46GV Karbon 3.375%

TIDM46GV

RNS Number : 5918I

Karbon Homes Limited

14 December 2020

 
 Karbon Homes Group 
 14th December 2020 
 
 Karbon Homes Group trading update for the period ending 
  30 September 2020 
 -- Karbon Homes Group (KHG) is today issuing its consolidated trading update 
  for the period ended 30 September 2020. 
 -- These figures are unaudited and for information 
  purposes only. 
 
 Highlights for the period ending 30 September 
  2020 
 -- KHG own and manage 26,546 homes 
 -- Turnover for the period was GBP67.9m (2019: 
  GBP66.1m) 
 -- Operating surplus (including asset sales) for the period 
  was GBP20.8m (2019: GBP20.3m) 
 -- Overall operating margin (including asset sales) 
  was 31% (2019: 31%) 
 -- Overall operating margin (excluding asset sales) 
  was 30% (2019: 30%) 
 -- Net margin on shared ownership (first tranche) 
  was 3 0% (2019: 20%) 
 -- The surplus before tax for the period was 
  GBP12m (2019: GBP12m) 
 -- Gearing as at 30 September 2020 was 48% 
  (2019: 44%) 
 -- Return on capital employed for the period 
  was 2% (2019: 2%) 
 
 
 Commenting on the results, Scott Martin, Executive Director of Resources, said: 
 "The past six months has seen an unprecedented situation across the UK as a result of the Covid-19 pandemic. During 
 this time, our focus has been 
 on 
 the health and wellbeing of our colleagues, customers and those living in our communities. 
 
 As a landlord, we recognised the vital role we could play in offering local support during this very challenging 
 time. We immediately identified 
 our 
 most vulnerable customers (over 7,000) and contacted them to see if they needed any assistance from us. 
 
 We are also incredibly proud to have increased the volunteers for our Silver Talk service that provides a regular 
 weekly call to those customers 
 who are experiencing isolation or loneliness. There are now 360 customers receiving a weekly call and we're receiving 
 really positive feedback. 
 
 We know many customers have been struggling financially during this period and our Money Matters Team has offered a 
 range of money advice 
 to 3,245 customers in this six-month period to 30(th) Sept 2020. This builds on our performance during the year to 
 31(st) March 2020, where we provided 
 advice to 
 over 5,300 tenants, helping them to access an additional GBP6.5m of income. 
 Providing financial support locally was also important and so we invested over GBP120k to 104 charities and community 
 groups who were delivering 
 vital support and services during the pandemic. 
 
 Towards the end of March, we prioritised all emergency and essential repairs and maintenance activity with 11,652 
 emergency and out of hours repairs 
 completed in this six-month period. As restrictions eased, we carefully reintroduced more services with detailed risk 
 assessments and Covid-safe 
 measures in place to protect both colleagues and customers. We have continued to keep customers updated with any 
 changes to our services with 
 regular communication and our Customer Relationship Team have been there to help throughout. 
 We believe our response to Covid-19 has helped us achieve high levels of customer satisfaction and we achieved a Net 
 Promoter Score of +52 
 at the end of September 2020. 
 
 Despite the heavy restrictions across the UK, we are still making very good progress on our plan to build high 
 quality affordable housing, and have 
 delivered 139 new homes in the first six months of this financial year. 
 We are expecting to be able to deliver on our business plan aim of 475 new homes this year as our building and 
 construction partners re-group 
 in the second half of the year. 
 
 We were also very pleased to have issued our GBP100m retained bonds in June 2020, thus providing Karbon with 
 excellent liquidity to support our strategy 
 in the years ahead. 
 We, therefore, look forward to continuing successes in delivering new homes whilst continuing to drive operating 
 efficiencies and strong financial 
 results. 
 
 Finally, we are pleased to update that, as of 9th Dec 2020, both boards of Karbon Homes Limited and Byker Community 
 Trust have agreed to progress 
 towards formal partnership arrangements, building on the existing strong relationship between the two organisations. 
 This process is due to complete 
 in readiness for the beginning of the next financial year 2021/22. 
 
 Our unaudited 6 monthly Group results and other key indicators are displayed below 
 
 
 Unaudited Financial Metrics 
                                                  30-Sep    30-Sep 
                                                    2020      2019 
 
                                                  Actual    Actual 
                                                 GBP'000   GBP'000 
 Statement of Comprehensive Income 
 
 Turnover                                         67,865    66,088 
 
 Operating Surplus (including asset sales)        20,809    20,339 
 Surplus before tax                               11,742    11,959 
 
 Margins 
 
 Overall operating margin (incl. asset sales) 
  (Note 1)                                           31%       31% 
 Overall operating margin (excl. asset sales) 
  (Note 2)                                           30%       30% 
 Operating margin on shared ownership (first 
  tranche) (Note 3)                                  30%       20% 
 
 Key Financial Ratios 
 
 Interest cover (EBITDA MRI) (Note 4)               281%      296% 
 Gearing (Note 5)                                    48%       44% 
 Return on Capital Employed (ROCE) (Note 6)           2%        2% 
 
 
                                                                                        30-Sep 
                                                                                          2020 
 
 Liquidity 
 24-month liquidity requirement (GBP'000) (Note 
  7)                                                                                    98,508 
 Cash and undrawn facilities (GBP'000) (Note 
  8)                                                                                   285,643 
 Unencumbered stock (no of properties)                                                   4,497 
 Value of unencumbered stock (Avg of EUV and 
  MV, GBP'000) (Note 9)                                                                160,443 
 Loan security excesses (Avg of EUV and MV, 
  GBP'000) (Note 10)                                                                   123,702 
 
 Credit Rating 
 
                                                                          A (stable): 27th May 
 S & P                                                                     2020 
 
 Notes: 
 
 1) Operating margin including asset sales 
  includes all activity 
 2) Operating margin excluding assets sales removes gain 
  or loss on disposal of assets 
 3) Operating surplus on First tranche shared ownership sales / Turnover from 
  first tranche shared ownership sales 
 4) (Operating surplus + Depreciation + Amortisation - Capitalised major 
  repairs) / Net interest paid 
 5) Group Net Debt / Group Housing assets at historic cost less depreciation (RSH VFM Gearing 
  definition), 
  differs to Karbon's banking gearing calculation 
     which is defined as Net Debt/Housing assets at historic cost, and informs 
      our internal Golden Rules 
 6) Operating Surplus (incl. asset sales) / Total 
  Assets less current liabilities 
 7) 24-month cashflow requirements 
 8) Cash and undrawn RCF (Revolving Credit 
  Facilities) 
 9) Value of stock not held by a lender or security trustee, 
  at average GBP35k per unit 
 10) Value of excess security held with current lenders 
  or Prudential Trustees 
 
 
 
 This trading update contains certain forward-looking statements about the future outlook for Karbon Homes Group. 
 These have been prepared and 
 reviewed by Karbon 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 this statement should not be construed as solicitation/recommendation to 
 invest in Karbon's bonds 
 
 
 
 For further information, please contact: 
 Andrew Thompson, Assistant Director: Treasury 
 07917 642957 
 
 https://www.karbonhomes.co.uk/corporate/ 
 END 
 

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