TIDM17YE
RNS Number : 4944B
Platform HG Financing PLC
14 February 2022
14 February 2022
Platform HG Financing Plc
Platform Housing Group's Trading Statement for the quarter to December
2021
The following report provides a trading update for Platform
Housing Group (Platform), covering unaudited financial performance,
development and treasury activities.
Highlights
-- Strong turnover growth of 11.7% to GBP223.8m (Q3 20/21: GBP200.4m)
-- Strong shared ownership sales volumes and values
demonstrating robust housing market in areas of operation - year to
date sales of 457 (Q3 20/21: 272)
-- Impacts of Covid-19 and Brexit experienced in supply chains
for maintenance and development activities, affecting materials
costs, labour availability and completions
-- Operating surpluses reduced by 8.8% to GBP70.3m (Q3 20/21:
GBP77.1m) driven by maintenance expenditures, one-off depreciation
charges and higher void levels
-- Arrears performing well, little impact noted from the end of
Government support measures. Moving forward arrears expected to be
under pressure as customers are affected by rising energy costs
-- Full year projected to be below budget, with outlook for the
year to March 2023 affected by voids and maintenance pressures
coupled with the impact of national insurance and pensions cost
increases. This will be mitigated to some extent by rental
inflationary increases of over 4%
-- Development of a net zero carbon plan underway
-- A+ rating affirmed by S&P shortly after quarter end
-- Sale of GBP50m (2055) retained bonds achieving an all-in rate of 1.76%
At or for the nine months ended 31 2020 2021 Change
December
--------------------------------------- ---------- ---------- ---------
Turnover GBP200.4m GBP223.8m 11.7%
Operating surplus(1) GBP77.1m GBP70.3m -8.8%
New homes completed 642 971 51.2%
Investment in new and existing homes GBP155.9m GBP164.4m 5.5%
Share of turnover from social housing
lettings 84.43% 78.15% -6.28ppt
Social housing lettings margin(2) 44.72% 36.67% -8.05ppt
Current tenant arrears(3)(4) 3.12% 2.71% -0.41ppt
Gearing(2)(4) 42.8% 42.00% -0.8ppt
EBITDA-MRI interest cover(2)(4) 226% 196% -30ppt
---------------------------------------- ---------- ---------- ---------
Notes
(1) Surplus excluding gains on disposal of property, plant and equipment
(2) Regulator for Social Housing Value for Money metric; for more information go to https://www.gov.uk/government/publications/value-for-money-metrics-technical-note/value-for-money-metrics-technical-note-guidance-june-2020
(3) Current tenant arrears includes all general needs tenants
(this excludes shared ownership properties)
(4) Figures as at 31 December (as opposed to accumulated over the nine months to December)
Elizabeth Froude, Platform's CEO commented:
"It is my pleasure to share our third quarter results, which
show a strong core business still delivering on its strategic
objectives, despite what must be acknowledged as a difficult
trading environment.
Whilst our margins are lower than this time last year, this is
mostly as a result of two strategic changes, namely loan breakage
costs and a depreciation adjustment on review of asset holding
costs.
We are still carrying investment and repairs backlogs which
although reducing, will push programme spend forward into the
coming financial year.
The staff, materials and supply chain issues we encounter are
being seen across the sector, although we do now have mitigation
plans in place to move forward.
Void levels, which are directly affected by lockdown cycles, are
currently higher than we would like and we have refocussed
resources from planned programme works to accelerate the return to
letting of much needed housing.
Our Development and Sales activities remain strong and this is
reflected in our ongoing solid gearing and liquidity levels.
Year-end expectations are for a full financial year with similar
margins to current levels."
Financial review
Turnover
In the year to 31 December 2021 total turnover grew 11.7% to
GBP223.8m (Q3 20/21: GBP200.4m).
Social housing lettings turnover increased by 3.4% to GBP174.9m
(Q3 20/21: GBP169.2m) as a result of inflationary rental increases
and a year-on-year increase in social housing units.
Shared ownership first tranche sales continue to perform
strongly. Turnover from these sales was GBP12m in the quarter,
GBP4.9m higher than the prior year (Q3 20/21: GBP7.1m).
Turnover from social housing activities of GBP215.4m (Q3 20/21:
GBP192.9m) accounted for 96.2% (Q3 20/21: 96.3%) of Platform's
total turnover in the period.
Surpluses and margins
Operating surpluses excluding fixed assets sales decreased by
8.8% to GBP70.3m (Q3 20/21: GBP77.1m) and operating surpluses
including sales decreased by 5.3% to GBP76.7m (Q3 20/21: GBP81.0m).
Surpluses from social housing lettings decreased by 15.2% to
GBP64.1 (Q3 20/21: GBP75.6m).
Operating margins were 31.4% excluding fixed asset sales (Q3
20/21: 38.5%), 34.3% including sales (Q3 20/21: 40.4%) and 36.7%
from social housing lettings (Q3 20/21: 44.7%).
Operating surpluses and margins were adversely affected by
one-off depreciation charges, higher maintenance expenditures and
increased voids. Maintenance expenditures have been affected by
higher materials costs, labour availability and an element of catch
up to compensate for delayed programmes. The prior year was
characterised by subdued maintenance as activity was curtailed
during the first national lockdown, affecting the comparative
figures. Voids have been adversely affected by delays in repairs
caused by staff shortages. Operating margins have also been
affected by a larger proportion of turnover being generated from
shared ownership sales (that have relatively lower margins).
If one-off depreciation charges of GBP5.8m are adjusted for
surpluses movements are revised as below:
One-off Adjusted
Operating surpluses 2021 depreciation - 2021 2020 Movement Movement
GBP'm GBP'm GBP'm GBP'm GBP'm %
Excluding fixed asset
sales 70.3 5.8 76.1 77.1 -1.0 -1.3%
Including fixed asset
sales 76.7 5.8 82.5 81.0 1.5 1.9%
From social housing lettings 64.1 5.8 69.9 75.6 -5.7 -7.5%
Shared ownership sales surpluses were GBP7.8m, representing
10.2% of total operating surplus (Q3 20/21: 10.6%), with associated
margins of 19.7% (Q3 20/21: 17.2%).
Staircasing sales of shared ownership properties, where a
customer buys a further stake in their homes, had another strong
quarter with 40 sales completed (Q3 20/21: 26), earning a surplus
and margin of GBP1.6m and 48% (Q3 20/21: GBP0.8m / 40%).
The overall surplus after tax, which incorporates interest
costs, was GBP33.6m (Q3 20/21: GBP41.2m), driven by the items
outlined above in combination with one-off loan breakage costs
exceeding the equivalent prior year cost by GBP2.3m. When one-off
depreciation and loan breakage costs are adjusted for net surpluses
after tax are in line with the prior year.
Outlook
For the fourth quarter turnover is expected to grow in line with
new units coming into management, inflationary rental increases
(that occur later in the year for some properties) and further
sales activity. The economic environment is expected to be
challenging, with increased costs and supply chain issues set to
continue as the year progresses. Major works programmes are
expected to experience an element of catch up, which will impact
expenditures.
Development review
Developments have continued in line with projections in quarter
three, with 256 homes completions (31 December 2020: 248). Of
these, 39 (15%) were built for social rent, 117 (46%) for
affordable rent and 100 (39%) for shared ownership. At 31 December
2021, Platform owned a total of 46,968 homes (31 December 2020:
46,046).
Development expenditures were GBP62m in the quarter (31 December
2020: GBP51m). Expenditures included cGBP15m in relation to the
acquisition of land for a large development in Gloucestershire,
expected to deliver 272 units, the majority of which are for
affordable tenures.
There were 135 shared ownership sales in the quarter (Q3 20/21:
92), making a total for the year to date of 457 (Q3 20/21: 272).
Unsold shared ownership units were 124 (Q3 20/21: 209) of which 85
were reserved.
Outlook
Projected completions have been revised downwards due to timing,
with supply chain issues and planning delays holding up schemes in
the year to date. Completions of 1,200 to 1,300 homes are expected
for the year to March 2022. The size of the programme remains
consistent, with homes completions expected to recover in future
years.
Sales are expected to continue to perform strongly, with, high
levels of reservations off plan set to continue into the fourth
quarter.
Platform continues to look towards more land led housing
development sites to support a growing building programme. The
Group does not invest in speculative land and has no actual or
expected impairment in development sites.
Treasury review
Recent financing activity
The Group sold GBP50m retained bonds in December 2021. The bonds
were part of the 2055 GBP350m bonds issued in July 2020 and the
only outstanding retained in issue. At the point of sale a
favourable gilt allowed for an all-in rate of 1.76%.
Ratings activity
Platform is rated A+ (stable outlook) by both S&P and Fitch.
Shortly after the quarter end S&P re-affirmed the rating
(https://www.platformhg.com/our-ratings-).
Debt and liquidity
Net debt was GBP1,139.4m (Q3 20/21: GBP1,104.3m). Net debt
comprised nominal values of GBP881.9m in bond issues, GBP80.0m in
private placements and GBP494.7m in term loan and revolving credit
facilities, partially offset by GBP304.6m in cash and cash
equivalents and GBP12.6m in unamortised financing fees and other
accounting adjustments.
Platform's weighted average cost of finance was 3.28% (Q3 20/21:
3.40%), benefitting from the low all-in rates achieved on the two
capital markets transactions in September (GBP250m sustainability
bonds) and December (GBP50m retained bonds) 2021, in addition to
the repayment of a GBP33m legacy facility, which also enhanced the
flexibility and consistency of funding covenants.
Platform had sufficient liquidity as at 31 December 2021 (over
GBP825m including undrawn committed facilities and cash and cash
equivalents) to meet all its forecast needs until 2024, taking into
account projected operating cash flows, forecast investment in new
and existing properties and debt service and repayment costs.
Financial ratios
Platform monitors its performance against various financial
ratios, including Value for Money metrics reported to the Regulator
of Social Housing and ratios it is required to comply with under
its financing arrangements.
Gearing, measured as the ratio of net debt to the net book value
of housing properties, was 42% at December 2021 (December 2020:
42.8%). Gearing has reduced in the last year as development
expenditures have been largely funded through operating cash
surpluses, including strong levels of shared ownership and fixed
asset sales. Gearing was comfortably within Platform's target of
maintaining gearing below 50%.
EBITDA-MRI interest cover for the quarter to December 2021 was
196% (December 2020: 226%). The movement from the prior year is
largely driven by increases to maintenance costs due to high
inflation and a catch up in repairs. The ratio remains well above
Platform's guideline minimum (120%) and tightest financial covenant
in its banking arrangements.
Outlook
Gearing and EBITDA-MRI interest cover ratios are expected to
remain well within Platform's targets. Some upwards pressure in
gearing and downwards pressure to interest cover is expected as
Platform pushes ahead with its strategic development and
maintenance objectives.
For more information please contact:
Investor enquiries
Ben Colyer - +44 7918 160990 / +44 1684 579 566
investors@platformhg.com
Media enquiries
media@platformhg.com
Disclaimer
These materials have been prepared by Platform Housing solely
for use in publishing and presenting its results in respect of the
nine months ended 31 December 2021.
These materials do not constitute or form part of and should not
be construed as, an offer to sell or issue, or the solicitation of
an offer to buy or acquire securities of Platform Housing in any
jurisdiction or an inducement to enter into investment activity. No
part of these materials, nor the fact of their distribution, should
form the basis of, or be relied on or in connection with, any
contract or commitment or investment decision whatsoever. Neither
should the materials be construed as legal, tax, financial,
investment or accounting advice. This information presented herein
does not comprise a prospectus for the purposes of Regulation (EU)
2017/1129 as it forms part of domestic law by virtue of the
European Union (withdrawal) Act 2018 (the UK Prospectus regulation)
and/or Part VI of the Financial Services and Markets Act 2000.
These materials contain statements with respect to the financial
condition, results of operations, business and future prospects of
Platform Housing that are forward-looking statements. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by these forward-looking statements, including
many factors outside Platform Housing's control. Among other risks
and uncertainties, the material or principal factors which could
cause actual results to differ materially are: the general
economic, business, political and social conditions in the key
markets in which Platform Housing operates; the ability of Platform
Housing to manage regulatory and legal matters; the reliability of
Platform Housing's technological infrastructure or that of third
parties on which it relies; interruptions in Platform Housing's
supply chain and disruptions to its development activities;
Platform Housing's reputation; and the recruitment and retention of
key management. No representations are made as to the accuracy of
such forward looking statements, estimates or projections or with
respect to any other materials herein. Actual results may vary from
the projected results contained herein.
These materials contain certain information which has been
prepared in reliance on publicly available information (the "Public
Information"). Numerous assumptions may have been used in preparing
the Public Information, which may or may not be reflected herein.
Actual events may differ from those assumed and changes to any
assumptions may have a material impact on the position or results
shown by the Public Information. As such, no assurance can be given
as to the Public Information's accuracy, appropriateness or
completeness in any particular context, or as to whether the Public
Information and/or the assumptions upon which it is based reflect
present market conditions or future market performance. Platform
Housing does not make any representation or warranty as to the
accuracy or completeness of the Public Information.
These materials are believed to be in all material respects
accurate, although it has not been independently verified by
Platform and does not purport to be all-inclusive. The information
and opinions contained in these materials do not purport to be
comprehensive, speak only as of the date of this announcement and
are subject to change without notice. Except as required by any
applicable law or regulation, Platform Housing expressly disclaims
any obligation or undertaking to release publicly any updates or
revisions to any information contained herein to reflect any change
in its expectations with regard thereto or any change in events,
conditions or circumstances on which any such information is
based.
None of Platform Housing, its advisers nor any other person
shall have any liability whatsoever, to the fullest extent
permitted by law, for any loss arising from any use of the
materials or its contents or otherwise arising in connection with
the materials. No representations or warranty is given as to the
achievement or reasonableness of any projections, estimates,
prospects or returns contained in these materials or any other
information. Neither Platform nor any other person connected to it
shall be liable (whether in negligence or otherwise) for any
direct, indirect or consequential loss or damage suffered by any
person as a result of relying on any statement in or omission from
these materials or any other information and any such liability is
expressly disclaimed.
Any reference to "Platform" or "Platform Housing" means Platform
Housing Group Limited and its subsidiaries from time to time and
their respective directors, representatives or employees and/or any
persons connected with them.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTQFLFFLLLZBBZ
(END) Dow Jones Newswires
February 14, 2022 01:59 ET (06:59 GMT)
Plat Hg Fin 55 (LSE:17YE)
Historical Stock Chart
Von Nov 2024 bis Dez 2024
Plat Hg Fin 55 (LSE:17YE)
Historical Stock Chart
Von Dez 2023 bis Dez 2024
