TIDM42RJ
RNS Number : 4051Y
Aster Treasury PLC
12 May 2021
Aster Group t r ad i ng update for t he year ended 31 March 2 0 21
11 May 2021
Aster Group issues its unaudited group trading update for the 12
months ended 31 March 2021, with comparatives to the audited
financial statements for the 12 months ended 31 March 2020.
Full year highlights:
- Development delivery of 921 homes - a brilliant achievement given COVID-19
- Profits achieved of GBP45.2m, ahead of expectations
- A strengthening of our social housing operating margin through
a combination of increased focus across the group on value for
money and deferred maintenance works
- Impressive rent arrears figures at only 2.0%
- Over 90% of colleagues would recommend Aster as a great place to work
- Awarded Registered Restorative Organisation status by the Restorative Justice Council
- Introduced our diversity principles and launched our first LGBTQ+ network
- Issued GBP250m through our inaugural sustainable MTN issuance
- A+ (stable) credit rating from S&P reconfirmed
- G1/V1 rating maintained
- Released the group's first ESG report
- 143 days of remote and virtual volunteering into community organisations
As with most businesses, the measures imposed by the government
to limit the spread of COVID-19 during 2020/21 impacted on our
ability to deliver our services for significant periods of the
year.
Despite this we ended the year positively with a turnover of
GBP222.6m, operating profit of GBP73.5m and a profit for the year
of GBP45.2m. Due to the impact of COVID-19, our profits are lower
than we had budgeted for but significantly ahead of our
expectations this time last year.
We also continued at pace with our development programme in the
second half of the year, investing over GBP157m throughout the year
into building an impressive 921 homes, 471 for social and
affordable rent and 339 for affordable home ownership options
including shared ownership. The remainder of homes we completed
during the year were for open market sale. Although completions
were lower than anticipated pre-pandemic, we saw record interest in
our shared ownership properties and as a result very few sales fell
through.
When necessary during the year, we switched to an essential-only
service in an effort to limit the spread of COVID-19 and to help
keep our people and customers safe. D uring this time, we adapted
quickly to move viewing appointments online for sales and lettings
and created secure, contactless handovers which meant we could
continue providing the homes the country needs.
We resumed some non-essential works after the first lockdown but
the on-going nature of the restrictions meant that we had to
continue to postpone non-essential works several times during the
year which has led to a backlog of non-essential repairs and
planned major works.
We had expected to be able to progress with the backlog of
repairs and major works in the second half of the financial year,
however a subsequent lockdown meant that expenditure and other
recovery related costs will impact on our financial results and
indicators throughout 2021/22 and beyond. Positively we ended the
year with rent arrears standing at just 2%, lower than the same
time last year.
With government restrictions easing in March 2021, we restarted
some services inside customers' homes again and will continue to
resume more services in line with the government's roadmap to
recovery.
We continue to follow government guidance closely and have
personal risk assessments in place for colleagues working in our
communities - we believe this to be the best way to help keep our
colleagues and customers safe.
We accelerated improvements to our self-serve portal MyAster
during the year, doubling the number of new sign-ups during this
time, and t hrough the Aster Foundation, we have continued to
provide opportunities for our colleagues to support local
communities and causes through charitable donations, fundraising
activities and volunteering. In 2020/21, the group invested 143
days of remote and virtual volunteering into community
organisations and causes in support of COVID-19 as well as
launching a new volunteering platform, Aster VIP, in December 2020
with 28 community partners signed-up to the new platform to
date.
We provided mental wellness and resilience training to over
1,000 colleagues and customers including community organisations
during the year and launched Aster Connect, our telephone
befriending service, which to date has supported over 100 customers
with regular calls from our colleagues. We've now expanded Aster
Connect and are working with our partner, Re-engage to provide this
service.
In addition, the group also launched social incubator inc., the
first of its kind in the sector. Aimed at aspiring entrepreneurs,
inc., is set up to support entrepreneurs working on financial and
social exclusion, unemployment, mental health, and sustainability
concepts. The first cohort of social entrepreneurs embarked on the
10-month programme in the autumn of 2020.
We have continued to develop our colleague wellbeing offer this
year, adapting the support we provide colleagues in response to the
challenges of COVID-19. This has included a range of digital
wellbeing resources, a wellbeing app and regular wellbeing
calls.
We have continued to listen to colleagues' feedback on all
aspects of life at Aster, with 91% of colleagues recommending Aster
as a great place to work in our most recent engagement survey.
Creating an environment where everyone feels safe to speak up is
an important part of our culture. This year, we worked with the
Restorative Engagement Forum to embed restorative practice, which
promotes personal accountability and responsibility at work across
the business, becoming the first non-criminal organisation in the
UK to be awarded Registered Restorative Organisation status by the
Restorative Justice Council.
Inclusivity and fairness is central to our purpose and a core
element of The Aster Way, a set of cultural principles that
underpin everything we do. This year saw us introduce our diversity
principles, and launch of our LGBTQ+ network, involving colleagues
from across the business. We are working with the Employers Network
for Equality and Inclusion and Stonewall to benchmark and improve
against a framework of best practice. As we look to the recovery
from the COVID-19 pandemic this will be key.
In January, we priced a GBP250m Sustainability Bond under our
new European Medium-Term Notes (EMTN) programme, with the proceeds
being used to develop new affordable housing. This 15-year bond,
which was four times oversubscribed, comprised GBP200 million
immediate funding and a further GBP50 million retained. It priced
at a spread of gilts plus 80bps, with an all-in cost of 1.4%,
attracting investors that have not previously invested in us,
demonstrating the appetite for this type of bond in the market.
Our ratings of A+ (stable) from Standard and Poor's recognised
our strong fundamentals and experienced management team, and our
robust governance framework as evidenced in the maintenance of our
G1 governance and V1 viability ratings by the Regulator of Social
Housing.
We were also the first housing association outside of London to
produce an Environmental, Social and Governance (ESG) report and
Framework for Sustainable Finance this year, outlining our
environmental responsibility, demonstrating the positive impact our
activities have on people in our communities and outlining our
sustainable approach to finance.
Fina n ci al and ope r a t i ng p e rfo rman ce
Profit before tax for the year ended 31 March 2 0 21 was
GBP45.2m compared to GBP59.8m last year where the March 2020
results included a one-off gain on acquisition of GBP14.0m. H o
using p r o perties (net of depreciati o n) h a ve increased to GBP
1,822m fr om GBP1,733m at 31 March 2 0 20.
Consolidated Statement of Comprehensive Income 12 months 12 months
(GBP000) March 2021 March
2020
Turnover 222,590 214,560
Operating costs (166,721) (162,859)
Surplus on sale of housing property, plant and
equipment 17,674 20,042
Operating Profit 73,543 71,743
Profit on disposal of other property, plant,
equipment and intangible assets 168 214
Impairment of housing assets (138) 135
Impairment of office premises (1,240) -
Share of profit in joint ventures 411 374
Increase in fair value of investment properties 632 -
Net finance expense (28,179) (26,680)
Gain on acquisition - 14,013
Profit for the year 45,197 59,799
Financial indicators 12 months 12 months
March 2021 March
2020
Operating margin (excluding surplus on sale
of housing property, plant and equipment) (1) 24.5% 24.2%
Social housing operating margin(2) 29.4% 27.2%
EBITDA MRI interest cover(3) 215.6% 191.8%
Gearing 52.7% 53.5%
------------ -----------
Sales of shared ownership homes and open market sales homes
(predominantly delivered through joint ventures) totaled 470 units
for the year ended 31 March 2021 (2020: 543). As at 31 March 2021,
the group had 115 completed shared ownership homes void and
available for sale, with 100 of these sold and yet to complete and
only 15 unsold (2020: 133).
Overall customer satisfaction was 81% as at 31 March 2021 (2020:
82%). Void losses for the group's general needs and sheltered stock
were 0.8% (2020: 0.7%). Rent arrears have been tightly managed and
were good at only 2.0% (2020: 2.2%).
Debt and li qu i d i ty
Net debt over the year has increased to GBP937m from GBP902m. We
had liquidity at 31 March 2021 of GBP514.3m, consisting of
committed and available undrawn facilities of GBP307.5m, and cash
and
cash equivalents of GBP206.8m. During the period we issued
GBP250m from our EMTN (GBP50m retained) and GBP100m of Commercial
Paper under the COVID-19 Corporate Financing Facility (CCFF).
GBP50m of the CCFF was repaid during the year.
Development
We're proud to have delivered 921 homes this year, a remarkable
achievement given the difficult operating environment because of
COVID-19. This includes 810 affordable homes (2020: 955) and we
have a contracted pipeline of 3,406 homes (2020: 2,204). The number
of completed homes during the year reduced as a direct result of
the disruption caused by COVID-19. Output across our development
sites has slowly increased since sites closed following the first
national lockdown. As the rate of infection has reduced in our
operating areas, issues with material supplies and resourcing have
reduced back to levels that allow construction to continue
effectively. It has been difficult to tell if the UK-EU trade and
cooperation agreement has had any impact on development. The
housing market remains strong and this is reflected in the good
performance of our shared ownership sales over the year. The
outlook for 2021/22 is positive and we have a strong forward
pipeline and are actively securing new opportunities.
Board and Executive Team changes
During the year, the following appointments were made:
Claire Whitaker OBE was appointed as a co-optee to the Board
from 12 August 2020.
Emma O'Shea was appointed to the Executive Board on 6 April
2020.
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.
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+ (stable) by Standard and Poor's
(December 2 020), and G 1/ V1 by t he Regulat or of Social H o
using (25 March 2020 ).
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, Group Finance Director - Chris.benn@aster.co.uk
Lynsey Thorp, Head of Communications -
lynsey.thorp@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, fair value of investment properties, 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
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END
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