive income Actual Actual
----------------------------------------- ---------- --------------
Turnover from social housing lettings GBP85m GBP87m
Turnover GBP113m GBP101m
Operating surplus (including asset GBP35m GBP33m
sales) GBP18m GBP16m
Surplus after tax
----------------------------------------- ---------- --------------
31 Mar 31 Mar
2019 2018
Margins Actual Actual
----------------------------------------- ---------- --------------
Operating margin (1) on social housing
lettings (2) 29% 32%
Overall operating margin (3) (inc
asset sales) 31% 33%
Overall operating margin (3) (exc
asset sales) 29% 31%
Operating margin on operating sales
(4) 26% 21%
----------------------------------------- ---------- --------------
31 Mar 31 Mar
2019 2018
Key financial ratios Actual Actual
----------------------------------------- ---------- --------------
EBITDA MRI / Interest cover (5) 178% 156%
Gearing (6) 47% 45%
Social housing interest cover (7) 1.3 x 1.7 x
----------------------------------------- ---------- --------------
31 Mar
2019
Liquidity Actual
----------------------------------------- ---------- --------------
18 month liquidity requirement (8) GBP102m
Cash and undrawn facilities (9) GBP133m
Unencumbered stock 1,931 homes
----------------------------------------- --------------------------
Credit rating
----------------------------------------- ---------- --------------
Moody's A3 (stable)
Notes:
1 Operating surplus / turnover
2 General needs, supported housing, affordable rent and low cost home ownership tenures
3 Operating margin including asset sales includes all activity;
operating margin excluding assets removes gain or loss on disposal
of assets including shared ownership staircasing profits
4 Operating surplus on first tranche shared ownership and open
market sales / turnover from first tranche shared ownership and
open market sales
5 (Operating surplus + depreciation + amortisation - capitalised
major repairs) / net interest paid
6 Net debt / housing assets at historic cost
7 Operating surplus on social housing lettings / net interest paid
8 18 month cash flow requirement
9 Cash and undrawn facilities
This trading update contains certain forward looking statements
about the future outlook for YH. These have been prepared and
reviewed by YH only and are unaudited. Forward looking statements
inherently involve a number of uncertainties and assumptions.
Although the Directors believe that these statements are based upon
reasonable assumptions on the publication date, any such statements
should be treated with caution as future outlook may be influenced
by factors that could cause actual and audited outcomes and results
to be materially different. Additionally, the information in the
statement should not be construed as solicitation/recommendation to
invest in YH's bonds.
For further information, please contact:
Guy Millichamp, Director of Finance:
tel 0113 825 6050 guy.millichamp@yorkshirehousing.co.uk
https://www.yorkshirehousing.co.uk
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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