TIDM42RJ
RNS Number : 8703F
Aster Treasury PLC
09 November 2022
Aster Group t r ad i ng update for t he six months ended 30
September 2 0 22
9 November 2022
Aster Group issues its unaudited Group trading update for the
six months ended 30 September 2022, with comparatives to the
audited financial statements for the 12 months ended 31 March
2022.
Half year highlights
-- Despite a challenging political and economic climate, we have
achieved profits of GBP30.8m for the six months, ahead of
expectations
-- Encouragingly, liquidity is at GBP396.8m, and in response to
strong demand for our bonds, GBP50 million nominal retained bonds
were sold in July 2022
-- We have maintained a strong development pipeline, delivering
685 affordable homes. Looking ahead, we remain on track to complete
on our forecast to deliver over 1,300 homes by 31 March 2023
-- Our shared ownership first tranche sales are up 14.4% for the
six-month year on year period to GBP30.3m, demonstrating a strong
market in our areas of operation across the south of England
-- We're proud to remain a sector leader in delivering Community
Land Trust (CLT) developments. Our pipeline is growing with us set
to deliver 250 CLT homes by 2029
-- In August we announced our intention with Hampshire-based
disability charity, Enham Trust, to join Aster Group (confirmed
completion in October 2022). As a subsidiary of Aster Group, this
will add 316 homes to our 35,000-strong portfolio, whilst retaining
its name, heritage, and charity status
-- Central and Cecil Housing Trust (C&C), which joined Aster
Group at the start of 2022, opened Grace House. This flagship
scheme in St John's Wood, London, is a 170-apartment affordable and
adaptable development for over-55s
-- Since joining the Institute of Customer Services (ICS) in
2020, we've been working towards achieving the ServiceMark
accreditation, a national standard to understand how we compare
with other housing associations and other sectors, in relation to
perceptions around customer service
-- Further to our commitment to invest GBP2.8m to carry out a
comprehensive stock condition survey on our homes, we have already
made excellent progress in completing 12,000 home surveys. We hope
to complete the project by the end of the financial year. This
exercise will help us to better understand any improvements that
need to be made, plan more effectively into the long-term future
and inform our sustainability roadmap to 2050
-- We continue to empower our colleagues to work in locations
that get the best from their day and provide greatest business
outcome. Similarly, we endeavour to deliver homes that protect the
biodiversity of our communities and lower our carbon footprint. We
remain committed to working towards every one of our homes
receiving an Energy Performance Certificate (EPC) rating of 'C' or
above before 2030
-- Fundamental to our customer services offer is ensuring that
our homes remain safe places in which to live. We are pleased to
confirm that this continued focus on safety in our customers' homes
is reflected in the results across all key areas of health and
safety, including 99.9% on gas servicing and 100% fire safety
actions
-- In April 2022, the Aster Foundation which focuses on enabling
better lives beyond bricks and mortar, was granted official charity
status by the Charity Commission. The charity's mission is to
better at least 40,000 people by 2030 through its impact programmes
and proactive approach to tackling social challenges. Recently, the
charity's social incubator, inc. announced its third cohort of
entrepreneurs embarking on the programme designed to support
businesses focused on making positive social change
-- As an accredited Menopause Friendly Employer, we have also
been recognised for our support to our colleagues, including the
'Best Support Group Award' in the industry-recognised Menopause
Friendly Employer awards
-- Further to achieving a 14% increase in our annual Diversity
and Inclusion (D&I) benchmarking from enei (the Employers
Network for Equality and Inclusion), we gained access to the
Housing Diversity Network Board Diversity Programme, and continued
to accelerate our action plan including extending colleague
networks and creating an Inclusion Steering Group
-- We recently released our third Environmental, Social and
Governance (ESG) report covering the 12 months to 31 March 2022,
benchmarking our delivery against the Sustainability Reporting
Standard (SRS) for social housing as well as the United Nation's
Sustainable Development Goals (SDGs).
Fina n ci al and ope r a t i ng p e rfo rman ce
Unaudited profit before tax for the six months ended 30
September 2 0 22 was GBP30.8m. H o using p r o perties (net of
depreciati o n) h a ve increased to GBP 2,122m fr om GBP2,053m at
31 March 2 0 22.
Consolidated Statement of Comprehensive Income 6 months 12 months
(GBP000) Sept 2022 March 2022
Turnover 145,297 240,933
Operating costs (114,152) (188,618)
Surplus on sale of housing property, plant and
equipment 11,870 22,609
Operating Profit 43,015 74,924
Profit on disposal of other property, plant,
equipment and intangible assets - 8
Impairment of housing assets (204) 137
Share of profit in joint ventures 917 2,631
Increase in fair value of investment properties - 1,153
Net finance expense (12,909) (27,664)
------------ -------------
30,819 51,189
Gain on acquisition - 119,409
Profit before tax for the period 30,819 170,598
Financial indicators 6 months 12 months
Sept 2022 March 2022
Operating margin (excluding surplus on sale
of housing property, plant and equipment) (1) 21.3% 21.8%
Social housing operating margin(2) 25.7% 25.6%
EBITDA MRI interest cover(3) 190.0% 182.5%
Gearing 48.6% 50.0%
----------- -------------
Following the ongoing effects of the pandemic and storms in
February 2022, there has been a focused effort to reduce the order
bank and backlog for routine repairs during the six months to 30
September 2022. We also continue to see the catch up of major
works, carried forward from the prior financial year. Overall
operating margin was 21.3%, slightly down from 21.8% in the
comparative period due to general inflationary increases across the
business and the catch up on the routine repair order bank.
Sales of shared ownership homes and open market sales homes
(predominantly delivered through joint ventures) totalled 289 units
for the six months ended 30 September 2022 (12 months ended March
2022: 540). We continue to see high demand for shared ownership
properties with customers drawn to their lower risk, particularly
in the current climate. As at 30 September 2022, the Group had
stock of 72 completed shared ownership homes (March 2022: 50)
available for sale, of which 55 were reserved (March 2022: 49).
Other asset sales continue to perform ahead of budget for the
period due to the continuation of our Void Disposal Programme (VDP)
and an upturn in sales from staircasing of shared ownership homes
due to the market conditions.
The gain on acquisition reflected in the comparative period, 12
months to 31 March 2022, relates to the acquisition of Central and
Cecil Housing Trust (C&C), which was recognised as a
non-exchange transaction.
Overall customer satisfaction was 77% as at September 2022
(March 2022: 82%). Rent arrears have been tightly managed and
remained strong at 1.9% (March 2022: 1.8%) of associated revenue
due to the assistance of our financial wellbeing team. Void losses
for the Group's general needs and sheltered stock were improved for
the period at 0.7% (March 2022: 0.8%).
Debt and li qu i d i ty
Net debt during the period has increased to GBP1,031m from
GBP1,002m at March 2022. Liquidity at 30 September 2022 was
GBP396.8m, consisting of committed and available undrawn facilities
of GBP270.0m, and cash and cash equivalents of GBP126.8m. During
the period GBP50m of guaranteed fixed rate secured bonds were
sold.
Development
The Group completed 685 affordable units in the six months ended
30 September 2022 (year ended March 2022: 768 units). Aster has
seen a strong start to the year with 56% of our delivery target of
handovers achieved by the end of September 2022. We have received
the first handovers from C&C since it became part of the Aster
Group earlier this year. Planning, material and labour delays
continue to be experienced and make accurate forecasting of
programme delivery difficult. Build cost inflation and the general
economic climate are being monitored closely, alongside the
approach from contractors and developers. We have a strong pipeline
of schemes and have been successful securing both land and
developer led opportunities; a good proportion of these schemes are
due to enter contract over the next quarter, adding to our
contracted pipeline of 3,434 homes. Aster is a Homes England
Strategic Partner and has secured GBP114 million to deliver 1,550
homes by March 2028. Grant has been drawn down against the land
purchase of 190 homes and we are forecasting 200 homes to start on
site within 22/23 with first handovers commencing from 23/24.
Board and executive team changes
Aster Group Ltd: The members of the Executive Board are Bjorn
Howard, Chris Benn, Rachel Credidio, Dawn Fowler-Stevens, Emma
O'Shea and Amanda Williams.
There were no changes to the Board during the six-month period
to 30 September 2022.
Aster Treasury plc: There were no changes to the membership of
the board.
Aster Group credit rat i ng and governance
Aster Treasury plc is rated A+ (negative) by Standard and Poor's
(December 2 021), and G 1/ V1 by t he Regulat or of Social H o
using (January 2022).
Notes:
(1) Demonstrates the profitability of operating assets before
exceptional expenses. Defined as operating profit, excluding
surplus on sale of property, plant and equipment, as a percentage
of total turnover.
(2) Demonstrates the profitability of social housing operating
assets before exceptional expenses. Defined as operating profit
derived from social housing activities, excluding surplus on sale
of property, plant and equipment, as a percentage of total
turnover.
(3) Seeks to measure the level of surplus generated compared to
interest payable. It is a key indicator for liquidity and
investment capacity. EBITDA MRI is Earning before interest, tax,
depreciation, amortisation, excluding profit on disposal of
property, plant and equipment, but including the cost of
capitalised major repairs (major repairs included). Interest
includes the group's interest payable plus interest capitalised
during the year but excluding interest on the net pension
liabilities.
Calculated as net debt (loans less cash) as a proportion of
social housing assets. Shows how much of the social housing assets
are made up of debt, and the degree of dependence on debt finance.
It also sets out the potential capacity for further borrowing which
can be used to fund the future development of new housing.
END
For m o re i nfo rmation, p l e ase c onta ct:
Chris Benn, Chief financial officer - Chris.benn@aster.co.uk
https://www.aster.co.uk/corporate/about-us/investor-relations
Dis claimer
The information contained herein (the "Trading Update") has been
prepared by Aster Group Limited (the "Parent") and its subsidiaries
(the "Group"), including Aster Treasury plc (the "Issuer") and is
for information purposes only. The information contained in the
Trading Update is unaudited.
The Trading Update 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.
Statements in the Trading Update, including those regarding
possible or assumed future (or other) performance of the Group as a
whole or any member of it, industry growth or other trend
projections may constitute forward-looking statements and as such
involve risks and uncertainties that may cause actual results,
performance or developments to differ materially from those
expressed or implied by such forward-looking statements.
Accordingly, no assurance is given that such forward-looking
statements will prove to have been correct. They speak only as at
the date of the Trading Update and neither the Parent nor any other
member of the Group undertakes any obligation to update or revise
any forward- looking statements, whether as a result of new
information, future developments, occurrence of unanticipated
events or otherwise. The information contained in the Trading
Update is unaudited. Trading Updates may be based on Management
Accounts rather than draft financial statements so may not take
into account all consolidation and other adjustments as required
for the financial statements. These include, but are not limited
to, corporation tax, fair value of investment properties, fair
values relating to business combinations, balance sheet
reclassifications between fixed and current asset housing stock and
defined benefit pension costs such as interest and current service
cost adjustments. The group does not anticipate these adjustments
will have a material effect on the outputs.
None of the Parent, any member of the Group or anyone else is
under any obligation to update or keep current the information
contained in the Trading Update. The information in the Trading
Update is subject to verification, does not purport to be
comprehensive, is provided as at the date of the Trading Update and
is subject to change without notice.
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Trading Update is or should be relied on as a promise or
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is intended to be a profit estimate or forecast. No representation
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END
IR FLFSVLLLAIIF
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November 09, 2022 08:43 ET (13:43 GMT)
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