PenArian Housing Finance PLC
Summer update 2024
Overview
Given the challenging external
conditions, ClwydAlyn performed well during 23/24.
We maintained strong liquidity, ending
23/24 with cash balances of £55.8m.
Our turnover for 2024/25 is budgeted
at just under £64m and our operating margin remaining at 20%. We
are on site with over 470 new homes and have recently been awarded
£4m grant to invest in decarbonisation projects and the opportunity
to bid for a further £2m. All new homes are constructed to EPC A
standard.
The handover of our latest Extra Care
Home has been delayed by several months and will now not be open
until the autumn causing budget pressures, however this has been
offset by the successful lobbying of the Welsh Government to
substantially increase fees paid for care and supported living
schemes. These fees increased by 7.8% which was not in the original
budget.
We saw a reduction in voids during
23/24 and these have remained stable for the first quarter of the
year. Our expenditure is currently forecast to remain within
budget. In July we re-let our gas supply contract and saw a £1.1m
reduction in the annual contracted cost. Most of this saving will
be passed on to tenants as lower service charges.
At the end of 23/24, an issue emerged
across the sector regarding the administrative requirements of the
new Renting Homes Wales Act. Non-compliance has the potential to
bring with it a financial liability. This is currently the subject
of legal action in the high court and ClwydAlyn is awaiting the
outcome. We do not expect that the implications of this judgement
will be material for ClwydAlyn.
We are continuing to invest in fire
safety works across our complex buildings. One extra care scheme
has just been awarded £3m grant towards structural works that
include fire safety. In addition, we had a programme to replace £1m
of fire doors across our properties and this has now completed.
Unlike in England, sprinklers have been mandatory on all new builds
including houses since 2016, so a large proportion of our stock has
these fitted.
There has been significant turbulence
in the Welsh Senedd with the newly elected leader stepping down
along with his cabinet. This creates delays in policy support from
Welsh Government, however they recently announced their
continuation of the existing social rent policy meaning that rent
for next year can be set at CPI+1%.
Cashflow
Cashflow throughout 23/24 was very
strong with £40m drawn on the bond and over £40m received in
grants. Cash has continued to be strong in 24/25 and we continue to
hold a minimum of 24 months-worth of funds or facilities available
for drawdown.
We do not build properties to sell and
rely on a relatively small amount (£1m per year) of income from
disposal of surplus properties and staircasing of shared ownership.
Despite increased interest rates there is still reasonable interest
from residents in staircasing and we are on target to reach our
budget.
Rating
We were pleased to retain our 'A
Stable' credit rating with Standard and Poor's after their review
in July 24. Our Moody's rating was reviewed in October 23 and
remained at A3. However, we were pleased that Moody's improved our
outlook from 'negative' to 'stable.'
Staffing
In April 24, our Executive Director of
People retired, her replacement started in July.
Our Executive Director of Resources
has left to take up a post with a larger English RP. The
recruitment process is complete, and we are delighted to announce
the appointment of Sandy Murray to the Position of Executive
Director of Resources.
Sandy takes up the position on the 1st
of October 2024. In the interim, should you have any queries you
can contact the Company Secretary - rachel.storr-barber@clwydalyn.co.uk
or the Chief Financial Officer -
adam.fletcher@clwydalyn.co.uk.
