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10 Aug 2020 16:08
Stonewater Funding
Stonewater full-year audited accounts to 31 March 2020
10 August 2020
Stonewater full-year trading statement and audited accounts to 31 March 2020
Stonewater delivered stable results and strengthened its financial postion in the year ended 31 March 2020. The comparisons are with Stonewater's audited accounts for the year ended 31 March 2019.
Highlights
- S&P A+ rating reaffirmed with a stable outlook
- Regulator of Social Housing maintains Stonewater G1/V1 rating
- Turnover flat at £189.00m (2019: £190.72m)
- Operating costs £121.97m (2019: £118.25m)
- Surplus on disposal of fixed assets £28.19m (2019: £9.42m)
- Operating surplus up 22% to £80.83m (2019: £65.80m)
- Operating margin 28% (2019: 30%) (excludes surplus on disposal of fixed assets)
- Surplus for the year £42.30m (2019: £22.38m)
- Strong liquidity position maintained with £53m bond issue, additional RCFs of £125m and US private placement of £75m
- 33,271 homes owned and managed (2019: 32,354)
- 654 homes completed (2019: 548)
- Acquired 731 homes from Southern Housing Group. All the homes are located in our key strategic growth areas of Wiltshire, Oxfordshire and Berkshire
Commenting on the results, Nicholas Harris, Chief Executive at Stonewater, said: "We are pleased to report a good set of results and a stable financial position, endorsed by a strong investment grade A+ rating from Standard & Poor's. This financial position - alongside the continued G1/V1 rating from the Regulator of Social Housing - provides a solid foundation to deliver our Vision 'for everyone to have the opportunity to have a place that they can call home'.
"We are living in unprecedented times, with the impacts of coronavirus on economies worldwide and forecasts of a global recession. However, as a leading social housing provider we entered the crisis in a position of relative financial strength. We had robust stress testing in the run up to Brexit, which has meant we have established a range of mitigations in the event of any financial distress and on our surplus, which looks beyond COVID-19.
"One thing we know and accept is that there is no going back to 'normal'. Out of these extraordinary events, we're navigating a new way forward. We've already responded by adapting our services and ways of working, reviewing our plans and assessing how we can support our customers, our communities and our business to get through this in the best shape possible. It is a dynamic situation, however, we are in a strong position, having already invested significantly in technology, mobile working and a digitally enabled approach over the last three years.
"Like our peers in the sector, we face considerable challenges in the coming months and years and must continue to innovate, develop with new funding models, and work with stakeholders to keep delivering affordable homes and investing in communities."
John Bruton, Executive Director - Finance at Stonewater, said: "Despite the challenging backdrop, we have prudently explored our funding options in the past 18 months and concluded several transactions to support our business plan objectives.
"Our turnover in 2019-20 decreased slightly due to a drop in income from first-tranche sales of shared ownership properties, but rental income increased due to the handover of 654 new homes (2019: 548). Our operating costs increased by £3.5m, mainly due to an impairment, additional bad debt provision and increased professional fees due to a stock condition survey of the planned maintenance programme.
"The increase in surplus on disposal of fixed assets is due to large sector sales that took place in 2019-20, and the Voluntary Right to Buy pilot scheme in the Midlands in which Stonewater participated. The surplus generated for 2019-20 will continue to be reinvested in our development programme - which will grow to 1,500 homes a year by 2022-23 - and in further enhancing our systems to continue to provide excellent customer service.
"181 shared ownership properties were sold in the year. This is less than the 203 anticipated due to delayed handovers. The margin was, however, higher than anticipated at 17.5%. Our assessment of the recoverable amount of all properties held for sale at 31 March was in excess of cost.
"In the three months to 30 June 2020, 26 shared ownership units were sold and of 104 properties available for sale, 48 were reserved or under offer. In addition, in response to COVID-19, we have also reduced our expectation about the recovery of rent arrears across all our rental stock."
Link to the full audited accounts on Stonewater's website:
https://www.stonewater.org/about-us/investors-information/
Key indicators from audited accounts 2019-20:
Consolidated statement of comprehensive income | 2020 | 2019 |
| £'000 | £'000 |
Turnover | 189,001 | 190,724 |
Operating costs | (121,979) | (118,255) |
Cost of sales | (14,390) | (16,085) |
Surplus on disposal of fixed assets | 28,198 | 9,422 |
Operating surplus | 80,830 | 65,806 |
Operating margin excluding surplus on disposal of fixed assets (%) | 28% | 30% |
Net interest | (33,209) | (42,053) |
Movement in fair value of non-hedging instruments | (5,315) | (1,368) |
Surplus for the year | 42,306 | 22,385 |
Actuarial gains/(losses) on defined benefit schemes | 17,321 | (6,922) |
Net impact of the initial recognition of multi-employer defined benefit scheme | - | (10,876) |
Movement in fair value of hedging instruments | (13,812) | 10,601 |
Total comprehensive income for the year | 45,815 | 15,188 |
Statement of financial position | 2020 | 2019 |
| £'000 | £'000 |
Tangible fixed assets - housing properties | 1,887,962 | 1,776,052 |
Other tangible fixed assets | 9,337 | 8,877 |
Net current assets | 94,368 | 79,093 |
Total assets less current liabilities | 1,991,667 | 1,864,022 |
|
|
|
Creditors due after more than one year | (1,679,225) | (1,577,414) |
Provisions for liabilities and charges | (85) | (340) |
Pension scheme liability | (16,684) | (36,410) |
Net assets | 295,673 | 249,858 |
Cash flow hedge reserve | (83,252) | (69,440) |
Income and expenditure reserve | 378,925 | 319,298 |
Total reserves | 295,673 | 249,858 |
For more information, contact:
John Bruton, Executive Director - Finance, Stonewater
John.Bruton@stonewater.org
07764 791004
For more information about Stonewater please visit: https://www.stonewater.org/media-pack/media-kit/
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