TIDM71WG

RNS Number : 8966Q

Sanctuary Capital PLC

30 June 2022

Sanctuary publishes Annual Report and Financial Statements for 2021/22

30 June 2022

Key highlights

   --    Homes in management 105,509 (2021: 105,219) 
   --    Revenue GBP812.5m (2021: GBP765.4m) 
   --    Operating surplus GBP178.6m (2021: GBP170.1m) 
   --    Surplus before tax GBP58.6m (2021: GBP46.9m) 
   --    Underlying surplus GBP47.2m (2021: GBP39.0m) 
   --    Operating margin, excluding development and asset surpluses 22.2% (2021: 22.1%) 
   --    EBITDA GBP256.7m (2021: GBP248.7m) 
   --    EBITDA MRI interest cover 128.4% (2021: 134.2%)

Sanctuary is pleased to report a strong financial performance for the financial year 2021/22. The last 12 months have seen a period of growth and recovery as Covid restrictions eased. Performance metrics are on an improving trend, with many back to pre-pandemic high levels.

Group revenue has grown significantly to GBP812.5m, an increase of GBP47.1m (6.2%) from the previous year, reflecting revenue growth across all business areas. Sanctuary's social housing business has also remained strong in the face of the pandemic and has benefited from rental inflation, the development of new rental units, as well as a recent acquisition.

The results show a growth in overall Group operating surplus of GBP8.5m (5.0%) to GBP178.6m (2021: GBP170.1m). The growth in surplus will allow for a further increase of investment in homes to GBP100m this year.

Sanctuary's operating margin, excluding development and asset surpluses, is 22.2% (2021: 22.1%), demonstrating the Group's ability to maintain a sustainable margin in a challenging economic environment. This margin improvement was dampened by catch-up maintenance works following large periods of Covid restrictions in the prior year.

Surplus before tax of GBP58.6m is GBP11.7m (24.9%) higher than the prior year (2021: GBP46.9m), with underlying surplus for the year of GBP47.2m, which is GBP8.2m (21.0%) higher than the prior year (2021: GBP39.0m). These increases were driven by a combination of the improved operating results and a reduction in finance costs.

Strong operational metrics continue to underpin Sanctuary's financial performance. Rent arrears remained stable and low at 3.21% (2021: 3.16%) and while void losses increased to 1.9% (2021: 1.6%), they are on an improved trajectory, particularly in the last quarter.

Sanctuary's care homes and supported living schemes have continued to be resilient and flexible, with year-end occupancy levels being ahead of the prior year, despite staffing challenges. Occupancy of 90% in student accommodation reflects a strong recovery towards pre-pandemic levels.

EBITDA MRI interest cover remained high at 128.4% (2021: 134.2%), which reflects that the Group has been able to enhance reinvestment spend while maintaining solid cash interest cover.

The continued strength of Sanctuary's liquidity is highlighted by the closing cash balance for the year of GBP102.1m (2021: GBP494.7m) and undrawn facilities of GBP433.0m (2021: GBP365.0m), providing the Group with 35 months of committed financing versus committed expenditure.

The solid interest cover and strong balance sheet place the Group in a good position to deliver its primary business objective of investing in homes and services over the long term for the benefit of customers.

Whilst Sanctuary has a modest outright sale programme (representing 6.8% of total Group revenue), the Group remains committed to developing new homes of all tenures, with around 5,000 units on-site and in development at the year end. In September 2021 Homes England announced Sanctuary as one of its 31 new strategic partners, resulting in grant funding to deliver 2,000 affordable homes over the next five years.

Ed Lunt, Sanctuary's Chief Financial Officer, said: "Our strong operational performance coupled with the recovery in our surplus will enable us to pursue our strategic objectives, while having the continued capability to withstand external economic factors, including inflationary pressures."

- Ends -

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