Optivo Finance PLC

Optivo 2018-19 full year trading update

RNS Number : 0289Z
Optivo Finance PLC
14 May 2019
 

OPTIVO TRADING UPDATE

FULL YEAR 2018-19

 

This is Optivo's unaudited trading update for the twelve months ended 31 March 2019.

 

Highlights

 

Financial KPIs*

2018-19 (unaudited)

2017-18

Turnover

£314m

£317m

Operating surplus

£102m

£117m

Surplus before tax

£89m

£90m

Net interest costs

£41m

£42m

Operating margin (excluding sales)

28.3%

30.5%

            * excluding pensions adjustments

 

Strategic KPIs

2018-19 result

2018-19 target

Residents' net promoter score

62

56

Residents using our services online

53%

45%

Staff feel proud to work for Optivo

81%

75%

Staff say Optivo is a great employer

77%

75%

Helping people into jobs and training

1,122

870

New homes started

1,003

1,000

 

·    2018-19 was Optivo's first full year of operation.

 

·    We met and exceeded our strategic KPIs.

 

·    The decrease in turnover was in large part a result of no open market sales during 2018-19 as there were no completions of properties for the open market sales tenure (2017-18: £12.5m).

 

·    2018-19 was the third of four years in which social housing rents decrease by 1% before returning to CPI+1% growth in 2021.

 

·    The decrease in operating surplus was due to a lower surplus on asset disposals (£13m vs £20m) and zero surplus on open market outright sales (2017-18: £4m).

 

·    Higher revaluation movements this year (£28m vs £11m) compensated for the operating surplus fall, keeping our surplus before tax broadly level with last year.

 

Core operations

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:

 

Voids

2018-19

2017-18

Void rental losses as a % of annual rent debit

0.92%

0.59%

Average vacant properties re-let time, excluding voids for major works

39.3 days

26.5 days

 

We carried a higher level of voids this year while readying properties for asset disposals. The rise in re-let times was concentrated in 23 sheltered housing schemes in our Midlands region, and our review of these is underway.

 

Rent arrears at year-end

March 2019

March 2018

0 to 4 weeks

£3.4m, 1.62%

£3.5m, 1.68%

5 to 6 weeks

£0.7m, 0.32%

£0.7m, 0.32%

7 to 12 weeks

£1.5m, 0.73%

£1.5m, 0.71%

13 weeks or more

£3.6m, 1.74%

£2.6m, 1.25%

Total rent arrears of annual rent debit

£9.3m, 4.41%

£8.2m, 3.96%

 

Out-turn rent arrears for the year were in line with our expectations and financial plan.

 

Property development

At 31 March we were in contract to deliver 2,020 homes (March 2018: 2,054) across 39 sites, with remaining capital commitments on these sites of £361m (March 2018: £363m). In December 2018 we entered into a 50/50 Joint Venture with Linden Homes to develop a site in Kent.  This will deliver a further 76 homes for Optivo with remaining capital commitments of £19m.

 

We had 262 Shared Ownership 1st tranche properties that were practically complete and available for sale, of which 158 were ready for occupation (March 2018: 65), and no open market sale unsold units (March 2018: 0).

 

The increase in unsold homes in part reflects a relatively large number of shared ownership completions (223) during Q4.  At year end we had 27 homes unsold for more than six months (March 2018: 7 homes).

 

Liquidity

At the end of the financial year we had available undrawn facilities of £380m (March 2018: £606m) and £61m (March 2018: £82m) unencumbered cash and deposits available.  We sold £25m retained bonds after the financial year end in April 2019.

 

Our outstanding debt balance was £1,281m (March 2018: £1,089m).

 

Optivo and Optivo Finance plc are rated A2 by Moody's.

 

Unaudited Financial Results

 

Statement of Consolidated Income

2018-19
£m

2017-18
£m

Turnover

314

317

Cost of Sales

(19)

(21)

Operating Expenditure

(206)

(199)

Surplus on disposal of fixed assets

13

20

Operating Surplus

102

117

Surplus on commercial property disposals

-

4

Interest receivable

1

1

Interest and financing costs

(42)

(43)

Fair value movements

28

11

Surplus before taxation

89

90

Hedge reserve movement

-

(141)

Surplus/(deficit) before taxation

89

(51)

 

·    The figures exclude pension adjustments which we are reviewing as part of year-end accounting processes.

 

·    Fair value movements represent the movement on Optivo's investment property and interest rate derivatives. Optivo has opted not to apply hedge-accounting.

 

Next Update

We will publish a half-year financial update after 30 September 2019.

 

Notes

Optivo is a charitable Housing Association owning and/or managing 44,000 homes across London, the South East and the Midlands.

 

Contact for more information

https://www.optivo.org.uk/about-us/investors.aspx 

 

Tariq Kazi

Head of Treasury

[email protected]

020 8036 2293

 

DISCLAIMER

This update contains certain 'forward-looking' statements reflecting, among other matters, 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 and when 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. 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
FR FMGMKVDGGLZM