Sovereign Network Group's Quarterly Performance Update covering
unaudited Q1 results for the financial year 2024/25
Sovereign Housing Association trading as Sovereign Network
Group (SNG)
Sovereign Network Group is the sixth
largest housing association in the UK in terms of unit size with
over 84,000 homes, with a core geographical focus in the South of
England and London. SNG rose up to be the
second largest housing association builder in 2023/24, with an
ambition to develop 25,000 homes over the next 10 years.
2023/24 Audited Full year overview
SNG published its audit annual
accounts and annual report on
31st
July 2024. The group increased
its operating surplus to £171.5m (2022/23: £163.1m), and its
operating margin to 21.1% (2022/23: 19.5%). Turnover also saw an
increase to £707.8m (2022/23: £691.3). As a merged organisation,
SNG has a robust, diversified and resilient balance sheet with net
assets totalling £2.7bn as at 31 March 2024, and fixed assets
totalling £7.3bn (2022/23: £7.0bn), reflecting recent investment in
new and existing homes.
Matching its ambition to deliver, SNG increased
reinvestment to 7.8% (2023: 5.6%). This was reflected in higher
operational costs of £466.6m (2022/23: £432.5). Increased capital
investment in maintenance as well as improved data analytics and
customer service software, are expected to reduce future costs
while delivering better services to customers.
Quarter 1 Performance Update - period to 30 June
2024
Sovereign Network Group's unaudited underlying
financial performance in Q1 FY25 shows growth in turnover against
the previous quarter. Core lettings turnover also increased
year on year owing to additional income from new homes and the rent
uplift. However Q1 FY25 retained surplus declined slightly compared
to Q1 FY24 as a result of an increase in financing
costs.
The development programme produced 317 handovers
in the quarter. Q1 FY25 sales are slightly ahead of the
overall run rate for the year with 182 sales, which is an increase
from the 176 sales in Q4 FY24, and produces a marginal favourable
variance on surplus on sales against budget.
|
£'m
|
FY25 Q1
|
FY24 Q4
|
Variance
|
Variance
|
FY24 Q1
|
Variance
|
Variance
|
|
|
Qtr Actuals
|
Qtr Actuals
|
£m
|
%
|
Qtr Actuals
|
£m
|
%
|
|
Turnover
|
187.8
|
180.8
|
7
|
3.90%
|
166.6
|
21.1
|
12.70%
|
|
Operating Surplus
|
44.8
|
27.4
|
17.3
|
63.20%
|
42.7
|
2
|
4.70%
|
|
Retained Surplus
|
21.8
|
4.7
|
17.1
|
362.50%
|
22.4
|
-0.5
|
-2.40%
|
Treasury
As at Q1 FY25, SNG had total long-term
facilities of £4,543 million. £3,765 million of facilities were
drawn, with £778m of available liquidity facilities and cash and
cash equivalents of £55m.
There continues to be significant headroom
against Interest Cover and Gearing covenants across all SNG
facilities.
Credit
ratings
SNG has an A3 (Outlook: Stable) rating with
Moody's.
SNG has an A (Outlook: Negative) with S&P.
SNH has an A (Outlook: Negative) with
Fitch.
Customer Services
To broaden our understanding of
customer satisfaction by contact channel, SNG introduced feedback
capabilities on some of our non-voice channels, including our
online portal. Analysis of online responses showed that circa 9 in
10 customers were able to complete the task they set out to do
online. This led to a 4.7/5 satisfaction rating.
SNG launched a new contractor portal
as part of ongoing work to improve how we manage our repairs
contractors and their relationships with our customers.
Communities and
Sustainability
In Q1 FY25, SNG generated £50m of
social value through activity across Community Investment and the
wider organisation against a full year target of £100m. Since the
beginning of April, we've partnered with 160 community
organisations, enabled 182 young people to engage in youth social
action through our #iWill Fund, supported customers to achieve 53
jobs, access 619 training courses and provided 434 fuel poverty
interventions.
SNG continues to make good progress
on improving the thermal efficiency of existing core stock with an
overall average RdSAP score of 73.08%.
SNG also published its
Impact and Sustainability Report for
FY24.
Corporate Affairs
Prior to the general election being
called, we maintained our engagement with political stakeholders at
all levels. This included those from the then opposition, holding
senior level meetings with candidates who are now ministers.
Through the election, we worked with our sector bodies to maximise
the impact of sector-wide calls for support for housing, which were
focused on a long-term rent settlement, as well as planning and
land reform. At the Housing '24 conference, SNG arranged the
political breakfast event that was well attended, and Mark Washer
spoke alongside a panel including experts from the planning,
private development, and institutional funding sectors.
ENDS
For more information, please
contact:
Anup Dholakia,
Treasury Director, Sovereign Network Group
07920205992
James McLarin, Head of External
Affairs, Sovereign Network Group
07776616024
Disclaimer The information contained
herein (the "Trading Update") has been prepared by Sovereign
Housing Association Limited trading as Sovereign Network Group (the
"Parent") and its subsidiaries (the "Group"), including Sovereign
Advances Ltd, Sovereign Housing Capital PLC (the "Issuers") and is
for information purposes only.
The Trading Update should not be
construed as an offer or solicitation to buy or sell any securities
issued by the Parent, the Issuers or any other member of the Group,
or any interest in any such securities, and nothing herein should
be construed as a recommendation or advice to invest in any such
securities.
Statements in the Trading Update,
including those regarding possible or assumed future or other
performance of the Group as a whole or any member of it, industry
growth or other trend projections may constitute forward-looking
statements and as such involve risks and uncertainties that may
cause actual results, performance or developments to differ
materially from those expressed or implied by such forward-looking
statements. Accordingly, no assurance is given that such
forward-looking statements will prove to have been correct. They
speak only as at the date of the Trading Update and neither the
Parent nor any other member of the Group undertakes any obligation
to update or revise any forward-looking statements, whether as a
result of new information, future developments, occurrence of
unanticipated events or otherwise.
None of the Parent, any member of
the Group or anyone else is under any obligation to update or keep
current the information contained in the Trading Update. The
information in the Trading Update is subject to verification, does
not purport to be comprehensive, is provided as at the date of the
Trading Update and is subject to change without notice.
No reliance should be placed on the
information or any projections, targets, estimates or forecasts and
nothing in the Trading Update is or should be relied on as a
promise or representation as to the future. No statement in the
Trading Update is intended to be an estimate or forecast. No
representation or warranty, express or implied, is given by or on
behalf of the Parent, any other member of the Group or any of their
respective directors, officers, employees, advisers, agents or any
other persons as to the accuracy or validity of the information or
opinions contained in the Trading Update (and whether any
information has been omitted from the Trading Update). The Trading
Update does not constitute legal, tax, accounting or investment
advice.
www.sng.org.uk/working-with-us/investors
Note: Figures quoted in the update
are based on unaudited management accounts which are subject to
review and further adjustments, for example in the areas of
pensions, investment property valuation and taxation.
