Last checked at 24 Nov 2023 09:30
A2Dominion Housing Group's Half Yearly Performance Update covering the period to 30 September 2023
A2Dominion Housing Group announces the following update for the period to 30 September 2023.
Financial Performance
The Group's performance for the first six months to 30 September 2023, shows a £9.4m increase in surplus when compared to the performance over the same period for last year.
6 Months to | 6 Months to | |
| 30-Sep-23 | 30-Sep-22 |
| £m | £m |
| ||
Turnover | 204.6 | 192.5 |
Cost of Sales | (42.0) | (39.5) |
Operating Costs | (120.6) | (116.8) |
Share of Joint Venture Surplus | 1.1 | 0.4 |
Surplus on Sale of Fixed Assets | 4.7 | 7.9 |
Operating Surplus | 47.8 | 44.5 |
Operating Margin | 23.4% | 23.1% |
Interest | (27.7) | (33.8) |
Surplus for the Period | 20.1 | 10.7 |
Turnover has increased year on year by £12.1m. This is due to a £14.9m increase in rental and service charge income to £142.5m (2022 - £127.6m). Rents increased by £7.6m, a 6.2% year on year increase with a further £7.4m increase from service charge income, which is primarily the recovery of service charge costs incurred. The service charge income was impacted by high inflation on the underlying service charge costs incurred over the previous 18 months, with £2.5m relating to the prior year.
At 23.4%, the operating margin is marginally higher than the prior year. Operating costs have increased across the board due to the impact of inflation. An increase in responsive repair costs of £4.2m is also in part due to a rise in the volume of work being delivered. Service charge and housing management costs have increased by £6.4m, particularly in utilities and decanting costs. These increases have been offset by the phasing of the planned maintenance programme, which is weighted more to the second half, which resulted in a lower spend for the first six months in planned maintenance of £6.5m when compared to 2022. Included in interest is a one-off gain of £5.3m due to an early repayment of a loan.
Higher spend is budgeted for the second half of the year so the year-to-date surplus is expected to fall in line with full year budget.
Unaudited Consolidated Statement of Financial Position |
| |
30-Sep-23 | 30-Sep-22 | |
| £m | £m |
Other Fixed Assets and Investments | 3,655.5 | 3,607.4 |
Current Assets | 226.3 | 322.0 |
Total Creditors including loans and borrowings | (2,821.6) | (2,892.6) |
Total Reserves | 1,060.2 | 1,036.8 |
Through continued investment in maintaining existing stock and the development of new homes the Group's fixed asset base continues to increase year on year. The drop in current assets is due to a decrease in the level of stock as well as a lower level of debtors compared to last year. Debtors have reduced due to a reduction in sales debtors, prepayments and accrued income and loans to joint ventures. Total creditors have reduced reflecting a combination of decreases in borrowings, deferred grant, and pension liability. Total reserves show an increase compared to the previous year through positive movement in cashflow hedge reserve at yearend and the improved surplus for the six months to September 2023 compared to 2022.
Operational Performance
Customer: As a housing association the Group puts customers' needs first. Their new corporate strategy prioritises a high-level of operational performance to provide customers with homes and neighbourhoods that are safe, affordable, and well maintained.
Performance for customers is assessed through a variety of key measures. For the first six months of the year, customer effort measure improved on the 4.0 target with a score of 3.8, and their 'would you recommend the Group' for our new homes measure is at 93.0%, versus a target of 92%. However, customer satisfaction is at 78.0% at the half year, which is short of the 82.0% target, and improvements have already been actioned to bring this closer to the end of year target. Median repair days stand at 14 days, which is ahead of a target of 15 days.
The Group's social impact value is standing at £7.7m, with a full year target of £12.0m. Arrears levels are running at 4.1%, which is slightly better than the target of 4.3% and continues to be in the upper quartile of A2Dominion's peer group. As the cost-of-living crisis continues 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 development team have successfully handed over 245 units during the first six months of the year of which 50.6% (124 units) are for our affordable tenures, and 757 units are forecasted to be handed over by 31 March 2024. The current development pipeline from 2023/24 onwards totals 2,612 units.
Treasury:
As at 30 September, the Group's loan facilities and borrowings are summarised as follows:
Arranged | Drawn | |
£m | £m | |
Revolving Credit Facilities | 505.9 | 190.5 |
Term Loans | 503.6 | 503.6 |
Capital Market Issues (including 'Club' bonds) | 898.5 | 898.5 |
1,908.0 | 1,592.6 |
In addition to the £316m of undrawn facilities, the Group had £16m of cash.
As at 30 September 2023, the Group's overall fixed rate ratio was 84.5% (September 2022: 94.8%) and the average borrowing rate is 4.74% (September 2022: 4.46%).
There are over 16,000 unallocated or unencumbered properties across the Group with a security value of around £1.9bn.
Further Information
An Investor Update presentation is available on our website:
https://www.a2dominiongroup.co.uk/content/doclib/152.pdf