TIDMBB26

RNS Number : 6579M

Guinness Partnership (The) Limited

23 September 2021

Publication of The Guinness Partnership Ltd.'s Financial Statements for the year ended 31st March 2021

Financial Statements are now available online: https://www.guinnesspartnership.com/about-us/company-publications/

 
 The Guinness Partnership                     2021        2020 
 Financial Metrics 
                                        ----------  ---------- 
 Turnover                                GBP368.2m   GBP359.4m 
                                        ----------  ---------- 
 Surplus after tax                        GBP69.9m    GBP38.2m 
                                        ----------  ---------- 
 Operating Surplus                       GBP167.4m    GBP98.2m 
                                        ----------  ---------- 
 Operating margin                           45.50%      27.30% 
                                        ----------  ---------- 
 Operating margin (excluding property 
  sales)                                    19.90%      24.30% 
                                        ----------  ---------- 
 Operating margin - social housing 
  lettings                                  24.80%      29.80% 
                                        ----------  ---------- 
 EBITDA-MRI interest cover (inclusive 
  of early redemption penalty)              91.20%     130.80% 
                                        ----------  ---------- 
 Interest cover                               231%        263% 
                                        ----------  ---------- 
 Other Metrics 
                                        ----------  ---------- 
 Homes managed                              64,236      64,039 
                                        ----------  ---------- 
 Homes under construction                    2,593       1,070 
                                        ----------  ---------- 
 New homes completed                           506         199 
                                        ----------  ----------

The Group generated an overall surplus of GBP69.9m for the year ended 31 March 2021, an increase of GBP31.7m compared to the prior year. This year-on-year increase in surplus reflects the GBP94m accounting surplus generated through the stock swap with Paradigm Housing Group which saw Guinness take ownership of 1,157 properties and transfer 1,386 properties to Paradigm, this accounting surplus has been partially offset by a one-off GBP35.4m charge on the early redemption of our high coupon 2025 bond.

Underlying operating performance remains strong with the Group achieving an operating margin of 45.5% (2020: 27.3%). This operating margin includes the surpluses on the sale of housing properties as required under FRS102 and the SORP. If the surpluses from the sale of housing properties are excluded an operating margin of 19.9% was delivered by the Group (2020: 24.3%).

Our core business remains social housing lettings with 90% of the Group's turnover being generated from this activity. Our social housing lettings business delivered an operating surplus of GBP82.1m (2020: GBP97.1m) for the year. An operating margin of 24.8% (2020: 29.8%) was generated from our social housing letting activities during the year. The reduction in operating margin reflects the impact on performance of a number of necessary building safety and stock investment decisions combined with the increased cost of delivering maintenance services in-house during Covid-19 lockdowns and working restrictions.

Net interest charges for the year totalled GBP99.7m (2020: GBP58.7m), with the year-on-year increase reflecting a GBP35.4m charge on the redemption of our 2025 bond which took place on 31 March 2021. The early redemption of this high coupon bond will provide additional capacity to Guinness over the next 4 years.

We delivered a 91.2% (2020: 130.8%) EBITDA-MRI margin as a percentage of interest payable. This ratio is artificially low as the basis of calculation includes the bond redemption penalty noted above but excludes the accounting surpluses generated from property sales. If the bond redemption penalty is excluded then an underlying EBITDA-MRI of 136.2% is reported which demonstrates that the core business continues to perform strongly and cover the investment needed to keep our homes in good condition.

All information has been extracted from the 2020/21 year-end financial statements.

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