Last checked at 28 Oct 2022 10:30
A2Dominion Housing Group's Half Yearly Performance Update covering the period to 30 September 2022
A2Dominion Housing Group announces the following update for the period to 30 September 2022.
Financial Performance
The Group's performance for the first six months to 30 September 2022, shows a lower surplus compared to last year. Our results have been impacted by current market conditions, particularly from higher energy costs and the rising rate of inflation. Despite this, the Group still continues to deliver a healthy surplus.
6 Months to | 6 Months to | |
| 30-Sep-22 | 30-Sep-21 |
| £m | £m |
| ||
Turnover | 192.5 | 177.2 |
Cost of Sales | (39.5) | (37.4) |
Operating Costs | (116.8) | (99.4) |
Share of Joint Venture Surplus | 0.4 | 1.7 |
Surplus on Sale of Fixed Assets | 7.9 | 8.0 |
Operating Surplus | 44.9 | 50.1 |
Operating Margin | 23.3% | 28.3% |
Interest | (33.8) | (31.2) |
Surplus for the Period | 10.7 | 18.9 |
Turnover has increased year on year, due to a 7.2% increase in rental income to £127.6m (2021: £119.0m) and an increase in housing for sale income of £48.8m (2021: £44.5m). At 23.3%, the operating margin is lower than the prior year. This is due to inflationary pressures which have increased our operating costs (particularly utility costs), thereby eroding the margin. The remaining six months of the year will continue to be challenging, as we manage these cost pressures and supply chain struggles, which have both been heightened by the uncertain economic environment.
Unaudited Consolidated Statement of Financial Position |
| |
30-Sep-22 | 30-Sep-21 | |
| £m | £m |
Other Fixed Assets and Investments | 3,607.4 | 3,601.7 |
Current Assets | 322.0 | 422.4 |
Total Creditors including loans and borrowings | (2,892.6) | (3,049.3) |
Total Reserves | 1,036.8 | 974.8 |
The Group's fixed asset base has increased year on year as we continue to invest in our existing housing stock and develop new homes. Current assets have decreased from the previous year in line with our level of work in progress, which has been more than matched with a drop in total creditors. This is largely due to the early part-repayment of a £75m retail bond in April. Total reserves now exceed £1 billion and show an increase compared to the previous year, reflecting our strong financial performance during the period from 1 October 2021 to 31 March 2022.
Operational Performance
Customer: As in previous years, the Group has continued to produce a good operational performance maintaining a combined high level of customer satisfaction (reflecting complaints handling, our repairs service and the customer service centre services) of 81.6%, which is just below our 82.0% target. Our customer effort measure was on target with the score at 4.0 and our 'would you recommend the Group' for our new homes measure was at 92.2%, exceeding our target of 92%. Median repair days stand at 12 days ahead of our target of 15 days. The Group is fully committed to providing our communities with services they need, and this is demonstrated with our social value delivered standing at £2.9m, with a full year target of £9.0m. Our arrears levels stand at 4.2%, which is beyond our target of 3.4%. However this arears level remains in the upper quartile of our peer group. The Group continues to focus on supporting and signposting customers to the help available to them, to enable them to continue to manage their financial obligations, particularly given the cost pressures on households today.
Development: The Group's delivery from its development pipeline continues to be slower than anticipated. This is largely due to the skills and material shortages hindering the industry's capacity to return to pre-pandemic levels. Despite these issues, during this first six months we have successfully handed over 390 units of which 81.0% (316 units) are for our affordable tenures and are forecasting a further 517 units by 31 March 2023. The current development pipeline from 2023/24 onwards totals 2,919 units.
Treasury: As at 30 September, the Group's loan facilities and borrowings are summarised as follows:
| Arranged | Drawn |
| £m | £m |
Revolving Credit Facilities | 520.3 | 35.0 |
Term Loans | 533.1 | 533.1 |
Capital Market Issues (including 'Club' bonds) | 1,004.3 | 1,004.3 |
Total | 2,057.7 | 1,572.4 |
In addition to the £485.3m of undrawn facilities, the Group had £23.6m of cash.
Over the next two years, committed loan facilities will reduce by £165.0m through scheduled loan facility amortisation and as a consequence of a retail bond maturity in October 2022.
As at 30 September 2022, the Group's overall fixed rate ratio was 94.8% (September 2021: 90.3%) and the average borrowing rate is 4.46% (September 2021: 4.18%).
Further Information
An Investor Update presentation will be available on our website link from 3 November 2022: https://www.a2dominiongroup.co.uk/content/doclib/94.pdf