Optivo Finance PLC

Trading update for period ending 31 March 2018

RNS Number : 3496P
Optivo Finance PLC
25 May 2018
 

OPTIVO TRADING UPDATE

On 14 February 2018 AmicusHorizon Finance Plc changed its name to Optivo Finance Plc. Both Optivo Finance Plc and Optivo had their A2 credit rating affirmed by Moody's on 1 March 2018.

This is an unaudited trading update for Optivo for the twelve months ended 31 March 2018 ("2017/18").

Highlights

Comparators in this trading update are the unaudited proforma results for Optivo for the previous financial year ("2016/17"). Optivo was formed from the amalgamation of AmicusHorizon and Viridian Housing on 22 May 2017.

Full year 2016/17 results included one-off acquisition gains of £21m as turnover arising from accepting a transfer of engagements from Southwark and London Diocesan HA and the St Martin's Estate (Lambeth) stock transfer.

·     Turnover £321m (2016/17 £347m)

·     Operating surplus £119m (2016/17 £150m)

·     Surplus before tax and hedge reserve write off £99m (2016/17 £109m)

·     Deficit before tax and after hedge reserve write off £69m (2016/17 Surplus £109m)

·     Operating margin 29% (2016/17 35%)

·     Net interest costs £42m (2016/17 £43m)

Loan restructures in May 2017 caused accounting hedging relationships with standalone swaps to be broken though the economic hedging relationships remain. In accordance with FRS102, because the hedging relationship ceases, the related cashflow hedge reserve is written back through the Statement of Comprehensive Income and therefore in to the Income & Expenditure Reserve during 2017/18.

Operations

At the end of March 2018 our strategic KPI performance were as follows:

·     A net promoter score of 66 for resident satisfaction (target: 50) - 2018/19 target 56

·     We helped 1,045 people into jobs and training (target: 870) - 2018/19 target 870

·     42.9% of residents are using our services online (target: 40%) - 2018/19 target 45%

·     84% of staff feel proud to work for Optivo (target: 70%) - 2018/19 target 75%

·     75% of staff say Optivo is a great employer (target: 70%) - 2018/19 target 75%.

For our core business of General Needs, Supported Housing and Housing for Older People operational income KPIs for Optivo for the year to date were as follows:

 

March 2018

September 2017

Total rent arrears of annual rent debit

£8.2m, 3.96%

£7.9m, 3.52%

Rent arrears of 0 to 4 weeks

£3.5m, 1.68%

£3.1m, 1.36%

Rent arrears of 5 to 6 weeks

£0.7m, 0.32%

£0.8m, 0.36%

Rent arrears of 7 to 12 weeks

£1.5m, 0.71%

£1.6m, 1.73%

Rent arrears of 13 weeks or more

£2.6m, 1.25%

£2.4m, 1.07%

 

In the financial year to 31 March 2018 the average time to re-let vacant properties, excluding voids for major works, was 26.5 days. At 30 September 2017 the average for the financial year to date was 26 days

Out-turn for the financial year ended March 2018 was in line with expectations and in accordance with Optivo's financial plan.

Investment and Sales

At 31 March we were in contract to deliver 2,054 homes (September 2017: 1,819) across 51 sites, with remaining capital commitments on these sites of £363m (September 2017: £321m). We had 65 unsold Shared Ownership 1st tranche properties (September 2017: 39), and no open market sale unsold units (September 2017: 3).

Liquidity

Optivo issued a £250m 30 year secured bond in March at a coupon of 3.283% (£100m was retained for future sale). At the end of the year we had available undrawn facilities of £606m (March 2017: £191m) and £82m (March 2017: £87.5m) unencumbered cash and deposits available. Our outstanding net debt balance was £1,007m (March 2017: £920m).

Appointments

We have made two new appointments to our Executive Team.

·     Suzie Woodhams joined as Executive Director People and Communications in January 2018, replacing Kate Dodsworth

·     Kerry Kyriacou joined as Executive Director Development and Sales in May 2018, replacing Mark Miles-Lea.

Unaudited Financial Results

Unaudited financial results for year to 31 March 2018 are below, together with comparatives for the full year to 31 March 2017.  

Statement of Consolidated Income

 

2017/18

(£m)

2016/17
(£m)

Turnover

321

347

Cost of Sales

(22)

(23)

Operating Expenditure

(204)

(203)

Surplus on disposal of fixed assets

24

29

Operating Surplus

119

150

Surplus on commercial property disposals

-

1

Interest receivable

1

1

Interest and financing costs

(42)

(44)

Fair value movements

22

1

Surplus before taxation

99

109

Hedge reserve write off

(168)

-

Deficit before taxation

(69)

109


Notes:

·     The full year figures exclude movements in the fair value of investment properties and pension adjustments. These items are being reviewed as part of year end accounting processes

·     Fair value movements represent the movement on Optivo's unhedged instruments.

Next Update

We will publish the audited financial statements in July 2018.  The re-valuation of property security used as asset cover on the 2043 public bond will be uploaded to our website in June 2018.

Notes

Optivo is a charitable organisation that was formed on 22 May 2017 when AmicusHorizon Ltd amalgamated with Viridian Housing. It currently manages 44,000 affordable homes across London, the South East and the Midlands with a target to start building 1,500 new homes by 2020-21.

 

Further information on Optivo is available on our website https://www.optivo.org.uk/about-us/investors.aspx 

 

Contact: Tim Luckhurst, Head of Treasury on 020 8726 8713 or [email protected] 

 

DISCLAIMER

This update contains certain "forward-looking" statements reflecting, among other things, our current views on markets, activities and prospects. Actual outcomes may differ materially. Such statements are a correct reflection of our views only on the publication date and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Financial results quoted are unaudited. No reliance should be placed on the information contained within this update. We do not undertake to update or revise such public statements as our expectations change in response to events. This update is neither recommendation nor advice. This is not an offer or solicitation to buy or sell any securities. 


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