Great Places Housing Group Limited ANNUAL REPORT AND FINANCIAL STATEMENTS (1614M)

TIDM15HG

RNS Number : 1614M

Great Places Housing Group Limited

17 September 2021

GREAT PLACES HOUSING GROUP LIMITED

GBP345,000,000 4.75 per cent Secured Bonds due 2042 (ISIN Number XS0842152281)

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR YEAR ENDING 31ST MARCH 2021

At the AGM of Great Places Housing Group Limited ("Great Places") on 16th September 2021 the shareholders agreed and adopted the Annual Report and Financial Statements for the year ending 31st March 2021.

Turnover for 2020/21 was GBP144.2M, up by 19.3% from the GBP120.9M recorded in 2019/20, the increase principally driven by the addition of the former Equity Housing Group ("Equity") activities. Operating surplus of GBP40.2M was 4.4% higher than last year and the operating margin declined to 25.8% from 28.6% in the previous year (as defined by the RSH VFM metric), the reduction mainly caused by expenditure on building safety and one off post-merger integration costs. Our total surplus after tax increased from GBP16.9m to GBP54.3m, this growth included the gain on transfer of engagements following the merger with Equity.

Turnover from social housing lettings was GBP109.9M (2019/20: GBP87.9M). Turnover from shared ownership first tranche sales and open market sales was GBP23.7M (2019/20: GBP24.3M).

Total Fixed Assets were GBP1.36bn (2019/20: GBP1.11bn) and total debt was GBP713.5M (2019/20: GBP540.5M). The increases in Assets, Debt and Turnover is principally driven by the addition of the former Equity Housing Group.

2020/21's Operational performance remained strong despite the impacts of Covid-19 and the related lockdowns. We had anticipated a significant increase in tenant arrears but this didn't materialise due to support for our tenants through the UC uplift, furlough and our own Hardship and Community Resilience Funds which provided over GBP100,000 of financial support to community-based projects and initiatives providing a lifeline to customers and making a significant difference to their lives. We did see a small impact on relet times but were able to quickly revise our lettings process and continue being able to rehouse customers who needed a home. We did experience some additional costs in the purchase of PPE, staff absence and through the process of setting up safe home and virtual working environments. We have managed the increase in costs in these areas with reduced office costs, facilities costs and through a small amount of additional income with some employees being furloughed.

Our Development programme did experience some slippage due to the early stages of the initial lockdown and our sales approach had to change as contractors, solicitors and estate agents etc. put in place their new working practices. Our new processes include virtual sales viewings which has lead to the majority of sales reservations completing, although some were delayed into early 2021/22. Our repairs team were able to continue working relatively normally other than for a short period where only emergency work took place. This lead to some gas safety certificates falling behind our target, although we did quickly catch back up with this following lockdowns easing. The component replacement programme was delayed by roughly six months, we have a plan in place to bring the programme back on track within the next two to three years.

The effects of Covid referred to above however, didn't have a significant impact on our operating margin. Great Places has reported a record surplus after tax of GBP54.3M for the 2020/21 Financial year and this includes a GBP39.4M fair value gain. Excluding this we have seen a decrease of GBP2.1m (12.4%) compared to 2019/20. This was impacted by the effects of the inclusion of Equity's service delivery which has historically generated a lower margin, some one-off costs as a result of the merger with Equity (including costs relating to the integration of their services and staff) and additional investment in building safety.

As a profit for purpose organisation, we ensure that all our surpluses are invested in line with our values and to meet our vision of "Great Homes, Great People, Great Communities".

The Financial Statements for Great Places are available on our website at: https://www.greatplaces.org.uk/about-us/corporate-and-investor-information/financial-accounts

The Annual Report is also available on our website at: https://www.greatplaces.org.uk/about-us/corporate-and-investor-information/annual-report

During the year we completed 325 much needed new homes and now own or manage 24,392 homes across the North West and South Yorkshire. At 31st March 2021 we had 1,455 new homes on site, making a significant contribution to tackling the housing crisis.

A year on from our merger with Equity, Great Places' new two-year Corporate Plan was launched. The internal focus will remain on completing our integration programme which has made fantastic progress during 2020/21, despite the challenges we have faced due to the pandemic. By March 2022 we are looking to have achieved the majority of our key milestones including the full implementation of the new housing management system. Following this we will be assessing how new structures and ways of working have embedded to ensure everything is functioning as seamlessly as intended before the end of the new Corporate Plan period. This includes the delivery of an ambitious development programme to help tackle the housing crisis, an even stronger customer service offer and eventually estimated savings of GBP3m per annum. Great Places is one of the North of England's largest providers of shared ownership and leasehold services following the merger.

The merger led to an interim regulatory judgement of G1/V2 in April 2020. Following an In Depth Assessment (IDA) early in this financial year 2021/22 the Regulator of Social housing (the "regulator") returned Great Places to G1/V1 in July 2021. The rating clearly shows that the regulator remains confident that we continue to have strong governance, strategic business planning and stress testing arrangements in place. We have also maintained our credit ratings with Moody's and Fitch which remain unchanged (A3 stable and A+).

We acknowledge that we need to respond to an ever-changing external environment and have plans to address the requirements of the White Paper "The Charter for Social Housing Residents" and new and emerging Building Safety legislation. Customers are at the forefront of everything we do and their safety is paramount. Great Places does not have many properties over 18 metres tall, but we have identified around 30 buildings, comprising of c.1,000 apartments, which we have categorised as higher risk. To address this risk we invested over GBP2.5m on safety works within our properties in 2020/21 and expect similar amounts in the next two years. Great Places will ensure that our housing meets the needs of our customers, both now and in the future.

Our ambitious development plans are key to our growth strategy and to helping meet the housing crisis. Great Places are therefore pleased to have been awarded Strategic Partnership status by Homes England which will support the development of 4,920 units with GBP240.8m of grant as part of the Affordable Homes Programme 2021-26. This additional funding will support our target of 11,000 new homes over the first ten years following the merger.

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September 17, 2021 05:37 ET (09:37 GMT)

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