Last checked at 18 Nov 2021 11:39
Longhurst Group consolidated Trading Update for the period ending 30 September 2021
Longhurst Group ('LG') is today issuing its consolidated unaudited trading update for the six months ending 30 September 2021 ('2021/22 Q2'). All statement of comprehensive income comparatives are to LG's consolidated unaudited prior year equivalent period being the six months ending 30 September 2020 ('2020/21 Q2').
HIGHLIGHTS
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· There are 24,014 units in management (as at 31 March 2021: 23,838)
· LG has completed 277 new residential homes 2020 Q2 (2020 Q2: 205)
2021/22 FORECAST
The forecast assumes that current market conditions continue and are based on information available at Q2 2021/22
Commenting on the results Rob Griffiths, Deputy Chief Executive and Chief Financial Officer said:
The group's results for the first 6 months of the financial year demonstrate some strong performance in several key areas. In particular our performance on first tranche sales has significantly exceeded our business plan target and we have a healthy forward plan of sales already agreed off plan for the remainder of the year. Our core general needs rental business continues to perform well with current tenant arrears at 1.87% at the end of September.
We continue to see some Covid related impact on performance across our care and support business with increased staffing costs and lower income due to voids on some of our services.
Our short-term expectation, for the next 6 months, is that our core social housing operating costs will be higher than forecast, as we address a backlog of repairs to our properties. The backlog has materialised due to a combination of the pandemic / Brexit, and we have needed to address an interim impact of performance from our repairs contractor, with shortages of both labour and materials cited. This has been quickly mitigated by management through a Task and Finish Group to concentrate on a recovery plan and we are progressing with other contractors to better distribute the work.
In line with the rest of the construction industry we continue to experience some challenges linked to the availability of labour and materials which has caused some delays on our development programme, although this is much less significant than the delays experienced in 20/21.
DEVELOPMENT PROGRAMME
We continue to progress with our development programme using a prudent, risk-based approach, in line with our business plan assumptions and targets. Longhurst Group were successful in their bid for additional Homes England funding through the Affordable Homes Programme 2021-26. Total completions for the financial year 21/22 are forecast to be 713 properties (537 Rented and 176 Shared Ownership).
SHARED OWNERSHIP SALES
120 sales have completed as at Q2 achieving an average first tranche % of 47%. Most properties are being sold 'off plan' and are sold subject to contract with only one property being unsold for greater than 6 months which is sold subject to contract.
As at 30 September 2021, LG, held 24 completed shared ownership homes as unsold stock of which 21 were 'sold subject to contract' and 3 'under offer'.
LG are forecasting a pipeline of further sales throughout the next 6 months with a forecast 20% profit in the current financial year.
NET DEBT AND LIQUIDITY
During Q2 LG has strengthened its funding and liquidity position, agreeing £100.0m of additional funding to be drawn on a deferred basis during 2022 and 2023. LG was also successful in their bid for AHP 2021-26 Homes England funding under their Strategic Partner status.
ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG)
LG continue to work with the team at Savills, the Executive and Board to consider the wider ESG Strategy to be agreed at the end of the year. LG have adopted the Good Economy reporting framework.
Production has started on 56 factory-built new homes for our innovative new development in Cambridgeshire.
Low-carbon housing manufacturer LoCaL Homes, owned by GreenSquareAccord, will supply our development partners Burmor Construction with the units for our California Road development near Huntingdon. The properties will also benefit from ground source heat pumps.
The new homes are being built in the LoCaL Homes facility in Walsall and delivered to site as complete thermally efficient insulated wall panels with external coverings.
Charmaine Simei, the Group's Director of Community Investment, won the 'Professional of the Year' award at the Women in Housing Awards.
As Director of Community Investment, Charmaine is the figurehead and ambassador for all our Community Investment activity, leading a newly formed team and discovering innovative ways to boost social value across the communities we serve.
Over the last year, she's driven forward projects including the launch of our new Customer Wellbeing Hub, the Improving Lives Hardship Fund and is also heavily involved with the work of the Housing Associations' Charitable Trust (HACT). She's also recently joined the board of Communities that Work.
Thanks to Charmaine's work, the Group is now front and centre of Community Investment and social value discussions and made nearly 4,000 interventions last year through our Community Investment programme.
IMPROVING LIVES STRATEGY
Our Improving Lives Strategy reaffirms LG's commitment to focus our efforts into the two areas of health and wellbeing and economic resilience and delivering five key objectives between now and 2025
· Focusing on our customers and communities
· Delivering an integrated housing, care and support offer
· Providing the homes people want, where they're needed
· Building and maintaining great partnerships
· Our people and culture
KEY UPDATES
The Board of Longhurst Group Limited has approved the appointment of Jenny Brown as its new Chair with effect from 1st January 2022 when current Chair, Bob Wilson, steps down following the end of his nine-year term.
LG appointed to Homes England's new £20bn procurement framework. The new Dynamic Purchasing System (DPS) will make it easier for organisations like ourselves to access land owned by Homes England - the Government's housing delivery agency.
Longhurst Group and Nottingham Community Housing Association (NCHA) will receive £230 million in Government funding after once again being selected as a Homes England strategic partner. Our joint application with NCHA will see a total of 3,935 new affordable homes being built over the coming years.
UNAUDITED FINANCIALS
The unaudited financials exclude further adjustments that are subject to audit review:
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This trading update contains certain forward-looking statements about the future outlook for LG. Although the Directors believe that these statements are based upon reasonable assumptions, any such statements should be treated with caution as the future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.
For further information, please contact:
Libra (Longhurst Group) Treasury PLC
Robert Griffiths
Leverett House
Gilbert Drive
Boston
Lincolnshire
PE21 7TQ