Last checked at 14 Dec 2021 08:23
Catalyst Housing Limited half year update
Catalyst Housing Limited is today issuing its consolidated unaudited trading update for the six months ending 30 September 2021 (H1 2021/22).
Following merger with Rosebery Housing Association, the number of homes in management has increased from approximately 34,000 to 37,000. Merger is reflected in year to date figures.
Catalyst has retained its G1/V2 rating from the Regulator of Social Housing and S&P has affirmed that the current A- rating has been retained. S&P has noted that this is unlikely to change due to merger with Peabody (anticipated 1 April 2022).
Performance highlights
Highlights | H1 2021/22 | H1 2020/2021 |
Turnover £ms | 141 | 144 |
Operating surplus £ms | 43 | 38 |
Operating margin % | 31% | 22% |
Social Housing Operating Margin % | 31% | 35% |
EBITDA MRI interest cover % | 131% | 172% |
Gearing % | 42% | 44% |
Investment in existing properties £ms | 15 | 13 |
Voids % | 1.57% | 1.54% |
Arrears % | 5.61% | 5.62% |
Commenting on the results, Tim Jennings, Executive Director Finance said:
"Against the ongoing backdrop of the pandemic we have continued to adapt to new ways of working and to develop our business models. Using our customers' feedback we've redesigned the way we deliver customer experience to focus on a truly local service. We've completed a pan-business IT integration project, bringing together all our IT systems. Through our Build Back Better programme we are embracing agile and flexible ways of working that we now all consider normal, ensuring that we can deliver efficiencies in the future.
Our unaudited overall position shows Catalyst delivering in line with budget at the half year, and our performance metrics are at or better than the year ended 31 March 2021. In the first half of last year we saw reductions in repairs, maintenance and capital works in response to the first lockdown, however this year saw a return closer to normal levels, despite the on-going restrictions in the earlier months. Consequently our social housing operating margins and EBITDA MRI interest cover have reduced compared to the first half of last year.
These results include Rosebery Housing Association, which became a subsidiary on 1 April 2021. A significant gain arising from the net gift of assets of £125m has been included in the results for the period.
There has been less impact on the delivery of key services this year due to the pandemic, with the net surplus from our core landlord services delivering to budget.
Our strong cashflows enable us to take advantage of market conditions and during the period to date we cancelled £65 million notional value of our stand alone derivatives, thereby reducing our future interest costs as we benefit from the current lower variable rates of interest.
Decent homes and building safety
Building safety and decent homes remains a critical focus for the group. We have been able to catch up on repairs and maintenance delayed due to Covid-19, albeit some non-critical planned capital works have been delayed from the first half to the second half.
Catalyst received a further £22 million in grant enabling us to accelerate fire remediation works across our stock. All contracts have been let, all ACM cladding has been removed, and we have brought forward our overall programme of works. We continue to assume leaseholders will not be asked to contribute to works on the blocks over the 18 metres height set by the Government.
Property sales
The sale of homes, market sale and first tranche shared ownership, are just 4% below budget volumes in the first half. The mix in has seen shared ownership sales over perform, with market sales below, this seeing revenues slightly lower, but overall property sales margins are in line with budget. Asset sales, primarily the customer driven sales from staircasing and equity loan redemptions continue to perform strongly.
ESG
We have continued to build on our sustainability commitments and aspirations. Following our Ritterwald Certificate in Sustainable Housing, we have published our first ESG Report and a Sustainable Finance Framework (links below), both of which align our activity to the UN Sustainable Development Goals. Our ESG strategic working group continues to refine and develop our vision for the future. During COP26 we launched a series of webinars for employees provided by a range of external experts to make sure we are fully engaged with the wider debate.
https://www.chg.org.uk/wp-content/uploads/2021/07/Sustainable-Finance-Framework-final-version.pdf
https://www.chg.org.uk/wp-content/uploads/2021/09/210902_ESG-Report-2021_final-v2-2.pdf
Merger with Peabody
On 30 July 2021 Peabody and Catalyst Housing announced proposals to join together to create a better, locally focussed organisation which would deliver significant benefits for residents, providing the scope to invest and innovate more in services, homes, communities, technology and people. The process to complete this by 1 April 2022, with Catalyst Housing joining Peabody Group as a subsidiary, remains on track.
Sarah Thomas took over as interim Chief Executive Officer from 1 October 2021 following Ian McDermott's move to Peabody Chief Executive on secondment.
Statement of Comprehensive Income
£ millions | YTD September 2021 | 2020/21 |
Turnover | 141.2 | 298.2 |
Cost of sales | (28.2) | (94.4) |
Operating costs | (82.3) | (149.2) |
Surplus on disposal of fixed assets | 10.9 | 12.9 |
Share of joint venture operating results | 1.3 | - |
Operating surplus | 42.9 | 67.5 |
Gift arising from Gift of Net Assets | 125.4 | - |
Net interest payable | (20.5) | (43.3) |
Movement in fair value of investment properties | - | (0.1) |
Movement in fair value of derivative financial instruments | 1.9 | 10.1 |
Surplus for the year | 149.7 | 34.2 |
Statement of Financial Position
£ millions | YTD September 2021 | March 2021 |
Housing properties | 3,310 | 3,069 |
Other fixed assets | 46 | 45 |
Intangible assets | 2 | 2 |
Investments | 112 | 115 |
Stock | 126 | 128 |
Cash and bank | 126 | 160 |
Debtors | 26 | 34 |
Current creditors | (88) | (135) |
Total Assets less current liabilities | 3,660 | 3,418 |
Long term liabilities | (1,851) | (1,735) |
Derivative Financial instruments | (58) | (82) |
Reserves | (1,751) | (1,601) |
Total long term creditors and reserves | (3,660) | (3,418) |
Ends
This update may contain certain forward-looking statements reflecting, among other things, our current views on markets, activities and prospects. Actual outcomes may differ materially. Such statements are a correct reflection of our views only on the publication date and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared.
For further information, please contact:
Michaela Booth 07834 106257 |