TIDM15HG
RNS Number : 8876L
Great Places Housing Group Limited
05 May 2020
QUARTERLY PERFORMANCE UPDATE
This update covers performance for the period ending 31 March
2020.
Our Performance Updates are aimed at ensuring our investors and
other stakeholders receive regular, timely information regarding
the performance of the Group. We will publish these reports on a
quarterly basis and will produce them within six weeks of the
relevant quarter end.
These results are published in advance of the Statutory Accounts
for the year ended 31 March 2020 which will be issued following the
AGM in September. The information included is based on unaudited
management accounts and other internal performance measures and is
subject to concluding the routine annual accounting adjustments as
well as any adjustments that arise as a result of the external
audit process.
KEY HEADLINES
More details of these headlines are provided below in Corporate
News, Governance.
TRANSFER OF ENGAGEMENTS
Great Places successfully completed the Transfer of Engagements
of Equity Housing Group on 1st April 2020. The merger reinforces
Great Places' geographical focus around Greater Manchester,
Cheshire and South Yorkshire, and the larger Organisation will be
financially stronger with greater influence and have increased
operational resilience which is particularly of importance given
the backdrop of the Coronavirus pandemic.
RSH INTERIM REGULATORY JUDGEMENT G1/V2
The Regulator of Social Housing has regraded Great Places'
Governance and Viability rating to G1/V2. This is referred to as an
interim judgement following the Transfer of Engagements with Equity
and takes into account the previous ratings of both
Organisations.
CORONAVIRUS PANDEMIC
The Coronavirus pandemic is having a profound global impact.
Great Places has responded effectively to ensure we maintain
essential services whilst following Government and HSE guidelines.
Our business continuity team continues to meet several times per
week to manage the operational effects, developing innovative
solutions to some of the challenges faced, to respond to emerging
guidance and now to start planning for the eventual recovery
phase.
FINANCIAL PERFORMANCE: QUARTER FOUR RESULTS
The financial performance disclosed here excludes any of
Equity's activities, which will be combined with Great Places
Housing Association from 1(st) April 2020.
The management accounts of the Group show full year surplus of
GBP16.5m, GBP2.5m better than budget. Property sales, including
first tranche shared ownership properties and open market sales
(less cost of sales), and the sale of fixed assets such as
staircasing shared ownership properties, exceeded budget by
GBP2.6m. Net interest costs, repair costs and bad debt expense were
all better than budget. Turnover in the year was GBP113.8m and
operating surplus GBP39.1m.
These are unaudited management accounts and may change during
the year end audit process, so the 2019/20 statutory accounts
results may differ.
Drawn debt (excluding bond premium and including finance leases)
as at 31 March 2020 was GBP531.7m (March 2019: GBP535.7m).
Mark to Market exposure on the Group's free standing derivatives
was GBP51.8m, up from GBP44.9m at 31 March 2019, due mainly to
reductions in 15-25 year swap rates. There was GBP28.5m cash
collateral posted to meet counterparties' security requirements, up
from GBP19.3m at 31 March 2019.
Liquidity is strong with closing cash balances (excluding cash
held on behalf of leaseholders) of GBP37.1m. Undrawn facilities
immediately available are GBP111.8m of which GBP106.9m is fully
secured, with GBP73.8m being revolving credit facilities. This does
not include our GBP70m retained bond, which we can sell at any
time. Our internal financial "Golden Rules" around interest cover,
gearing, operating surplus and operating cash flows funding our
investment works were all met at the end of the year.
OPERATIONAL PERFORMANCE
Our performance management centres around our Critical Success
Factors ("CSFs") which are designed to focus us on the delivery of
our Corporate Plan, and particularly our vision of "Great Homes,
Great Communities, Great People". We had ten CSFs for 2019/20, as
well as three-year targets and ten-year ambitions within our
Corporate Plan. The CSFs give immediate oversight on progress
against our vision and key objectives.
As at year end we achieved target or better with seven of our
ten CSFs, hitting stretch target with four. Colleague engagement
was 86%, which is comfortably above our stretch target of 80%.
We helped 1,431 Households into work, training and volunteering
this year, 606 more than the stretch target of 825. Together with
the 880 households achieved in 2018/19 we have already achieved our
Corporate Plan three-year target to help 2,000 households into
work, training and volunteering.
Stretch targets for Arrears and for Average Days per Re-Let were
both exceeded this year, with the Universal Credit impact not felt
as quickly on arrears as predicted and an improvement on re-let
times showing continuous improvement over the past five years.
We exceeded our targets for Trusted Stock Condition Surveys,
Development Completions and Group Surplus. At year end there was
96.2% trusted stock data compared to around 85% at the start of the
Year. For development completions we built 229 affordable homes
against a target of 177. Group Surplus was GBP16.5M against a
target of GBP14M. We achieved 110 shared ownership sales and 84
Outright sales - in line with our expectations.
The target for Sickness days per colleague was missed this year,
with a year end result of 9.3 days, which a significant improvement
on the 11.3 days at the end of the last financial year. During
March 2020 Coronavirus resulted in more colleagues being absent:
without this absence our Sickness days per colleague would have
been 8.7.
Overall Customer Satisfaction ended the year at 7.53/10, against
a very ambitious target of 7.85/10. However it should be noted that
performance remains above the housing association average of
7.35/10. We have also reported increases in satisfaction for seven
consecutive months, with the average satisfaction in March being
8.11/10, the highest individual monthly figure reported during the
year.
We also missed the target of 65% for the % of digital contacts,
with 62.2% of contacts in March 2020 being digital. This is an
improvement on 56.2% reported at the end of the last financial
year.
CORPORATE NEWS
These stories illustrate some of our recent activities,
particularly in terms of Environmental, Social and Governance.
GOVERNANCE
RSH Interim Regulatory Judgement
Great Places' viability rating has been regraded by the RSH as
G1/V2 in response to the merger with Equity. This is an interim
regulatory judgement based on the regulator's previous assessments
of both Great Places and Equity.
As a significant developer over many years and now established
as one of Homes England Strategic Partners, we recognise that this
brings risk and sales exposure. We understand the Regulator's
perspective that this needs to be carefully managed, so it comes as
no great surprise that we have been regraded to V2. This is
consistent with the messaging from the Regulator over a number of
years, the regrade of several other developing Registered Providers
(RPs) and takes into account our recent merger with Equity Housing
Group, who held a V2 rating. The regrade has no impact on our
ambitious growth targets and we look forward to working with our
various stakeholders and partners to deliver the new homes so
desperately needed in the North of England.
It is fair to say that all regrades are not the same, so we are
pleased to have kept our G1 rating which shows that we have strong
governance arrangements to ensure ongoing financial strength, and
have an effective risk management framework. We also have a robust
business planning and stress testing environment, a simple
structure and a consistent strategic approach. These factors have
helped us sustain excellent relationships with our many funders and
to maintain our credit ratings with both Moody's and Fitch over
many years, contributing to the high levels of liquidity that we
see as an essential business requirement.
We have recently completed the transfer of engagements of Equity
Housing Group, which will make the larger organisation financially
stronger, operationally more resilient and able to deliver even
better services to our customers. These are outcomes we expect to
deliver over the next few years, but greater resilience and
strength in depth is already proving beneficial in shaping our
response to the current unprecedented Coronavirus lockdown. This
includes setting up a GBP100k Hardship Fund to support those most
in need and we are working with our local authority and other
partners to ensure it reaches them.
Great Places remains committed to its vision and values, and to
achieving profit for social purpose. We have a modern portfolio of
homes, providing safe, secure, high quality and energy efficient
homes for our customers, backed up by high quality customer service
delivery. We have the financial capacity to maintain and invest in
our homes, and we expect the costs of meeting enhanced building
safety requirements in our predominantly modern portfolio of family
houses to be relatively low.
We are committed to developing thousands more much needed new
homes over 10 years following the merger with Equity Housing Group.
Great Places has been a significant developer of all tenures with
an excellent track record over many years, whilst Equity's
successful development activity has focused on shared ownership and
rural schemes. Our 11,000 new home ambition represents an increase
of around 15% over what both organisations had planned
individually, clearly showing how this merger will unlock capacity
to allow us to do more to tackle the housing crisis.
New Innovation Chain North framework sees 56% increase in tender
submissions
The tender period for the new GBP750m, Innovation Chain North
Framework closed on 31st January 2020. The renewed framework aimed
at organisations interested in supplying construction works,
modular supply and related Consultancy services to a range of
housing clients across the North of England, saw a 56% increase in
the number of tender submissions. The Great Places development team
are now in the process of evaluating the bids and suppliers will be
notified of the outcome in late spring 2020.
ENVIRONMENTAL
Energy Efficiency news
Great Places completed the energy efficiency improvement works
on one of its key estates in Greater Manchester. This comprehensive
programme of works included Party Wall Insulation, Loft and Cavity
Wall insulation. The works will be monitored to get a detailed
picture of the impact in terms of carbon savings and the customer's
financial savings.
Our Distribution centre was moved to a renewable electricity
tariff, saving over 6.5 tonnes of carbon per year.
Great Places continues to progress with work on improving our
homes in terms of energy efficiency. Unfortunately, the COVID 19
lockdown measures have impacted on planned works. The Group is
using this lockdown period to review the energy performance of our
homes and plan for what works can be completed post lockdown.
SOCIAL
Great Places collaborates with group planning first 50+
cohousing scheme in Greater Manchester
Great Places is working with Manchester Urban CoHousing (MUCH)
to develop homes for residents aged over 50 who want to create a
sustainable community, sharing some aspects of their lives whilst
retaining individual private living spaces. The aim is to create
homes for residents who have chosen to work together to create an
environmentally sustainable housing community, which is low cost to
run, and where they can gain support from each other. Homes
England, the government's housing agency, has awarded MUCH an
GBP86,000 grant from its Community Housing Fund, which will help
support the development in the early stages of the project. The
development will provide around 20 apartments, alongside shared
facilities such as meeting rooms, a kitchen and dining room,
gardens and roof space, and bedrooms for visitors.
Great Places to offer post release support to prisoners
Great Places is aiming to help newly-released prisoners adjust
to life on the outside thanks to a new initiative. The "United
Together" programme offers prisoners leaving HMP Preston 1-2-1
post-release support to help reduce the likelihood repeat
offending. The programme followed a successful week-long pilot
delivered in conjunction with Active Lancashire and Preston North
End Community and Education Trust.
Great Places to deliver new homes in Little Hulton
Great Places Housing Group is to invest GBP2.7million in a new
housing development in Salford. The housing association is to build
21 new homes for affordable and social rent - a mix of one, two and
three-bedroom properties in Little Hulton. The new homes will be
built on a derelict site, bringing new homes to an area of high
demand. This new development is located close to The Wells on Old
Lane, an GBP8.6 million mixed tenure site which is currently
delivering 83 new homes.
GBP7.4million Oswaldtwistle, Lancashire development
The Mayoress of Hyndburn officially broke ground on a
GBP7.4million housing development in Oswaldtwistle at the former
John Wood Steel Drums site on Victoria Street where Great Places is
building 53 new homes on the 1.3 hectare site. The new homes, a mix
of two, three and four-bedroom houses, will be made available for
affordable rent. Work on the development is expected to be
completed by Spring 2021.
FEEDBACK
We welcome feedback on our performance update. Please contact
Kal Kay, Director of Finance, on 0161 447 5029 or at
kal.kay@greatplaces.org.uk
The information included within this report is for information
purposes only. The Financial results quoted are unaudited. The
report may contain forward looking statements and actual outcomes
may differ materially. No statement in the report is intended to be
a profit estimate or forecast. We do not undertake to revise such
statements if our expectations change in response to events. This
report does not constitute legal, tax, accounting or investment
advice.
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END
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