TIDM46GV
RNS Number : 5291U
Karbon Homes Limited
24 November 2023
Karbon Homes Group
24(th) November 2023
Karbon Homes Group trading update for the six-month period
ending 30 September 2023
-- Karbon Homes Group (KHG) is today issuing its consolidated
trading update for the period ended 30 September 2023.
-- These figures are unaudited and for information purposes only.
Highlights for the period ending 30 September 2023
-- KHG own and manage 32,383 homes
-- Turnover for the period was GBP98.0m (2022: GBP84.2m)
-- Operating surplus (including asset sales) for the period was GBP26.3m (2022: GBP22.7m)
-- Overall operating margin (including asset sales) was 26.8% (2022: 26.9%)
-- Overall operating margin (excluding asset sales) was 25.0% (2022: 24.6%)
-- The surplus before tax for the period was GBP21.9m (2022: GBP13.7m)
-- Gearing as at 30 September 2023 was 37.7% (2022: 35.3%)
-- Interest cover for the period was 218.3% (2022: 211.6%)
Commenting on the results, Scott Martin, Executive Director of
Resources, said:
We're pleased to publish our six-monthly results to September
2023, which highlights our continued positive performance in
delivering our key strategic aims of providing as many good quality
homes as we can, delivering an excellent customer service and
shaping strong sustainable places for our communities. These
results also recognise the hard work of our people across the
organisation, who have remained committed to the delivery of our
strategic aims through what has been a challenging macro-economic
environment.
Since our previous set of half-year results, published in 2022,
we've welcomed two new organisations to the Karbon family. 54North
Homes joined the group in December 2022; a 3,000-home organisation
which was the result of a merger between Leeds & Yorkshire
Housing Association and our subsidiary York Housing
Association.
In July 2023, a further 439 homes were acquired as a result of
the transfer of engagements into Karbon Homes from South Tyneside
Housing Ventures Trust (STHVT). These homes and teams are now fully
integrated into the group and are part of the financial data
presented here to September 2023. It is worth noting that the
surplus before tax for the period ended 30 September 2023, includes
GBP4.7m of goodwill adjustments, which reflect the differences
between the fair values of the properties and loan facilities
acquired, and their historic costs. There were no goodwill
adjustments in the prior year 6-month results.
As we began this current financial year for 2023/24, using our
position as an anchor institution to positively benefit our
communities, continued to be a key focus. Many of our customers and
communities continue to face ongoing pressures connected to the
rising cost of living and we've continued to offer support, where
possible, through our Money Matters services. For the first half of
this year we've successfully generated additional benefits for our
customers of over GBP2.8m, against our full year target of
GBP4m.
We're also working hard to create new job opportunities for
those living in our households, through our New Start work
placement scheme and our apprenticeship programme, as well as
assisting people back into education, with 298 customers engaged in
these areas in the year to date.
Another key priority is ensuring our homes are safe,
comfortable, and efficient. Currently, over 73% of our homes
achieve an Energy Performance Certificate rating C or above and an
ongoing programme of work is in place to bring the remaining homes
up to EPC C.
The recent spotlight on damp and mould cases in the housing
sector has put the issue into sharp focus for us. A number of
robust systems and processes are in place to ensure we proactively
identify any such issues in our homes and to ensure any issues
raised by our customers are dealt with promptly. We have also
accelerated our stock condition survey works and have attempted to
gain access to 100% of our homes.
In terms of the delivery of new homes, we're pleased to say that
we have delivered 314 high quality and affordable new homes across
the North East and Yorkshire in the period to the end of October
2023. This is despite some ongoing challenges within our supply
chain, and is ahead of where we were at this time last year. We are
optimistic about achieving close to our target of more than 700 new
homes being delivered by the end of the financial year.
Furthermore, almost 90% of our customers were very or fairly
satisfied with the quality of their new home in this period, which
is a great achievement for us and our various construction partners
against this challenging backdrop.
We've invested over GBP30.2m so far this year in the maintenance
of our existing homes, across our planned, responsive and cyclical
repairs programmes, with over 93% of our customers saying they were
very or fairly satisfied with our repairs services overall. This is
an excellent achievement and a concerted effort by the repairs,
scheduling and customer service teams in working closely with our
customers, has been an important factor in maintaining this
KPI.
In recognition of the increased demand on our repairs service,
our board has recently approved GBP1m of additional expenditure
over the remainder of this and next financial year.
We're pleased to be maintaining strong performance in customer
satisfaction, with two different benchmarking exercises placing us
at top quartile performance on all perception Tenant Satisfaction
Measures as at October 2023. Finally, we are also glad to report
that rent lost due to voids is being contained within our target of
1.87% on a rolling 12-month basis.
On 31st July 2023, we published our third annual ESG Report
against the Sustainability Reporting Standard for Social Housing.
The report provides an overview of the variety of work we deliver
and our impact across Environmental, Social and Governance areas.
The release of our ESG report, at the same time as our Annual
Review and Financial Statements, was part of a commitment we made
to ensure that our various stakeholders were provided with complete
and timely information around our performance data. The releases
can be found at our website, both in downloadable and interactive
versions:
https://www.karbonhomes.co.uk/about-us/corporate/
We'll be holding our annual investor update in early January
2024, which will provide insight into our full year FY24 results
and discuss future challenges and opportunities moving into
2024/25. The webinar on the 11th January 2024 will be hosted by our
Group Chief Executive, Paul Fiddaman, with the opportunity for one
to one meetings on both 11th and 15th January.
To register an interest in this event or in a one-to-one meeting
with us, please get in touch with Andrew Thompson (AD
Treasury),
andrew.thompson@karbonhomes.co.uk
Our unaudited 6 monthly Group results and other key indicators are displayed
below
Unaudited Financial Metrics
30-Sep 30-Sep
2023 2022
Actual Actual
GBP'000 GBP'000
Statement of Comprehensive Income
Turnover 98,024 84,216
Operating Surplus (incl. asset sales) 26,285 22,656
Surplus before tax (Note 1) 21,853 13,727
Margins
Overall operating margin (incl. asset sales) (Note
2) 26.8% 26.9%
Overall operating margin (excl. asset sales) (Note
3) 25.0% 24.6%
Key Financial Ratios
Interest cover (EBITDA MRI) (Note 4) 218.3% 211.6%
Gearing (Note 5) 37.7% 35.3%
Return on Capital Employed (ROCE) (Note 6) 1.99% 1.93%
30-Sep
2023
Liquidity
24-month liquidity requirement (GBP'000) (Note 7) 188,350
Cash and undrawn facilities (GBP'000) (Note 8) 216,509
Unencumbered stock (no of properties) 8,620
Value of unencumbered stock (Avg of EUV and MV, GBP'000)
(Note 9) 374,754
Loan security excesses (Avg of EUV and MV, GBP'000)
(Note 10) 263,388
Credit Rating
A (positive): 18th
S & P May 2023
Notes:
1) Surplus before tax includes negative goodwill arising on
acquisition of STHVT of GBP4.7m, (2022: GBPnil)
2) Overall operating margin (incl. asset sales), includes all
activity but removes the benefits of any negative goodwill
amortisation.
3) Overall operating margin (excl. asset sales) removes the gain
or loss on disposal of housing properties and other fixed assets
(as per RSH VFM Metric definition)
4) Earnings before interest, tax, depreciation and amortisation,
major repairs included is defined as: (Operating surplus - Disposal
of assets - Outright sales and first tranche SO surpluses +
Depreciation & impairment - Grant amortisation - Capitalised
major repairs) / Interest paid
(reflecting the 'S&P global methodology for rating public
and non-profit social housing providers', published 1st June 2021
and its calculation of 'non-sales adjusted EBITDA)
5) Gearing is defined as Group Net Debt / Group Housing assets
at historic cost less depreciation (RSH VFM Gearing definition).
Any fair value adjustments of loans are ignored within this
calculation.
Karbon have chosen to include cash held in non ring-fenced
investment accounts as available cash, Sept 2023: GBP11.3m (Sept
2022: GBP56.0m)
6) Return on capital employed is defined as Operating surplus
(incl. asset sales) / Total assets less current liabilities
7) 24-month cashflow requirements
8) Cash, investments and undrawn RCF (Revolving Credit
Facilities)
9) Value of stock not held by a lender or security trustee.
10) Value of excess security held with current lenders or
security trustees
This trading update contains certain forward-looking statements
about the future outlook for Karbon Homes Group. These have been
prepared and reviewed by Karbon only and are unaudited.
Forward looking statements inherently involve a number of
uncertainties and assumptions. Although the Directors believe that
these statements are based upon reasonable assumptions on the
publication date, any such statements should be treated with
caution as future outlook may be influenced by factors that could
cause actual and audited outcomes and results to be materially
different.
Additionally, the information in this statement should not be
construed as solicitation/recommendation to invest in Karbon's
bonds.
For further information, please contact:
Andrew Thompson, Assistant Director: Treasury
07917 642957
https://www.karbonhomes.co.uk/corporate/
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END
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Karbon 3.375% (LSE:46GV)
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