Paradigm Housing Group Half Year Trading Statement

Paradigm Homes Charitable Housing

25 October 2024

 

PARADIGM HOUSING GROUP LIMITED

TRADING UPDATE

Six months ending 30 September 2024

The following trading update compares Paradigm Housing Group Limited's ("the Group") unaudited accounts for the six months ending 30 September 2024 with the unaudited equivalent position for the six months ending 30 September 2023.

Overview

·        The Group has seen an increase of 5.3% in operating surplus to £31.9m (30 September 2023: £30.3m).

·        Income from rents has increased due to the annual formula uplift of 7.7% along with rents from new homes.

·        Operating costs have increased to reflect inflation and new homes. The overall operating margin has increased from 40.7% to 41.4%.

·        77 shared ownership homes have been sold in the six months to 30 September 2024 (30 September 2023: 112 homes) generating a margin of 23.8% (30 September 2023: 25.4%).

·        Sales of existing homes and staircasing has increased resulting in a £2.1m surplus (30 September 2023: £1.9m).

·        The Group continues to invest, spending £24.5m in the first six months of the year investing in and maintaining our existing homes (30 September 2023: £20.5m) and £45.7m on completing new homes (30 September 2023: £57.4m).  160 new homes have been delivered (30 September 2023: 229) for rent or shared ownership.

Nicola Ewen, Chief Financial Officer said: "We continue to deliver our corporate plan objectives despite the challenging economic backdrop. Our operating margin of 41.4% reflects our financial strength.  Our rental income remains stable, and we continue to invest in our existing homes and new homes in our area of operation".

Statement of Comprehensive Income

£'m	Six months ending 30 September 2024	Six months ending 30 September 2023	Movement
Turnover - rent, service charge & other income	64.7	57.6	7.1
Turnover - 1st tranche sales	12.4	16.8	(4.4)
Total turnover	77.1	74.4	2.7
Operating costs	(38.1)	(33.6)	(4.5)
Cost of 1st tranche sales	(9.4)	(12.5)	3.1
Total operating costs	(47.5)	(46.1)	(1.4)
Surplus on disposal of fixed assets	2.1	1.9	0.2
Gains from jointly controlled operations	0.2	0.1	0.1
Operating surplus	31.9	30.3	1.6
Net interest payable	(17.6)	(15.8)	(1.8)
Movement in fair value of investments	(0.1)	(0.4)	0.3
Surplus to 30 September	14.2	14.1	0.1

Trading update

Turnover from rents and other income increased by 12.3% to £64.7m.

Turnover from 1st tranche property sales decreased from £16.8m to £12.4m as the number of homes sold decreased from 112 to 77 due to lower shared ownership practical completions during the six months ending 30 September 2024 compared to equivalent position for the six months ending 30 September 2023.

Operating costs have increased by 13.4% to £38.1m driven by inflation and increased activity. Our operating cost per property has increased by 3.4% to £4,370 (30 September 2023: £4,225)

The cost of 1st tranche sales decreased by 24.8% to £9.4m as a result of a reduction in the number of properties sold. Our overall margin on 1st tranche sales for the six month ending 30 September is 23.8% (30 September 2023: 25.3%)

The number of existing homes sold and tenants purchasing additional shares (staircasing) has increased resulting in a 10.5% increase in the surplus on sale of fixed assets from £1.9m to £2.1m.

Interest costs have increased by 11.4% to £17.6m as a result of an increase our debt to fund development following the issuance of a new bond in April 2024. 

Statement of Financial Position

£'m	As at 30 September 2024	As at 30 September 2023	Movement
Housing properties	1,660.3	1,562.1	98.2
Other assets	13.7	12.5	1.2
Investments	21.7	21.2	0.5
Net current assets	11.9	28.3	(16.4)
Total assets less current liabilities	1,707.6	1,624.1	83.5
Loans due in more than one year	949.1	882.1	67.0
Unamortised grant liability	42.7	42.3	0.4
Other long-term liabilities	8.9	12.0	(3.1)
Capital and reserves	706.9	687.7	19.2
Total Funding	1,707.6	1,624.1	83.5

Investment & Debt Analysis

Housing properties have increased by £98.2m to £1,660.3m as at 30 September 2024. This is due to the £92.4m spent on building new homes, £1.1m for stock acquisition and £16.4m of property improvements over the 12 month period, offset by depreciation and existing home disposals.

Group debt including loans due in less than one year at 30 September 2024 was £950.6m (30 September 2023: £881.4m). A £150m bond was issued in April 2024 with a resultant net repayment on our revolving credit facility of £122m in the six months to the end of September 2024. Undrawn facilities stand at £252.0m (30 September 2023: £100.0m).

We continue to build new homes with 160 homes across all tenures completed in the six months to 30 September 2024 (30 September 2023: 229).

Key performance statistics

	As at 30 September 2024	As at 30 September 2023
Surplus as % of turnover	18.4%	18.9%
Operating Margin (overall)	41.4%	40.7%
Operating Margin (excluding sales)	41.2%	41.7%
Rent loss % (voids as % of rent and service charge receivable)	0.69%	0.95%
Bad debt % (Bad debt charge as % of rent and service charge receivable)	0.75%	0.59%
Rent arrears (gross arrears as % of rent and service charges receivable)	2.99%	3.09%
Interest cover (operating surplus before interest payable, depreciation and amortisation as % of interest payable)	155.1%	162.3%
Gearing (total loans less cash as % of housing properties at cost)	56.4%	55.4%

For further information please contact:

Financial enquiries
Nicola Ewen, Chief Financial Officer	[e-mail]
Media enquiries
Anne Michael, Head of Communications	[e-mail]

 

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