3 Nov 2020 09:55
A2Dominion Housing Group's Half Yearly Performance Update covering the period to 30 September 2020
A2Dominion Housing Group announces the following update for the period to 30 September 2020.
Financial Performance
The Coronavirus pandemic has made the last six months a challenging environment in which to operate. The Group has stood up well to this challenge, delivering a near normal operational service to customers alongside ensuring support was provided for customers that saw their financial positions become more difficult to maintain. The Group has felt an impact from the pandemic on the financial performance of some areas of the business; private sale completions and student rent in particular being behind budget expectation for the six-month period, which has impacted the Group's overall financial performance. Sale reservations have remained strong, but sales have been affected by some delays in the practical completion of homes in development. As at 30 September 2020 the Group only held 29 homes completed but unsold.
Unaudited Consolidated Statement of Comprehensive Income | ||||
|
|
| 6 Months to | 6 Months to |
|
|
| 30-Sep-20 | 30-Sep-19 |
|
|
| £m | £m |
|
|
|
|
|
Turnover |
| 151.3 | 168.7 | |
Rent |
|
| 116.6 | 114.7 |
Sales |
|
| 16.1 | 40.5 |
Social Housing Grant Amortisation | 7.9 | 8.3 | ||
Other Income |
| 4.6 | 4.2 | |
Share of Joint Venture Surplus |
| 6.1 | 1.0 | |
Operating Surplus |
| 42.3 | 49.4 | |
Operating Margin |
| 28.0% | 29.3% | |
Interest |
|
| (30.5) | (29.1) |
Surplus for the Period |
| 11.8 | 20.3 | |
The Group's core rental income stream remained steady and has increased 1.7% year on year but is below budget due to waived rents at our student accommodation during the first quarter of the year, as a result of the initial pandemic lockdown. The lower turnover is primarily a result of lower sales volume, which although budgeted to be lower this year has been further impacted by the pandemic with some schemes build programmes extended out till later in the financial year or into the next financial year. Operating margin has decreased as a result by 1.3% when compared to the same period last year.
Unaudited Consolidated Statement of Financial Position | ||||
|
|
| Sep-20 | Sep-19 |
|
|
| £m | £m |
|
|
|
|
|
Fixed Assets |
| 3,574.0 | 3,470.5 | |
Current Assets |
| 421.6 | 373.6 | |
Creditors |
|
| (3,016.3) | (2,879.7) |
Net Assets |
| 979.3 | 964.4 | |
Revenue Reserves |
| 984.3 | 959.6 | |
Other Reserves |
| (5.0) | 4.8 | |
Net Equity |
| 979.3 | 964.4 | |
The Group's fixed asset base has again increased as we have continued to invest in our existing housing stock and develop new homes. The current assets have increased year on year, and this is largely as a result of a larger cash amount held compared to last year. Creditors have increased due to increased borrowings. Reserves show an increase when comparing 2020 to 2019 as a result of our performance for the year ended 31 March 2020.
Operational Performance
Customer: Over the course of the pandemic the Group has provided a near full service to all our customers. The Group has produced a strong performance over the period maintaining a combined high level of customer satisfaction for complaints, repairs and the customer service centre of 83.9% above our target of 83.5%. Arrears levels have remained steady for the year to date across all tenures reflecting the additional focus placed on supporting and signposting customers to the help available to them to continue to manage their financial obligations.
Development: The Group's development pipeline for the year has been impacted by the pandemic with sites having to close in the early stages. Even though the Group adapted quickly and opened all sites within three months, this has impacted delivery for this year with some sites build completions delayed till later in the current year or into 2021/22. The Group has had 118 handovers to the end of September 2020 and is currently forecasting to complete 1,122 units by the year end, with 1,102 units in the following year, both a significant increase above last year's total of 415. The current development pipeline totals 6,046 units forecast to be delivered between 2020 and 2025.
Treasury: As at 30 September, the Group's loan facilities and borrowings are summarised as follows:
|
| Arranged | Drawn |
|
| £m | £m |
Revolving Credit Facilities | 549.1 | 35.0 | |
Term Loans | 654.4 | 654.4 | |
Capital Market Issues (including 'Club' bonds) | 1,011.0 | 1,011.0 | |
|
| ________ | _______ |
|
| 2,214.5 | 1,700.4 |
|
| ________ | _______ |
In addition to the £514.1m of undrawn facilities, the Group had £77.5m of cash.
The Group also has deferred private placements of £75.0m from March 2022, which is not included within the £2,214.5 stated above.
Over the next two years, committed loan facilities will reduce by £85.0m through scheduled loan facility amortisation. This has been partly refinanced through the deferred bonds issue of £75.0m in March 2022. The annual update of the Group's Euro Medium Term Note Programme documentation was completed in September, enabling the Group to maintain the option to issue further unsecured notes over the next 12 months.
As at 30 September 2020, the Group's overall fixed rate ratio was 90.23% (March 2020: 89.1%) and the average borrowing rate is 4.17% (March 2020: 4.19%).
Further Information
An Investor Update presentation is available on our website link: https://www.a2dominiongroup.co.uk/content/doclib/94.pdf
A2dominion 28 (54XE)