Last checked at 30 Jun 2021 15:00
Karbon Homes Group |
30/06/2021 |
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Karbon Homes Group trading update for the period ending 31 March 2021 |
· Karbon Homes Group (KHG) is today issuing its consolidated trading update for the period ended 31 March 2021. |
· These figures are unaudited and for information purposes only. |
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Highlights for the period ending 31 March 2021 |
· KHG own and manage 27,542 homes |
· Karbon Homes Limited maintained its G1/V1 status from the Regulator for Social Housing, following an interim regulatory judgement in April 2021 |
· Turnover (excl. asset sales) for the period was £142.4m (2020: £135.9m) |
· Operating surplus (excl. asset sales) for the period was £37.1m (2020: £34.3m) |
· Overall operating margin (excl. asset sales) was 26.1% (2020: 25.3%) |
· The surplus after tax for the period was £22.3m (2020: £22.1m) |
· Gearing as at 31 March 2021 was 35.9% (2020: 38.4%) |
· Return on capital employed for the period was 3.5% (2020: 4.0%) |
Commenting on the results, Scott Martin, Executive Director of Resources, said: |
'2020/21 has been a remarkable year in so many different ways, and we are proud to publish our draft results for the year ended 31st March 2021. This represents the third year of our five-year strategy and, like many other organisations during the pandemic, we've had to work very |
hard to steer a path through these challenging times, keeping a focus on our strategic aims of Homes, Customer and Place.
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As an employer we did all we could to support our colleagues' health and wellbeing, and we invested significantly in enabling our whole workforce to work remotely, both through technology and in adjusting our working practices to keep everyone safe. |
Our customers have had to tackle huge challenges this year, some having to face bereavement and loss, some losing jobs, many moving on to Universal Credit for the first time. Our team have been there to support them through it all. |
In continuing to deliver vital services for our customers and offering increased pro-active support for the most vulnerable, we have achieved our highest ever customer satisfaction score: a Net Promotor Score of 55.6. |
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We are very pleased to have delivered 454 new affordable homes in this financial year, despite lengthy shutdown periods, with more units being developed using modern methods of construction. |
Customers moving into our new homes have also shown high levels of satisfaction with nearly 90% very satisfied or satisfied with the service they received during the process. |
We also continue to invest in our existing homes. Our planned maintenance and capital investment programme has seen us spend over £27m across our geographical footprint. |
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From a place point of view, we continue to invest in our communities, expanding our services and focussing on those who need our help most. This can be through financial support for community organisations, helping customers maximise their income and get into secure |
paid employment or working with partners to make communities safer places to live. Some key achievements in the year have been helping over 5,600 customers via our 'Money Matters' team access over £5.4m in income and helping over 150 customers into employment or training. |
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Finally, our strong investment grade credit rating of A/Stable was retained in May 2021 as well by our rating agency Standard & Poor's (S&P). S&P recognised the challenges facing housing associations in controlling rent losses through voids and pressure on tenant arrears levels, |
especially in parts of the UK where they think it may take longer to recover from the impacts of the pandemic. They praised Karbon's focus on traditional social housing activities, cash resources and our experienced management team. |
Pleasingly, in first quarter FY22, it appears as if Karbon continues to manage these challenges very well, with rent collected at 99.8% compared to a target of 99.5%, and void rent losses at 1.69% compared to a target of 1.94%. |
We look to the rest of the year with optimism as we build on these positives." |
Unaudited Financial Metrics |
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| 31-Mar | 31-Mar |
| 2021 | 2020 |
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| Actual | Actual |
| £'000 | £'000 |
Statement of Comprehensive Income |
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Turnover (excl. asset sales) | 142,400 | 135,933 |
Turnover (incl. asset sales) | 146,355 | 142,918 |
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Operating surplus (excl. asset sales) | 37,140 | 34,356 |
Operating surplus (incl. asset sales) | 38,757 | 38,622 |
Surplus after tax | 22,096 | 22,105 |
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Margins | % | % |
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Overall operating margin (excl. asset sales) (Note 1) | 26.1% | 25.3% |
Overall operating margin (incl. asset sales) (Note 2) | 26.5% | 27.0% |
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Key Financial Ratios |
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EBITDA MRI interest cover (Note 3) | 212.4% | 227.3% |
Gearing (Note 4) | 35.9% | 38.4% |
ROCE (Note 5) | 3.5% | 4.0% |
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| 31-Mar | 31-Mar |
| 2021 | 2020 |
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Liquidity |
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24 month liquidity requirement (£'000) (Note 6) | 82,457 | 102,271 |
Cash and undrawn facilities (£'000) (Note 7) | 282,389 | 186,396 |
Unencumbered stock (no of properties) | 4,736 | 5,111 |
Value of unencumbered stock (average of EUV and MV, £'000) (Note 8) | 170,729 | 181,389 |
Loan security excesses (average of EUV and MV, £'000) (Note 9) | 112,341 | 211,539 |
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Credit Rating |
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S & P | A/Stable - May 2021 | |
Notes: |
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1) Operating margin excluding asset sales removes the gain or loss on disposal of housing properties. |
2) Operating margin including asset sales includes all activity |
3) Earnings before interest, tax, depreciation and amortisation, major repairs included is defined as: (Operating surplus - Disposal of assets - Outright sales and first tranche SO surpluses + Depreciation & impairment - Amortisation - Capitalised major repairs) / Interest paid |
(reflecting the 'S&P Global methodology for rating public and non profit social housing providers', published 1st June 2021) |
4) Gearing is defined as: Group Net Debt / Group Housing assets at historic cost less depreciation (RSH VFM Gearing definition). |
Karbon have chosen to include cash held in non ring fenced investment accounts as available cash, 2021: £83.3m (2020: £27.6m). Removing this would result in the gearing calculations being 2021: 45% (2020: 41.6%). |
5) Return on capital employed is defined as Operating Surplus (incl asset sales) / Total Assets less current liabilities |
6) 24 month cashflow requirements |
7) Cash, investments and undrawn revolving credit facilities |
8) Value of stock not held by a lender or security trustee, at average £36k per unit |
9) Value of excess security held with current lenders or Prudential Trustees |
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This trading update contains certain forward looking statements about the future outlook for Karbon Homes Group. These have been prepared and reviewed by Karbon only and are unaudited. |
Forward looking statements inherently involve a number of uncertainties and assumptions. Although the Directors believe that these statements are based upon reasonable assumptions on the publication date, |
any such statements should be treated with caution as future outlook may be influenced by factors that could cause actual and audited outcomes and results to be materially different. |
Additionally, the information in this statement should not be construed as solicitation/recommendation to invest in Karbon's bonds |
For further information, please contact: |
Andrew Thompson, Assistant Director: Treasury |
07917 642957 |
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https://www.karbonhomes.co.uk/corporate/ |
END |