Trading Statement

RHP Finance PLC

22 June 2023

 

RHP Group trading update for the year ending 31 March 2023

·    Richmond Housing Partnership Group (RHP) is today issuing its consolidated trading update for the year ended 31 March 2023.

·    These figures are unaudited and for information purposes only.

Highlights for the period ending 31 March 2023

·    RHP own and manage 11,142 homes

·    Turnover for the period was £67m (2022: £62m)

·    Social housing lettings turnover contributed 85% of total turnover (2022: 87%)

·    Operating surplus (including asset sales) for the period was £19m (2022: £16m)

·    Operating margin on social housing lettings was 28% (2022: 27%)

·    Overall operating margin (including asset sales) was 28% (2022: 26%)

·    Overall operating margin (excluding asset sales) was 25% (2022: 21%)

·    Net margin on shared ownership (first tranche) was 2% (2022: 37%)

·    Surplus after tax and pensions for the period was £14m (2022: £13m)

·    Asset gearing was 57% (2022: 58%)

·    Return on capital employed for the period was 3.7% (2022: 3.3%)

Commenting on the results, Corinna Bishopp, Executive Director of Finance, said:

We are pleased to publish our unaudited financial results for 22/23.

Despite difficult economic conditions and the significant impact of inflation and energy cost increases, our financial results show an improvement in performance compared to the prior year. In accordance with our strategy, our investment in our asset portfolio has increased to ensure we provide safe and secure homes for our customers, and we have invested in additional resource in order to improve our service. To deliver this within our financial constraints, we have adopted some careful financial controls to ensure we are prioritising our spend.

We note a particular ongoing challenge with our repairs service and corresponding customer satisfaction levels and are pleased to confirm our transition to a new repairs provider and new delivery model in June 2023 is going well. We are hopeful that 23/24 will deliver an improvement in service levels, faster turnaround of repairs and correspondingly customer satisfaction.

The Group's operating surplus was £19m (2022: £16m) and operating margin was 25% (2022: 21%). Continued development has ensured we continue to grow our turnover, and the first tranche sales of shared ownership properties has contributed £3.3m (2022: £2.3m) to our turnover and £0.1m (2022: £0.9m) to our overall surplus.

Our social housing cost per unit of £5,007 (2022: £4,803) has increased due to higher core operating spend and increased investment in our properties during the year.

The Group's total comprehensive income was £14.3m (2022: £12.8m) and RHP's subsidiary, Co-op Homes (South) Limited has contributed £0.6m (2022: £1.0m) to this overall surplus.

Our EBITDA-MRI margin at 32% (2022: 15%) demonstrates the additional investment made, but still illustrates strong core performance that can comfortably cover the level of investment required to keep our homes in good condition.

We anticipate later than normal publishing of our audited results due to audit delays, however expect to deliver within regulatory and legal requirements.

Unaudited Financial Metrics

Statement of comprehensive income	31 Mar 2023 Actual	31 Mar 2022 Actual
Turnover from social housing lettings	£57m	£55m
Turnover	£67m	£62m
Operating surplus (including asset sales)	£19m	£16m
Surplus after tax and pensions	£14m	£13m
Margins	31 Mar 2023 Actual	31 Mar 2022 Actual
Operating margin ₁ on social housing lettings ₂	28%	27%
Overall operating margin ₃ (inc asset sales)	28%	26%
Overall operating margin ₃ (exc asset sales)	25%	21%
Operating margin on shared ownership (first tranche) ₄	2%	37%
Key financial ratios		31 March 2023 Actual
EBITDA MRI Interest cover ₅		132%
Gearing ₆		57%
Liquidity		31 March 2023 Actual
24-month liquidity requirement ₈		£42m
Cash, short term investments and undrawn facilities ₉		£173m
Retained bonds10		£25m
Unencumbered stock (EUV-SH)		£127m
Credit rating
S&P June 2023 (affirmed)		A+ (negative)

Notes:

₁ Operating surplus / Turnover

₂ General Needs, Supported housing, Affordable rent and Low-cost home ownership tenures

₃ 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

₄ Operating surplus on first tranche shared ownership sales / Turnover from first tranche shared ownership sales

₅ (Operating surplus + Depreciation + Amortisation - Capitalised major repairs) / Net interest paid

₆ Net Debt / Housing assets at historic cost

₇ Net debt / Total units owned & managed

₈ 24-month cashflow requirement (before financing). Factors in cash generated from operating activities.

₉ Cash, deposits, undrawn loans and RCF

₁₀ Retained element of RHP Finance PLC 2048 bonds

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

[e-mail]

https://www.rhp.org.uk/rhpui/investors

 

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