TIDM62ZW

RNS Number : 6569D

RHP Finance PLC

22 June 2023

RHP Group trading update for the year ending 31 March 2023

-- Richmond Housing Partnership Group (RHP) is today issuing its consolidated trading update for the year ended 31 March 2023.

   --    These figures are unaudited and for information purposes only. 

Highlights for the period ending 31 March 2023

   --    RHP own and manage 11,142 homes 
   --    Turnover for the period was GBP67m (2022: GBP62m) 
   --    Social housing lettings turnover contributed 85% of total turnover (2022: 87%) 
   --    Operating surplus (including asset sales) for the period was GBP19m (2022: GBP16m) 
   --    Operating margin on social housing lettings was 28% (2022: 27%) 
   --    Overall operating margin (including asset sales) was 28% (2022: 26%) 
   --    Overall operating margin (excluding asset sales) was 25% (2022: 21%) 
   --    Net margin on shared ownership (first tranche) was 2 % (2022: 37%) 
   --    Surplus after tax and pensions for the period was GBP14m (2022: GBP13m) 
   --    Asset gearing was 57% (2022: 58%) 
   --    Return on capital employed for the period was 3.7% (2022: 3.3%) 

Commenting on the results, Corinna Bishopp, Executive Director of Finance, said:

We are pleased to publish our unaudited financial results for 22/23.

Despite difficult economic conditions and the significant impact of inflation and energy cost increases, our financial results show an improvement in performance compared to the prior year. In accordance with our strategy, our investment in our asset portfolio has increased to ensure we provide safe and secure homes for our customers, and we have invested in additional resource in order to improve our service. To deliver this within our financial constraints, we have adopted some careful financial controls to ensure we are prioritising our spend.

We note a particular ongoing challenge with our repairs service and corresponding customer satisfaction levels and are pleased to confirm our transition to a new repairs provider and new delivery model in June 2023 is going well. We are hopeful that 23/24 will deliver an improvement in service levels, faster turnaround of repairs and correspondingly customer satisfaction.

The Group's operating surplus was GBP19m (2022: GBP16m) and operating margin was 25% (2022: 21%). Continued development has ensured we continue to grow our turnover, and the first tranche sales of shared ownership properties has contributed GBP3.3m (2022: GBP2.3m) to our turnover and GBP0.1m (2022: GBP0.9m) to our overall surplus.

Our social housing cost per unit of GBP5,007 (2022: GBP4,803) has increased due to higher core operating spend and increased investment in our properties during the year.

The Group's total comprehensive income was GBP14.3m (2022: GBP12.8m) and RHP's subsidiary, Co-op Homes (South) Limited has contributed GBP0.6m (2022: GBP1.0m) to this overall surplus.

Our EBITDA-MRI margin at 32% (2022: 15%) demonstrates the additional investment made, but still illustrates strong core performance that can comfortably cover the level of investment required to keep our homes in good condition.

We anticipate later than normal publishing of our audited results due to audit delays, however expect to deliver within regulatory and legal requirements.

Unaudited Financial Metrics

 
 Statement of comprehensive income              31 Mar 2023     31 Mar 2022 
                                                     Actual          Actual 
---------------------------------------------  ------------  -------------- 
 
 Turnover from social housing lettings               GBP57m          GBP55m 
 Turnover                                            GBP67m          GBP62m 
 Operating surplus (including asset sales)           GBP19m          GBP16m 
 Surplus after tax and pensions                      GBP14m          GBP13m 
---------------------------------------------  ------------  -------------- 
 
 
 
 Margins                                             31 Mar          31 Mar 
                                                       2023            2022 
                                                     Actual          Actual 
---------------------------------------------  ------------  -------------- 
 
 Operating margin on social housing lettings            28%             27% 
 Overall operating margin (inc asset sales)             28%             26% 
 Overall operating margin (exc asset sales)             25%             21% 
 Operating margin on shared ownership (first 
  tranche)                                               2%             37% 
 
 
 Key financial ratios                                              31 March 
                                                                       2023 
                                                                     Actual 
---------------------------------------------  ------------  -------------- 
 
 EBITDA MRI Interest cover                                             132% 
 Gearing                                                                57% 
 
 
 Liquidity                                                         31 March 
                                                                       2023 
                                                                     Actual 
---------------------------------------------  ------------  -------------- 
 
 24-month liquidity requirement                                      GBP42m 
 Cash, short term investments and undrawn                           GBP173m 
  facilities 
 Retained bonds(10)                                                  GBP25m 
 Unencumbered stock (EUV-SH)                                        GBP127m 
 
 
 Credit rating 
---------------------------------------------  ------------  -------------- 
 
 S&P June 2023 (affirmed)                                     A+ (negative) 
 

Notes:

Operating surplus / Turnover

General Needs, Supported housing, Affordable rent and Low-cost home ownership tenures

Operating margin including asset sales includes all activity; operating margin excluding assets removes gain or loss on disposal of assets including first tranche shared ownership sales

Operating surplus on first tranche shared ownership sales / Turnover from first tranche shared ownership sales

(Operating surplus + Depreciation + Amortisation - Capitalised major repairs) / Net interest paid

Net Debt / Housing assets at historic cost

Net debt / Total units owned & managed

24-month cashflow requirement (before financing). Factors in cash generated from operating activities.

Cash, deposits, undrawn loans and RCF

(10) Retained element of RHP Finance PLC 2048 bonds

This trading update contains certain forward-looking statements about the future outlook for RHP Group. These have been prepared and reviewed by RHP Group 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 the statement should not be construed as solicitation/recommendation to invest in RHP's bonds.

For further information, please contact:

Corinna Bishopp, Executive Director of Finance

Investor.relations@rhp.org.uk

https://www.rhp.org.uk/rhpui/investors

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