TIDM42RJ
RNS Number : 1564L
Aster Treasury PLC
11 May 2022
Aster Group
Trading update for the year ended 31 March 2022
Aster Group issues its unaudited Group trading update for the
twelve months ended 31 March 2022, with comparatives to the audited
financial statements for the 12 months ended 31 March 2021.
Full year highlights:
-- We remain in a stable financial position and ended the year
with a turnover of GBP240.7m, operating profit of GBP75.3m and a
profit before tax of GBP171.0m
-- Standard and Poor's (S&P) maintained our 'A+ rating'. The
outlook was amended from 'stable' to 'negative'. Our continued
commitment to health and safety, our plans to increase investment
in existing and new homes and our transition to carbon neutral as
well as our acquisition of Central and Cecil Housing Trust (Central
and Cecil) in January are particular areas which influenced
S&P's decision
-- Despite the challenges faced across the sector over the past
12 months, our strong operational management and financial
stability remain robust and we continue to hold our governance and
viability ratings of G1 / V1 from the regulator
-- Merging with London-based Central and Cecil in January 2022 -
a mutually beneficial arrangement that will boost our combined
capacity to build new homes. Together we'll be able to build over
11,200 homes by 2030. Our partnership also enables GBP571m worth of
asset management, maintenance, improvements, and sustainability
upgrades to existing stock, as well as increased investments in the
technology we need to support a great customer experience.
Integration is continuing at pace, with a focus on realising real
term cost efficiencies over the next three years
-- We delivered 939 new homes in the year, a significant
achievement given the challenges faced. 768 of those homes were
affordable homes with the remaining 171 homes sold on the open
market through our joint venture with Vistry
-- 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. 51% of those homes will
be for shared ownership and 49% for affordable and social rent. Of
this additional funding from Homes England, 5% (82 homes) will be
allocated for supportive living via our partner East Boro Housing
Trust and 14% for Community Land Trusts. Under the programme, we're
committed to building 25 per cent of these homes using modern
methods of construction, we'll use high-quality sustainable design
and work with small and medium-sized enterprises
-- We spent GBP80.1m on repairing and maintaining our homes and
have invested GBP2.8m to carry out full stock condition surveys on
almost 26,000 of our homes - we're one of only a few housing
associations to take this approach. Understanding the condition of
our homes provides us further assurance around health and safety,
compliance and decent homes standards and gives us the opportunity
to look at how we can further improve the quality of our homes and
services we provide to our customers
-- We continue to focus on the modernisation of our customer
services through the delivery of our strategic framework, The
Future of Customer Experience. The framework sets out how we will
ensure we are delivering our vision to provide modern, reliable
customer services into the future
-- Over 50% of customers are now registered to use our free
online portal MyAster, with 80% telling us they're happy with our
service. With the introduction of Live Chat messaging last autumn,
we're giving customers more ways to access our services in ways
that suits them. Customers can use Live Chat to log repairs, ask
questions, update their tenancy and more. Their feedback will
continue to help us shape and improve our digital platforms that
provide accessible ways for customers to reach us
-- Customer voice is embedded across every team in the business.
During the year, over 3,750 customers shared their views and
experiences via our engaged customer groups, consultations and
complaints and compliments service and we've seen over 300%
increase in customer engagement over the past three years as we
offer customers more ways to engage and provide feedback. Our
recently enhanced complaints service makes it simple for customers
to let us know when something could be improved and a new dedicated
complaints learning group will give us more opportunities to learn
from complaints and make positive change
-- Through The Future of Customer Experience programme, we're
committed to co-designing current and future services with
customers. Their contributions strengthen our service delivery by
ensuring we provide proactive services that meet their expectations
and needs. We are also members of the Institute of Customer Service
(ICS) and currently working towards ICS and tenant engagement
specialists, TPAS accreditation
-- GBP350,000 grant to tackle rough sleeping in Hampshire. Using
the Homes England funding and working with Test Valley Borough
Council we have bought one new home and plan to buy a further four
homes in the next financial year to help people who rough sleep or
are at risk of sleeping rough in Andover
-- Aster Foundation has been granted official charitable status
by the Charity Commission. This is a really exciting step forward
for the Foundation's vision to enable the better lives of 40,000
people by 2030. We'll do this through impact programmes that are
aligned to our community's needs: financial wellbeing; employment;
mental wellness and resilience; homelessness; volunteering; ageing
well; inc. (our social incubator); inc.academy (developing
entrepreneurial capabilities) and influencing social change
-- Through our charity events and individual fundraising, we
raised over GBP20,000 for our Charity of the Year, Dementia UK
-- We are committed to ensuring all our stock is at least EPC C
or above ahead of the government's deadline of 2030, lowering our
carbon footprint and protecting the biodiversity of our
communities. We are continually reviewing and upgrading our fleet
with new fuel-efficient vehicles and have been trialling fully
electric and hybrid vehicles. We're also looking to introduce green
slots, allowing customers to select an appointment time that
ensures operatives drive the most energy efficient route to reach
them. Alongside this we're trialling new digital approaches to
first time fixes and online viewings for lettings to provide an
easier and quicker service for our customers
-- We are one of the first employers in the UK to achieve
Menopause Friendly Employer accreditation. The accreditation
recognises inclusive employers that build awareness and
understanding around menopause. Our menopause support programme has
been running for three years and is part of our wider inclusion
programme and our commitment to creating a fair and inclusive
culture. Our commitment to ongoing training, awareness and guidance
helps those experiencing menopause symptoms allowing us to support
colleagues more effectively
-- Released our second Environmental, Social and Governance
(ESG) report covering the 12 months to 31 March 2021
Financial and operating performance
Unaudited profit before tax for the twelve months ended 31 March
2022 was GBP171.0m and includes a gain on acquisition of GBP119.6m.
Excluding this gain, underlying profit before tax is GBP51.4m,
GBP5.9m ahead of last year. Housing properties (net of
depreciation) have increased to GBP2,003m from GBP1,866m at 31
March 2022.
Consolidated Statement of Comprehensive Income 12 months 12 months
(GBP000) March 2022 March 2021
Turnover 240,682 224,379
Operating costs (188,135) (168,223)
Surplus on sale of housing property, plant and
equipment 22,751 17,871
Operating Profit 75,298 74,027
Profit on disposal of other property, plant,
equipment and intangible assets 23 (44)
Impairment of housing assets - (138)
Impairment of office premises - (1,241)
Share of profit in joint ventures 2,707 400
Increase in fair value of investment properties 1,154 633
Net finance expense (27,794) (28,163)
Gain on acquisition 119,590 -
Profit before tax for the period 170,978 45,474
Financial indicators 12 months 12 months
March 2022 March 2021
Operating margin (excluding surplus on sale
of housing property, plant and equipment) (1) 21.8% 24.4%
Social housing operating margin(2) 26.5% 29.2%
EBITDA MRI interest cover(3) 184.7% 210.5%
Gearing 48.8% 52.8%
------------ -------------
With the easing of COVID-19 measures back in March 2021 we were
able to start to return to normality, working through the backlog
of non-essential and planned major works deferred from the prior
financial year. Despite the second half of the year seeing a larger
programme of works completed, with increased expenditure, some
works have rolled over into the new financial year. Further costs
were also incurred as a result of the storm damage in February
2022. Overall, operating margin was 21.8% being down from 24.4% in
the prior year due to partial catch up of works unable to be
completed during covid lockdown, continued IT and staff investment
in the underlying business.
Sales of shared ownership homes and open market sales homes
(predominantly delivered through joint ventures) totalled 540 units
for the twelve months ended 31 March 2022 (12 months ended March
2021: 470). We continue to see high demand for shared ownership
properties with customers drawn to their lower risk, particularly
in the current climate. As at 31 March 2022, the Group had stock of
50 completed shared ownership homes (March 2021: 115) available for
sale, of which 49 were reserved (March 2021: 100).
Other asset sales performed ahead of budget for the year due to
the continuation of our Void Disposal Programme and an upturn in
sales from staircasing of shared ownership homes due to the market
conditions.
The acquisition of Central and Cecil was recognised as a
non-exchange transaction and resulted in a gain of GBP119.6m based
on the fair value of assets and liabilities acquired as at 1
January 2022.
Overall customer satisfaction was 82% as at March 2022 (March
2021: 81%). Rent arrears have been tightly managed and remained
strong at only 1.8% (March 2021: 2.0%) of associated revenue due to
the assistance of our financial wellbeing team. Void losses for the
Group's general needs and sheltered stock were 0.8% (March 2021:
0.8%).
Debt and liquidity
Net debt over the year has increased to GBP1,002m from GBP941m a
year earlier. Liquidity at 31 March 2022 was GBP377.9m, consisting
of committed and available undrawn facilities of GBP280.0m, and
cash and cash equivalents of GBP97.9m. During the year the
remaining GBP50m borrowed under the Covid Corporate Financing
Facility (CCFF) was repaid.
Development
The Group completed 768 affordable units in the year ended 31
March 2022 (year ended March 2021: 817 units) which was a
significant achievement given the challenges faced during the year.
The number of handovers is lower than the prior year, mainly due to
the material and labour delays experienced across the industry
pushing back the programme. Our developer led programme has also
suffered where developers concentrated on their private sale homes
because of the strong market conditions and limited materials.
Build cost inflation and the general economic climate are being
monitored closely. We have a strong pipeline of schemes and have
been successful securing both land and developer led opportunities,
with a contracted pipeline of 3,464 homes compared to 3,406 homes
at the end of the previous year. Aster is a Homes England Strategic
Partner and has secured GBP114 million to deliver 1,550 homes by
March 2028, which will support the delivery of our land led
programme.
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.
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 Treasury PLC: There were no changes to
the membership of the board.
Aster Group credit rating and governance
Aster Treasury PLC is rated A+ (negative) by Standard and Poor's
(December 2021), and G1 / V1 by the Regulator of Social Housing
(December 2021).
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.
4 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.
For more information, please contact:
Chris Benn, Chief financial officer - chris.benn@aster.co.uk
www.aster.co.uk/corporate/about-us/investor-relations
Disclaimer:
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.
No reliance should be placed on the information or any
projections, targets, estimates or forecasts and nothing in the
trading update is or should be relied on as a promise or
representation as to the future. No statement in the trading update
is intended to be a profit estimate or forecast. No representation
or warranty, express or implied, is given by or on behalf of the
Parent, any other member of the Group or any of their respective
directors, officers, employees, advisers, agents or any other
persons as to the accuracy or validity of the information or
opinions contained in the trading update (and whether any
information has been omitted from the trading update). The trading
update does not constitute legal, tax, accounting or investment
advice.
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END
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