Beyond.hs 51 Regulatory News (63SQ)

Beyond Housing

Financial monitoring report for the six months ended 29 September 2024

1. The financial performance for the six months ended 29 September 2024 shows a surplus before transfer to reserves of £5.909m, £0.200m lower than the budgeted surplus. The forecast surplus before transfer to reserves is £9.536m, £3.411m below budget for the year.

2. Turnover is £1.765m under budget for the six months ended the 29 September 2024, of which £1.149m can be attributed to development sales proceeds. Outright sales at Filey are £1.271m behind budget due to timing. There are only four unreserved units remaining at the Filey development (September 2024) giving confidence that the budgeted sales receipts will be achieved during 2024/25. In addition, higher void levels, voids held for management, lower new units entering management in the first six months have had an adverse impact on rent receivable.

3. Operating costs are £0.878m under budget. This is driven by the favourable variance of £2.067m on the surplus of fixed assets due to the profiling/timing of the demolition of Spencerbeck House and lower component replacement write-offs. If not for these, operating costs would be £1.189m over budget with overspends on corporate overheads, reach & respond, responsive repairs and other operating costs primarily driven by cost inflation or volume.

4. Net interest payable - £0.397m favourable and reflects higher cash reserves and lower facilities given the £29m reduction to the RBS and NBS revolving credit facilities. Corporation tax is £0.290m favourable as the profit for the year on Filey outright sales progress is expected to be nil due to the additional costs needed to complete the scheme (c£1.5m).

5. Total capital expenditure for the six months ended the 29 September 2024 was £18.760m, £15.720m lower than the budgeted net expenditure of £34.480m. The capital investment programme (key component replacements) £5.223m, regeneration & development programme £9.475m and other capital investment (ICT/furniture etc.) £1.022m create the variance.

6. The forecast surplus before transfer to reserves is £9.536m, £3.411m below budget for the year. Rents & service charge income (£1.458m), development sales profits (£0.996m) and responsive repairs (£1.281m) primarily generate the unfavourable variance. They are added to by forecast overspends on corporate overheads, other operating costs and reach & respond, although are partly offset by favourable forecast variances on interest and corporate overheads. The impact of the forecast is a 4% drop in the projected operating margin to c18%.

7. From a treasury perspective, gross borrowings stand at £275m, of which £270.7m (98.4%) is at a fixed rate of interest. Borrowings net of cash reserves is £252.9m. The total revolving credit facility (RCF) available and undrawn is £75m and Beyond Housing has £45m retained bond available if required. There are no debt repayments due within the next 24 months and the liquidity requirement meets the treasury management policy and golden rule of 21 months.

8. All loan covenants are comfortably above lender covenant targets. The tightest covenant at a funder level is the asset cover ratio, as c4,300 units are not allocated to any of the lenders. The overall asset cover ratio is c168% demonstrating the headroom that exists between target and overall performance.

9. The balance sheet demonstrates that the total assets, less current liabilities, has grown by £9.0m during the six months ended 29 September 2024. This is mainly due to the increase in fixed assets of £13m but offset by the reduction in current assets of £5.4m, as properties held for sale have reduced (particularly at Filey), Beyond Housing loans were £275m and the gearing ratio is 54%, well below our golden rule of 63%.