TIDM46QW
RNS Number : 9412T
Peabody Capital PLC
30 November 2021
Trading update for the 6 months to September 30, 2021
This is an unaudited, consolidated trading update for Peabody
for the six months ending 30 September 2021.
Trading highlights for the Group
6 months 6 months
to September to September
Highlights 2021 2020
Homes completed in the period 502 501
Homes started in the period 801 390
Turnover (GBPm) 346 299
Operating surplus (GBPm) 124 103
Operating margin 36% 34%
Surplus for the period (GBPm) 87 67
September
Highlights 2021 March 2021
Homes in management 67,732 67,331
-------------------------------- ---------------------- -----------------------
Drawn debt (GBPm) 2,963 2,911
Available facilities (GBPm) 1,116 1,278
Cash (GBPm) 110 127
Eamonn Hughes, CFO of Peabody, made the following comments on
the half-year results:
"This is a strong financial performance for the first half of
the year, with overall operating margin continuing to be in line
with pre-pandemic levels. We expect the trading environment to
become more difficult in the second half of the year as we absorb
increasing repairs and maintenance costs, but we have built a
strong base level of performance to date and expect full year
performance to be in line with budget for key metrics.
We are making good progress on our fire and building safety
programmes. By closely managing all our expenditure, we are
prioritising the safety of our residents and improving the quality
of our housing stock and continue to direct resources to building
safety spending, planned improvement works and responsive repairs
activity. This includes catching up on works we were unable to
undertake in 2020 due to Covid restrictions.
As expected, operating costs are higher than in the same period
last year. The increase in revenue is largely due to the volume of
completions of new build sales in the first half of the year. Rent
arrears, which are in line with expectations, are being carefully
managed and monitored.
Our balance sheet has strengthened over the period and we retain
strong liquidity, with GBP1.2 billion of cash and undrawn
facilities in place to fund our pipeline of new affordable homes.
We continue to have very low gearing compared to the sector whilst
our interest cover, including capitalised repairs, is healthy at
323%.
We have also continued to make significant progress in
development and place-making, having started work on over 800 new
homes in the last 6 months. We completed the first 130 new homes in
South Thamesmead and submitted planning applications to deliver
over 2,000 affordable homes at Dagenham and Holloway.
In the last six months Peabody has remained at the forefront of
ESG in the sector through publishing our first ESG report, a
refreshed sustainability strategy and completing two sustainable
linked loans."
Building safety
We have kept up with increased demand for responsive repairs as
customer confidence has returned following the periods of national
lockdown. Investment in our stock continues to be a priority
informed by stock condition data and is progressing well despite
some delivery challenges linked to supply of labour and materials.
We have continued to prioritise the safety of our residents by
proactively investigating and remediating our highest priority
buildings while also maintaining a 95% compliance rate for
completing all new Fire Risk Assessments within one month.
Progress of Development programme
Our development programme is making good progress. We carefully
manage risk through continuous evaluation of the pipeline and by
maintaining flexibility on the mix of tenures within schemes.
In May 2021 we completed our acquisition of the 45-acre land
site comprising the former Ford Stamping and Tool Operations site
in the London Borough of Barking and Dagenham. Our vision is to
build more than 3,000 new homes on this site over several years and
the planning process for this is underway. The acquisition cost was
largely funded through our strategic partnership with the Mayor of
London.
Our sales portfolio is under constant review. Trading has been
steady throughout the last six months, with buyers taking advantage
of the Stamp Duty holiday whilst available and margins at
consistent levels with those seen in the second half of 2020-21. At
30 September 2021 the value of unsold units was GBP42.9m (GBP48.9m
as at 31 March).
Reserved
Unsold new dwellings /
exchanged Available Total
3 - 6 months 30 53 83
Over 6 months 25 77 102
Ratings update
On 29 November Moody's reaffirmed our A3 (stable) rating, and we
have an A- (stable) rating from S&P Global. These ratings
reflect the continuing strength of the Peabody balance sheet, its
low level of gearing, strong liquidity and the robust business
plan. We remain committed to holding a credit rating within the A
band.
Peabody continues to have a G1 (Governance) and V2 (Viability)
rating from the Regulator of Social Housing.
ESG section
Peabody remains at the forefront of promoting ESG credentials
for the sector. In September as an early adopter we published our
first detailed report under the Sustainable Reporting Standard for
Social Housing (
https://www.peabody.org.uk/media/15382/esg-report-2021-final.pdf )
as well as our Sustainability Strategy
(https://www.peabody.org.uk/about-us/our-performance/sustainability).
We remain committed to improving both our reporting and our
performance under a number of ESG related criteria. We also
completed two sustainability linked loans in the last six months,
which support our continuing delivery of new affordable homes, with
metrics linked to improving the energy efficiency of homes,
increasing electric vehicle charging points on Peabody estates and
a fellowship scheme to support grassroots organisations in our
communities.
Merger with Catalyst Housing
On 30 July 2021 Peabody and Catalyst Housing announced proposals
to join together to create a better, locally focused organisation
which would deliver significant benefits for residents, providing
the scope to invest and innovate more in services, homes,
communities, technology and people. The process to complete this by
1 April 2022, with Catalyst Housing joining Peabody Group as a
subsidiary, remains on track.
Brendan Sarsfield stepped down as Chief Executive on 30
September 2021. Ian McDermott took over as Chief Executive on
secondment from Catalyst Housing with effect from 1 October 2021
and will assume the full permanent role on 1 April 2022.
Statement of Comprehensive Income
6 months 6 months
to September to September
2021 2020
GBPm GBPm
Turnover - from core operations 254 248
Turnover - from sales 92 51
Turnover 346 299
Operating costs 186 174
Cost of sales 80 41
Surplus on staircasing and disposal
of fixed assets 44 19
Operating surplus 124 103
Net interest costs 37 36
Taxation - -
Surplus for the period(3) 87 67
Operating margin 36% 34%
Sales margin % 13% 20%
EBITDA - MRI %(1) 323% 311%
Statement of Financial Position
September
2021 March 2021
GBPm GBPm
Housing properties 7,159 7,004
Other tangible fixed assets(3) 551 557
Other investments 134 141
Net current assets 236 143
Total assets less current liabilities 8,080 7,845
Capital and reserves 3,471 3,382
Loans > one year 2,729 2,678
Other long term liabilities 1,880 1,785
Reserves and long term liabilities 8,080 7,845
Gearing %(2) 36% 34%
1 - operating surplus excluding depreciation and amortisation,
less capitalised repairs / interest expense
2 - net debt / non-current assets
3 - revaluations of investment properties are
performed at year end only
Enquires
Please contact Anthony Marriott, Director of Treasury &
Corporate Finance at anthony.marriott@peabody.org.uk
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END
IR MZMZMNLLGMZM
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