Unaudited trading update for FYE 31 March 2024

Notting Hill Genesis

28 June 2024

 

Notting Hill Genesis unaudited trading update for financial year ending 31 March 2024

28 June 2024 London - Notting Hill Genesis, one of London's largest not-for-profit housing associations, is today providing a trading update ahead of the publication of its audited 2023/24 annual report and financial statements in September.

We have made good strategic progress over the past financial year and, despite the challenges of inflation and repair costs, performance in the core housing association business is commensurate with the prior year. However, and as we set out in the trading update in April, we identified some significant one-off items which have materially impacted the overall surplus for the year.

These items relate substantively to recognition of building safety liabilities and asset impairments totalling £110m as well as £12m of non-recurring operational items. In addition, timing of our development programme meant that sales were £13m lower than 2022/23. Taken collectively this has resulted in an annual deficit of £82m.

Strategic update

Our group board are committed to making significant improvements and upgrades to our homes, as set out in our Better Together strategy to improve our residents' lives through better connections, homes and places, which we published last summer. The strategy reflects resident feedback on what is important to them and is underpinned by a commitment to make a significant investment in our estate over the next 10 years.

We have made a good start, with our refurbishment and improvement programme and the transformation of our finance and operations functions, both supporting the future delivery of better quality homes and a far better experience for residents. We have also made a considerable investment in improving customer experience with a focus on better complaint handling, service charge management and repairs, in line with what our residents have told us matters most to them.

Increasing the supply of homes for Londoners, whatever their circumstances, is an important part of our mission. Over the past five years, we have made a meaningful contribution to new supply through the development of more than 5,000 new homes. We are also playing a significant role in two of London's largest regeneration schemes, the Aylesbury Estate in Southwark and Grahame Park in Colindale. But inflation and higher interest rates have altered the economics of development, particularly for not for profit organisations like Notting Hill Genesis. We have therefore concluded that continuing to develop new homes at the same rate would not be financially sustainable and would jeopardise our ability to make the much needed improvements to residents' homes. 

Our new homes focus going forward will be on our regeneration schemes and other projects to which we are already committed. That means we will still plan to deliver around 3,000 new homes over the next five years - an average of 600 a year. This decision also allows us to increase investment into our estate, which will rise from £500m over the next 10 years to £770m.

Our social purpose of providing affordable homes for Londoners has never been more important. It guides all our decisions and is enabled by our financial strength. Going forward it is critical that we maintain and build this resilience to ensure we have an organisation that can sustainably deliver the housing Londoners so desperately need.

Development and sales

The following table provides details of acquisitions, starts on site and completions in 2023/24 compared to 2022/23.

Figure 1: Development programme as at 31 March 2024

	Acquisitions		Starts		Completions
Tenure	2023/24	2022/23	2023/24	2022/23	2023/24	2022/23
Low-cost rental	400	336	263	353	446	217
Shared ownership	-	317	344	48	138	60
Market rent	50	-	229	-	99	18
Private sale	228	44	11	58	139	164
Total	678	697	847	459	822	459

We started the financial year with 33 unsold homes and took handover of an additional 329 homes (152 shared ownership and 177 private sale) during the year. As at 31 March 2024 only 50 homes were unsold.

Figure 2: Unsold homes as at 31 March 2024

Category	Shared ownership	Private sale	2023/24 Total	2022/23 Total
Unsold homes as at 1 April 2023	30	3	33	275
Homes completed for sale	138	139	277	60
Homes sold	(118)	(142)	(260)	(303)
Unsold homes as at 31 March 2024	50	0	50	32

Treasury update

The group has access to liquidity of £863.9m, comprising available loan facilities of £768.1m and free cash of £93.8m. The weighted average life of drawn debt is 12.4 years, carrying a weighted average cost of 4.28%.

Figure 3: Group debt position as at 31 March 2024

Entity	Facilities £m	Drawn £m	Undrawn £m
Notting Hill Genesis	3,405.9	2,837.8	568.1
Notting Hill Home Ownership Limited	458.4	258.4	200.0
Folio Treasury Limited	250.0	250.0	-
GenFinance II plc	250.0	250.0	-
Group	4,364.3	3,596.2	768.1

£31.6m of drawn loans are due for repayment within one year with 69.3% due to mature after five years.

Figure 4: Group drawn debt maturity profile

Financial years ending 31 March	Debt maturity £m	Debt maturity %
2025	31.6	0.9
2026	42.9	1.2
2027	130.3	3.6
2028	431.9	12.0
2029	468.5	13.0
2030-34	646.5	18.0
2035-44	1,036.5	28.8
After 2044	808.0	22.5
	3,596.2	100.0

93% of the group's interest payments net of hedging arrangements is fixed cost.

Figure 5: Group debt mix

Category	Range		Target	Actual
	Lower	Upper
Fixed	50%	105%	90%	93%
Floating	(5%)	40%	5%	5%
Inflation-linked	0%	20%	5%	2%

As at 31 March 2024, the group had 17,213 unencumbered assets with estimated security value of £3.4 billion to support medium term funding requirements.

Subsequent to financial year end, a further 1,244 homes were secured to the £2 billion secured note programme, increasing the security value to £1.1 billion.

Figure 6: Security charged

	Homes	Security value £m
Charged and allocated	37,091	7,519.7
Numerical apportionment security pool	3,434	757.8
Unencumbered	17,484	3,399.1

For further information, please contact:
Financial enquiries
Mark Smith chief financial officer	[e-mail]
Media enquiries
Sanctuary Counsel	[e-mail]

 

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