TIDM38EO
RNS Number : 0583Z
Metropolitan Funding PLC
19 May 2021
Metropolitan Funding PLC
Thames Valley Housing Association (TVHA) unaudited consolidated
results for the year ended 31 March 2021.
The TVHA group (trading as Metropolitan Thames Valley), one of
the UK's leading providers of affordable housing and care and
support services, announces unaudited consolidated results for the
year ended 31 March 2021. These results may be subject to further
adjustments, most notably in respect of pension costs and property
valuations.
Headlines
-- Operating Surplus up 9% to GBP138m (2020: GBP127m).
-- Total Revenue GBP446m, down 4% (2020: GBP465m).
-- 923 new homes completed (2020: 1,022 homes) of which 704 (2020: 781) were affordable.
-- Strong liquidity position with around GBP790m of available cash and facilities.
-- Net debt to EBITDA 10.5x (2020: 12.1x).
-- S&P credit rating A- (stable outlook).
-- RSH grading confirmed as G1/V2.
-- Appointment of new Board members Tania Brisby, Davinder
Dhillon, Nigel Ingram and Ofei Kwafo-Akoto.
Geeta Nanda, Chief Executive of Metropolitan Thames Valley,
commented:
"The safety and wellbeing of our customers and colleagues has
been our number one priority throughout global pandemic which has
dominated the 2020/21 financial year. Consistent with our strategy
of "Serving People Better Every Day", we moved quickly to maintain
essential frontline services, particularly across our Care and
Support schemes which serve some of the most vulnerable people in
society. We also focussed on maintaining full services to our NHS
keyworker accommodation schemes, which are designed to give
frontline healthcare workers comfortable and secure homes near to
the hospitals where they work.
Reported operating surplus rose 9% to GBP138m while underlying
Social Housing margin rose by 4 percentage points to 32%. Sales
revenue was GBP109m (down 17%) as we sold 531 new homes (2020: 711
homes). The average selling price of our homes was GBP321k for
Shared Ownership (down 5%) and GBP430k for outright sale (down
12%), both driven by geographic sales mix. Meanwhile the sales
market continues to perform in line with our expectations. The
Group is well-funded with GBP0.8bn of available liquidity.
Despite disruption from Covid 19 and Brexit to the construction
sector we built 923 new homes, and our pipeline is set to deliver a
further 6,000 over the next five years. We also maintained our
commitment to the quality of existing properties, with GBP42m
invested in people's homes - including improvements such as
replacing bathrooms and kitchens and installing new boilers. Our
money advice team also worked with customers proactively through
the year to support those undergoing financial stress, such that
our concerns around arrears at this time last year did not
materialise, with rental arrears rates ending the year just under
5%.
"Building safety continued to be an area of focus for us during
the year, with our dedicated Safer Buildings team delivering a
programme of surveys across more than 50 of our tallest blocks.
This work is ongoing, as we identify and address risk across our
properties, in line with government guidelines. The challenges
faced by leaseholders trying to sell or re-mortgage their
properties or concerned by the prospect of incurring costs for fire
safety work on their buildings, has caused great anxiety for many
homeowners across the country. We continue to work to support
residents affected in this way, and to urge government to take
action to help resolve these challenges."
Results overview
Total Housing operations (including supported housing and market
rent) were in line with expectations, with non-sales income
representing 76% (2020: 72%) of turnover. Underlying Social Housing
operating margin was 32% (2020: 28%). Sales revenue was GBP108m
(2020: GBP131m) with an average sales margin of 10% (2020: 16%). We
built 923 new homes (2020: 1,022 new homes) in the year, investing
GBP158m (2020: GBP281m) in new housing.
Underlying operating margins are 31% (2020: 28%) driven by the
return to an indexed rent roll. Liquidity remains strong at GBP790m
(2020: GBP611m). Drawn borrowings are GBP1.9bn (2020:
GBP2.0bn).
Our partnership integration activities are complete and we
continue to deliver on the integration savings in respect of
headcount and procurement.
Operations review - Customer Services (including Care and
Support)
Social housing letting revenue was GBP299m (2020: GBP295m), with
underlying rental income up 3.2% in line with the inflation
settlement. We invested GBP42m (2020: GBP42m) in property
improvements, while our overall spend on fire safety was GBP21m
(2020: GBP16m). Our total spend on the existing estate was GBP127m
(2020: GBP129m) prioritising property compliance, condition and
customer satisfaction issues. Social rent arrears closed the year
at 4.98% (2020: 4.82%) as a result of proactively contacting
vulnerable customers offering support and financial advice and
assisting new claimants on to Universal Credit. Our average general
needs re-let time improved from around 32 days in 2020 (weighted
between MHT and TVHA by unit stock) to 27 days 2021.
In line with our commitment to improve the lives of our
customers, we invested GBP3.6m (2020 GBP3.7m) in building stronger
communities.
Operations review - New homes development and sales
First tranche revenues were GBP44m (2020; GBP77m) with margins
diluted as we sold down long-term stock units on some lower-margin
sites outside London. We sold 380 First Tranche units at an average
14% surplus margin (2020: 600 units at 15% margin). In addition we
sold 151 outright sale units at an average underlying margin (net
of post-planning remediation costs) of 10% (2020: 111 units at
17%). As at 31 March 2021, MTVH held 262 unreserved completed units
(2020: 183).
During the year we completed 370 staircasing transactions which
delivered GBP16.5m of operating surplus at a 37% margin (2020:
GBP16.0m at 34% from 412 completions). In addition, we completed
206 Homebuy loan redemption transactions, achieving GBP5.8m of
operating surplus at a 38% margin (2020: GBP6.2m at a 40% margin
from 234 completions). Surplus derived from Right to Buy disposals
fell by GBP2.5m to GBP0.9m as a result of the completion of the
extended Right to Buy pilot scheme in the East Midlands at the end
of last year.
The future development pipeline remains strong at 6,914 units
(2020: 6,344 units) despite the impact of the COVID19. At Clapham
Park we are now out to tender seeking a Joint Venture partner with
whom to deliver futures sales phases, with the next social phase
under construction.
Debt and facilities
Net debt (excluding derivative financial instruments) at 31
March 2021 is GBP1.9bn (2020: GBP2.0bn) following a year of strong
cash generation boosted by a good sales market and some delayed
development spend. Available liquidity (cash and committed secured
undrawn facilities) is up at GBP790m (2020: GBP611m). MHT covenant
gearing reduced on the Historic Cost basis to 38% (2020: 42%).
Interest cover was around 1.68 times (2020: 1.6 times) on an EBITDA
MRI basis.
The Standard & Poor's credit rating was confirmed in
December 2020 at A- (stable outlook).
Consolidated Statement of Comprehensive Income for the year
ended 31 March 2021 (unaudited)
2021 2020 %
------- -------- -------- ----------
GBPm GBPm
------- -------- -------- ----------
Revenue 445.8 465.0 -4%
------- -------- -------- ----------
Cost of sales -96.1 -111.2 -14%
----------
Operating costs -241.2 -257.6 -6%
------- -------- -------- ----------
Surplus from disposal of fixed assets
and investments 24.5 28.8 -15%
--------------------------------------------------------- -------- -------- ----------
Share of Surplus from Joint Ventures 5.0 5.7 -12%
--------------------------------------------------------- -------- -------- ----------
Underlying Operating Surplus 138.0 130.7 6%
--------------------------------------------------------- -------- -------- ----------
Non-recurring operating costs - -4.1
--------------------------------------------------------- -------- -------- ----------
Operating Surplus 138.0 126.6 9%
------- -------- -------- ----------
Revaluation of Investments 3.0 -0.5 -700%
------- -------- -------- ----------
Net interest payable -74.9 -77.3 -3%
------- -------- -------- ----------
Movements in fair value of financial
instruments and investment property -4.3 0.7 -714%
--------------------------------------------------------- -------- -------- ----------
Movement in fair value of financial
assets -0.7 -0.7 -
------- -------- -------- ----------
Surplus before Tax 61.1 48.8 25%
------- -------- -------- ----------
Taxation - 0.3 -
------- -------- -------- ----------
Surplus for the Year 61.1 49.1 24%
------- -------- -------- ----------
Actuarial loss in respect of pension
schemes -48.2 43.7 -210%
------- -------- -------- ----------
Change in fair value of hedged financial
instruments 12.4 -14.6 -185%
------- -------- -------- ----------
Total comprehensive income for the
year 25.3 78.2 -68%
------- -------- -------- ----------
Consolidated Statement of Financial Position as at 31 March
2021 (unaudited)
Housing and Investment properties 4,592.1 4,489.1 2%
------------ -------- ------
Other fixed assets 36.0 29.9 21%
------------ -------- ------
Investments 262.0 271.1 -3%
------------ -------- ------
Net current assets -267.8 -6.1 4309%
------------ -------- ------
Total Assets less current liabilities 4,622.3 4783.9 -3%
------------ -------- ------
Loans due to be repaid in more than
one year 2,066.7 2,297.8 -10%
------------ -------- ------
Pension liabilities 75.7 31.1 143%
------------ -------- ------
Capital and reserves 2,479.9 2,455.0 1%
------------ -------- ------
Total non-current liabilities
and reserves 4,622.3 4,783.9 -3%
------------ -------- ------
Consolidated Statement of Cashflows for the year ended
31 March 2021 (unaudited)
Net cash from Operating Activities 273.2 172.6 58%
------- ------- ------
Net cash from Investing Activities -162.7 -206.7 -21%
------- ------- ------
Net cash used in Financing Activities -59.7 -83.5 -29%
------- ------- ------
Net movement in cash and cash equivalents 50.8 -117.6 -143%
------- ------- ------
Cash and cash equivalents carried
forward 156.3 105.5 48%
------- ------- ------
Sales revenue and margins 2021 2020
(unaudited)
-----------------------
Revenue Margin Revenue Margin
-------- ------- -------------- -------
First Tranche 43.8 14% 76.9 15%
---------------------------- -------- ------- -------------- -------
Outright Sales 64.9 10% 54.3 16%
---------------------------- -------- ------- -------------- -------
Staircasing 44.4 37% 47.6 34%
---------------------------- -------- ------- -------------- -------
RTB / RTA 2.8 32% 11.8 29%
---------------------------- -------- ------- -------------- -------
Redemptions 15.5 37% 16.9 37%
---------------------------- -------- ------- -------------- -------
Fixed Asset Sales 10.6 13% 9.8 33%
---------------------------- -------- ------- -------------- -------
Outlook
Uncertainty relating to the twin effects of Covid and Brexit
still occupy our planning however the sales market continues to
perform well and overheads and housing operating costs remain under
control. The withdrawal of HM Treasury incentives and support,
including SDLT holidays and furlough may adversely impact the
outturn, as well as some indications that construction and property
cost increases will run ahead of underlying inflation as the
economy recovers. Notwithstanding these risks we remain confident
in the resilience of our plans.
We expect to publish the audited results in July 2021.
Enquiries
Please contact:
Donald McKenzie , Director of Corporate Finance, at
donald.mckenzie@mtvh.co.uk or on (W) 0203-535-4434 or (M) 07738
714126
This information for investors is also available on our website:
https://www.mtvh.co.uk/about-us/investors/
Notes
-- Operating margin is operating surplus divided by turnover
-- Net debt is borrowings (excluding derivatives) less cash and cash deposits
-- Gearing is net borrowings divided by net housing properties at cost
-- Interest cover is earnings before interest, tax and
depreciation/amortisation less capitalised major repairs, divided
by net interest costs
Disclaimer
The information in this Preliminary Results announcement has
been prepared by the Thames Valley Housing Association group and is
for information purposes only.
The Results announcement should not be construed as an offer or
solicitation to buy or sell any securities issued by the Parent,
the Issuer or any other member of the Group, or any interest in any
such securities, and nothing herein should be construed as a
recommendation or advice to invest in any such securities.
This unaudited preliminary announcement contains certain
'forward-looking' statements reflecting, among other things, our
current views on markets, activities and prospects. Actual and
audited outcomes may differ materially. Such statements are a
correct reflection of our views only on the publication date and no
representation or warranty is given in relation to them, including
as to their completeness or accuracy or the basis on which they
were prepared. Financial results quoted are unaudited. We do not
undertake to update or revise such public statements as our
expectations change in response to events.
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