TIDM42RJ
RNS Number : 9370R
Aster Treasury PLC
10 November 2021
Aster Group t r ad i ng update for t he six months ended 30 September 2 0 21
10 November 2021
Aster Group issues its unaudited group trading update for the
six months ended 30 September 2021, with comparatives to the
audited financial statements for the 12 months ended 31 March
2021.
Half year highlights:
- Strong development delivery of 390 affordable homes; on track
to complete 920 affordable homes by 31 March 2022.
- Profits achieved of GBP31.2m, ahead of expectations.
- First tranche sales up 44% to GBP26.5m (compared with same
six-month period last year), a strong market in our areas of
operation.
- Liquidity at GBP457.7m.
- Selected as a Homes England Strategic Partner - we will
receive GBP114m in grant funding to deliver 1,550 homes with start
on site due before the end of March 2026.
- Merging with London-based Central & Cecil Housing Trust
(C&C) in January 2022 - a mutually beneficial arrangement that
will boost our combined capacity to build new homes.
- Strengthened approach to customer services working through our
new membership of the Institute of Customer Services.
- Continuing our work to ensure all our stock is at least EPC C or above.
- Continued focus on safety in our customers' homes with 99% compliance in many key areas.
- Housing First initiative - partnering homeless charity Two
Saints and Test Valley Borough Council to provide people who have
experienced homelessness with a stable home to help rebuild their
lives.
- Menopause Friendly Employer accreditation - we are one of the
first employers in the UK to achieve this.
- Released our second Environmental, Social and Governance (ESG)
report covering the 12 months to 31 March 2021, placing a greater
emphasis on ESG across the group.
Operational and trading update:
The easing of COVID-19 measures back in March 2021 has allowed
us to start the process of a return to normality in the six-month
period to 30 September 2021. Our profits for the period are better
than expected with margins holding up well partially due to a
prudent approach in controlling costs across the COVID-19 pandemic.
Overall, the financial impact on us from the COVID-19 pandemic has
not been as bad as anticipated providing further confidence in the
underlying strength of our business model.
First Tranche Shared Ownership Sales have remained strong and
have exceeded budget showing the continued demand for this product
as a mainstream tenure. Asset disposals are also ahead of target
mainly because of the acceleration in our Void Disposal Programme
(VDP) and an upturn in sales from staircasing.
We've continued to work through the backlog of non-essential and
planned major works deferred from the last financial year as a
result of COVID-19. We anticipate an increase in expenditure in the
second half of the year with a larger programme of works scheduled
for this period. The expectation is that the increased expenditure
from the catch up in these repairs is likely to have some impact on
the group's financial results and indicators in the second half of
the year.
We are proud to have been selected as a Strategic Partner with
Homes England and through this will receive GBP114m of funding to
deliver 1,550 homes with start on site prior to the end of March
2026. This move unlocks more funding for us and supports our
development strategy to confidently build more homes through our
land programme and in partnership with Community Land Trusts
(CLTs). This partnership provides certainty for us as rather than
access funding on a scheme-by-scheme basis, Strategic Partners
enter into a multi-year grant agreement with Homes England to
deliver affordable housing.
Earlier this year we announced our intention to merge with
Central and Cecil Housing Trust (C&C). With the final business
case approved by both boards and C&C's shareholders we
anticipate a merge date in January 2022. Established in 1926,
C&C have approximately GBP300m of assets and specialises in
providing affordable housing and care for over 55s living in
London, promoting supportive, inclusive communities across all its
homes. The merger will create a combined group with approximately
34,500 homes, servicing around 100,000 customers. This will enable
us to provide an enhanced service offering whilst also boosting our
combined capacity to build new homes, furthering our vision of
'everyone has a home'. This move will be the second Aster merger
within the last 18 months having entered into partnership with East
Boro Housing Trust (EBHT) in March 2020.
We're already working from a position of strength in relation to
our customer services, and in our recent customer survey, customers
gave us an overall satisfaction score of 80%, a neighbourhood
satisfaction rate of 88% and a repairs satisfaction rate of 72%.
Despite the positive feedback we receive from our customers, we are
always looking to improve. Therefore, we have implemented a new
approach to customer services with our refreshed strategy focused
on five key strands namely customer voice, connected customer,
customer focussed culture, proactive customer services and
effective customer services. This strategy aims to deliver a
consistently good service and one that is shaped by our customers
through their ongoing input and feedback via our engaged customer
groups, regular customer surveys and our compliments and complaints
procedure. Our membership of the Institute of Customer Services and
commitment to its Service with Respect campaign has helped us drive
this strategy forward. Over 15,000 customers have now registered
with our online portal MyAster, making a range of our services
accessible 24/7. Through MyAster, customers can log a repair, pay
their rent or update their details at a time that suits them.
We have maintained our strong track record of ensuring that our
homes adhere to safety regulations with compliance for properties
with valid gas servicing certificates, Electrical Installation
Condition Reports and Fire Risk Assessments remaining above
99%.
We are leading the way in becoming one of the first
organisations to be awarded the 'Menopause Friendly Employer'
accreditation. Menopausal women are the fastest-growing workplace
demographic meaning it's a key area for employer focus. Our
menopause support programme includes Hot Topic sofa sessions,
leader awareness training and talks from leading authorities in
menopause and women's health. We have also signed up to the
'Menopause Workplace Pledge' furthering our commitment to
supporting our colleagues going through this change or supporting
those around them.
We have secured GBP350k of grant funding through the Aster
Foundation towards providing homes and life changing support for
rough sleepers in Test Valley. The funding, provided by the
Department for Levelling up, Housing and Communities Rough Sleeping
Accommodation Programme, is part of a national scheme to help
thousands of people who sleep rough, or are at risk of sleeping
rough, into secure housing. We are one of two housing associations
operating in Hampshire to take part in the initiative providing
five homes each, along with Test Valley Borough Council who applied
for the funding and charity Two Saints, which will provide the
tenants access to a range of other vital support services including
mental health and substance misuse support.
Fina n ci al and ope r a t i ng p e rfo rman ce
Unaudited profit before tax for the six months to 30 September 2
0 21 was GBP31.2m. H o using p r o perties (net of depreciati o n)
h a ve increased to GBP 1,866m fr om GBP1,821m at 31 March 2 0
21.
Consolidated Statement of Comprehensive Income 6 months 12 months
(GBP000) September March
2021 2021
Turnover 120,559 224,379
Operating costs (89,098) (168,223)
Surplus on sale of housing property, plant and
equipment 12,828 17,871
Operating Profit 44,289 74,027
Profit on disposal of other property, plant,
equipment and intangible assets - (44)
Impairment of housing assets - (138)
Impairment of office premises - (1,241)
Share of profit in joint ventures 806 400
Increase in fair value of investment properties - 633
Net finance expense (13,861) (28,163)
Profit before tax for the period 31,234 45,474
Financial indicators 6 months 12 months
September March
2021 2021
Operating margin (excluding surplus on sale
of housing property, plant and equipment) (1) 26.1% 24.4%
Social housing operating margin(2) 32.5% 29.2%
EBITDA MRI interest cover(3) 222.2% 210.5%
Gearing 50.4% 52.8%
----------- -----------
Sales of shared ownership homes and open market sales homes
(predominantly delivered through joint ventures) were well ahead of
this time last year and totalled 285 units for the six months ended
30 September 2021 (12 months ended March 2021: 470). Shared
ownership sale enquiries in Q2 this financial year are up 35% to
2,985 enquiries. 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 2021, the
group had stock of 34 completed shared ownership homes (March 2021:
15) available for sale.
Overall customer satisfaction was 80% as at September 2021
(March 2021: 81%). Void losses for the group's general needs and
sheltered stock were 0.8% (March 2021: 0.8%). Rent arrears have
been tightly managed and remained strong at only 2.0% (March 2021:
2.0%).
Debt and li qu i d i ty
Net debt over the year has increased to GBP941m from GBP937m.
Liquidity at 30 September 2021 was GBP457.7m, consisting of
committed and available undrawn facilities of GBP302.5m, and cash
and
cash equivalents of GBP155.2m. During the period we repaid the
remaining GBP50m borrowed under the Covid Corporate Financing
Facility (CCFF).
Development
The group completed 390 affordable units in the six months ended
30 September 2021 (twelve months ended March 2021: 817 units) and
has a contracted pipeline of 2,394 homes (March 2021: 2,313). The
output of completed homes is forecast to increase this year as the
effects of COVID-19 decline. We, like many businesses involved in
the development of homes, have had issues with material supplies
and resourcing of labour which has reduced the development output
of the group in the first half of the year and may to a lesser
extent lead to reduced output in H2. However, the housing market
remains strong, evident through the low unsold unit stock figures
for shared ownership homes over the past six months.
The outlook for 2021/22 is positive, we have a strong forward
pipeline and supported by the announcement of our successful bid to
become a Homes England Strategic Partner, we are actively seeking
new opportunities for both land-led and S106 home delivery.
Board and Executive Team changes
During the year, the following appointments were made:
Claire Whitaker OBE was appointed as a Non-Executive Director to
the Board from 12 August 2021.
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 (December 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, corporation tax, 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
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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is intended to be a profit estimate or forecast. No representation
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Parent, any other member of the Group or any of their respective
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END
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