TIDM38OI
RNS Number : 8493H
Anchor Hanover Group
29 November 2022
Anchor Hanover Group
29 November 2022
Anchor Trading Statement for six months to 30 September 2022
Unaudited trading update for the six months to 30 September 2022
for Anchor Hanover Group, trading as Anchor
Anchor, the largest not for profit operator of housing for older
people and, following its recent acquisition of 11 care homes, the
fourth largest residential care home operator in England, announces
its trading highlights and unaudited financial results for the
first half of the 2022/23 financial year.
Anchor is working hard to alleviate the cost-of-living crisis
for both residents and colleagues with initiatives to support those
most in need and continues to be a voice for older people.
Anchor is proud to have gained its Living Wage Employer
Accreditation as part of our commitment to our colleagues who
continue to work hard to ensure that our residents can love living
in later life. We are extremely grateful to our colleagues for all
that they do for residents.
Anchor's reputation for providing high quality services, coupled
with strong underlying demand for our services has seen continued
high levels of occupancy in rented housing, care occupancy improve
close to pre-covid levels, and delivery of both rent and care fee
growth.
Anchor engaged positively with the government consultation on
social housing rents and is working with local authorities looking
at the fair cost of care fees.
The first half of this financial year has seen economic
pressures from rising inflation, particularly in energy, and rising
interest rates, coupled with political uncertainty both in the UK
and abroad. Anchor has been somewhat insulated from interest rate
rises and energy price hikes in the period due to having largely
fixed interest rate debt and energy contracts in place.
Anchors low gearing, strong liquidity and low-cost fixed rate
debt from its sustainability linked public bond issued in July 2021
mean that Anchor is well placed to continue to progress with the
Four Mores of the strategic plan -- More and better homes, More
opportunities for colleagues, More influence for older people and
More Efficient.
Inflation across the economy will continue to be challenging for
all sectors including social housing and care. Anchor remains
committed to improving efficiency within its operations and to meet
its long-term objectives of investing in and developing more new
homes for older people in a sustainable way.
Peter Haspel, Interim Chief Financial Officer
29 November 2022
Highlights
-- Continued strong underlying demand and high occupancy in rented housing and care occupancy improvement to near
pre-covid levels.
-- Growth in rented housing rental levels and care fees.
-- Margins at 9.8% were marginally below the full year 2022 (10.2%) but down on the half year to September
2021(13.7%) reflecting increased operational costs particularly in staffing and repairs.
-- Operating surplus before exceptional items was GBP26.2m on turnover of GBP266.1m (half year to September 2021
operating surplus GBP34.8m on turnover of GBP253.8m). Operating cost inflation was an increasing factor during
the first half year.
-- Return to a more evenly spread annual programme of capitalised planned major repairs compared to the half year
ended 30 September 2021, when covid impacted on works. EBITDA MRI for the six months to September 2022 of
GBP31.5m compared to GBP46.4m to September 2021.
-- Strong liquidity with GBP297m of undrawn available loan facilities and cash available to fund the strategic plan.
-- Gearing at a low level for the sector at 22.0% (March 2022: 21.4%).
-- Interest cover including capitalised repairs (EBITDA MRI) strong at 2.9x (March 2022: 3.0x).
-- Anchor maintains an A+ stable rating from S&P and G1/V1 rating from the Regulator of Social Housing.
-- Our second Sustainability Report was published in October 2022, showing the breadth of our positive impact and
how we continue to ensure Anchor is a well-governed and sustainable organisation.
Financial Highlights
Figures in GBPm 6 months to 30 Sept 2022 6 months to 30 Sept 2021 FY to 31 March 2022
------------------------------------------ ------------------------- ------------------------- --------------------
Turnover 266.1 253.8 526.2
Operating surplus before exceptional
items 26.2 34.8 53.8
Operating margin before exceptional items
% 9.8% 13.7% 10.2%
EBITDA MRI 31.5 46.4 64.8
Operational highlights
Anchor's strong reputation for providing quality services,
coupled with robust underlying demand for our services, has seen
continued high levels of occupancy in rented housing (Sept 2022:
98.8%, March 2022: 98.5%), and care occupancy improve close to
pre-covid levels (Sept 2022: 86.0%, March 2022: 83.9%). Turnover of
GBP266.1m is up GBP12.3m (4.8%) on the same period in 2021 due to
annualised rent and fee uplifts combined with improved occupancy
levels.
Operating margins at 9.8% were marginally below full year 2022
(10.2%) although down on the first half year 2022. Anchor aligned
all hourly rate roles with Living Wage Foundation rates from 1(st)
December 2021, which combined with higher agency staff usage,
higher maintenance activity and higher sales costs of developed
property, increased operating costs this half year compared to the
first half year last year (September 2022: GBP239.9m, September
2021: GBP219.0m).
Anchor's commitment to achieve Living Wage Employer
Accreditation made us the first large provider of care and housing
to pay all our colleagues, whatever their age or wherever they
work, at or above the Real Living Wage and is part of a reward and
wellbeing offer to attract and retain staff in a competitive
marketplace.
Interest charges for the six months to September 2022 of GBP11m
were GBP5.5m lower than the six months to September 2021, largely
reflecting realised losses of GBP6.2m on interest rate swaps closed
out as part of the refinancing in 2021.
EBITDA MRI for the six months to September 2022 of GBP31.5m
(September 2021: GBP46.4m) having delivered more capitalised major
repairs than was possible in the same period last year when there
were ongoing effects of covid restrictions (MRI spend Sept 2022:
GBP21.0m, Sept 2021: GBP14.3m).
Anchor has worked to alleviate the cost-of-living crisis for
both residents and colleagues with initiatives to support those
most in need. The "Be Wise" support assisting residents to claim
the benefits they are entitled to and to get the best deal on their
energy has experienced sustained, high demand over the past 18
months, with the team receiving c.900 calls per month. Anchor
gained its Living Wage Employer Accreditation as part of our
commitment to our colleagues who continue to work hard to ensure
that our residents can love living in later life.
Development and Acquisitions
Anchor has plans to build 5,700 new affordable and energy
efficient homes for older people, in a balance of tenures. Since
2019 Anchor has completed 305 homes and has a further 852 homes
under construction. Our new developments are designed to achieve
Energy Performance Certificate rating of B or better as part of
Anchor's ongoing commitment to sustainability.
Anchor contracted to complete the acquisition of 11 care homes
during the period and this transaction has recently completed,
taking the total care homes that Anchor operates to 125 and over
6,500 care residents, making Anchor the fourth largest residential
care home operator in England.
Liquidity
Liquidity remains strong with undrawn available loan facilities
and cash of GBP297m, together with retained bond capacity of
GBP100m nominal value, positions Anchor well to deliver on its
strategic objectives.
At 22.0%, gearing remained at a low level for the sector (March
2022: 21.4%). Interest cover including capitalised repairs (EBITDA
MRI/Interest) at 2.9x (March 2022: 3.0x) remains strong.
Credit and Regulatory ratings
Anchor has retained its rating of A+ stable from S&P in the
March 2022 review (first issued March 2021) and G1/V1 rating from
the Regulator of Social Housing (reaffirmed 15 November 2022).
These ratings reflect the group's strong balance sheet position and
robust business plans set out within a strong risk control
framework.
Unaudited Financial Statements for the Six Months to September
2022
Comparatives are to Anchor's consolidated audited year end
results to 31 March 2022 and unaudited results for the six months
ended September 2021.
Group Statement of Comprehensive Income
---------------------------------------------------------------------------------------- -------------------------
Figures in GBPm Six Months Ended 30 Six Months Ended 30 Year Ended 31 March 2022
September 2022 September 2021
----------------------------- ---------------------------- ---------------------------- -------------------------
Turnover from ongoing
operations 255.0 244.0 493.5
Turnover from property sales 11.1 9.8 32.7
Turnover 266.1 253.8 526.2
Operating costs from ongoing
operations (228.5) (211.9) (444.0)
Cost of Sales -- property
sales (11.5) (9.0) (28.6)
Surplus on disposal of fixed
assets 0.1 1.9 0.3
Operating Surplus before
exceptional items 26.2 34.8 53.8
Exceptional items - - (1.8)
Operating Surplus after
exceptional items 26.2 34.8 52.0
Net interest costs (11.0) (16.5) (28.4)
Taxation - - 0.8
Surplus for the period 15.2 18.3 24.4
Operating margin excluding
property contribution 10.4% 13.2% 10.0%
Operating margin before
exceptional items 9.8% 13.7% 10.2%
Operating margin 9.8% 13.7% 9.9%
EBITDA MRI(1) 31.5 46.4 64.8
EBITDA MRI -- Interest
cover(2) 2.9x 4.5x 3.0x
1. Group operating surplus including property proceeds less amortisation of social housing grant, less Government
capital grants taken to income, add back depreciation and impairment attributed to retirement housing to let and
residential care homes, less improvements to existing properties capitalised
2. EBITDA MRI including property proceeds, divided by interest and financing costs less interest receivable
Comparatives are to Anchor's consolidated audited year end
results to 31 March 2022 and unaudited results for the six months
ended September 2021.
Group Statement of Financial Position
------------------------------------------------------------------------------- --------------------
Figures in GBPm As at 30 September 2022 As at 30 September 2021 As at 31 March 2022
---------------------------- ------------------------ ------------------------ --------------------
Tangible fixed assets 1,192.8 1,206.4 1,200.5
Other investments 0.9 1.2 0.8
Total long-term assets 1,193.7 1,207.6 1,201.3
Properties held for sale 231.6 190.0 205.2
Cash 61.8 82.3 83.9
Other current assets 55.8 45.2 44.4
Total current assets 349.2 317.5 333.5
Loans (500.7) (502.7) (501.9)
Finance lease obligations (97.4) (99.5) (98.1)
Grants (223.0) (242.4) (231.9)
Pension liabilities (8.2) (12.9) (8.2)
Other liabilities (124.6) (101.0) (122.7)
Total Liabilities (953.9) (958.5) (962.8)
Total net assets 589.0 566.6 571.9
Reserves 589.0 566.6 571.9
Gearing(3) 22.0% 21.9% 21.4%
1. Net debt divided by historical cost of completed properties
Anchor Hanover Group
Derya Filiz
Head of External Communications
The Heals Building Suites A & B, 3(rd) Floor
22-24 Torrington Place
London
WC1E 7HJ
07713 085004
derya.filiz@anchor.org.uk
communications@anchor.org.uk
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