TIDM62ZW
RNS Number : 1480C
RHP Finance PLC
16 June 2021
RHP Group (including RHP Finance PLC) trading update for the
year ending 31 March 2021
-- Richmond Housing Partnership Group (RHP) is today issuing its
consolidated trading update for the year ended 31 March 2021.
-- These figures are unaudited and for information purposes only.
Highlights for the period ending 31 March 2021
-- RHP own and manage 10,821 homes
-- Turnover for the period was GBP64m (2020: GBP58m)
-- Social housing lettings turnover contributed 84% of total turnover (2020: 89%)
-- Operating surplus (including asset sales) for the period was GBP20m (2020: GBP22m)
-- Operating margin on social housing lettings was 37% (2020: 37%)
-- Overall operating margin (including asset sales) was 31% (2020: 39%)
-- Overall operating margin (excluding asset sales) was 33% (2020: 34%)
-- Net margin on shared ownership (first tranche) was 7% (2020: 40%)
-- The surplus after tax and pensions for the period was GBP7m (2020: GBP7m*)
-- Asset gearing as at 31 March 2020 was 58% (2020: 59%)
-- Return on capital employed for the period was 4.1% (2020: 5.5%)
"*" - During the year ended 31 March 2020, we repaid the full
outstanding GBP74m loan with Dexia Credit, which had various
tranches with rates ranging from 2.49% to 6.18%. This incurred
break costs of GBP11m.
Commenting on the results, Corinna Bishopp, Executive Director
of Finance, said:
Despite the truly unique circumstances that were felt globally
throughout the last year, we delivered a strong and consistent
financial performance in 2020/21.
Our strong, clear and consistent strategy as an organisation
over many years, including ensuring focus on maintaining our
financial strength has enabled us to be confident through the year
that we could withstand the economic shocks of the current
environment.
Despite 4 years of rent reductions, we maintain a sector leading
operating margin performance as a result of a keen focus on
efficiency and value for money.
We focused this year on ensuring we looked after 3 things; our
customers, our employees and our finances. To support our
customers, we increased resource to help over 500 in their move to
Universal Credit and provided those in real difficulties with
access to a hardship fund. We maintained our IIP Platinum
accreditation and believe our culture as an organisation remains as
strong as before the pandemic.
We delivered good financial performance despite slower shared
ownership sales and additional spend on cleaning activities to keep
our customers safe. Our rent collection levels remained strong at
99.9% and slower spend on development and void activity delivered a
lower operating cost per unit than budget and only a small
deterioration in operating margin performance.
As a result of the ongoing leaseholder and cladding crisis, the
economic impact on our commercial tenants and the financial failure
of one developer, we have taken the opportunity to review the
carrying value of our development and commercial assets. We have
recognised a GBP1.3m impairment and a GBP0.7m fair value adjustment
in the year as a result of this prudent approach and are pleased to
confirm this does not affect our covenant performance
adversely.
We completed the second phase of our three phase roll out of our
sprinkler installation programme and have commenced work on
replacing the cladding on our one affected block (having already
installed sprinklers in that property). We have commenced our
extensive work to deliver an improvement in the environmental
sustainability of our customer's homes and continue our roll out of
our SMART homes programme.
We continue to hold a governance and viability rating of G1/V1
from the Regulator of Social Housing.
We consider ourselves fortunate that our legacy focus on
financial strength and stability has allowed us to adapt our
organisation to a more volatile environment in which profitability
and cash flow are under simultaneous pressure and we are confident
of our ongoing financial and business resilience in the face of the
current uncertainties.
Unaudited Financial Metrics
Statement of comprehensive income 31 Mar 2021 31 Mar 2020
Actual Actual
--------------------------------------------- ------------ ------------
Turnover from social housing lettings GBP54m GBP52m
Turnover GBP64m GBP58m
Operating surplus (including asset sales) GBP20m GBP22m
Surplus after tax and pensions GBP7m GBP7m
--------------------------------------------- ------------ ------------
Margins 31 Mar 2021 31 Mar 2020
Actual Actual
--------------------------------------------- ------------ ------------
Operating margin on social housing lettings 37% 37%
Overall operating margin (inc asset sales) 31% 39%
Overall operating margin (exc asset sales) 33% 34%
Operating margin on shared ownership (first
tranche) 7% 40%
Key financial ratios 31 March
2021
Actual
--------------------------------------------- ------------ ------------
EBITDA MRI / Interest cover 239%
Gearing 58%
Liquidity 31 March
2021
Actual
--------------------------------------------- ------------ ------------
24-month liquidity requirement GBP45m
Cash and undrawn facilities GBP210m
Unencumbered stock (EUV-SH) GBP61m
Credit rating
--------------------------------------------- ------------ ------------
S&P A+ (stable)
Notes:
Operating surplus / Turnover
General Needs, Supported housing, Affordable rent and Low-cost
home ownership tenures
Operating margin including asset sales includes all activity;
operating margin excluding assets removes gain or loss on disposal
of assets including first tranche shared ownership sales
Operating surplus on first tranche shared ownership sales /
Turnover from first tranche shared ownership sales
(Operating surplus + Depreciation + Amortisation - Capitalised
major repairs) / Net interest paid
Net Debt / Housing assets at historic cost
Net debt / Total units owned & managed
24-month cashflow requirement (before financing)
Cash and undrawn RCF
This trading update contains certain forward-looking statements
about the future outlook for RHP Group. These have been prepared
and reviewed by RHP Group 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 the statement should not be construed as
solicitation/recommendation to invest in RHP's bonds.
For further information, please contact:
Corinna Bishopp, Executive Director of Finance
Investor.relations@rhp.org.uk
https://www.rhp.org.uk/rhpui/investors
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END
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