TIDM42RA
RNS Number : 0933Z
Bromford Housing Group Ltd
15 May 2019
RNS Number: 0933Z
Bromford Housing Group
15 May 2019
Bromford Housing Group trading update for the year ending 31
March 2019
o Bromford Housing Group (BHG) is today issuing its consolidated
trading update for the year ended ended 31 March 2019 (2019).
o Merlin Housing Society Limited (Merlin), became a Registered
Provider subsidiary of BHG on 2 July 2018. Severn Vale Housing
Society (Severn Vale) joined BHG on 2 January 2019 as transfer of
engagements into Merlin.
o The consolidated year end performance measures set out in this
document are provided for BHG inclusive of Merlin and Severn Vale.
Merlin performance reflects the full twelve month period to 31
March 2019 under merger accounting rules. Severn Vale is accounted
for under acquisition accounting rules with a fair value
determination of assets and liabilities at 2 January 2019.
Comparative metrics for 31 March 2018 (2018) are provided on the
same basis of consolidation.
o These figures are unaudited and for information purposes
only.
Highlights (BHG for the period ending 31 March 2019)
o BHG own and manage 42,735 homes
o Turnover for the period was GBP257m (2018: GBP221m)
o Social housing lettings turnover contributed to 76% of total
turnover (2018: 85%)
o Operating surplus (including asset sales) for the period was
GBP85m (2018: GBP89m)
o Operating margin on social housing lettings was 35% (2018:
40%)
o Overall operating margin (including asset sales) was 33%
(2018: 40%)
o Overall operating margin (excluding asset sales) was 31%
(2018: 35%)
o Net margin on shared ownership (first tranche) was 22% (2018:
22%)
o Net margin on outright sales was 19% (2018: n/a)
o The surplus after tax for the period was GBP56m (2018:
GBP64m)
o Asset gearing as at 31 March 2019 was 39%
o Interest cover as at 31 March 2019 was 2.0x
Commenting on the results, Lee Gibson, Chief Financial Officer,
said:
"It has been a busy and successful year for the Bromford Housing
Group. Merlin and Severn Vale are now fully integrated into the
Group and we are pleased to now deliver the Bromford proposition to
over 40,000 households. We are proud of our customer advocacy
results which remain high at 89%.
We are delighted with our preliminary year end results. We have
out-performed the consolidated Group budget on a number of key
metrics including turnover, operating surplus and overall margin.
The operating surplus has reduced slightly year-on-year, reflecting
the ongoing investment we are making in our business transformation
programme and neighbourhood coaching model which will ultimately
drive an improved customer experience and longer term operational
efficiencies and financial savings.
We have refreshed our New Homes Plan and are now targeting
c.13,100 new homes by 2028, with a greater focus on social and
affordable homes than in the previous plan. We delivered over 1,200
homes in the financial year and have been appointed as one of Homes
England's strategic partners with a grant award of GBP66m. This,
combined with our continuing financial strength, will help us to
make an even bigger impact in the communities where we work."
Imran Mubeen, Head of Treasury, added:
"The Group now benefits from strong levels of liquidity, having
successfully raised over GBP0.5bn of new funding in the financial
year. We followed our GBP300m debut public bond with our inaugural
GBP100m private placement in the US market and a new GBP100m RCF.
We were delighted to bring new investors to Bromford.
The Group's low leverage with significant headroom against key
funding covenants, and the strength of our financial performance
present effective capacity for future borrowings. We are delighted
to have maintained our leading dual sector credit ratings following
the recent mergers (Moody's A1, S&P A+) and remain committed to
maintain two credit ratings moving forwards."
Development: housing completions (31 March 2019)
Unit type Housing completions
31 March 2019
Social rent 270
Affordable rent 490
Shared ownership 442
Open market sales 34
------------------- --------------------
Total 1,236
o BHG completed 1,236 new homes in the full year ending 31 March
2019. We expect to complete over 1,000 new homes for the financial
year ending 31 March 2020.
Development: pipeline
o BHG plan to deliver c. 13,100 new homes by 2028 under its New
Homes Programme. In the pursuit of this development strategy, BHG
are engaging in discussion to explore joint venture arrangements
with third parties to optimise commercial return with risk
mitigation.
Unaudited Financial Metrics
31 Mar 2019 31 Mar 2019 31 Mar 2018
Statement of comprehensive income Actual Budget Actual
---------------------------------- ------------ ------------ --------------
Turnover from social housing
lettings GBP196m GBP190m GBP187m
Turnover GBP257m GBP251m GBP221m
Operating surplus (including
asset sales) GBP85m GBP82m GBP89m
Surplus after tax GBP56m GBP44m GBP64m
31 Mar 2019 31 Mar 2019 31 Mar 2018
Margins Actual Budget Actual
-------------------------------------- ------------ ------------ ------------
Operating margin(1) on social
housing lettings(2) 35% 36% 40%
Overall operating margin(3)
(exc asset sales) 31% 30% 35%
Overall operating margin(3)
(inc asset sales) 33% 33% 40%
Operating margin on shared ownership
(first tranche) (4) 22% 20% 22%
Operating margin on outright
sales(5) 19% 17% n/a
-------------------------------------- ------------ ------------ ------------
31 Mar 2019
Key financial ratios Actual
------------------------------------ -------------
EBITDA MRI / net interest paid(6) 2.0x
Social housing interest cover(7) 1.8x
Asset gearing(8) 39%
Net debt per unit(9) GBP22k
------------------------------------ -------------
31 Mar 2019
Liquidity Actual
------------------------------------ -------------
18 month liquidity requirement(10) GBP249m
Cash and undrawn facilities(11) GBP545m
Unencumbered stock 11,177 homes
------------------------------------ -------------
Credit ratings
--------------- --------------
Moody's A1 (negative)
S&P A+ (negative)
--------------- --------------
Notes:
(1) Operating surplus / Turnover
(2) General Needs, Supported housing, Affordable rent and Low
cost home ownership tenures
(3) Operating margin including asset sales includes all
activity; operating margin excluding assets removes gain or loss on
disposal of assets
(4) Operating surplus on First tranche shared ownership sales /
Turnover from first tranche shared ownership sales
(5) Operating surplus on outright sales / Turnover from outright
sales
(6) (Operating surplus + Depreciation + Amortisation -
Capitalised major repairs) / Net interest paid(6)
(7) (Operating surplus on Social housing lettings) / Net
interest paid(6)
(8) Net Debt / Housing assets at historic cost
(9) Net debt / Total units owned & managed
(10) 18 month cashflow requirement - 20% of sales income +
GBP25m
(11) Cash and undrawn RCF
This trading update contains certain forward looking statements
about the future outlook for BHG. These have been prepared and
reviewed by Bromford only and are unaudited. Forward looking
statements inherently involve a number of uncertainties and
assumptions. Although the Directors believe that these statements
are based upon reasonable assumptions on the publication date, any
such statements should be treated with caution as future outlook
may be influenced by factors that could cause actual and audited
outcomes and results to be materially different. Additionally, the
information in this statement should not be construed as
solicitation/recommendation to invest in Bromford's bonds
For further information, please contact:
Imran Mubeen, Head of Treasury
07711 221464
https://www.bromford.co.uk/investorrelations/
END
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END
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