Wrekin Housing Group Ltd (The) Trading Statement (1150X)
25 Août 2020 - 1:48PM
UK Regulatory
TIDM67TS
RNS Number : 1150X
Wrekin Housing Group Ltd (The)
25 August 2020
Released: 25 08 2020
The Wrekin Housing Group
The Wrekin Housing Group trading update for the period ending 31
March 2020
-- The Wrekin Housing Group (Wrekin) is today issuing its
consolidated trading update for the year ending 31 March 2020 (2020
FY).
-- The consolidated year end performance measures set out for
2020 FY reflect the first year of trading of the full Wrekin Group,
inclusive of the activities of Choices Housing Association Limited,
Old Park Services Limited and Strata Housing Services Limited.
-- The preliminary 2020 FY outturn figures are unaudited and for
information purposes only. The figures are largely unaffected by
the coronavirus outbreak. Stress test modelling by Wrekin
identified income collection, increased costs and difficulties in
delivering development and some repairs tasks as key risks for 2021
FY, aspects which have been closely monitored to date.
-- More detail on Wrekin's response to the Covid-19 pandemic can
be accessed on the previous update issued on 30 March 2020 (RNS
number 0664I), available at the following link:
https://www.wrekin.com/Docs/RNS_COVID_19_March_2020.pdf
-- In our monitoring so far of 2021 FY, no particular causes for
concern have been noted with performance close to budget. As at 16
August 2020, which is the latest point of the housing benefit
cycle, arrears stood at 0.61% of the overall rent debit, compared
with 0.57% at the same point last year, indicating that income
collection is still holding up well.
-- Although Wrekin does not rely on market sales to support its
development programme, it does dispose of older properties under
the Asset Renewal Programme and this programme was suspended during
the period of lockdown. The programme is planned to recommence
imminently, although it is expected that the volume of sales will
be reduced compared with 2020 FY.
-- Some development sites were closed at the beginning of the
pandemic, although all have now restarted. Planned programmed works
were rescheduled in the light of Covid-19 but we expect to complete
at least three quarters of the programme during 2021 FY.
-- The 2020 FY year-end audit is currently nearing completion
and will include an impairment review, as well as any adjustments
reflecting the treatment under FRS102 of the financial
restructuring during the year. This involved the partial repayment
of existing bank loans and mark to market losses on embedded
derivatives of GBP52.1m but reduced the cost of debt by 178bps to
3.18%, representing a reduction in annual interest payments of
GBP1.9m.
Highlights (The Wrekin Housing Group for the period ending 31
March 2020)
Unaudited Financial Metrics
31 March 31 March 31 March
2020 2020 2019
========================================== =========== =========== ================
Statement of Comprehensive Income Actual Budget Actual
Restated(1)
Turnover GBP92.1m GBP91.3m GBP95.7m
Turnover from social housing lettings GBP73.5m GBP72.8m GBP73.0m
Turnover from social housing activities GBP77.7m GBP73.9m GBP76.9m
(inc. garages, leaseholders, SO
first tranche etc.)
Operating Surplus (inc asset sales) GBP27.8m GBP25.8m GBP30.1m
(Deficit)/Surplus after Interest (GBP59.8m) (GBP52.1m) GBP9.4m
and Tax(2)
Margins
Operating margin on social housing
lettings 33.5% 31.8% 35.8%
Operating margin on social housing
activities (inc. garages, leaseholders,
SO first tranche etc.) 32.6% 31.7% 34.9%
Overall operating margin (including
asset sales) 30.2% 28.3% 31.5%
Overall operating margin (excluding
asset sales) 27.5% 25.0% 28.0%
Operating margin on shared ownership
first tranche sales 34.8% N/A(3) 31.2%
Operating margin on outright sales
(asset renewal) 74.6% 64.1% 70.0%
Liquidity 31 March
2020
Actual
18 month liquidity requirement(4) GBP39m
Cash and undrawn facilities GBP179m
Unencumbered stock 1,865 homes
Credit Rating
S&P A / Stable
Regulator of Social Housing G1 / V1
Notes:
1. Comparatives have been restated to reflect like for like group structure.
2. This figure reflects a non-cash adjustment in respect of the
FRS102 treatment of the refinancing transaction in the year and may
be subject to a further audit adjustment.
3. No budget provision is made for Shared Ownership sales.
4. Defined as Development and Capitalised Major Repairs, offset
by cash from operations, income from asset sales, grant income,
less net interest payable.
Development: housing completions (31 March 2020) Unit Type Housing completions
31 March 2020
Social rent 29
--------------------
Affordable rent 152
--------------------
Rent to Buy ("In Reach") 68
--------------------
Home Ownership for People with Longterm Disabilities ("HOLD") 2
--------------------
Total 251
--------------------
Comments from Wayne Gethings, Group Chief Executive
"It has been another successful year for The Wrekin Housing
Group and we have become financially stronger through the
refinancing that took place in October 2019. We intend to sell up
to GBP25m of our retained bond in the near future, which will
support our ongoing objectives to make a difference to people's
lives by providing excellent homes and services.
"We recognise that everyone is experiencing unprecedented
challenges on account of the coronavirus pandemic and part of our
social purpose is about ensuring that our customers can remain
safe, receive the services and support that they need and that we
adapt our delivery to the future environment in whatever form that
takes.
"Our business has remained resilient in the initial phase of the
pandemic but we recognise that continuing challenges remain, which
is why we retain flexibility of approach. We thank our excellent
workforce and strong partners for their delivery so far and look
forward to continued progress into the future."
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END
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