TIDM46QW
RNS Number : 0815G
Peabody Capital PLC
14 July 2023
Peabody Group Trading Update (including Peabody Trust, Peabody
Capital PLC, Peabody Capital No.2 PLC)
Peabody Group announces the following unaudited information
ahead of its Annual Report for the year ended 31 March 2023 to be
published during the Summer.
Throughout the last 12-months, our priority has remained our
residents and their safety despite the challenging economic
environment of high inflation, rising interest rates and labour and
material shortages. Margins have also been put under pressure by
these factors. But financial performance during the year including
from sales activity, has enabled us to continue to invest in our
existing homes. We have and will continue to allocate our resources
accordingly while realigning our organisation to get closer to
residents through locally focused services.
Turnover and sales performance
Peabody's turnover for the year exceeded GBP1.1bn. Over GBP300m
of this related to market sales or first tranche shared ownership
sales of new homes, all built to a high energy efficiency EPC B
standard. Our rents remain substantially below market levels at an
average of GBP127 per week and an annual subsidy of over GBP600m.
The impact of inflation on our underlying cost base has inevitably
led to pressure on margins.
Our sales performance was above expectations both in terms of
the number and value of homes sold. This reflects the importance of
our land-led development activity, focusing on location and the
quality of the homes we offer for sale. It is also important in
helping to fund the development of new social rent homes. We
continue to closely monitor the impact of pricing, changing
building requirements and the cost of mortgages on our current
development schemes as we respond to the challenges that the sector
faces.
Staircasing has continued to perform well, generating around
GBP81m to be reinvested back into improving the quality of our
homes. This demonstrates the strength of the shared ownership
product.
The performance of sales and staircasing during the year has
enabled us to make the investment in our residents' homes that is
needed to provide high quality, safe, energy efficient homes for
the future.
Investment in our existing homes
We now have over 107,000 homes under management within the
Peabody Group. In the 12 months to 31 March 2023, we invested
GBP179m in our existing homes including GBP66m on building safety.
The building safety programme will continue through 2023-24. This
substantial investment in existing homes has seen us focus on
making our homes safer and more energy efficient. We have also
continued to invest in our proactive response to potential issues
of damp, mould and condensation in people's homes.
We secured GBP25m from the Government's Social Housing
Decarbonisation Fund (SHDF) which, together with our match funding
of GBP25m, will enable us to improve over 6,500 homes, making them
more energy efficient, installing better insulation, better
ventilation and replacing doors and windows.
Over 75% of our homes are currently rated EPC C or above, but
there is much more to do. Further details will be published shortly
in our Sustainability Strategy, but we estimate that the cost of
getting Peabody homes to achieve EPC B could well exceed GBP1bn by
2050 and will constrain future development capacity.
Investment in new homes
We invested over GBP550m in our new homes programme during the
last year completing 2,399 new homes and starting 2,376 homes.
Across the Group we completed 604 homes at Social Rent, 251 for
London Affordable Rent, 158 at Affordable Rent and 861 for shared
ownership, with an additional 525 market sale homes generating a
cross subsidy. Whilst still a substantial investment building on
our successful sales activity during the year, it is below previous
years. This reflects a rebalancing of our expenditure to focus on
existing homes and respond appropriately to the current economic
environment. We are carefully managing our development programme
and maintaining appropriate flexibility on the level of future
spend and commitments.
Development and sales
Our unsold completed homes remain at low levels and continue to
be subject to tight monitoring.
Unsold new homes
- Peabody Group Reserved
at 31 March 2023 /
exchanged Available Total
3 - 6 months 19 59 78
Over 6 months 60 95 155
Liquidity
We retain very strong access to liquidity, with GBP1.7 billion
of cash and undrawn facilities. This ensures we can continue to
operate and deliver for the benefit of our residents in challenging
times. Limited levels of amortisation mean that our liquidity will
remain strong over the next 18 months and beyond. During the year
we acted decisively to protect ourselves from further increases in
interest rates with GBP286m in new hedging at an average tenor of 6
years and an interest rate of 3.7%. Our gearing remains very low
for the sector, and we continue to have around 80% of our borrowing
on fixed rates. We retain over 34,000 unallocated or unencumbered
properties across the Group with a security value of around
GBP4bn.
Ratings and certification
We are rated G1, V2 by the Regulator of Social Housing. We
continue to hold an A3 negative outlook rating from Moody's and an
A- negative outlook rating from S&P Global. During the year we
achieved our second Ritterwald Certified Sustainable Housing
accreditation, with frontrunner status in two categories.
Transfer of engagements
The transfer of engagements of Catalyst Housing Limited into
Peabody Trust completed on 3 April 2023. This was followed by a
similar exercise for Rosebery Housing Association Limited into Town
& Country Housing on 4 April. This consolidation of our
structure allows us to move into the next phase of transformation.
We're now getting closer to residents through a locally focused
approach to service delivery, with more locally based teams
alongside better use of data and technology across our
operations.
Note: Figures quoted in the update are based on unaudited
management accounts, which are subject to review and further
adjustments.
Contact: Anthony Marriott, Director of Treasury & Corporate
Finance or Ben Blades, Assistant Director Corporate Affairs
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END
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