TIDM46QW
RNS Number : 6323G
Peabody Capital PLC
27 November 2020
Peabody Trust Trading Update for the period ending 30 September
2020
This is an unaudited, consolidated trading update for Peabody
for the six months ending 30 September 2020.
Trading Highlights for the Peabody Group
The results for the period are shown for the Peabody Group:
6 months 6 months
to September to September
2020 2019
Homes completed in the
period 501 447
Unit starts in the period 390 442
--------------------------- ------------------------ ------------------------
Turnover (GBPm) 299 318
Operating Surplus (GBPm) 103 105
Operating margin 34% 33%
--------------------------- ------------------------ ------------------------
Commenting on the results Eamonn Hughes, CFO, said:
"Despite the prevailing economic environment, Peabody continues
to deliver a resilient financial performance with an operating
margin that is broadly in line with the same period last year.
We have experienced an increase in rent arrears but this has
been managed closely and is within business planning assumptions. A
reduction in sales revenue compared to the same period last year is
due to the make-up of completions in the period, and sales remain
on target for the year. We achieved a sales margin of 20% and this
supports our investment in our social purpose. Through strong
partnerships we continue to prioritise social rented homes and
investment in our existing homes and neighbourhoods.
Reduced revenues are more than offset by lower operating costs,
which reflect the level of our asset management activities due to
the Pandemic. Operating costs and major investments are expected to
increase as our programme of post-lockdown catch-up on investment
continues.
Liquidity is strong, with GBP1.6 billion in available facilities
and cash to fund our pipeline of affordable homes whilst gearing
remains at a low level for the sector. Interest cover including
capitalised repairs (EBITDA-MRI) is also strong at 311%."
Covid-19
As set out in our statement from April this year, we implemented
our business continuity plans early in the pandemic and entered
these unprecedented times with a strong financial and liquidity
position.
We have nevertheless seen the impact on our organisation across
a number of areas including:
- Our arrears on current rents are higher than our usual levels,
increasing in line with applications for universal credit before
reducing over a period of weeks as people receive their
entitlements. Throughout this period our arrears have always
remained at manageable levels and currently sit just below 2% of
rent charged year-to-date. We do remain concerned that the
statutory 5 week wait for universal credit causes unnecessary
hardship for our residents.
- We have continued to sell new build properties, making use of
our existing virtual sales platform for new homes. Our development
sites were shut for a limited number of weeks but re-opened in a
covid-safe way and have remained open since early Summer.
- We continue to invest in creating great places, including in
Thamesmead which has enormous potential as a sustainable new town
for London and the South East, and on high quality developments
such as the award winning Fish Island joint venture in East
London.
- We have sourced significant levels of PPE for our employees
who require it, particularly those in our care & support
operations and other customer facing and estate based roles.
- We continue to focus on resident wellbeing, with dedicated
teams mobilised to support residents through this difficult time.
As part of supporting our residents in the 6 months to 30 September
we had made over 21,000 resident calls, and delivered thousands of
emergency food and medication packages from our community hubs. We
continue to align our efforts with local authorities, voluntary and
community organisations, and other partners to provide ongoing
support to our residents and their communities.
Fire Safety
Peabody puts resident safety first, prioritising fire safety
improvements and remedial measures in the property management
programme. We are taking a prioritised approach to our
investigations so that we address the highest risk buildings first,
making sure that our buildings meet both the requirements of the
new regulatory regime but also current government guidance. We are
a member of the post Hackitt 'early adopters' group.
Development Programme
We continue to progress with our development programme using a
prudent, risk-based approach through our land holdings across
London and the South East. Flexibility in the tenure mix allows a
balanced portfolio of development sites with a diversified risk
profile that can respond to market requirements
The value of completed and unsold homes at 30 September (GBP68m)
was broadly in line with 31 March (GBP62m). The number of dwellings
unsold after over 3 months as at 30 September 2020 for the group,
was as follows:
Reserved/
exchanged Available Total
3-6 months 14 1 15
Over 6 months 80 58 138
Liquidity
Peabody has continued to strengthen its funding and liquidity
position over the last 6 months, despite the impact of Covid with a
key focus on flexibility. As a result, we have been able to respond
to changes in our spending profile whilst managing interest costs
prudently. As at 30 September 2020 Peabody had GBP4.3 billion of
total funding to finance our delivery of affordable homes. GBP1.5
billion was available to draw plus available cash of GBP55m.
Credit and Regulatory ratings
On 24 September 2020, S&P Global confirmed Peabody's rating
at A stable. Peabody continues to hold an A3 stable rating with
Moody's. Both ratings reflect the group's strong balance sheet,
relatively low level of gearing and robust business plans.
Peabody remains G1/V2 compliant under the Regulator of Social
Housing's Governance and Viability assessments.
Sustainability Reporting Standard (ESG)
Peabody played a key role in the inception of the project to
develop standardised ESG reporting criteria for social housing
providers and has continued to support the project through to the
publication of the Sustainability Reporting Standard for Social
Housing which was published in November.
We are an early adopter of the Standard and remain committed to
improving our reporting and performance under the criteria,
particularly in respect of key areas on sustainability and
diversity.
Directorate Change
On 13 November we announced that the Chief Executive Brendan
Sarsfield would be stepping down in Summer 2021. The recruitment
process for his successor has begun.
Unaudited Financial Statements and key metrics for the six
months to September 2020
Statement of Comprehensive Income
6 months 6 months
to September to September
2020 2019
GBPm GBPm
Turnover - from core
operations 248 243
Turnover - from sales 51 75
--------------------------- ---------------------- -----------------------
Turnover 299 318
Operating costs & cost
of sales 215 233
Surplus on disposals
of fixed assets 19 20
--------------------------- ---------------------- -----------------------
Operating Surplus 103 105
Net interest costs 36 38
Taxation - -
--------------------------- ---------------------- -----------------------
Surplus for the period(1) 67 67
Operating margin 34% 33%
Sales margin % 20% 23%
EBITDA - MRI(2) 311% 234%
Statement of Financial Position
September March
2020 2020
GBPm GBPm
Housing Properties 6,977 6,739
Other tangible fixed
assets(1) 540 556
Other investments 72 65
Net current assets 305 423
----------------------------- ------------------------- ----------------------
Total assets less current
liabilities 7,894 7,783
Capital and reserves 3,370 3,303
Loans > one year 2,746 2,778
Other long term liabilities 1,778 1,702
----------------------------- ------------------------- ----------------------
Reserves and long term
liabilities 7,894 7,783
Gearing(3) 36% 36%
(1.) Revaluations of investment properties are performed at year
end only
(2.) Operating surplus excluding depreciation and amortisation,
less capitalised repairs / interest expense
(3.) Net debt / non-current assets
Disclaimer
The information set out above ("the Update") contains certain
forward-looking statements about the future outlook for Peabody
Trust and its subsidiaries (together "the Peabody Group").
Statements in the Update, including those regarding possible or
assumed future performance of the Peabody Group, or the sectors in
which Peabody operates, should be treated with caution, as although
based on reasonable assumptions, they 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. Further, the information is
provided as at the date of this Update and no obligation is
accepted to update the information, except as required by law or
regulation. The Update should not be construed as an offer or
solicitation to buy or sell any securities issued by Peabody
Capital PLC or Peabody Capital No.2 PLC, and nothing in this Update
should be construed as a recommendation or advice to invest in any
such securities
For more information, contact: Benjamin Blades, Head of External
Affairs, Peabody on 07875020950 or
Benjamin.blades@peabody.org.uk
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END
IR KZMZMGVNGGZM
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