TIDM38OI
RNS Number : 2913U
Anchor Hanover Group
02 December 2021
Anchor Hanover Group
2 December 2021
Anchor Trading Statement for six months to 30 September 2021
Unaudited trading update for the six months to 30 September 2021
for Anchor Hanover Group, trading as Anchor
Anchor, the largest operator of social housing for older people
and sixth largest residential care home operator in England,
announces its trading highlights and unaudited financial results
for the first half of the 2021/22 financial year.
"Our focus in the first half of this financial year continues to
be on ensuring that we achieve the 'Four Mores' of our strategic
plan - More and better homes, More opportunities for colleagues,
More influential for older people, and More efficient - alongside
our Covid-19 recovery plan."
"We are on track to meet our plan to deliver new affordable and
energy efficient homes and have seen recovery in occupancy in
established care and housing services in line with our expectations
during the period. We have also completed the corporate refinancing
that will underpin delivery of our strategic plan in a sustainable
way."
"We recognise that our achievements as a group would not be
possible without the efforts of our skilled and dedicated
colleagues, and I would like to thank them for their continued
work. Availability of a suitably qualified and experienced
workforce is crucial to achieving quality services for residents,
high levels of regulatory compliance and occupancy and therefore a
sustainable and successful business. We have therefore taken the
decision to apply the Living Wage Foundation rates of pay across
all current National Living Wage roles across the Group from 1
December 2021 and we commit to gaining Living Wage Employer
Accreditation by May 2022."
Sarah Jones, Chief Financial Officer
2 December 2021
Highlights
-- Recovery in occupancy and operating margin in line with Covid-19 recovery plan
-- Good consumer demand for new retirement housing
-- Delays to planned works programme due to supply chain constraints with some contractors
-- Strong liquidity with GBP300m in undrawn available loan
facilities and cash available to fund the strategic plan
-- Gearing at a low level for the sector at 21.9% (March 21: 19.7%)
-- Interest cover including capitalised repairs (EBITDA MRI)
strong at 4.5x (March 21: 2.4x), flattered by delays to planned
works programme
-- A+ stable rating from S&P; G1/V1 rating from the Regulator of Social Housing
-- Executive Board strengthened by several new appointments.
Financial Highlights
Figures in GBPm 6 months to 30 FY to 31 March
Sept 2021 2021
====================================== =============== ===============
Turnover 253.8 528.2
Operating surplus before exceptional
items 34.8 47.9
Operating margin before exceptional
items % 13.7% 9.1%
EBITDA MRI 46.4 56.2
Commentary
Operations
Whilst Covid-19 is still with us, keeping Anchor's customers,
colleagues, and contractors safe remains our priority. Government
support has continued into this financial year. Local Authorities'
grants to support the cost of managing Infection Control, Rapid
Testing and Sustainability along with the provision of free
personal protective equipment has ensured our services remained as
safe as possible.
Occupancy in both Care Homes and Housing increased over the
period, and operations overall achieved an operating surplus ahead
of expectations.
Occupancy in care homes recovered strongly and closed the period
at 84.1% (31 March 2021: 78.2%). Voids in housing reduced from 842
to 693 units, maintaining our typically high levels of occupancy in
comparison with the housing sector closing the period at 98.2% (31
March 2021: 97.7%).
In common with much of the sector, we experienced delays to our
planned works programme due to supply chain and capacity
constraints with some contractors. We proactively managed this by
deferring some works and bringing forward others where supplier
capacity allowed. Health and safety compliance works were completed
as required.
Applying Living Wage Foundation rates to all National Living
Wage roles across the group is an important response to both
recognising the contribution of colleagues in delivering high
quality services, but also sustaining those services through the
immediate challenges of the employment market and preparing for
growth.
The inevitability of the increase is marked by a government
commitment that National Living Wage rates will match Living Wage
Foundation rates by FY25. Early adoption therefore drives a
strategic advantage in achieving sustainable and profitable
services in the longer term.
Development
We plan to build 5,700 affordable and energy efficient homes
over a balance of tenures over 10 years. The Board has approved a
pipeline of 1,654 units to date, of which just over 55% are shared
ownership, 39.5% are affordable or social rent, with the remainder
as outright sales.
Demand for completed properties was strong in the period,
boosted by the relaxing of Covid-19 restrictions and the stamp duty
land tax holiday that ended in June 2021.
Liquidity
Liquidity is strong following our debut public bond issue in
July 2021 with GBP300m in undrawn available loan facilities and
cash available to fund the development programme. Gearing was 21.9%
at the end of the period, remaining at a low level for the sector.
Interest cover including capitalised repairs (EBITDA MRI) was
strong at 4.5 times, albeit that was flattered by delays to planned
works that are anticipated to be undertaken in the second half of
the year.
Credit and Regulatory ratings
Anchor maintains a rating of A+ stable from S&P which was
issued in March 2021. This rating reflects the group's strong
balance sheet position and robust business plans set out within a
strong risk control framework.
The group remains G1/V1 compliant under the Regulator of Social
Housing's Governance and Viability assessments.
Executive Board Changes
Two new Executive Directors have joined Anchor this year.
John Westwood joined Anchor in June 2021 as Executive Director
for Property and Assets, a newly created role responsible for all
property services and strategic asset management. John has nearly
30 years' experience in the property industry, for the past six
years as Executive Director of Asset Management at NHS Property
Services, a property company owned by the Department of Health and
Social Care.
Suki Jandu joined Anchor in November 2021 as Executive Director
for Housing Services, responsible for rented and homeownership
housing services, including extra care. He oversees the customer
contact centre and the services provided by Anchor on Call. Suki
has extensive social housing experience and was formerly Group
Executive Director of Customer Experience and Assets at Futures
Housing Group. He is also a Group Audit Committee Member at
Riverside.
Mark Curran, Executive Director of Development, will be retiring
in December 2021. Oliver Boundy will succeed Mark in January 2022
joining from Southern Housing Group where he is Executive Director
- Development and Growth.
Unaudited Financial Statements for the Six Months to September
2021
All comparatives are to Anchor's consolidated audited year end
results to 31 March 2021.
Group Statement of Comprehensive Income
Figures in GBPm Six Months Ended Year Ended 31
30 September March 2021
2021
----------------------------------------- ----------------- --------------
Turnover from ongoing operations 244.0 482.6
Turnover from property sales 9.8 45.6
Turnover 253.8 528.2
Operating costs from ongoing operations (211.9) (451.4)
Cost of Sales - property sales (9.0) (32.6)
Surplus on disposal of fixed assets 1.9 3.7
Operating Surplus before exceptional
items 34.8 47.9
Net interest costs (16.5) (17.8)
Refinancing costs (40.3)
Taxation - (0.2)
Surplus for the period 18.3 (12.0)
Operating margin excluding property
contribution 13.2% 6.5%
Operating margin before exceptional
items 13.7% 9.1%
Operating margin 13.7% 8.8%
EBITDA MRI(1) 46.4 56.2
EBITDA MRI - Interest cover(2) 4.5x 2.4x
1. Group operating surplus including property proceeds less
Amortisation of social housing grant, less Government capital
grants taken to income, add back Depreciation and Impairment
attributed to Retirement housing to let and Residential care homes,
less improvements to existing properties capitalised
2. EBITDA MRI including property proceeds, divided by Interest
and financing costs less Interest receivable
Group Statement of Financial Position
Figures in GBPm As at 30 September As at 31 March
2021 2021
--------------------------- ------------------- ---------------
Tangible fixed assets 1,206.4 1,227.4
Other investments 1.2 2.6
Total long-term assets 1,207.6 1,230.0
Properties held for sale 190.0 146.6
Cash 82.3 150.2
Other current assets 45.2 54.0
Total current assets 317.5 350.8
Loans (502.7) (538.4)
Finance lease obligations (99.5) (99.4)
Grants (242.4) (245.3)
Pension liabilities (12.9) (12.9)
Other liabilities (101.0) (142.8)
Total Liabilities (958.5) (1,038.8)
Total net assets 566.6 542.0
Reserves 566.6 542.0
Gearing(3) 21.9% 20.5%
3. Net debt divided by historical cost of completed properties
Anchor Hanover Group
Derya Filiz
Head of External Communications
The Heals Building Suites A & B, 3(rd) Floor
22-24 Torrington Place
London
WC1E 7HJ
07713085004
derya.filiz@anchor.org.uk
communications@anchor.org.uk
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END
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